The Bank for Investment and Development of Vietnam (BIDV) and Russia’s VTB Bank have signed a memorandum of understanding (MoU) this week to strengthen the position of their Vietnam-based joint venture, the Vietnam – Russia Bank (VRB), in promoting economic cooperation between Vietnam and Russia.
The signing ceremony was conducted during the visit of Russian prime minister Dmitry Medvedev to Ho Chi Minh City. According to the agreement, the bilateral trade between the two countries will see development of a unique payment system that allows the transition to national currencies, the rubles and the Vietnamese dongs, in import and export settlements.
The joint venture has been chosen as the main bank and coordinator for export and import operations to and from Vietnam and Russia. A working group for the channel will be established within this month.
In addition, the Vietnamese subsidiary is designated with the function of supporting key economic projects in the energy area and national security.
“VRB will become the main bank in credit, factoring, foreign exchange, guarantees, and other financial and banking operations involving Russia and Vietnam. The parties also agreed to support VRB and strengthen its role in the banking sector,” VTB Bank said.
It added that the first results of the implementation of this memorandum will be reviewed in May, during a scheduled visit of Vietnamese president to Russia. He will be accompanied by Tran Bac Ha, chairman of BIDV.
VRB, set up in 2006, has a total asset of $477 million and outstanding loans of $269 million. It is a familiar name for businesses and entrepreneurs who have regular transactions with both Vietnamese and Russian companies and with the total value of payments at $218.74 million.
Meanwhile, Vietnam – Russia trade turnover has been improving since 2008, hitting $2.6 billion in 2014. The annual growth of two-way trade stands at 28 per cent.