Commonwealth Bank of Australia (CBA) said on Tuesday that it has formally commenced its strategic partnership with Vietnam International Bank (VIB) following the handing down of regulatory approvals from the Vietnamese government.

For starters, CBA said that it has taken some 15 percent holdings in VIB that would mark the Australian bank's emerging role in improving the Vietnamese bank's operational and commercial capabilities, risk management services and competitiveness.

The strategic agreement would require VIB to open up two slots on its board for CBA representatives as both entities look forward for common business initiatives over the coming five years, which should provide the Vietnamese bank the necessary tools to become a full service bancassurance group.

The deal also calls on VIB to allow the entry of a number of CBA officials to its numerous management level positions in order to prepare the bank for the expected major overhauls on its management system and to sufficiently meet the anticipated growth and competition during the initial stages of the partnership.

In line with the approved agreement, which was inked earlier this year, CBA said that it would ask for a raise of its investment on VIB by up to 20 percent at the earliest possible time, adding that the figures were the ceiling investment permitted by the country's State Bank of Vietnam.