State to focus on managing its investments

Lê Anh Xuân, deputy director of the Department of Finance and Accounting of the State Bank of Vietnam. — VGP Photo

HÀ NỘI — The Ministry of Finance (MoF) and the State Bank of Vietnam (SBV) have been collecting opinions and feedback on a draft law for managing State capital in economic enterprises.

Speaking at a recent workshop to discuss various issues with the draft law, representatives from the MoF and the SBV said the State agencies appreciate contributions from credit institutions and State-owned enterprises across the country.

Bùi Tuấn Minh, director of the MoF’s Department of Corporate Finance and a member of the drafting committee said given the vast resources at the central bank’s disposal and the stakes held by the State in some of the largest economic enterprises in the country, State capital should play a crucial part in developing the economy.

He said the new law should address numerous bottlenecks and contradictions of the previous law. According to Minh, the State was to take a step back to focus on handling investment activities.

“The State has a legitimate right to safeguard its capital in economic enterprises,” he said.

“On the other hand, the State is just one investor among many investors. Therefore, it should focus on managing its investments.”

Minh added that there are four key areas of focus under the new law: how to best deploy the State’s human resources, strategies, capital options, and investment policies.

Lê Anh Xuân, deputy director of the Department of Finance and Accounting from the SBV said the central bank represented the rights and interests of key credit institutions in the country, with a total charter capital of VNĐ233 trillion (as of the end of 2023) and a total equity of VNĐ470 trillion.

Phạm Phan Dũng, former director of the banking and finance department under the MoF, and a member of the drafting committee, said that State-owned commercial banks need to increase their charter capital to increase capital mobilisation, boosting lending. For years, increasing capital for State-owned banks has faced difficulties.

The draft law proposed three options for profit distribution, setting up a development investment fund for enterprises, which allows enterprises to boost their capital to better navigate economic developments by retaining part of their profit-after-tax. — VNS