The State Bank of Vietnam (Vietnamese: Ngân hàng Nhà nước Việt Nam) is the central bank of Vietnam.
The development of the Vietnam banking system has closely linked with the national cause of revolution and construction.
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. Its functioned as both the central bank of the whole Indochinese region (Vietnam, Laos and Cambodia) and a commercial 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. The task was fulfilled by 1950, when the anti-French resistance war grew stronger, obtaining many triumphs in the battled field, and expanding the liberalized region. In this context, the development required economic and financial activities to be improved and promoted to meet new demands.
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 in order to carry out five urgent missions: issuing banknotes, managing treasury, carrying out credit policy in order to facilitate production and coordinating with the trade authorities for monetary management and struggling against the enemy.
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. Following the liberation of the South in 1975, the takeover of the Republic of Vietnam National Bank and private capitalist banks was a starting point of banking activities all over the country under the banking activity regime of a central planning economy. In July 1976, the country was officially unified and the Socialist Republic of Vietnam was founded.
On the basis of important changes in the revolutionary directives and tasks as well as the functions, tasks and organizational structure of the State Bank of Vietnam, the development process of the Vietnam banking system could be divided into 4 periods as follows:
- From 1951 to 1954: The Vietnam National Bank was founded and had relatively independent operations in the financial system, implementing the first important duties assigned by the Communist Party of Vietnam and the Government, i.e, issuing banknotes, retrieving poor quality banknotes, managing state treasury to help increase revenue and reduce expenditure, unifying fiscal management, developing banking credit to serve commodity production and circulation, and enhancing state – owned economic sector and fighting against the enemy in the monetary field.
- From 1955 to 1975: The whole country launched the anti-American resistance war; the North carried out socialist construction and made great efforts to support the revolutionary liberation of the South; all socio-economic activities had to move along with new demands. In this period, the Vietnam National Bank carried out the following principal tasks:
- Reinforce the money market, stabilize prices, contain inflation and create favorable conditions for the economic recovery.
- Promote the provision of credit for food production, enhance the recovery and development of agriculture, industry and trade, thus contributing to the implementation of the two strategic tasks, namely the development of the socialist economy of the North and liberation of the South.
- From 1975 to 1985: This is the ten-year postwar economic recovery after the liberation and reunification of the country. As such, Vietnam built up the new banking system under the new government, establishing a country – wide unified banking system and liquidating the banking system of the previous government in the South. Accordingly, the Vietnam National Bank of the government of the Republic of Vietnam (in the South) was nationalized and unified with the system of the State Bank of Vietnam, carrying out together the task of currency unification in the country. It issued new kinds of banknotes of the Socialist Republic of Vietnam and revoke the old banknotes in both the South and the North in 1978. In the late 1980s, basically, the state banking system did not implement the market – oriented monetary, but still served as a budget tool. Changes in the quality of the banking system operations, the gradual move to market – based operations only started since late 1980s.
- From 1986 up to 1990:
The state management function was gradually separated from the commercial credit and monetary functions. The new mechanism of banking operations was built up and gradually improved. In May 1990, the Ordinance on the State Bank of Vietnam and ordinance on banking, credit co-operatives and finance companies, were enacted, thereby officially changing the operation mechanism of the banking system of Vietnam from one-tier to two – tier system, in which each tier’s roles and responsibilities are clearly defined as follows:
Together with the process of reforming operational mechanism of the banking system, a series of second- tier specialized commercial banks with many different ownership forms such as: state-owned commercial banks, joint-stock banks, joint-venture banks, representative offices or branches of foreign banks, credit co-operatives, people’s credit funds and finance companies.
- SBV implements the state management of currency trading, credit, payment, foreign exchange and banking; implements the task of a central bank, the only bank authorized to issue banknote; and acts as the bank of banks, and the bank of the state. The central bank is the agency that organizes the management of monetary policy, taking the task of stabilizing currency value as the main objective and govern specific management policies of the system of commercial banks.
- The tier of commercial banks in currency circulation, credit, payment, foreign exchange and banking services in the whole national economy comprises banks and non-bank financial institutions.
- From 1991 up to now: To implement the CPV's directions and policies during the period of modernization and industrialization, Vietnam’s banking system has been continuously reformed and improved to ensure its important role in national construction and economic development in the new millennium. The following benchmarks have direct links with and enhance the strong reform of banking activities.
1993: Normalizing credit relations with international monetary organizations (IMF, WB, ADB).
1995: Resolution on removing sales tax on banking activities was passed by the National Assembly; the bank for the Poor was founded.
1997: The Law on the State Bank of Vietnam and the Law on Credit institutions were passed by the 10th National Assembly of the Socialist Republic of Vietnam (dated 2/12/1997) and became effective from 1/10/1998; the Mekong Delta Housing Development Bank was established (Decision No 769/TTg dated 18/9/1997).
1999: The Deposit Insurance of Vietnam was established (on 9/11/1999).
2000: Financial and organizational restructure of the state-owned commercial banks and joint - stock commercial banks.
2002: offered VND denominated lending rate of credit institutions were liberalized - The last step to completely liberalize the credit market's interest rates.
2003: Comprehensive Operational restructure of commercial banks in line with international standards; the Vietnam Bank for Social Policies was set up as the successor to the Bank for the Poor in order to separate policy credit from commercial credit according to market mechanism; and starting to revise the Law on the State Bank of Vietnam.
2010: The 12th National Assembly (NA) passed the Law on the State Bank of Vietnam (SBV) and the Law on Credit Institutions at its seventh session in Hanoi on June 16, 2010. The two laws became effective on January 1, 2011. Accordingly, SBV is a ministerial agency of the Government and acts as the central bank of the Socialist Republic of Vietnam.
During the 50 years of development, the banking system has contributed to the achievements of the revolution and national security and development.
To acknowledge the remarkable contributions of the banking sector to the two resistance wars, the Communist Party and the Government have awarded many noble titles to collectives and individuals serving in the banking system. On the occasion of the 45th banking anniversary in 1996, a Ho Chi Minh Order was bestowed on the banking sector. 94 individuals were awarded the Ho Chi Minh Order or Independence Orders of the 1st, 2nd and 3rd classes.
In the 4th festival of patriotic emulation of the banking sector in September 2000, banking collectives and individuals were given “Hero of Labour” titles, orders and certificates of merit for their achievements in the process of Doi Moi (reform). Notably, on the occasion of the 55th banking anniversary on May 6, 2006, the Gold Star Order, the highest award of the nation, was bestowed on the banking sector. The Ho Chi Minh Order was awarded for the second time to the banking sector on the occasion of the 60th banking anniversary on April 27, 2011.
Up to now, the banking system has become a decisive and active factor in the process of completely renovating the national economy towards modernization and industrialization as well as operating under the socialist-orientated market macro-management.
Vietnam’s currency civilization has gradually been recognized through value stability, diversity in non – cash payment method and constant improvement of management technology as well as modern business technology for best serving the public. As an important factor of socio – economic development strategy of the country in the new period of challenges and trends of international integration and globalization, the State Bank of Vietnam will surely impress the Communist Party, domestic customers and international business colleagues with its strong growth and rapidly modernized directed changes in accordance with international standard as well as continuous improvement of remarkable banking traditions.
The State Bank of Vietnam (hereinafter referred to as the State Bank) is a ministerial agency of the Government, which performs the State management of monetary and banking activities and acts as the Central Bank of the Socialist Republic of Vietnam; and performs the State management of public services under the jurisdiction of the State Bank.
The State Bank shall perform the tasks and powers prescribed in Decree No. 178/2007/ND-CP of the Government dated December 3rd, 2007, defining the functions, tasks, powers and organizational structures of the ministries and ministerial-level agencies as well as the following specific tasks and powers:
- To submit to the Government bills, draft resolutions of the National Assembly, draft ordinances and draft resolutions of the Standing Committee of the National Assembly; and draft decrees of the Government in accordance with the approved annual law – making plans of the State Bank ; and projects and schemes assigned by the Government and the Prime Minister.
- 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; and draft decisions, instructions and other legal documents under the jurisdiction of the Prime Minister in line with law.
- 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; and to publicize, disseminate and educate all the legal documents related to the areas under the State management of the State Bank.
- To formulate the national monetary plans for the Government to submit to the National Assembly for approval; to utilize interest rates, exchange rates, reserve requirement, open market operations and other instruments in order to implement the national monetary policies; and to submit to the Government schemes on the development of the banking industry and credit institutions;
- To grant and revoke licenses to or from credit institutions with the exceptional cases as decided by the Prime Minister; to grant and revoke banking licenses to or from other institutions; to make decision on the dissolution, renaming, separation or merging of credit institutions; and to make guidelines on the conditions of establishment and operation of credit institutions.
- 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.
- In regard to foreign exchange management:
- 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.
- In regard to the development of the international payment balance:
- To collect, consolidate, compile, forecast and monitor the formulation and implementation of the international payment balance; and to make reports on the implementation of the international payment balance in line with law;
- To act as the lead entity in providing data of Vietnam’s international payment balance to domestic and foreign institutions in compliance with law.
- In regard to the management of the borrowing and repayment of foreign loans by resident economic and credit institutions and individuals in accordance with law:
- To conduct State management of the borrowing and repayment of foreign loans by the enterprises and other institutions of the public sector; to monitor the borrowing and repayment of foreign loans by the private sector; to guide and supervise the guaranty for foreign debts by commercial banks and other institutions which are allowed to provide guaranty in line with law;
- To take the lead and co-ordinate with the relevant authorities to develop the annual quota of foreign commercial loans by the enterprises and other institutions of the public sector and forecast the annual level of foreign loans by the private sector for consolidation by the Ministry of Finance to be submitted to the Prime Minister for approval;
- To take the lead and coordinate with the Ministry of Finance to manage the annual quota of foreign commercial loans by other enterprises and institutions approved by the Prime Minister;
- To consolidate the annual borrowing and repayment of foreign loans by enterprises and other institutions of the public and private sectors to be reported to the Prime Minister with C.C. reports to the Ministry of Finance for annual consolidation of foreign borrowing and repayment of the whole country;
- To guide and conduct registration of foreign loans by enterprises and other institutions of the public and private sectors (including the Government-guaranteed loans);
- To control cash flows related to the borrowing and repayment of foreign loans for compiling the international payment balance, managing monetary policies and controlling foreign exchange;
- To set up the early warning system for debt risks of the corporate sector;
- To conduct other tasks and powers of managing the borrowing and repayment of foreign loans in compliance with law.
- In regard to the lending and recovery of foreign debts of the Government and economic and credit institutions:
- To co-ordinate with the Ministry of Finance to submit to the Prime Minister for decision on the amount, borrowing sources, types, beneficiaries and mechanism of lending and recovery of foreign debts of the Government;
- 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.
- In regard to negotiating, signing and joining international monetary and banking treaties:
- To co-ordinate with the relevant authorities for preparing, negotiating, signing or joining international treaties on ODA with the World Bank (WB), the Asian Development Bank (ADB), the International Monetary Fund (IMF) under the authorization of the Government;
- To periodically compile and inform the Ministry of Finance, the Ministry of Planning and Investment, and the relevant agencies about the disbursement and payment via the accounts of ODA programs and projects with commercial banks.
- Banking and monetary institutions under the authorization of the President or the Government:
- 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 take the lead in coordinating with the relevant ministries to implement the constitutions and policies of IMF, WB, ADB, IIB, IBEC and the programs for macro- economic stabilization financed by IMF, WB and ADB in Vietnam ; to provide periodical and unexpected data as stipulated by the aforesaid institutions; to make recommendations of policies and measures to the Government for promotion of the relations with the aforesaid institutions.
- In regard to the implementation of the functions of the Central Bank:
- 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;
- To organize the payment system via banks; to conduct state management of payment activities; to provide payment services; and to pursue the policy of encouraging and strengthening non-cash payment under the approval of the relevant authorities;
- To act as an agent for, and provide banking services to the State Treasury;
- To develop the banking information system and provide banking information services; to manage credit information organizations; and to conduct credit rating for Vietnamese enterprises;
- To perform other functions of the Central Bank.
- To make decision on and carry out investment projects under its authority; to evaluate and inspect the implementation of investment projects in the banking field in accordance with law;
- To manage its allocated financial resources and assets as stipulated by law; and to use part of the revenue from foreign exchange, monetary and banking operations in service of its own professional activities in accordance with law;
- To promote international cooperation in the monetary and banking field in accordance with law;
- To organize and conduct scientific and technological research and application and environmental protection in the banking field in accordance with the law;
- To make decision on specific directions and measures and guide the implementation of operational mechanism of public-service institutions in the monetary and banking field; and to perform the State management over operations of non-productive entities under its jurisdiction in accordance with law;
- To act as the owner of the state capital in the state-owned enterprises :
- To submit the plan on establishing, restructuring and divesting the state-owned enterprises under the management of the State Bank to the Prime Minister for approval and guide the implementation of the approved plan;
- To approve under its authority or submit to the Prime Minister for approval the charters of the enterprises operating in the banking field;
- To submit to the Prime Minister for appointment, or to appoint under its authority the members of the Board of Directors, General Directors and Deputy General Directors of the State-owned Credit Institutions and other State-owned enterprises under its management.
- To guide and monitor activities of associations and non-governmental organizations operating in the fields under the management of the State Bank; and to handle or to make recommendations to the relevant authorities to handle violations committed by associations and non-governmental organizations in compliance with law.
- To inspect, investigate, and handle the complains and denunciations and violations related to banking and monetary field under its jurisdiction ; to fight against corruption, red tape, bureaucracy and negative doings; and to conduct thrift and anti-waste in line with law.
- To make decision on and guide the implementation of the administrative reform program of the State Bank in line with the objectives and agenda of the Government’s administrative reform program and the direction of the Prime Minister; to make decision on and guide the renovation of the working modality, office modernization and IT application in service of daily operations of the State Bank;
- To manage ranks and grades of specialized staff and officials in the banking field:
- To organize upgrading-civil service exams; and to promulgate professional criteria for staff in accordance with law;
- To develop professional criteria of civil servants in the banking sector for the Ministry of Home Affairs to issue.
- To manage the organizational apparatus and staff; to employ, train, promote, relieve, move and rotate and to apply the regime of pension, reward, penalties, salaries and other regimes for the staff under the management of the State Bank.
- To submit to the Prime Minister for issuance of the regulations on wage policies, recruitment and employment of civil servants in accordance with the special characteristics of the State Bank;
- To perform other tasks as well as powers assigned by the Government and/or the Prime Minister in line with law.
- Monetary Policy Department;
- Foreign Exchange Department;
- Payment Department;
- Credit Department;
- Monetary Statistics and Forecasting Department;
- International Cooperation Department;
- Internal Auditing Department;
- Legal Department;
- Accounting and Finance Department;
- Personnel Department;
- Emulation and Reward Department;
- SBV Office;
- Banking Information Technology Department;
- Issue and Vault Department;
- Administration Department;
- Banking Operation Center;
- Financial Supervision Agency;
- Branches in provinces and the cities under the central government.
- Representative Office in Ho Chi Minh City;
- Banking Strategy Institute;
- Credit Information Center;
- Banking Times;
- Banking Magazine
- Banking Training School
The departments numbered 1 to 19 in this article shall assist the Governor of the State Bank to perform the State management functions and the functions of the Central Bank; the entities numbered 20 to 24 are non-productive ones under the State Bank.
The departments in the organizational structure of the State Bank shall consist of various divisions; and the Issue and Vault Department and the Banking Information Technology Department shall set up their sub-departments in Ho Chi Minh City.
The Governor of the State Bank shall report to the Prime Minister to issue the decision prescribing the functions, tasks, powers and organizational structure of the Financial Supervision Agency and another decision on the list of other non-productive entities under the State Bank.
- Currency of Socialist Republic of Vietnam:
- Vietnamese Dong
- List of Central Banks:
- Central Banks
- Official website of State Bank of Vietnam:
- Ministry of Finance of The Socialist Republic of Vietnam: