HANOI, Jan. 4 (Xinhua) -- The Vietnam Association of Financial Investors has proposed the Vietnamese government raise the cap for shares held by foreign investors in local joint stock banks to 35 percent or 37 percent from current 30 percent, according to local newspaper Youth on Friday.

    The higher ownership rate would permit an increasing number of foreign investment funds and foreign individual stock investors to invest in Vietnamese joint stock banks, the association said, noting that most of the banks have set aside all the permissible amount of shares to their foreign strategic partners, leaving limited remaining shares to other investors.

    In April 2007, Vietnam raised the cap for shares held by strategic foreign investors in local joint stock banks to 15 percent from previous 10 percent, leaving it open for the prime minister to raise the limit to 20 percent on a case-by-case basis.

    However, the country maintains the total foreign ownership ceiling at 30 percent, while the maximum stake a non-strategic foreign investor can hold remains at 5 percent for an individual investor and 10 percent for a foreign bank.

    Vietnam's current banking system includes seven state credit institutions, 31 urban joint stock commercial banks, four rural joint stock commercial banks, 37 branches of foreign banks, and five joint venture banks.