Vietnam Daily News

Vietnam has stricter rules for new banks

Written by Dailynews.vn Wednesday, 21 December 2011 15:46

The State Bank of Vietnam has introduced new regulations to restrict the establishment of new banks, including one that doubles the minimum asset requirement to VND100 trillion (US$4.75 billion).

Under the regulations, which will come into effect this February, founding shareholders of a bank are not allowed to be founders, owners or strategic investors in another credit institution. The restriction aims to prevent conflict of interest in the banking system and to make sure banking founders are not spreading their capital too thin, the central bank said.

Founding shareholders, before applying for a license to open a new bank, are required to make profits for five consecutive years, instead of the present three profit-making years.

According to a central bank statement in October, Vietnam's banking system has 52 commercial banks, 51 branches of foreign banks, and many other non-bank credit institutions.

The central bank plans to restructure the sector, aiming to have 10-15 large banks that can become "pillars" to support the financial system.

News webiste VnExpress cited central bank governor Nguyen Van Binh as saying on Friday that by 2015, Vietnam will have one or two banks with an asset base of around $50 billion that can compete with regional lenders.

Vietnam's largest bank, state-owned Agribank, now has an asset base of just $25 billion, Binh said.

Source: www.intellasia.net/news/articles/legal/111351496.shtml