Beginning February 1, 2012, the minimum assets required to form a new bank will jump to VND100 trillion (USD4.76 billion), doubling the current level of VND50 trillion.

This is part of a new set of regulations contained in a circular recently issued by the State Bank of Vietnam on the licensing of commercial banks, foreign bank branches and representative offices of foreign credit organisations in Vietnam.

According to the circular, the founding shareholders of any new bank cannot, at the same time, be founding shareholders, owners or strategic shareholders of a credit organisation in Vietnam. The new regulation is aimed at restricting unfair competition and interest disputes among credit organisations, as well as ensuring the financial capacity of founding shareholders.

Other stipulations include: All founding shareholders must be fully up to date on tax and social insurance payments, and they must have made profits in their business activities for five consecutive years before submitting the documents to form a new bank. Previously this profitability rule only extends to three years.

At the time the application documents for forming a bank are submitted, the group's assets must total at least VND100 trillion, an increase of 100%.

The State Bank of Vietnam said these stricter rules will ensure that only organisations which have the financial capacity to operate will be able to set up commercial banks.