The Development Assistance Fund (DAF) held a ceremony in Hanoi on May 30 to welcome the Prime Minister decision No 108/2006/QD-TTg dated May 19, 2006 on establishing the Vietnam Development Bank (VDB).

Speaking at the ceremony, Prime Minister Phan Van Khai praised efforts made by the staff and cadres from the DAF (now VDB) in recent times.

He said the VDB will not operate for profit and its payment liquidity will be secured by the Government. The obligatory reserve proportion is 0 percent, the bank will have a statutory capital of VND5 trillion and will be exempt from paying taxes and State budget collections.

PM Khai asked the VDB and Bank of Social Policies to continue implementing the target and poverty reduction and hunger elimination by building irrigation works in rural areas and socio-economic infrastructure in remote areas.

As Vietnam’s capital market has not developed, the VDB should implement the issuance of bonds, mobilise capital sources for projects, improve credit quality, overcome slow disbursement and reduce the rate of arrears. The Ministry of Finance, the State Bank of Vietnam, the Ministry of Planning and Investment and other relevant agencies should devise proper solutions to such problems.

The VDB should contribute to promoting exports in the future and serve as an important tool of the State to orient investment in key socio-economic projects and major products, which require a slow payback period.

The current situation has posed new requirements in the management of the State’s human resources to implement socio-economic targets for 2006 and the 2006-2010 period. In the future, the VDB should continue to perfect its policies to mobilise human resources for development.