“Just look at a bank and you will see the shadow of a business behind it.”

Continuing the 5th session, on the afternoon of June 5, the National Assembly discussed in groups the Law on Credit Institutions (amended).

Participating in giving comments on the draft Law, delegate Nguyen Hai Nam (Thua Thien - Hue delegation) highly appreciated the positive contributions of the banking industry to the economy, however, the damage or losses of the banking industry are not small.

According to Mr. Nam, the banking industry is a special enterprise, because banks must meet high-level, modern management requirements such as the principles of transparency, independence and objectivity.

Compared to the current Law, the draft Law adjusts the share ownership ratio of individual shareholders, organizational shareholders, shareholders and related persons of such shareholders from not exceeding 5%, 15%, 20% down to 3%, 10% and 15% respectively.

Finance - Banking - — Delegate Nguyen Hai Nam gave comments at the group discussion session (Photo: Pham Thang).

Delegate Nam said that this was an effort to amend the Law on Credit Institutions. “This reduction is to reduce the influence of major shareholders in banking activities. In a deeper analysis, major shareholders often secretly collude and influence banking activities. If we use stronger language, it would be an act of manipulation,” Mr. Nam stated.

According to Mr. Nam, there is also cross-ownership between banks and financial companies, even "circumventing the law" in terms of ownership ratio and credit limit for a business entity.

The delegate said that it is necessary to clearly assess the current status of share ownership at credit institutions to clearly determine the extent and causes of cross-ownership in order to propose fundamental and radical solutions to handle the current cross-ownership situation.

“Cross-ownership in banks is an obstacle to the competitiveness of banks, as well as an obstacle to the healthy development of the banking system,” Mr. Nam said, emphasizing that clearer measures are needed to deal with this situation.

“In the Vietnamese banking market, if you look at a bank, you will see the shadow of a business behind it. And these businesses all operate in the real estate sector,” Mr. Nam added.

Therefore, to limit cross-ownership in credit institutions, delegate Nguyen Hai Nam said that it is necessary to strengthen the responsibility of state management agencies and inspection and supervision agencies in the banking sector.

"I think that the people have entrusted the State management agency to fulfill its responsibilities to keep the banking system clean and the economic system sustainable," the delegate emphasized.

Similarly, delegate Dang Ngoc Huy (Quang Ngai delegation) said that the cross-ownership situation has not been completely resolved, but the Law on Credit Institutions has not yet set out regulations to prevent cross-ownership.

In addition, according to Mr. Huy, some banks were put under special control, including 3 zero-dong banks and 2 weak banks. Of these, the 3 zero-dong banks proposed a transfer plan, and some banks were willing to accept it, but the process was very slow.

Mr. Huy also pointed out the practical lessons from some American and Swiss banks. When facing difficulties, they went bankrupt or merged, but the State did not intervene. From there, he suggested that the drafting agency study and apply international practices to banks under special monitoring and control to avoid deep State intervention .

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