The World Bank (WB) and the State Bank of Viet Nam (SBV) on October 1 inked a grant agreement worth US$2.2 million, sponsored by the Swiss Government, to launch strengthening banking sector soundness and development project. 

The World Bank (WB) and the State Bank of Viet Nam (SBV) ink a grant
agreement worth US$2.2 million, sponsored by the Swiss Government,
to launch strengthening banking sector soundness and development project,
October 1, 2019 - Photo: VGP

 Speaking at the ceremony, Deputy Governor of the SBV Dao Minh Tu said that the project aims to enhance the strength and resistance of the banking system by improving capacity of the SBV in addressing obstacles in the banking system’s structure. 

The project will focus on four key pillars including the completion of the legal framework and regulations of the banking sector, the framework of inspection, supervision and management of banks, addressing with bad debt and supporting banks and financial stability and macro-safety framework. 

At the ceremony, WB Country Director for Viet Nam Ousmane Dione said a sound banking system is of great significance to the sustainable economic development of a country.

By sharing experience in the development of the system, the WB could help the SBV to successfully launch its structural reforms, he added.

Within five years from 2019-2023, the WB will join hand with the SBV to strengthen legal framework for the banking system, especially the Law on Credit Institutions and the National Assembly’s Resolution No. 42/2017/QH14 on tackling bad debts.

The project will also look to enhance SBV’s forecast and monitoring skills in line with global standards and practices, as well as develop bond market and raise the capacity of the Viet Nam Asset Management Company.

The grant is part of the US$ 8 million-project titled “Strengthening banking sector’s soundness and development” managed by Switzerland’s State Secretariat for Economic Affairs and the WB.