What are banking operations of commercial banks in Vietnam? What are other business activities of commercial banks in Vietnam?

What are banking operations of commercial banks in Vietnam?

Pursuant to Article 107 of the Law on Credit Institutions in 2024 stipulating banking operations of commercial banks in Vietnam:

- Receiving demand deposits, term deposits, savings deposits and deposits of other types.

- Issuing deposit certificates.

- Extending credit by:

+ Lending;

+ Discounting or re-discounting;

+ Bank guarantee;

+ Issuance of credit cards;

+ Domestic or international factoring for banks licensed for international payment;

+ Letter of credit;

+ Other forms of credit extension according to regulations of the Governor of the State Bank;

- Opening payment accounts for clients.

- Providing payment instruments.

- Supplying the following A2A payment services:

+ Domestic payment services, including check, payment order, collection order, money transfer, bank card, and collection and payment services;

+ International payment services after obtainment of the State Bank's approval and other payment services according to regulations of the Governor of State Bank.

What are banking operations of commercial banks in Vietnam? What are other business activities of commercial banks in Vietnam? - image from internet

What are other business activities of commercial banks in Vietnam?

Pursuant to Article 114 of the Law on Credit Institutions in 2024 stipulating other business activities of commercial banks in Vietnam:

Other business activities of commercial banks

1. Commercial banks may carry out other business activities in accordance with regulations of the Governor of State Bank. To be specific:

a) Cash management, treasury services provided for credit institutions and foreign bank branches, asset management and preservation and leasing of security cabinets and safes.

b) Money transfer, collection, payment and other payment services without accounts;

c) Purchase and sale of the State Bank’s bills and corporate bonds; purchase and sale of other valuable papers, except for the valuable papers specified at Point a, Clause 2 of this Article;

d) Monetary brokerage services;

dd) Gold trade;

e) Other services related to factoring and letters of credit;

g) Consultancy on banking operations and other business activities specified in licenses.

...

As regulated above, commercial banks may carry out other business activities, including:

[1] Commercial banks may carry out other business activities in accordance with regulations of the Governor of State Bank. To be specific:

- Cash management, treasury services provided for credit institutions and foreign bank branches, asset management and preservation and leasing of security cabinets and safes.

- Money transfer, collection, payment and other payment services without accounts;

- Purchase and sale of the State Bank’s bills and corporate bonds; purchase and sale of other valuable papers, except for the valuable papers specified at Point a, Clause 2 of this Article;

- Monetary brokerage services;

- Gold trade;

-Other services related to factoring and letters of credit;

- Consultancy on banking operations and other business activities specified in licenses.

[2] Commercial banks may carry out other business activities in accordance with regulations of relevant laws. To be specific:

- Purchasing and selling debt instruments of the Government, government-backed bonds, and local government bonds;

- Issuing bonds;

- Conducting securities depository activities;

- Carrying out supervisory bank activities;

- Acting as agents that manage collateral of lenders which are international financial institutions, foreign credit institutions, credit institutions, foreign bank branches.

Is it permissible for commercial banks in Vietnam to open offshore payment accounts?

Pursuant to Article 109 of the Law on Credit Institutions in 2024 stipulating regulations on opening accounts for commercial banks in Vietnam:

Opening accounts

1. A commercial bank shall open a payment account at the State Bank and maintain a compulsory reserve amount on this account.

2. A commercial bank may open a payment account at a credit institution that may provide via-account payment services.

3. A commercial bank may open an offshore payment account in accordance with the law on foreign exchange.

As regulated above, a commercial bank may open an offshore payment account in accordance with the law on foreign exchange.

Best regards!