Under the SBV's plan, ten commercial banks will officially apply international bank management standards in accordance with Basel II governance standards from this month.
The selected banks are the biggest and most prestigious ones in Vietnam, and they include the Bank for Investment and Development of Vietnam (BIDV), Vietnam Bank for Industry and Trade (VietinBank), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), and Vietnam Technological and Commercial Joint Stock Bank (Techcombank), in addition to Southeast Asia Commercial Joint Stock Bank (ACB), Vietnam Prosperity Bank (VPBank), Military Commercial Joint Stock Bank (MB), and Maritime Bank. The other banks were Sacombank and Vietnam International Commercial Joint Stock Bank (VIB).
The banks, which will pilot capital and risk management methods according to Basel II standards, will complete the pilot by 2018 and the Basel II application will be then deployed at other commercial banks in the country. Local banks currently apply the Basel I.
However, to be able to apply the Basel II standards, local banks must increase capital as their capital adequacy ratio (CAR) would reduce. Banks, which have the CAR of around 9 percent, would have to increase capital to meet the Basel II standards. BIDV, for example, would have to mobilise more capital to meet the Basel II standards as its CAR is only roughly 9 percent.
Basel II is a new, higher level for Vietnamese banks in accordance with Basel Accords standards set by the Basel Committee on Banking Supervision (BCBS). The application is flexible to different countries but the overall spirit is tighter regulations on banking operations.
This is a timely and reasonable step now, when Vietnam is undergoing economic restructuring and banking reform./.
Source: VNA