The State Bank of Vietnam (SBV) has pledged to continue regularinspections of commercial banks to ensure the safety of Vietnam'sfinancial system.
The pledge came after the SBV's BankSupervisory Agency completed the first six months of inspections,designed to make the nation's banking sector healthier.
It is intended that close monitoring will identify banks that need restructuring and reduce the risk of a financial crisis.
The SBV confirmed that in the first six months, it had provided strictguidelines for voluntary mergers, consolidations, and acquisitionstaking place to remedy unfit lenders.
So far eight restructuringplans for nine commercial banks have been submitted to the PrimeMinister. Under the submission, three banks have merged and anotherthree banks have received approval for self-restructuring plans.
The central bank is yet to impose any involuntary restructuring, withonly one bank under consideration for compulsory intervention.
For the past two years, mergers have involved Saigon Commercial Bank(SCB), Vietnam Tin Nghia Bank (TinNghiaBank) and First Commercial Bank(Ficombank).
The SBV last year also gave approval for a takeoverof the Hanoi Housing Commercial Joint Stock Bank (HBB) by theSaigon-Hanoi Commercial Joint Stock Bank, merging over 8.866 trillionVND (422.19 million USD) of capital.
PetroVietnam Finance JointStock Corp (PVFC) and Western Commercial Joint Stock Bank (WTB) are alsoseeking a SBV approval for a completed merger to help boost earnings bythe third quarter.
The SBV backed the measures, saying they were helping to create a more solvent banking sector.
In a further measure, the SBV last week officially launched the Vietnam Asset Management Company (VAMC) to resolve bad debts.-VNA