Struggling to attract domestic funds, banks are rushing to seek foreign capital ahead of the central bank’s tightened policy on medium- and long-term lending early next year.

Banks will also need more capital to meet a capital adequacy ratio (CAR) of 8 percent in 2020 as per the SBV’s Basel II norms.
To prepare for the regulations, besides increasing interest rates for long-term deposits to attract depositors, banks also have to find capital from foreign partners.
Besides foreign capital loans, banks also expect the Government to increase the foreign ownership ratio to meet their dire need of capital. 
Under current regulations, the ownership ratio of a foreign investor in a Vietnamese bank can’t exceed 20 per cent of the bank’s charter capital and the total shareholding ratio of all foreign investors in the bank can’t exceed 30 percent.
According to banks, this is the biggest obstacle in attracting foreign capital and some banks have used up this limit. Therefore, many banks have asked the Government to increase the ratio to 49 percent to help them increase capital.
With the ratio increase, the State would still hold a dominant stake of 51 percent at banks and can also control banks through the Law of Credit Institutions and other legal regulations, BVSC experts said, adding the rise would not only help Vietnam meet commitments in joining the international economic integration but also attract large capital of foreign investors to local banks./.

Source: VNA