History


 III. The period that our country and people uprose against the invasion of the old and neo -       colonialist, the American imperialist and its elements (1945 - 1947), the establishment of       National Bank of the Kingdom of Laos took shape:

  1. The period (1945 - 1947): After the declaration of independence from France on 12 October  1945, the Ministry of Economics and Finance printed out Lao Kip currency called as Katay (Rabbit)  currency in 1945 - 1946 in 50 and 20 Kip paper bills for temporary use as a tool for the Lao  Monarch till December 1951 according to the agreement of the Currency Printing Institution of the 3  indochinese nations, the currency board was established. there was a royal order of the Kingdom of  Laos on 25 December 1954 to change the name of currency board to the Lao National Bank (after  the country gained independence from being French colony) having a headquarter located in  Vientiane capital city and had Mr. Phoui Panya as its Governor. Following the Geneva Agreement  on Laos, the French imperialist withdrew from Laos, acknowledged independence of the 3  Indochinese nations namely Laos, Vietnam and Cambodia. After that, the patriotic force were  associated in the two provinces: Xamneua and Phongsaly, not long since, the American imperialist  and its elements launched an fierce an open assault into the two provinces of Pathet Lao side,  violeted the 1954 Geneva Agreement on Laos. The purpose of organizing the Lao National Bank  was to use it as a tool serving tha evasion of the old and neo-colonialist and their elemnts, aiming  to put an end to the patriotic force or the Pathet Lao side, to gain more assistance from the  imperialists and foriegn capitalists, furnished their puppet administration to resist the patriotic  movement of the Lao people of all ethnics. At that time, the USA dumped an assistance in  foodstuff, money, gold, warfare and dispatched military advisors to Laos enormously to assist  France with an amount of US $ 945 millions in resisting the revolution. Meanwhile, the  asdministration in other 10 provinces ruling by the French imperialists awaited mainly the US  assistance to help stabilize the Lao Kip currency, the Governor of the Lao National Bank was called  Mr. Udong Souvannavong. Whereas the Pathet Lao force in the two provinces used the same Kip  currency as in the opposite side and got assistance from some socialist countries regarding  foodstuff such as: consumers'goods and warfare for the fight.
  

  2. The period from 1957 - 1959

     This was the period of implementing cease fire agreement and also the period of national  reconciliation and then was the first coalition. During this time the Banking affairs developed  slightly. There was treasury in some provinces to control budget expenditures at nation wide, in  particular, in the provinces having major cities.

  3. The period from 1959 - 1961

     This was the period that our army and people changed the strategy to fight
with armed forces  against American imperialist and their elements such as Katai and Phoui Sananikone who violated  the Geneva agreement on Laos. During this time, Banking system was maintained to previous  status, there was only one currency throughout the country.

  4. The period from 1962 - 1964

    This was the period of implementing cease fire agreement and also the period of national  reconciliation and was the second coalition, where a coalition government comprised of 3 sides  such as: Patriotic Lao Front, Neutral Patriotic side and the Kingdom of Laos. During this time our  country started to divide clearly into 2 administrative zones: a zone was controlled by Vientiane  side ans the other one was controlled by neutral patriotic side and patriotic Lao front side. The  central heardquarter of Vientiane side located in Vientiane where the Lao National Bank already  existed. While the Neutral Patriotic side and the Patriotic Lao Front had their centers located in  Khangkhai, Xiengkhuang provinces. During this time there were two types of currency in circulation  namely Vientiane Kip currency which was printed earlier and Khangkhai Kip currency which was  the currency of the coalition government of the three sides. The majority of this currency was  circulate in the zone cotrolled by the patriotic forces (Liberated zone) in parallel with Vientiane Kip  currency. There was no Bank in the liberate zone, there was only a treasury, established in 1961 in  Khangkhai. Mr. Sisavath Sisane was nominated by Prime Minister Prince Souvannaphouma as  Director General of this treasury department. The coalition Government's treasury was founded after  priting Khangkhai Kip currency at 50 Kip bills in an amount of 750 million kip to be circulated in the  liberated zone and at the service of the Patriotic Lao Front and Neutral Patriotic forces.

  5. The period from 1964 - 1973

     This was the period that the American imperialist and their elements breached to Lao agreement  on reunification and reconciliation, increased special war in Laos to ahigh level. The more the fight  was the more the victory yielded by the Patriotic forces, 2/3 of the country's territory was liberated  and the liberated zone was chained consicutively from North to South. More than a half of the  country's total popuration was liberated. During this time our country divided into two zones: a zone  controlled by Vientiane side or the Kingdom of Laos and the other zone was the liberated zone of  the Patriotic forces. The banking affairs undergone changes as follows:

   a. In the zone controlled by the Kingdom of Laos or Vientiane side: the Lao National Bank  continued with its operation and used Vientiane Kip money as the currency circulated within the  zone. Aid provided by the United States was to support the Vientiane kip currency and ensured the  expenditure. At this time the Lao National Bank kept up with steady development. Branches were  established in some provinces such as in Pakse, Champasak province and Luangprabang.  Provincial treasuries were operated in the remaining provinces. Beside the Lao National Bank there  were some local and foreign private bank such as:

   + Indochinese bank,
   + Tokyo bank,
   + Lao commercial development bank,
   + Development bank of the Kingdom of Laos,
   + Laovieng bank.

     All these banks were situated in Vientiane capital city without any branch in the provinces. There  was some organizational aspect, in particular, the recruitment of staff. The Lao National Bank alone  had over 100 staff whose majority was quarified and had multi - sector skills and a complete set of  regulations privialed. The provition with vehicles and equipment was considerably sufficient for the  bank's operation. It can be side that relative to that epoch, things complied with standardized  banking system. Technical aspects of the banks were also abundant and colorful, there were  calculations on initial capital funds, profits, funds mobilization, utilization of funds according to  business mechanism, except the Loa National Bank only which did not undertake business  calculations like private commercial banks.

   b. In the liberated zone of the Patriotic forces (the bank of the liberated zone)

       In order to meet the requirement of the cause of struggling for national liberation and acquire  complete victory, fulfill the national democratic revolution at at nation wide, the third plenary session  of the Lao people central Party committee of the first legislagure adopted a resolution in March  1966 on founding the liberated as an independent state and became autonomous in all sphere on  gradual and firm basis, likewise, the financial policy of the liberated zone was adopted also. To  implement the side goal and oblectives, the central committee of the Patriotic Lao Front made  arrangerments to establish a treasury in the liberated zone. Through long preparaion, till  07/10/1968, the standing committee of the central Patriotic Lao Front endorsed an agreement to  establish a central treasury in a cave where the cabinet office for economics and finance located in  a revolutionary base in Viengxai district, Hauphanh province. In order to inaugurate the printing of  the liberated kip currency as well as to exhert performances to welcome the 23rd anniversary of the  independence day on 12 October (12/10/1945 - 12/10/1968), it was called at the beginning as  Central Treasury comprised of 2 parts: special treasury and central treasury which were under the  supervision of the standing committee of the Central Patrioric Lao Front and the committee  members of the cabinet office for economices and finance. During the early stage of printing the  liberated Kip currency, there were Vientiane and Khangkhai Kip currencies in circulation alike. The  goal and objectives of the establishment of the treasury or the Bank were to make it as a tool  serving the struggle for national independence of our people as well as to improve the living  conditions of staff, army, policeman and people opf all ethnics throughout the liberated zone of the  patriotic forces, enhance the economic development in the liberated zone gradually and firmly  based on the spirit of self - autonomy and self - strenght. After seeing that the release of liberated  kip had many positive effects, the central Patriotic Lao Front agreed to expand the treasury  throughout the liberated zone of the Patriotic forces in a systemicmanner in December, 1968. There  emerged treasuries in Huaphanh, Xiengkhuang, Luang Prabang, Udomxai, Namtha, Phongsaly,  Bolikhamxai or former.

 

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