Viet Kieu (overseas Vietnamese) who in mid-November attended a meeting with Prime Minister Nguyen Xuan Phuc on economic development mentioned the establishment of a Viet Kieu-invested bank.

In fact, the suggestion was made 25 years ago. However, such a bank could not be set up at that time because of unfavorable conditions. The laws did not allow the establishment of a domestic bank with capital contribution from foreign shareholders.

However, with the current legal framework, according to Nguyen Tri Hieu, a respected banking expert, who is also a Viet Kieu, the establishment of the bank is possible. There are six foreign-invested banks operating in Vietnam.

The second favorable condition, as Hieu said, is the improved financial capability of overseas Vietnamese after the last 25 years. He estimates that the total income of overseas Vietnamese around the world makes up 50 percent of Vietnam’s GDP.

With the Vietnamese overseas community of 4.5 million members, the financial capability is significant.

And third, the government of Vietnam is now encouraging overseas Vietnamese to come to Vietnam to invest and contribute to the country’s development.

Vietnam needs a commercial bank set up in accordance with international standards, including the labor force, infrastructure, information technology and financial services.

Analysts believe that the current conditions for the establishment and operation of a Viet Kieu-invested bank in Vietnam are more favorable than 25 years ago.

Regarding the operation mode, Hieu said the Viet Kieu-invested bank must get permission from the State Bank to operate. It will be a bank with domestic operations like other Vietnamese banks. 

It will have a division in charge of giving advice to Viet Kieu to support their investment in Vietnam.

“I am optimistic about the idea on a Viet Kieu’s bank. Many overseas Vietnamese showed their interest in the idea at a meeting with Prime Minister Phuc,” Hieu said. “I am meeting with some other people who want to establish the bank to have further discussions about this.”

He went on to say that the only difference between the Viet Kieu-invested bank and other commercial banks is that the former will serve as a bridge to connect foreign investors and domestic businesses.

An analyst said that such a bank would present challenges to domestic businesses, especially startups and medium-sized and small- enterprises, which find it difficult to access bank loans.

He said that the bank would be the place where a foreign investor would come to learn about the Vietnamese business environment.

Thanh Mai