Will submit to the Government a plan to compulsorily transfer 2 weak banks

According to the report of the State Bank of Vietnam (SBV) sent to the National Assembly, for specially controlled banks/weak credit institutions, in 2022, the SBV reported to competent authorities the restructuring plan for specially controlled banks and specific handling plans for each bank.

These banks include Construction Bank (CBBank), Ocean Bank, Global Petroleum Bank (GP Bank) and DongA Bank (DongABank).

To date, the Government has issued a Resolution deciding on the compulsory transfer policy of the two compulsory purchasing banks.

oceanbank 1656996017.jpg — *OceanBank is in the process of restructuring.*

The State Bank is directing relevant parties to carry out procedures as prescribed in the Law on Credit Institutions (amended and supplemented) to submit to the Government for approval the compulsory transfer plan for the two banks and complete the plan and submit to the Government for decision on the compulsory transfer policy for the remaining compulsory purchase bank.

The State Bank has also resolutely directed banks to hire consulting organizations to determine enterprise value and coordinate with consulting organizations to determine enterprise value, ensuring compliance with legal regulations.

To date, valuation consulting organizations have issued valuation certificates and the State Bank has sent them to the State Audit to conduct an audit of the results.

Saigon Commercial Joint Stock Bank (SCB) in particular has been placed under special control since October 2022. The State Bank of Vietnam has coordinated with ministries and branches to deploy solutions to ensure the safety of the banking system and protect the rights and interests of depositors.

At the same time, based on the overall assessment report of the current situation and proposed restructuring policy of SCB and the SCB Special Control Board, the State Bank is looking for investors to participate in restructuring SCB to submit to the Government for consideration and decision on the restructuring policy of SCB according to regulations.

The State Bank of Vietnam said that the process of restructuring credit institutions has encountered many difficulties due to many reasons. The search and negotiation for commercial banks that are qualified to receive compulsory transfers (weak financial capacity, management, and experience in restructuring credit institutions) has been difficult due to the large dependence on the voluntary participation of commercial banks and the need for time to convince shareholders, especially major shareholders and foreign strategic shareholders, to agree to participate in the compulsory transfer.

The policy mechanism and financial resources to handle weak credit institutions in general and to develop a plan for compulsory transfer of compulsory-purchase banks and Dong A Commercial Joint Stock Bank in particular still have many shortcomings, obstacles and lengthy procedures.

Coordination and consultation with relevant ministries and branches is still taking a long time because handling weak banks is complicated and unprecedented.

In addition, the capacity of officers and civil servants doing inspection and supervision work is still limited in conditions of pressure to handle large and complicated workloads, with urgent requirements on progress (conducting inspection and supervision work while restructuring weak banks).

In the coming time, the State Bank will continue to closely coordinate with relevant ministries, branches and agencies to urgently implement solutions to fundamentally handle weak credit institutions.

Continue to complete the draft Law on Credit Institutions (amended), focusing on overcoming shortcomings, perfecting the mechanism for handling weak credit institutions, improving the management and operation capacity, especially risk management of credit institutions, limiting and preventing the abuse of management and operation rights and shareholder rights to manipulate banking operations for personal gain.

Direct banks receiving compulsory transfers to complete compulsory transfer plans in accordance with legal regulations and instructions of competent authorities, submit them to the Government for approval and implementation.

State Bank takes strong action against cross-ownership According to the State Bank, cross-ownership involves many entities under the management of ministries/sectors. Regarding ownership between companies in other fields, the State Bank has no information or tools to control.

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