ID :
48267
Sun, 03/01/2009 - 04:22
Auther :
Shortlink :
http://m.oananews.org//node/48267
The shortlink copeid
Struggling banks face merger, liquidation
Hanoi (VNA) - Poor-performing credit institutions have been told they could be forced to merge or be acquired by the State Bank of Vietnam if their collapse was seen to threaten the whole banking system.
A circular containing a draft plan for merger and acquisition of credit
institutions by the central bank has been sent to the institutions and its
available for public comment.
Under the drat plan, poor-performing credit institutions would be allowed to
spontaneously merge or acquire in order to remain or develop their business.
The draft plan states the goal is to set up credit institutions with bigger scale
and better and safer performances and is in line with integrations going on around
the world.
In order to reduce or limit illegal insider trading in advance of mergers and
acquisitions, the draft plan forbids members of the executive board, supervising
board, general director and deputy general director at the credit institutions to
transfer or contribute stake or capital.
In cases where the stake transfer or contribution is unavoidable, the credit
institutions must seek approval from the central bank.
Before implementing mergers and acquisitions, credit institutions must have an
approval in principle and official approval.
The draft plan covers merger and acquisition activities at State-owned banks,
joint stock banks, joint venture banks, wholly foreign banks and co-operative
banks.
In the latter part of last year, as many as nine small banks had reached the point
where they could be closed because they each had a charter capital of less than 1
trillion VND (37.47 million USD). By the end of the year, however, all the banks
had managed to increase their charter capital and remain in business.
Vietnam has 40 part-privatised banks and joint stock banks, four State-owned
banks, one bank for social policies, one bank for development, one institution
for deposit insurance, two wholly foreign banks, five joint-venture banks and
about 40 branches of foreign banks. Three foreign banks have been granted
licences and are expected to debut this year as wholly foreign banks in
Vietnam.-Enditem
A circular containing a draft plan for merger and acquisition of credit
institutions by the central bank has been sent to the institutions and its
available for public comment.
Under the drat plan, poor-performing credit institutions would be allowed to
spontaneously merge or acquire in order to remain or develop their business.
The draft plan states the goal is to set up credit institutions with bigger scale
and better and safer performances and is in line with integrations going on around
the world.
In order to reduce or limit illegal insider trading in advance of mergers and
acquisitions, the draft plan forbids members of the executive board, supervising
board, general director and deputy general director at the credit institutions to
transfer or contribute stake or capital.
In cases where the stake transfer or contribution is unavoidable, the credit
institutions must seek approval from the central bank.
Before implementing mergers and acquisitions, credit institutions must have an
approval in principle and official approval.
The draft plan covers merger and acquisition activities at State-owned banks,
joint stock banks, joint venture banks, wholly foreign banks and co-operative
banks.
In the latter part of last year, as many as nine small banks had reached the point
where they could be closed because they each had a charter capital of less than 1
trillion VND (37.47 million USD). By the end of the year, however, all the banks
had managed to increase their charter capital and remain in business.
Vietnam has 40 part-privatised banks and joint stock banks, four State-owned
banks, one bank for social policies, one bank for development, one institution
for deposit insurance, two wholly foreign banks, five joint-venture banks and
about 40 branches of foreign banks. Three foreign banks have been granted
licences and are expected to debut this year as wholly foreign banks in
Vietnam.-Enditem
