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Tuesday, June 25, 2024

Charter capital cuts planned for banks subject to forced transfer

By Nguyen Tan

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HCMC – The State Bank of Vietnam (SBV) would decide whether the charter capital of commercial banks subject to forced transfer in a bid to push down their accumulated losses, according to a draft SBV circular on special controls on problem banks.

The SBV, the central bank, is sending out the draft circular for reviews. If it is approved, it would replace Circular 11, which was signed on August 2, 2019 by the SBV governor to provide regulations on special surveillance of problem banks.

Some provisions in Circular 11 are no longer appropriate with the 2024 Law on Credit Institutions.

The new circular is expected to take effect on July 1.

The forthcoming cicular would empower the SBV to adjust down the charter capital of a bank subject to compulsory transfer as a way to reduce its accumulated losses.

CBBank, OceanBank, DongABank, and another bank under special control would be those forced to be transferred.

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