“It is imperative that the sector should build a new banking law and a law on credit organisations to be submitted to the National Assembly for approval in 2007,” said Mr Khai at a ceremony in Hanoi on May 4 to mark the 55^th anniversary of the banking sector.

The Government leader praised the sector for its contributions to national construction and development in the past and at present.

Among other tasks in the future, Mr Khai said the sector should renew the interest and exchange rate mechanisms, and banking inspection activities in line with international norms, increase transparency and combat bureaucracy and corruption, accelerate the equitisation of commercial banks and develop non-banking financial organisations.

In addition to the achievements, Governor of the State Bank of Vietnam (SBV) Le Duc Thuy frankly spoke of wrong doings for which the banking sector paid a high price in the past, including the collapse of people’s credit organisations in 1989-1990, big losses in economic court cases and bad debts as well as insecurity in transactions in recent years.  

“These are valuable lessons and big challenges for the banking sector in the process of renewal, development and integration,” said Mr Thuy. ““We should draw lessons and solutions to prevent similar risks in the future.”

During the past 55 years, particularly in the past 20 yeas of the Doi Moi (Renewal) process, the banking sector has developed a large system of credit organisations, comprising five State commercial banks, a social policy bank and 36 joint stock commercial banks. It has also established 29 State Bank branches abroad, four joint venture banks, six financial companies, nine financial leasing companies, and more than 900 people’s credit funds.

After the Asian financial crisis in 1997, the banking sector was restructured comprehensively to have a system of State commercial banks. As a result, the operation and competitive capacity of the system of credit organisations has improved significantly. Up to the end of 2005, their capital mobilisation and lending capacity increased by 30 and 40 fold respectively compared to 1990. Modern technology has been applied in banking transactions and services to better meet the requirements of enterprises and the population.

The State Bank of Vietnam has played an active role in expanding international co-operation, bilaterally and multilaterally. By the end of 2005, the World Bank and the Asian Development Bank (ADB) had committed more than US$9 billion worth of loans and credits for 108 national development programmes and projects. To date SBV and other credit organisations have established co-operation with more than 2,000 banks of more than 100 countries in the world.

On this occasion, the Party and State awarded the sector the Gold Star Order in recognition of its contributions to national development. Vice State President Truong My Hoa pinned the order on the sector’s traditional flag.