In a country where the average annual salary is a paltry US$450, it's not surprising a majority of Vietnamese do not have a bank account and have never even seen a cash-dispensing machine.
Government efforts to encourage a shift away from a cash-based economy to one with a modern banking system have come up against tradition and decades of mistrust about depositing hard-earned wages in someone else's protection.
"It is simply our habit of using cash for transactions," said 54-year-old Tran Tien Hung, an employee of a state-owned company in Hanoi.
At present, only about 1.1 million of the communist nation's 81 million people have bank accounts, according to the State Bank of Vietnam.
"These people are the minority among the vast population of Vietnam," said Nguyen Duc Vinh, director general of the Technological and Commercial Bank of Vietnam.
In 1998 there were only seven automated teller machines across the country.
About 500 ATMs now cater to Vietnam's newly-minted as well as expatriates and tourists.
But even in Hanoi, the political capital, many middle-class Vietnamese have never used one, yet alone seen one.
"What is an ATM? I have never heard of such a thing," said Nguyen Nhu Vuong, a 47-year-old accountant at a state-owned media agency.
Each month Nguyen collects around 2 billion dong (US$128,000) in cash from the state treasury to pay the salaries of the company's 500 employees.
Johan Nyvene, manager of corporate and institutional banking for HSBC in Vietnam, says government efforts to encourage non-cash transactions need to be supported by fundamental infrastructure changes to the banking system.
"To begin with, the centralized automated clearing system needs to be established in all provinces and used by all banks in the system comprehensively for all dong and non-dong transactions," Nyvene said.
"There is also a need for the inter-bank payment system to be operated efficiently with intra-day and overnight overdraft limits to be standardized between banks," he said.
A recent draft government ordinance that would force Vietnamese companies to use the banking system for transactions of more than 10 million dong or US$700 has triggered concern within the business community.
Businessmen say the ceiling is too low and that cash transactions are more convenient for themselves and for the recipients.
The World Bank, which is helping the government reform the banking system, says the cash economy fuels money laundering, while the government says change is needed to ensure the country's full integration into the world economy.
"Cashless transactions are essential to our efforts to become a part of the global economic community, particularly in our bid for WTO entry by the end of 2005," said a State Bank official who requested anonymity.
Experts, however, say it will take many more years before the majority of Vietnamese shift their savings from underneath the mattress to the bank vault.
"It's strange that this machine can give us money," said 74-year-old Vu Thi Chi as she watched a young woman withdraw cash from an ATM in Hanoi.
"I don't think it can provide the exact amount of money that you ask for," she said.
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Macronix International Co (旺宏), the world’s biggest NOR flash memory supplier, yesterday said it would spend NT$22 billion (US$699.1 million) on capacity expansion this year to increase its production of mid-to-low-density memory chips as the world’s major memorychip suppliers are phasing out the market. The company said its planned capital expenditures are about 11 times higher than the NT$1.8 billion it spent on new facilities and equipment last year. A majority of this year’s outlay would be allocated to step up capacity of multi-level cell (MLC) NAND flash memory chips, which are used in embedded multimedia cards (eMMC), a managed
CULPRITS: Factors that affected the slip included falling global crude oil prices, wait-and-see consumer attitudes due to US tariffs and a different Lunar New Year holiday schedule Taiwan’s retail sales ended a nine-year growth streak last year, slipping 0.2 percent from a year earlier as uncertainty over US tariff policies affected demand for durable goods, data released on Friday by the Ministry of Economic Affairs showed. Last year’s retail sales totaled NT$4.84 trillion (US$153.27 billion), down about NT$9.5 billion, or 0.2 percent, from 2024. Despite the decline, the figure was still the second-highest annual sales total on record. Ministry statistics department deputy head Chen Yu-fang (陳玉芳) said sales of cars, motorcycles and related products, which accounted for 17.4 percent of total retail rales last year, fell NT$68.1 billion, or
In the wake of strong global demand for AI applications, Taiwan’s export-oriented economy accelerated with the composite index of economic indicators flashing the first “red” light in December for one year, indicating the economy is in booming mode, the National Development Council (NDC) said yesterday. Moreover, the index of leading indicators, which gauges the potential state of the economy over the next six months, also moved higher in December amid growing optimism over the outlook, the NDC said. In December, the index of economic indicators rose one point from a month earlier to 38, at the lower end of the “red” light.
RSS