Commercial banks in Hanoi and Ho Chi Minh City, which have from two or more branches in each city, will temporarily not be allowed to open new affiliates, the State Bank of Vietnam has said.

A branch of Asia Commercial Bank in HCMC. Commercial banks are just allowed to open a maximum of two branches.

In a document on the establishment of transaction offices, branches and transaction departments of commercial banks in 2010, the State Bank said each commercial bank would initially be permitted to open a maximum of two branches.

The State Bank, however, would consider allowing commercial banks to establish more branches once their established affiliates operate well.

To establish transaction departments, commercial banks must have yielded profits, conformed to government standards, classified debts and established risk funds.

According to the document, transaction offices and branches would be allowed to open transaction departments after they have operated profitably for at least one year.

In addition, their bad debt ratio must be lower than 3 percent compared with the total liability at the time they apply to open new transaction departments.

Transaction offices or branches of commercial banks would be able to open only one transaction department at a time, according to the State Bank.