With 12 foreign banks with aggregate working capital approaching $1 billion, Vietnam is experiencing strong competition for banking customers and business sectors with the greatest potential. This is a consequence of Vietnam’s admission into the World Trade Organization three years ago.
Meanwhile domestic banks, concentrating on competing with each other, have largely been oblivious to development of foreign banks, partly because the foreign banks have been slow to increase branches and operate in provinces high in exports and industry — such as Ba Ria-Vung tau, Dong Nai, Binh Duong, Can Tho, Long An and Tien Giang.
But overall, Vietnam’s WTO commitment to open up the banking system led to gradually increasing competitive pressure on domestic banks and forced Vietnam to move toward international standards on operations of commercial banks — especially accounting and regulatory processes.
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