In fact, joint-stock banks’ massive increases in registered capital have required them to expand the scale of operations so as to ensure a high quality of banking services for customers and maintain high rates of dividend.

According to Director of the Technological and Commercial Join-stock Bank, (Techcombank) Nguyen Duc Vinh said, ”Thanks to the attractiveness of commercial banks’ shares, capital mobilization is not a difficult task but the question is how to expand the scale of operation while ensuring the quality of human resources to avoid affecting the quality of services for customers.

Focusing on capital mobilization and loan provision, commercial banks are facing difficulties as the amount of deposits by customers has slightly increased despite of the opening of more bank branches and transaction offices.”

As Habubank Director Bui Thi Mai put it, the amount of capital can increase by some hundreds of percent but work pressure will be some thousands of percent heavier.

According to Kieu Huu Dung, Director of the Department for Banks under the State Bank of Vietnam (SBV), several banks decided to increase registered capital massively to make a profit when share prices of stock holders surged but they neglected public benefits. Some other banks with scant operation network and poor services also issued shares instead of focusing on networks expansion and service development to mobilize capital for the national economy.

In order to control the increase in registered capital of joint stock commercial banks SBV Governor Le Duc Thuy asked directors of SBV branches in provinces and cities to get his approval before adopting plans to increase registered capital over the level of VND500 billion in 2007 presented by new rural joint stock commercial banks and urban joint stock commercial banks. In addition, other joint stock commercial banks also need approval when they increase registered capital surpassing VND1,000 billion.

Mr Thuy also urged directors of SBV branches in provinces and cities to consider and assess plans to increase registered capital of joint stock commercial banks based on assessments of objective demand for increasing registered capital. It is also essential to increase financial capacity so as to ensure safety when joint stock commercial banks expand their operations. Increase in the registered capital of the banks’ shareholders must be considered along with the business efficiency, administration, management and supervision capacity of the banks when expanding the scale of operations, he added.