State capital management needs to take into account the specific nature of credit institutions

	No direct intervention in salary and bonus policies of state-owned enterprises
	Strengthen decentralization to facilitate enterprises

Discussion on the draft Law on Management and Investment of State Capital in Enterprises. Photo: HD

At the Seminar to collect opinions on the draft Law on Management and Investment of State Capital in Enterprises, which continued to be held by the Ministry of Finance in coordination with the State Bank of Vietnam (SBV) on August 8, 2024, Mr. Le Anh Xuan, Deputy Director of the Department of Finance and Accounting (SBV) said that the SBV was assigned to represent the owner in 12 enterprises and credit institutions.

Of which, 8 credit institutions are the 4 "big 4" banks (Agribank, Vietcombank, BIDV, VietinBank), 3 compulsory transfer banks (CBBank, OceanBank, GPBank) and the Vietnam Cooperative Bank (Co-opBank). Along with that, there is 1 financial institution, Vietnam Deposit Insurance; 3 enterprises are the National Printing Factory, Vietnam Asset Management Company (VAMC) and Vietnam National Payment Joint Stock Company (NAPAS).

According to Mr. Le Anh Xuan, by the end of 2023, these 12 enterprises and credit institutions had a charter capital of about VND 233 trillion, total equity of VND 170 trillion with total assets of more than VND 8.5 million billion.

The representative of the State Bank said that the management of state capital at enterprises and credit institutions is currently being implemented according to the Law on Management and Use of State Capital to invest in Production and Business at Enterprises in 2014 (abbreviated as Law 69) and many related decrees and regulations of the Government and the State Bank. In particular, after several amendments, the State Bank is currently managing according to Decision 1500/QD-NHNN in 2021 on the regulations on direct owners' representatives, representatives of state capital at credit institutions, financial institutions and enterprises managed by the State Bank.

However, Mr. Le Anh Xuan also acknowledged that the implementation of Law 69 over the past 10 years has encountered some difficulties and problems such as the definition of enterprises established by owners, approval of investment in asset purchase, profit distribution, etc. while the operations of credit institutions and financial institutions have many specific characteristics and must comply with the Law on Credit Institutions (amended) which has just taken effect from July 1, 2024.

Also on this issue, Ms. Phung Nguyen Hai Yen, Deputy General Director of Vietcombank, assessed that the draft Law on Management and Investment of State Capital in Enterprises, which is being developed and consulted by the Ministry of Finance, basically follows the life "breath" of enterprises with state capital, amending the shortcomings of the current Law 69.

However, the representative of Vietcombank's leadership suggested that there must be consistency between the laws, in which, with the specific characteristics of credit institutions, it must be consistent with the Law on Credit Institutions.

For example, regarding the distribution of profits and funds, with credit institutions, this provision has been specified in Article 148 of the Law on Credit Institutions 2024, so this provision in the draft Law on Management and Investment of State Capital in Enterprises needs to be consistent and take into account the specific nature of credit institutions.

Further explaining the concerns of enterprises about capital flow management, Mr. Bui Tuan Minh, Director of the Department of Enterprise Finance (Ministry of Finance) said that the draft Law has added many new points, boldly following the direction of not managing corporate legal entities as before, but defining the State as only a professional capital investor. In management, the State manages the investment capital, that is, manages the part of the agency representing the owner investing capital. When the State's cash flow reaches a certain point, the State manages investment activities, thereby decentralizing and delegating more powerfully and balancing between management and investment, between the owner agency and the enterprise.

Regarding profit distribution, Mr. Pham Phan Dung, former Director of the Banking and Finance Department (Ministry of Finance), a member of the Drafting Committee of the Law, said that state-owned commercial banks currently need to increase their charter capital to increase capital mobilization, thereby boosting lending. For a long time, the issue of increasing capital for state-owned banks has faced many difficulties. Recently, the National Assembly has allowed Agribank to increase its charter capital from retained profits after tax.

Therefore, the draft Law on Management and Investment of State Capital at Enterprises has proposed 3 options for profit distribution, setting up a Development Investment Fund for enterprises at the rates of 50%, 80% and 100% of profits after tax. Mr. Dung said that the majority of enterprises proposed a level of 50-80% which is appropriate. If the National Assembly approves this regulation, credit institutions will have more capital to serve the economy because this is a source of funds for enterprises, so enterprises must find ways to use and preserve capital effectively.

Mr. Bui Tuan Minh also emphasized that the development investment fund for enterprises extracted from after-tax profits belongs to the owner, belongs to the owner's rights, not the enterprise's rights, but it will accept and study the opinions of enterprises on the retention ratio to ensure the use of the fund.