The Governor of the State Bank of Vietnam (SBV) has decided to allow the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank, coded VCB) to carry out some foreign exchange transactions with foreign banks to support liquidity and prevent risks. The duration of these other foreign exchange transactions is only two years.
Specifically, the bank will carry out foreign exchange activities including foreign currency swap transactions with foreign banks for the purpose of supporting foreign currency liquidity for Vietcombank; forex forward and swap transactions with foreign banks for the purpose of preventing risks for transactions which have been concluded by Vietcombank with authorised domestic credit organisations. At the same time, Vietcombank will be entitled to carry out currency call option transactions with foreign banks for the purpose of preventing risks for transactions that Vietcombank have entered into, in accordance with laws and regulations related to customers and authorised credit organisations.
Vietcombank is responsible for developing and taking responsibility for the content of internal regulations on professional procedures and risk management procedures for foreign exchange activities as aforementioned in this Decision. The State Bank also emphasized that the bank can only perform the aforementioned forex activities when it has developed an internal process for professional procedures and carried out foreign exchange transactions in accordance with established internal procedures. Transactions must be controlled in accordance with current regulations on internal inspection, control and audit.
When performing the above mentioned forex activities, Vietcombank must strictly abide by the current regulations on foreign exchange management and relevant law provisions.
Vietcombank is taking the leading position in business market share and foreign currency service. Deposits in market 1 alone (by economic organisations and the people) reached approximately 130 trillion dong at the end of 2017 and 109 trillion dong at the end of 2016.
This is also the only bank to play an intermediary role in the largest ever transaction ($5 billion) between Vietnam Beverage and the Ministry of Industry and Trade at the end of 2017.
