Central bank moves to accelerate restructuring of credit institutions hinh anh 1Illustrative image (Source: VNA)
Hanoi (VNA) – Governor of the State Bank of Vietnam (SBV) Le Minh Hung has called for more efforts to reshuffle credit institutions and settle bad debts to enhance the banking system’s safety.

According to recently-signed Directive No.2/CT-NHNN, Hung requested more mergers and acquisitions of credit institutions to increase their competitiveness and remove poor-performing ones.

He also ordered the accelerated restructuring of State-owned commercial banks to guarantee stability in the monetary market and safety in credit institutions.

Measures to increase the affordability of commercial banks and to improve the transparency of credit institutions’ activities are equally important, he said.

The Governor also asked credit institutions to draw up measures to handle bad debts and prevent new ones while curbing credit growth and quality, and promptly detecting and punishing violations in the field.

The SBV will not allow credit institutions without loan classification and risk provision to open new branches, transaction offices and ATMs, or share dividends and profits for shareholders, he said.

Instead, credit institutions will be required to gradually set up a transparent debt trading market for investors.

The directive states that credit institutions need to have a full and accurate assessment of credit growth in high-risk fields such as real estate, securities, build-operate-transfer (BOT) and build-transfer (BT) transport projects.

Any unhealthy competition behaviors in banking activities are banned, especially in capital mobilisation, the Governor said.

He also called for an improved legal system to open the financial market, develop the banking system, and ensure safety for business activities of credit institutions.-VNA