SBV said in 2022 the central bank proposed a plan on restructuring the commercial banks under special control as well as weak credit institutions, and specific solutions for each bank.

The banks include CBBank, OceanBank, GP Bank, and DongABank.

To date, the government has released a resolution on compulsory transfer of the two banks which SBV earlier bought for zero dong. The banks had to sell to SBV after they failed to implement measures to recover their operations.

SBV is directing relevant parties to carry out procedures as prescribed in the Law on Credit Institutions (amended and supplemented) on compulsory transfer.

Also, the central bank will submit to the government a plan on compulsory transfer for the remaining banks.

SBV has instructed ‘zero dong banks’ to hire consultancy firms to conduct a valuation of businesses as required by the law.

To date, the consultancy firms have issued valuation certificates that have been forwarded to the State Audit for auditing.

In the case of Saigon Commercial Bank Joint Stock Bank (SCB) which has been put under special control since October 2022, SBV said it has joined forces with ministries and branches to ensure the safety of the banking system and the benefits of depositors.

SBV, based on a report assessing the overall situation of SCB and the suggested plan on the SCB reshuffle, is seeking potential investors before it submits the reshuffle plan to the government.

According to SBV, the restructuring process of credit institutions meets faces difficulties because of different reasons. 

It is necessary to find commercial banks that can meet requirements to admit weak banks. This is a complicated process, because banks need time to persuade shareholders, especially big shareholders and foreign strategic shareholders to accept the compulsory transfer.

Meanwhile, there are problems in the policies and financial sources to handle weak credit institutions and to design solutions for compulsory transfer of banks, especially DongABank. 

The other steps, including the collection of opinions from relevant ministries and branches, take time because there is no precedent for such an action.

Moreover, the capability of officers, inspectors and supervisors is limited, and they are under pressure and have to handle a large, complicated workload (carrying out inspection and supervision and restructuring weak banks at the same time).

SBV is now implementing a project on amending the Law on Credit Institutions, with high attention paid to building a mechanism to deal with weak banks.

Tuan Nguyen