Capital difficulties are putting pressure on some banks struggling to meet the central bank’s Basel II deadline of early next year, but experts suggest the central bank should not delay the process.
If banks cannot increase charter capital, they’ll have to reduce credit growth, which could harm the provision of capital to serve economic development.
Capital limitations hinder banks from meeting regulations on capital adequacy ratio (CAR) and performing their business due to a series of other regulations.
The Government is directing ministries and agencies to raise capital for State-owned commercial banks through the use of dividends or share sales this year, Deputy Prime Minister Vuong Dinh Hue said at a recent meeting.
State Bank of Vietnam statistics show that the average capital adequacy ratio (CAR) of the banking sector has been consistently falling since the beginning of this year.
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