economic development, legal regulations on the operations of joint venture banks...; on the basis of reviewing the positive legal system on joint venture banks and their practical operations, thereby pointing out shortcomings and limitations to be able to overcome, proposing solutions to perfect the law on joint venture banks in Vietnam.
iii) Doctoral thesis by Dao Minh Phuc (1995), Joint venture banks between Vietnam and foreign countries in Vietnam today , National Economics University, Hanoi. The thesis focuses on researching and analyzing the role of joint venture banks in economic development in Vietnam. The thesis evaluates the organizational model and operation of joint venture banks between Vietnam and foreign countries, determines the position and operating mechanism of joint venture banks between Vietnam and foreign countries in the Vietnamese banking system. The thesis also makes a number of recommendations for effective management and use of joint venture banks between Vietnam and foreign countries in Vietnam.
iv) Master's thesis by Hoang Minh Hoan (2007), Solutions for restructuring joint venture commercial banks to improve competitiveness in the integration period , Ho Chi Minh City University of Economics. This thesis focuses on researching and analyzing the overall operations of commercial banks and the competitiveness of joint venture commercial banks. The thesis assesses the current competitive situation of joint venture commercial banks in Vietnam, stating the main causes limiting the competitiveness of joint venture commercial banks. The thesis provides detailed and specific solutions for restructuring joint venture commercial banks in Vietnam to improve competitiveness in the international integration period.
v) Research topic of Dang Tay Binh (2009), Overview of the development of foreign banks in Vietnam , Faculty of Economics - Business Administration, Can Tho University, Can Tho. This topic focused on clarifying some contents related to the activities of foreign banks in Vietnam such as: conditions for establishment and operation of foreign banks in Vietnam; advantages of foreign banks compared to domestic banks; some difficulties of banks
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foreign banks. In addition, the topic only assesses the impact of foreign banks on the domestic banking system during the integration period and offers some complete solutions related to lending activities when foreign banks participate.
vi) Research topic of Duong Thanh Tam (2009), Foreign bank branches in Vietnam - Current situation and solutions , National Economics University, Hanoi. This topic mentioned the history of foreign bank branches in Vietnam, overview and current situation of foreign bank branches in Vietnam. At the same time, this topic also provided some solutions to help foreign bank branches in Vietnam operate effectively.
- Research works on loan classification of commercial banks in general and banking services provided by foreign-invested commercial banks in Vietnam:
vii) Research topic of Pham Thi Huong (2013), Loan classification
of credit institutions, the legal significance of that classification , Hanoi Law University, Hanoi. This topic has focused on clarifying the classification of loans of credit institutions according to certain criteria and generally mentioned the provisions of current law on lending activities of credit institutions, including lending activities of foreign bank branches in Vietnam.
viii) Article by Le Hoang Lan (2005), Service provision capacity of foreign banks when Vietnam joins the WTO , Banking Magazine No. 9/2005, pp. 44-46, Hanoi. This article has briefly introduced some commitments on financial services of US banks and other foreign banks in Vietnam when Vietnam joins the WTO, in which it points out some limitations of foreign banks when performing services in Vietnam. On that basis, the article makes some recommendations related to improving the efficiency of foreign banks' lending activities in Vietnam.
In addition, there are a number of other articles and research exchanges published in specialized newspapers and magazines that mention the general activities of commercial banks with investment capital.
Foreign banks in Vietnam. However, similar to the above research works, these documents study the laws regulating the establishment and operation of foreign-invested commercial banks in Vietnam, thereby only mentioning in general or indirectly or a small part of the lending activities of foreign-invested commercial banks in Vietnam, not specifically, directly and comprehensively researching the lending activities of foreign-invested commercial banks in Vietnam.
1.1.2. Foreign research situation
Currently, we have not found any foreign documents or scientific research works that directly, specifically and comprehensively study the legal issues of lending activities of foreign-invested commercial banks in Vietnam. We have only found some foreign documents and scientific research works related to the activities of foreign-invested commercial banks in Vietnam or only mention the activities of foreign banks in some countries in the world, specifically as follows:
- Research works on foreign banks' approaches to foreign direct investment and network development in host countries:
i) Article by Valerie Priscilla Goby and Ramin Cooper Maysami (2014), Synergistic bank reform and economic advancement: development of Vietnam's banking sector [54], Journal of International Banking Law and Regulation. The main content of this article affirms that with the removal of restrictions placed on foreign banks when Vietnam joined the WTO, many foreign banks have tried to seek business opportunities in the banking industry in Vietnam. For foreign banks, there are two approaches when entering the Vietnamese banking market, which are the organic growth approach and the strategic investment approach with domestic banks. The organic growth approach is the traditional approach, according to which foreign banks establish their facilities in Vietnam such as infrastructure, equipment, network
operations, human resources, etc. Although this solution gives foreign banks significant control over their business in Vietnam, it takes a long time to acquire that business. In the strategic investment approach, foreign banks buy shares or capital contributions in domestic banks. This allows them to expand their business in Vietnam more quickly. However, the limitations of this approach are the high purchase price and more limited control over the bank in which they invest or buy shares. The total value of assets of foreign banks in Vietnam accounts for about 15% of the total value of assets in the banking system in Vietnam [55, p.9]. Although they have a relatively small market share in the credit market, foreign banks play an important role because their operations are based on modern banking technologies and international banking skills. Therefore, foreign-invested commercial banks in Vietnam contribute significantly to the in-depth development of the Vietnamese banking system.
ii) Article by Francis A. Less (1975), Foreign banking in the United States: growth and regulatory issues [45], The Denver journal of international law and policy, USA, pp. 463-483. The article focuses on clarifying the reasons for the strong growth of foreign banks in the United States and how this growth affects the role and function of the US credit market. The content of the article shows that the 1960s was a period that witnessed the explosive growth of foreign banks in the United States. Large banking institutions in the United States established international branches or offices, or banks or subsidiaries, and participated in global lending activities. In contrast, in the 1970s, many sources of investment capital from companies around the world appeared in the banking industry in the United States. Foreign banking institutions have established branches in some counties and localities in the United States, or established commercial banks in some important states to expand their lending activities.
- Research works on competitiveness in the banking sector of
Foreign banks in some countries around the world:
iii) Article by Edralin Lim (2013), Competition and efficiency of selected universal banks in the Philippines for the year 2011 [42] , International Journal of Information Technology and Business Management, De La Salle University, Vol.11, No.1, pp.12-
21. This paper is based on the author’s study of nine international banks in the Philippines from 2003 to 2011 and uses correlation analysis to determine the relationship between competition and efficiency of banks. The scope of the study is limited to the removal of barriers to entry, one of the six financial liberalization policies that allowed the entry of foreign banks. The Herfindahl Index (HI) was used to measure competition among banks. The study found that financial liberalization brings greater competition, improving efficiency in the operations of banks. The Herfindahl Index is correlated with the interest margin on assets and the loan to asset ratio. It also shows that the Herfindahl Index is correlated with the regulation of loan loss ratio.
iv) Article by Robert. N. Homick (1984), Foreign Banking in Indonesia [48], Northwestern Journal of International Law & Business, Volume 6, Issue 3, pp.760-802. The article focuses on the study of the rules regulating the operations of domestic and foreign banks and the regulation of security instruments in Indonesia. At the same time, this research paper provides analysis and views on the legal provisions applicable to international banks operating in Indonesia. In addition, this research paper affirms that although international banks have more flexible business operations than domestic banks, domestic banks still account for the majority of business market share, because domestic banks are given priority in terms of indicators by the government.
v) Adeel Haneef's Master's Thesis (2012), A Comparison of Financial Performance of Domestic and Foreign Banks in Pakistan (Domestic vs Foreign: A
Comparison of Financial Performance of Domestic and Foreign Banks In Pakistan) [38]. Master's thesis supervised by Professor Roy Mersland, Faculty of Economic and Social Sciences, University of Agder, Norway. This thesis is a scientific research work examining the relationship between ownership and financial performance of domestic and foreign banks in Pakistan during the period 2001-2010. This scientific research work has highlighted the issues related to ownership between domestic and foreign banks. Based on the results of financial performance assessment, asset utilization, return on equity and dividend payout ratio, this scientific research work has found the important relationship of domestic banks with the financial performance of foreign banks. Accordingly, the scientific research work has given the results that domestic banks perform better than foreign banks in Pakistan.
- Research works on foreign direct investment in the banking sector and the competitiveness of foreign banks with domestic commercial banks:
vi) Dervis Kirikkaleli (2013) PhD thesis, Foreign Direct Investment in the Banking Sector: Empirical Evidence from Turkey [41], PhD thesis at the Faculty of Economics, Stirling School of Management, Turkey. The thesis is considered a scientific research work focusing on explaining the gradual increase in the activities of multinational banks in developing countries since the early stages of globalization. This growth has motivated researchers to investigate the activities of foreign banks comprehensively. Turkey is a typical example of a developing country that has achieved high growth rates due to the strong increase in foreign bank asset investment. The study focused on clarifying two closely related issues: (1) the relationship between foreign bank penetration (FBP) and changes in banking activities; (2) the relationship between FBP, foreign direct investment (FDI) and investment portfolio.
foreign portfolio investment (FPI) in Türkiye.
vii) Michael G. Whitehead's PhD thesis (1990), The dynamics of competition within the basic bank markets in the UK [47], PhD thesis at Loughborough University, UK. This thesis is a scientific research work demonstrating the study of competitive forces in the basic bank market in the UK. The scientific research work affirms that the basic bank market is the area of operation of large clearing banks or building societies. However, a series of foreign banks are currently penetrating and threatening this market. The work focuses on studying the problem of restructuring the organization of clearing banks, proposing solutions to reduce processing costs, increase efficiency and activate a series of reform measures in terms of scale and technology to compete with foreign banks in the basic banking market in the UK.
In fact, there are a number of other articles and research exchanges published in international specialized newspapers and magazines that mention the general activities of foreign banks in some countries around the world. The above-mentioned foreign scientific works only study the methods of investing abroad, the ability to survive, operate and compete in the host country after being established and operating. The authors of the above works do not specifically, directly and comprehensively study the provisions of the law governing the lending activities of foreign-invested commercial banks, but only study the general activities or part of the lending activities of foreign-invested commercial banks in some countries around the world.
1.2. Theoretical basis
1.2.1. Research theory
When studying lending activities and lending laws of foreign-invested commercial banks in Vietnam, the researcher uses some typical theoretical bases such as: Marxist-Leninist doctrine on state and law; theory of legal relations, theory of contracts; theory of freedom of business; theory of lending activities of commercial banks.
1.2.2. Research questions
The thesis is developed with the following research questions:
- In theory
1. What is lending? What are the characteristics of lending compared to commercial lending (also known as commercial credit)? What types of lending are there?
2. What is a foreign-invested commercial bank? Characteristics of a foreign-invested commercial bank? What is the legal structure of lending to a foreign-invested commercial bank? Components of the legal structure of lending to a foreign-invested commercial bank? What is a bank credit contract? What role does a bank credit contract play for the participating entities and for the economy? What risks do the entities participating in a bank credit contract bear?
3. How is the law on lending by commercial banks understood? What are the characteristics of the law on lending by commercial banks? What are the provisions of the law on lending by commercial banks? What factors govern/influence the law on lending by commercial banks?
- On the aspect of legal status
4. How is the development of the law on lending to foreign-invested commercial banks in Vietnam reflected in the content of legal documents? Which legal documents currently regulate lending activities of foreign-invested commercial banks in Vietnam? What are the contents of current regulations on lending to foreign-invested commercial banks in Vietnam? What are the shortcomings and limitations of legal regulations as well as the current practice of law application in Vietnam?
- About the complete solution
5. What are the requirements for improving the law? What are the specific solutions to improve the law on lending to foreign-invested commercial banks in Vietnam today?
1.2.3. Research hypothesis
The thesis is developed with the following research hypotheses: