BOL: Lao banks must upgrade to acquire Asean certification
BOL: Lao banks must upgrade to acquire Asean certification
The Bank of the Lao PDR (BOL) says all banks in Laos must improve their quality of service and management systems to ensure they meet the criteria for Asean certification when the Asean Economic Community (AEC) comes into effect in 2015.
“A bank will not have this certification if its services and systems do not meet Asean banking standard requirements,” BOL Deputy Governor Mr Sonexay Sithphaxay said last week.
“This certification, which reflects international standards, will be offered only to banks in Asean member countries,” Mr Sonexay said.
Banks operating in Asean countries plan to create a standardised system of operations within the financial sector to ensure a similar quality of services within the bloc.
The aim is to create more facilities for customers and citizens of Asean countries whether they are resident in or visiting an Asean member country. “If a bank has certification, it will certainly benefit when Laos participates in the AEC,” he added.
“Certification within the Asean banking sector is now under study and Asean expects to be using it in 2015.”
When the AEC comes into being in 2015 it will create a single market and production base, a highly competitive economic region of equitable economic development, and a region that occupies a significant place within the global economy.
“Banks in Laos must work harder on improving their services and management,” Mr Sonexay said. “If not, we won't be able to compete with foreign banks in Laos or with locally-based banks when we open branches in other countries.”
BOL is urging financial institutions and the banking sector to rapidly upgrade their services to international standards, so they can compete with overseas banks.
This is necessary because Laos is now a member of the World Trade Organisation and will participate in the AEC. Financial institutions and banks must adopt international standards step by step, including their services and policies.
Laos currently has 33 banks and the sector has seen rapid growth in recent years. It is envisaged that this will continue while many of the existing banks are speeding up improvements and expanding the services they offer.
The big foreign financial service groups in Laos include the Industrial and Commercial Bank of China, ANZ, Bangkok Bank, Maybank, Banque Franco Lao Ltd, Acleda Bank Lao Ltd, and Maruhan Japan Bank.
Another Japanese bank is also interested in Laos and it too is a big global player. This bank is now studying the potential value of joining the market.
Several other foreign banks are considering investing in Laos, including a Cambodian group.
Some banks in Laos are signing banking service cooperation agreements with foreign banks to provide financial and banking services in both Laos and overseas.
In the next five or ten years, Lao banks will strengthen cooperation in the services they offer, which will help them to become stronger and bolster growth.
If they remain as individuals, they will struggle to compete with other banks in the global market. They will also have less money or revolving capital if they continue to provide services on an individual basis.
vientiane times
