Vietnam Central Bank Not to Subsidise All Costs for Bank Restructuring: SBV Governor

04-Jan-2012 Intellasia | StoxPlus | 7:01 AM Print This Post

The State Bank of Vietnam (SBV) would not subsidise restructuring costs of any credit institutions, Nguyen Van Binh, Governor of the central bank said via email on December 29, the Saigon Times reported.

Losses and costs incurred during banking sector restructuring process should be reasonably shared between related parties (government, owners, investors and depositors). Particularly, bank owners must wholly be responsible for arising losses.

Credit institutions will be assessed, classified into groups of “healthy”, “temporary lack of liquidity” and “weak”. Weak commercial banks, which are likely to adversely affect the whole system, will be prioritised for restructuring. In case these banks fail to recover, they will be eliminated from the market.

In addition, the central bank will support credit institutions with temporary liquidity shortage. These banks will also be asked to reorganise and consolidate their operations to become safer and healthier.

The central bank also voiced to encourage local lenders to carry out merger, acquisition, consolidation deals on voluntary basis.


Category: Finance

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