The State Bank has just sent a report to the National Assembly on the contents of questions raised by delegates related to the banking sector, which mentioned many difficulties in restructuring weak credit institutions.
According to this agency's report, on June 8, 2022, the Prime Minister issued Decision No. 689/QD-TTg approving the Project on restructuring the credit institution system associated with bad debt settlement for the period 2021-2025.
Increased monitoring of a bank with high bad debt ratio
After Project 689 was approved, the State Bank directed credit institutions to focus on implementing 3 groups of tasks: Promoting the handling of bad debts and limitations and shortcomings in operations; implementing the direction of competent authorities on restructuring and handling weak credit institutions, ensuring stable operations and supporting these credit institutions to gradually recover; and guiding credit institutions to develop and approve restructuring plans associated with bad debt handling for the 2021-2025 period to ensure consistency with the goals and orientations stated in Project 689.
Currently, credit institutions continue to implement the restructuring plan approved by competent authorities or continue to complete and revise the restructuring plan after receiving comments from the State Bank.
Of the three commercial banks that were compulsorily acquired, namely CB, GPBank, and OceanBank, the State Bank has announced the Decision on compulsory transfer with CB and OceanBank.
For the remaining compulsory acquisition banks, the State Bank is reviewing and carrying out necessary procedures to submit to the Government for approval the compulsory transfer plan.
The State Bank said that by June 30, 2024, the number of people's credit funds that must develop restructuring plans is 1,147/1,178 funds. Of these, 1,143 funds have had their restructuring plans approved; 4 funds have not been approved (because 2 people's credit funds that have just ended special control are developing restructuring plans and 2 funds are implementing plans to handle legal entities in the direction of voluntary dissolution).
In general, credit institutions are actively implementing restructuring plans approved by competent authorities.
4 difficulties in handling weak credit institutions
The State Bank's report stated four difficulties leading to the prolonged restructuring of weak credit institutions.
Firstly, the search and negotiation for a bank that is qualified to receive the compulsory transfer (weak financial capacity, management, and experience in credit organization structure) is long and difficult due to its great 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.
Second, 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.
Third, coordination and consultation with relevant ministries and branches is still taking a long time because the handling of poor banks is complicated and unprecedented.
Fourth, the capacity of some officials and civil servants doing inspection and supervision work is still limited in conditions of pressure to handle large and complicated workloads, with urgent requirements in terms of progress (both performing inspection and supervision work and restructuring weak banks).
The State Bank said that in the coming time, it will work with relevant ministries and branches to find ways to resolve the four above-mentioned obstacles to ensure the goal of restructuring credit institutions as set out in Project 689.
In addition, the State Bank continues to focus on specialized inspections of areas with high potential risks in the operations of credit institutions such as credit granting focused on large customers with potential risks, customer groups (lending to large individual customers, etc.); consulting and introduction activities related to corporate bonds and other consulting and introduction services; inspection of bad debt handling and off-balance sheet debt recovery after handling risks; inspection of share ownership ratio, purchase and sale, transfer of shares, etc.
Banking supervision continues to be closely linked to inspection. The supervision content does not only stop at monitoring compliance with regulations on safety in operations but also focuses on monitoring and assessing risks in the operations of credit institutions.
Thereby proposing and orienting the subjects and areas that need to be focused on inspection. In addition, continuing to strengthen the application of information technology to monitor the operations of credit institutions more promptly, improving the effectiveness of detecting and warning of risks early.
TB (according to VnEconomy)Source: https://baohaiduong.vn/tiep-tuc-thuc-hien-phuong-an-co-cau-lai-cac-to-chuc-tin-dung-396222.html
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