Central bank: Time to modernise financial institutions
Central bank: Time to modernise financial institutions
The Bank of the Lao PDR will modernise commercial banks in Laos as the country speeds up economic integration with the regional and global comm unity.
According to the central bank's annual report which was made available to Vientiane Times this week, the bank will modernise the services provided by commercial banks to enable them to integrate with international levels and standards.
Laos expects to be accepted as a member of the World Trade Organisation in October. Laos will also join the Asean Trade Area (AFTA) in 2015, which will create a single market of more than 600 million people where capital, goods and skilled labour flow freely throughout the region .
The planned regional and world economic integration of the Lao economy will not be a challenge if banks in Laos can provide secure, fast, reliable and safe money transactions, according to a bank official.
He said the central bank has spent about US$10 million to install modern banking IT infrastructure that will play a central role in providing more efficient transactions between commercial banks and between Lao banks and foreign banks.
The upgraded system will also enable the Lao Securities Exchange to provide electronic money transfer for share traders, and facilitate banks to join ATM pools, allowing customers to withdraw money from a greater number of ATMs, he said.
At present, account holders have to withdraw cash from one bank and deposit it in another because there is no electronic transfer system, while commercial banks use electronic transfer services offered by other countries to provide international credit and debit card services.
A number of banks in Laos have welcomed the changes, recognising the need to improve their services as customers increasingly need to transfer funds within the country, region and world.
BCEL is one state-owned bank that has undergone a lot of improvements to its IT systems. Its ATM cardholders can use their cards to pay electricity bills and withdraw money from Union Pay ATMs around the world.
The Lao-Viet Bank has also installed a core banking system to provide better services. The privately owned Phongsavanh Bank has made provisions for its customers to withdraw money from ATMs in Thailand so they can shop across the border.
The Bank of the Lao PDR says it will supervise and monitor commercial banks as they grow in number to ensure that all financial institutions are healthy and give the Lao public confidence in the local banking system.
When people have confidence in banks, they are more likely to open deposit accounts, making it easier for the country to mobilise investment funding to boost economic growth.
At present, there are 26 commercial banks operating in Laos.
vientiane times
