State Bank of Vietnam
Encyclopedia
The State Bank of Vietnam is the central bank
of Vietnam
.
was under French rule, the colonial government governed the Indochinese monetary system through Indochinese Bank
, which also acted as a commercial bank in French Indochina. After the August Revolution
in 1945, the government of the Democratic Republic of Vietnam gradually attempted to exercise a monetary system independent from France
. On May 6, 1951, president Hồ Chí Minh
signed decree 15/SL on establishment of National Bank of Vietnam (Ngân hàng Quốc gia Việt Nam). On 21 January 1960, the governnor of the bank signed an ordinance on behalf of the prime minister to rename the bank State Bank of Vietnam (Ngân hàng Nhà nước Việt Nam).
After the fall of Saigon
, the two Vietnams were united but not until July 1976 did the two countries’ administrations and institutions unite. In July 1976, the National Bank of Vietnam (the central bank of Republic of Vietnam) was merged into the State Bank of Vietnam.
In the Doi moi liberalization era, the banking system of Vietnam was reformed. New banks were created, starting with the Industrial and Commercial Bank of Vietnam and the Vietnam Bank for Agriculture in 1988, and the role of the State Bank was gradually narrowed to that of a central bank. In 1990, an ordinance reorganized the state bank and redefined its function as: "on behalf of the State, of managing money, credit, and banking operations throughout the country in order to stabilize a value of money, and is the only agency with power to circulate the currency of the Socialist Republic of Vietnam" While the State Bank continued to lend to state owned enterprises in the following years, its has now been largely superseded in the respect by other state-owned banks and by private banks.
đồng banknotes. There has been also a scandal in the deal of purchase of the state house by the governor Le Duc Thuy (in which he bought a house belonging to the bank for a price just 10 times less than the market value. However, the government annulled the deal when the press posted the news on the purchase). Nguyen Van Giau was named governor in August 2007.
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
.
History
When French IndochinaFrench Indochina
French Indochina was part of the French colonial empire in southeast Asia. A federation of the three Vietnamese regions, Tonkin , Annam , and Cochinchina , as well as Cambodia, was formed in 1887....
was under French rule, the colonial government governed the Indochinese monetary system through Indochinese Bank
Banque de l'Indochine
The Banque de l'Indochine was a minting and banknote-issuing bank established in Paris on January 21, 1875, for the territories of France in Asia.-History:...
, which also acted as a commercial bank in French Indochina. After the August Revolution
August Revolution
On August 19, 1945, the Việt Minh under Hồ Chí Minh began the August General Uprising Tổng Khởi Nghĩa, which was soon renamed the August Revolution . Whether or not this series of events should be called a "revolution" is disputable; what is clear is that, from August 19 onwards, demonstrations and...
in 1945, the government of the Democratic Republic of Vietnam gradually attempted to exercise a monetary system independent from France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
. On May 6, 1951, president Hồ Chí Minh
Ho Chi Minh
Hồ Chí Minh , born Nguyễn Sinh Cung and also known as Nguyễn Ái Quốc, was a Vietnamese Marxist-Leninist revolutionary leader who was prime minister and president of the Democratic Republic of Vietnam...
signed decree 15/SL on establishment of National Bank of Vietnam (Ngân hàng Quốc gia Việt Nam). On 21 January 1960, the governnor of the bank signed an ordinance on behalf of the prime minister to rename the bank State Bank of Vietnam (Ngân hàng Nhà nước Việt Nam).
After the fall of Saigon
Fall of Saigon
The Fall of Saigon was the capture of Saigon, the capital of South Vietnam, by the People's Army of Vietnam and the National Liberation Front on April 30, 1975...
, the two Vietnams were united but not until July 1976 did the two countries’ administrations and institutions unite. In July 1976, the National Bank of Vietnam (the central bank of Republic of Vietnam) was merged into the State Bank of Vietnam.
In the Doi moi liberalization era, the banking system of Vietnam was reformed. New banks were created, starting with the Industrial and Commercial Bank of Vietnam and the Vietnam Bank for Agriculture in 1988, and the role of the State Bank was gradually narrowed to that of a central bank. In 1990, an ordinance reorganized the state bank and redefined its function as: "on behalf of the State, of managing money, credit, and banking operations throughout the country in order to stabilize a value of money, and is the only agency with power to circulate the currency of the Socialist Republic of Vietnam" While the State Bank continued to lend to state owned enterprises in the following years, its has now been largely superseded in the respect by other state-owned banks and by private banks.
Corruption and scandals
The incumbent prime minister, Nguyễn Tấn Dũng, was a governor when he held the post of senior deputy prime minister but he handed the governor’s post to Le Duc Thuy later. There have been some public criticisms on the bad printing quality of the new polymerPolymer banknote
Polymer banknotes were developed by the Reserve Bank of Australia , Commonwealth Scientific and Industrial Research Organisation and The University of Melbourne and were first issued as currency in Australia in 1988. These banknotes are made from the polymer biaxially-oriented polypropylene ...
đồng banknotes. There has been also a scandal in the deal of purchase of the state house by the governor Le Duc Thuy (in which he bought a house belonging to the bank for a price just 10 times less than the market value. However, the government annulled the deal when the press posted the news on the purchase). Nguyen Van Giau was named governor in August 2007.
Functions and roles
The State Bank of Vietnam is a ministry-level body under the administration of the government; the bank governor is a member of the cabinet (equivalent to a minister in the cabinet). The governor is nominated by the prime minister subject to the approval of the National Assembly (Parliament). Vice governors are appointed by the prime minister on the recommendation of the governor. Both governor and vice governors serve a 5-year term. The State Bank of Vietnam defines its principal roles as http://www.sbv.gov.vn/eng_index.asp:- Promote monetary stability and formulate monetary policiesMonetary policyMonetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...
. - Promote institutions’ stability and supervise financial institutionFinancial institutionIn financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries...
s. - Provide banking facilities and recommend economic policiesEconomic policyEconomic policy refers to the actions that governments take in the economic field. It covers the systems for setting interest rates and government budget as well as the labor market, national ownership, and many other areas of government interventions into the economy.Such policies are often...
to the government. - Provide banking facilities for the financial institutions.
- Manage the country’s international reserves.
- Print and issue banknoteBanknoteA banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
s. - Supervise all commercial banks’ activities in Vietnam. Lend the state money to the commercial banks.
- Issue government bonds, organize bond auctions.
- Be in charge of other roles in monetary management and foreign exchange rates