ID :
153577
Thu, 12/16/2010 - 05:15
Auther :
Shortlink :
http://m.oananews.org//node/153577
The shortlink copeid
Commercial banks have one more year to comply with stricter new minimum capital requirements
Hanoi (VNA) - Commercial banks have one more year to comply with stricter new
minimum capital requirements.
The Prime Minister on Dec.4 set a new deadline of December 31, 2011, for banks to
comply with the requirement that they maintain a minimum charter capital of 3
trillion VND (141.71 million USD).
He has instructed the State Bank of Vietnam to work with related agencies to
amend Decree No 141, which sets the deadline at the end of this month.
The State Bank had earlier vowed that the deadline was hard-and-fast, since banks
had had four years to prepare for compliance, and warned that banks failing to meet
the deadline would face closure or forced merger or acquisition.
However, the process of increasing charter capital had been complicated for many
banks by the global financial crisis, the withdrawal of investment by State
shareholders, and a gloomy domestic securities market, said the head of the State
Bank's supervisory and inspection department, Duong Quoc Anh.
"The fact that the Government has discouraged State-owned economic groups from
investing in non-core business lines and instructed these groups to revoke such
investments has caused big trouble for a number of financial institutions," Anh
wrote on the State Bank website.
State-owned garment maker Vinatex, for instance, recently sold an 11-percent
interest in Navibank, one of the banks unable to meet the new requirements.
In prior proposals to the Government, the central bank had insisted on the higher
charter capital requirements in order to improve the security and capacity of the
nation's banking system.
By the end of October, 22 commercial banks not yet in compliance had received State
Bank approval to increase registered capital from an average of nearly 1.6 trillion
VND (75.57 million USD) to an average of 3.5 trillion VND (165.32 million USD).
Eleven of these banks had received State Securities Commission approval to raise
additional funds by offering shares.
The State Bank has previously extended deadlines for commercial banks to meet
higher capital requirements. Commercial banks were required by law to register
capital of at least 1 trillion VND(52 million USD) by the end of 2008, but only 28
banks had met the requirement by the deadline. Another 10 managed to meet it only
as late as the end of 2009, with the central bank granting permission for the
delayed compliance.- Enditem
minimum capital requirements.
The Prime Minister on Dec.4 set a new deadline of December 31, 2011, for banks to
comply with the requirement that they maintain a minimum charter capital of 3
trillion VND (141.71 million USD).
He has instructed the State Bank of Vietnam to work with related agencies to
amend Decree No 141, which sets the deadline at the end of this month.
The State Bank had earlier vowed that the deadline was hard-and-fast, since banks
had had four years to prepare for compliance, and warned that banks failing to meet
the deadline would face closure or forced merger or acquisition.
However, the process of increasing charter capital had been complicated for many
banks by the global financial crisis, the withdrawal of investment by State
shareholders, and a gloomy domestic securities market, said the head of the State
Bank's supervisory and inspection department, Duong Quoc Anh.
"The fact that the Government has discouraged State-owned economic groups from
investing in non-core business lines and instructed these groups to revoke such
investments has caused big trouble for a number of financial institutions," Anh
wrote on the State Bank website.
State-owned garment maker Vinatex, for instance, recently sold an 11-percent
interest in Navibank, one of the banks unable to meet the new requirements.
In prior proposals to the Government, the central bank had insisted on the higher
charter capital requirements in order to improve the security and capacity of the
nation's banking system.
By the end of October, 22 commercial banks not yet in compliance had received State
Bank approval to increase registered capital from an average of nearly 1.6 trillion
VND (75.57 million USD) to an average of 3.5 trillion VND (165.32 million USD).
Eleven of these banks had received State Securities Commission approval to raise
additional funds by offering shares.
The State Bank has previously extended deadlines for commercial banks to meet
higher capital requirements. Commercial banks were required by law to register
capital of at least 1 trillion VND(52 million USD) by the end of 2008, but only 28
banks had met the requirement by the deadline. Another 10 managed to meet it only
as late as the end of 2009, with the central bank granting permission for the
delayed compliance.- Enditem
