The Structure Of The Banking Industry

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The changes in the Vietnamese banking industry have been vast. From a formerly monobank system dominated by the State Bank of Vietnam (SBV) it has now expanded to several players and has recently enabled MFIs to be part of the formal financial system. However, despite these achievements, there are still challenges that linger and financial inclusion remains an issue. This part explores the current structure of the banking industry and touches on the status of financial inclusion in Vietnam.
4.3.1. Banking Industry

Vietnam’s banking sector is fairly recent being founded a little over 2 decades ago. Prior to sector’s current structure, the system operated from a monobank system. This meant that the State Bank of Vietnam (SBV) had a dominant role and functioning both as a central bank and a commercial bank. In the 1990s the banking industry transformed into a two-tier system with the SBV stopping its operations as a commercial bank and solely operating as a central bank.
This led to the creation of state-owned commercial banks (SOCB) namely Vietnam Bank for Agriculture and Rural Development (Agribank), The Bank for Investment and Development of Vietnam (BIDV), Bank for Foreign Trade of Vietnam (Vietcombank) and the Vietnam Industrial and Commercial Bank (Vietinbank). Likewise, policy banks also came into existence such as Vietnam Bank for Social Policies (formerly Vietnam Bank for the Poor) (Ninh 2003). Aside from the SOCBs, the evolution of the Vietnamese banking sector has
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