Chuyên đề The State Bank Of Vietnam

Topic 5: The State Bank Of Vietnam History of State bank of Vietnam Before the August Revolution in 1945, Vietnam was a feudal-colonial country under the French colonialists’ rule. The banking and credit system was founded and protected by the French colonialists through the Indo China bank The bank was an effective tool for the colonial policy of the French government and enriched the French capitalists. Thus, one of the key tasks of the August Revolution then, was to build an independent and autonomous monetary and banking system On the basis of the new economic and financial policy set out in the 2nd Congress of the Vietnam Workers’ Party (February,1951), President Ho Chi Minh signed Decision 15/SL on the establishment of the Vietnam National Bank – Bank of the first people’s democratic state in Southeast Asia. History of State bank of Vietnam The foundation of the Vietnam National Bank was the result of the struggle process to develop an independent, and autonomous monetary and credit system, marking a new development step, i.e, changing the quality of the national monetary and credit sector. Pursuant to Circular 20/VP – TH issued by the General Director of Vietnam National Bank under authorization of the Prime Minister on January 21st, 1960, the Vietnam National Bank was renamed as the State Bank of Vietnam, in accordance with the 1946 Constitution of the Democratic Republic of Vietnam. In July 1976, the country was officially unified and the Socialist Republic of Vietnam was founded. Now…State Bank of Vietnam is located in Hanoi Organizational structure Organizational structure of State Bank of Vietnam includes 24 departments: 1. Monetary Policy Department. 2. Foreign Exchange Department. 3. Payment Department. 4. Credit Department. 5. Monetary Statistics and Forecasting Department 6. International Cooperation Department. 7. Internal Auditing Department. 8. Legal Department. 9. Accounting and Finance Department. 10. Personnel Department. 11. Emulation and Reward Department. 12. SBV Office Organizational structure 13. Banking Information Technology Department. 14. Issue and Vault Department. 15. Administration Department. 16. Banking Operation Center. 17. Financial Supervision Agency. 18. Branches in provinces and the cities under the central government. 19. Representative Office in Ho Chi Minh City. 20. Banking Strategy Institute. 21. Credit Information Center. 22. Banking Times 23. Banking Magazine 24. Banking Training School. Governor of State Bank of Vietnam Deputy Governors Departments 63 municipal and provincial branches Representative Office in HCM city State non-productive units Monetary Policy Department Credit Department International Cooperation Department Foreign Exchange Department Payment Department Legal Department Internal Auditing Department Accounting and Finance Department Monetary Statistics and Forecasting Department Personnel Department Issue and Vault Department Banking Operation Centre Financial Supervison Agency SBV Office Banking Information Technology Department Emulation and Reward Department Administration Department Banking Strategy Institute Banking Times Banking Magazine Credit Information Centre Banking Training School Roles of State Bank of Vietnam in the economy Promoting monetary stability and formulate monetary policies. Promoting institutions’ stability and supervise financial institutions. Providing banking facilities and recommend economic policies to the government. Providing banking facilities for the financial institutions. Managing the country’s international reserves. Printing and issue banknotes. Supervising all commercial banks’ activities in Vietnam. Lend the state money to the commercial banks. Issuing government bonds, organize bond autions. Be in charge of other roles in monetary management and foreign exchange rates Tasks and powers of State Bank of Vietnam To submit to the Prime Minister the development strategies and schemes, long-term, five-year and annual plans; national targeted programs, action plans and important projects in the banking sector. To promulgate circulars, decisions and directives under the jurisdiction of the State Bank. To direct, guide, inspect and conduct the implementation of the approved legal documents, strategies, plans and important projects under the jurisdiction of the State Bank. To monitor and supervise  banking activities; to control credit activities; and to handle all violations in the  monetary and banking activities in accordance with law. Tasks and powers of State Bank of Vietnam To manage the current transactions, capital transactions and  foreign exchange spending  in the Vietnamese territory in accordance with law. To manage the State foreign exchange reserves; and to control international reserves. To determine the exchange rates of Vietnam dong versus foreign currencies; to develop foreign currency market; and to develop foreign exchange mechanism  to be submitted to the Prime Minister for approval. To collect, consolidate, compile, forecast and monitor the formulation and implementation of the international payment balance. Tasks and powers of State Bank of Vietnam To act as the lead entity in providing data of Vietnam’s international payment balance to domestic and foreign institutions in compliance with law. To stipulate the conditions, beneficiaries, forms and mechanism of lending and recovery of foreign loans for resident credit institutions. To stipulate the conditions and  procedures of granting licenses and submit to the Prime Minister to decide the choice of  resident economic institutions  to lend and recover foreign loans. To conduct other tasks and powers of lending and recovering foreign loans in accordance with law. Tasks and powers of State Bank of Vietnam To conduct the functions of a member of the International Monetary Fund (IMF), the World Bank (WB), the Asian Development Bank (ADB), the International Investment Bank (IIB), and  the International Bank for Economic Cooperation (IBEC) To make arrangement for  minting, preservation and transportation of money; and to carry out the operations of issuance, withdrawal, replacement and destruction of money; To carry out refinancing in order to provide short-term credit and payment instruments for the economy; To regulate the money market; and to carry out the open-market operations… Monetary Policies Open market operations Reserve requirements rate Discount rate Interest rate Comparision between State Bank of Vietnam and Federal Reserve System in US Similarities: Conduct the nation’s monetary policy. Manage account of Treasury. Maintain the stability of financial system. The chairman of the Board of Governors is appointed for four-year term. Open market operations to control the level of reserves in the depository system. Setting reserve requirements for depository institutions. Setting the discount rate for lending reserves. All of them supplies services for Treasury and government securities. Differences: Federal Reserve System Not issue money (Congress issue money and set its value) Independent within the Government Most of money of Fed is paid into the Treasury Conduct monetary policy by three tools: open market operations, reserve requirements rate, discount rate Manage some commercial banks if they are members Be audited by the GAO (General Accounting Office) Not reserve foreign currencies because US dollar’s a strong currency There’re 12 reserve banks all over US. The State Bank of Vietnam Coin and issue money Dependent within the Government State Bank holds money of Treasury. Conduct monetary policy by four tools: open market operations, reserve requirements rate, discount rate, interest rate. Manage all commercial banks. Be audited by the Finance-Accounting Department belongs to Ministry of Finance. Reserve foreign currencies. There’re 63 municipal provincial branches.