State Bank of Vietnam: History, Functions, and Impact

The State Bank of Vietnam has a rich history that dates back to 1951. It was established by the National Assembly as the central bank of the country.

The State Bank of Vietnam is responsible for managing the country's monetary policy, regulating the financial system, and maintaining financial stability. Its main functions include setting interest rates, managing inflation, and supervising commercial banks.

As the central bank, the State Bank of Vietnam plays a crucial role in the country's economic development. Its decisions have a significant impact on the overall economy, affecting both individuals and businesses.

The State Bank of Vietnam has a rich history dating back to the French colonial era. It was then governed by Banque de l'Indochine, which also acted as a commercial bank in French Indochina.

After the August Revolution in 1945, the government of the Democratic Republic of Vietnam attempted to establish an independent monetary system. President Hồ Chí Minh signed decree 15/SL on establishment of Vietnam National Bank on 6 May 1951.

The bank underwent a significant name change on 21 January 1960, when its governor signed an ordinance renaming it the State Bank of Vietnam. This marked a crucial milestone in the bank's evolution.

The two Vietnams were united in 1976, and the National Bank of Vietnam was merged into the State Bank of Vietnam in July of that year. This brought an end to the separate banking systems of North and South Vietnam.

The Đổi Mới liberalisation era brought significant reforms to the banking system, with new banks being created, including the Industrial and Commercial Bank of Vietnam in 1988. This marked a shift towards a more market-oriented economy.

In 1990, an ordinance reorganised the State Bank, redefining its function to focus on managing money, credit, and banking operations.

The State Bank of Vietnam is a ministry-level body under the administration of the government. It's headed by the governor, who is a member of the cabinet and nominated by the prime minister with the approval of the National Assembly.

The governor serves a 5-year term, as do the vice governors, who are appointed by the prime minister on the recommendation of the governor.

The State Bank of Vietnam has a clear set of roles, which include promoting monetary stability and formulating monetary policies.

Here are the bank's principal roles:

The State Bank of Vietnam has a robust governance structure in place. The bank is led by the Governor, who is appointed by the Prime Minister.

The Governor is responsible for setting the overall direction and strategy of the bank. This includes overseeing the implementation of monetary policy and ensuring the stability of the financial system.

The State Bank of Vietnam also has a Board of Directors, which provides additional oversight and guidance to the Governor. The Board is composed of experienced individuals with expertise in finance and economics.

Governor is a vital position in the State Bank of Vietnam, responsible for overseeing the country's monetary policy and financial stability.

Nguyễn Lương Bằng was the first Governor of the State Bank of Vietnam, taking office in 1951.

He was followed by Lê Viết Lượng, who served as Governor from 1952 to 1964.

Lê Viết Lượng's tenure was the longest among the early Governors, lasting 12 years.

The table below shows the list of Governors of the State Bank of Vietnam, along with their term in office:

Nguyễn Thị Hồng is the current Governor of the State Bank of Vietnam, having taken office in 2020.

Resuming work after a break can be challenging, especially for leaders who have to pick up where they left off. According to research, it can take up to 2 weeks to get back into the swing of things.

A good leader knows how to make a smooth transition, ensuring that their team is equipped to handle tasks without them. This is achieved through effective delegation and clear communication.

Studies have shown that employees who are given autonomy and trust are more productive and motivated. In fact, a study found that employees who were given more autonomy showed a 14% increase in productivity.

To make a successful return to work, leaders should review their goals and priorities before resuming their duties. This will help them stay focused and ensure that they're tackling the most important tasks first.

A leader's ability to adapt to change is crucial in today's fast-paced business environment. By being flexible and open to new ideas, they can make informed decisions that benefit the organization.

The State Bank of Vietnam has faced its fair share of challenges and controversies over the years. One notable controversy involved former governor Le Duc Thuy, who bought a state house from the bank at a significantly low price, sparking public outcry.

The bank's printing quality has also been criticized, particularly with the introduction of new polymer banknotes. The government had to intervene to stop the deal after media reports highlighted the issue.

A former State Bank of Vietnam official was recently put on trial for accepting $5.2 million in bribes, highlighting the need for greater transparency and accountability within the institution.

Corruption has been a significant issue in Vietnam's banking system. The former governor of the bank, Le Duc Thuy, was involved in a controversy when he bought a house belonging to the bank at a significantly low price, sparking criticism and eventual government intervention.

In 2024, a former State Bank of Vietnam official was accused of accepting $5.2 million in bribes, highlighting the extent of corruption within the system. This case was linked to the 2022 arrest of Trương Mỹ Lan and the near failure of Sai Gon Joint Stock Commercial Bank.

The governorship of the bank has been marred by controversy, with former Prime Minister Nguyễn Tấn Dũng holding the position while also serving as senior deputy prime minister. This dual role has raised questions about the separation of powers and potential conflicts of interest.

The printing quality of new polymer đồng banknotes has also been criticized, but this issue is not directly related to corruption.

The banking sector in Vietnam is taking a proactive approach to green growth. Banks are accelerating the country's green transition by following the National Green Growth Strategy.

The Vietnamese government has outlined specific goals for green growth, and the banking sector is working to support these objectives.

In fact, the banking sector has taken steps to accompany the nation in achieving these goals.

The State Bank of Vietnam has consistently demonstrated strong market performance, with assets growing from 2.8 trillion VND in 2010 to 10.3 trillion VND in 2020.

This significant increase in assets has been driven by the bank's efforts to expand its lending and investment activities, with a focus on supporting the country's economic growth.

The bank's net interest income has also seen a notable rise, increasing from 2.2 trillion VND in 2010 to 6.5 trillion VND in 2020, a growth rate of over 195%.

The gold market has been a wild ride lately, with prices reaching all-time highs. Gold ring prices were quoted at up to 82.75 million VND (3,362 USD) per tael for buyers and up to 83.45 million VND per tael for sellers.

The State Bank of Vietnam (SBV) has been working closely with ministries and local authorities to implement comprehensive strategies to address significant price disparities and stabilise the gold market. This has included requiring licensed credit institutions and businesses to strictly comply with legal regulations regarding gold trading activities.

The SBV has also organised auctions of gold bars and directly sold gold to four State-owned commercial banks and SJC (Saigon Jewelry Company) to meet demand from individuals. This move has helped to narrow the disparity between domestic SJC gold bar and international gold prices.

The SBV has issued Inspection Decision No. 324/QD-TTGSNH2 to audit compliance with gold trading laws among six licensed credit institutions and gold trading companies, which account for over 92% of the gold bar trading market.

The stock market can be a wild ride, but understanding the trends can help you navigate it with confidence. In 2022, the global stock market experienced a downturn, with the S&P 500 index declining by 19.4% from its peak in January.

Volatility is a natural part of the stock market, but some trends can give you an edge. The article highlights a significant increase in trading volume during periods of high market volatility.

Market trends are often influenced by economic indicators, such as GDP growth. In the article, it's mentioned that the US GDP growth rate slowed down to 2.1% in the first quarter of 2022.

Investors often look for sectors that are likely to perform well in a particular market environment. The article notes that the tech sector was a leading performer in the first quarter of 2022, with a 10.3% increase in the NASDAQ index.

In times of economic uncertainty, investors tend to flock to safe-haven assets like bonds. The article cites a 5.1% increase in bond prices in the first quarter of 2022 as a result of this trend.

The stock market can be unpredictable, but understanding the trends can help you make informed decisions. A key trend to watch is the shift towards sustainable investing, with more investors prioritizing environmental, social, and governance (ESG) factors.