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| NA ratifies amended laws on State Bank, credit organisations |
| 18-JUN-2010 Intellasia | Vietnamnews |
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| 18 Jun, 2010 - 7:00:00 AM |
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The National Assembly yesterday ratified the amended laws on State Bank and credit organisations.
Nearly 85 percent of NA deputies agreed with the amended Law on the State Bank, meaning that the law will come into effect from January 1, 2011.
According to the law, the State Bank of Vietnam is a ministry- level body and confirmed as the central bank of the country.
In relation to interest rates, the draft law on State banking stated that the State Bank would announce interest rates and manage monetary policies. In case of unusual developments on the monetary markets, the State Bank will decide the management mechanism on interest rates among credit organisations and among credit organisations with clients.
The NA Standing Committee said that allowing credit organisations to apply a negotiated interest rate mechanism did not mean letting interest rates float freely in the market.
Ha Van Hien, chair of the NA's Economics Commission, said that the State Bank would be in charge of adjusting the amount of money supply in the economy, through which it could decide the interest rate to stabilise the value of the currency.
Therefore credit organisation interest rates fall under the control of the State Bank.
The State Bank is also the governmental body that will announce the interest rate used as the foundation for settling conflicts and fighting loan sharking.
The prime minister and the Governor of the State Bank will decide the use of tools and management measures to carry out national monetary goals.
The law also allows the State Bank to contribute capital to the establishment of non-profit enterprises, such as a national mint. The State Bank is not allowed to contribute capital to enterprises operating in fields beyond their key competencies.
In terms of the State foreign currency reserve fund, some deputies said that the fund should be put under the management of the NA.
Hien explained that the fund was mainly used for intervening in the foreign currency market to stabilise the value of the domestic currency. This is carried out through selling foreign currency to credit organisations and to the State budget to pay foreign loans.
Therefore it would be rational that the State Bank is in charge of managing the fund, he said.
In the afternoon session, the NA also ratified the amended Law on Credit Organisations.
According to the new law, credit organisations are allowed to set and announce interest rates for attracting capital. They can also negotiate with clients on interest rates and credit issuance fees.
Negotiations in interest rates for these organ-isations must be within the limit allowed by the law.
The law states that an individual can only possess shares of no more than 5 percent of the charter capital of a credit organisation, while institutional shareholders can possess shares of no more than 15%, except in exceptional cases.
The law will come into effect on January 1, 2011.
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