Difficulty in finding banks eligible to receive compulsory transfers

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Illustrative photo. Internet

Recently, two “zero-VND” banks, the Construction Commercial Bank (CB) has officially transferred to the Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank), while the Ocean Commercial Bank (OceanBank) has been transferred to the Military Joint Stock Commercial Bank (MB).

Regarding the remaining compulsory purchase banks, the SBV's recent report to the National Assembly said that it reviews and carries out the necessary procedures to submit to the Government for approval of the Compulsory Transfer Plan.

Additionally, the SBV continues to put DongA Bank and SCB under special control.

According to the SBV, the slow process of bank restructuring results from the long process of seeking for and negotiation of commercial banks eligible for compulsory transfers (weak financial capacity, management, and experience in credit organization restructuring), and the large dependence on the voluntary participation of commercial banks.

Moreover, banks receiving compulsory transfers also need 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 and to develop a compulsory transfer plan still have many shortcomings, obstacles, and cucumber procedures.

The coordination and consultation of relevant ministries and branches is also prolonged because the handling of weak banks is complicated and unprecedented.

The capacity of some officers performing inspection and supervision is still limited in the context of pressure to handle a large and complicated workload, with urgent requirements on progress (both performing inspection and supervision and restructuring weak banks).

Therefore, the SBV said that in the near future, it will continue to closely coordinate with relevant ministries, branches and agencies to implement solutions to fundamentally address weak credit institutions.

Focusing on implementing the direction of competent authorities on restructuring and address weak banks, ensuring stable operations and supporting these banks to gradually recover.

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