The State Bank of Vietnam needs to clearly know the health and financial capacity of each commercial bank to prepare a suitable roadmap with specific policies and directions for restructuring each group of banks, Tran Du Lich, an economic expert told the local online newspaper Saigon Giai Phong.

Restructuring the banking system is the right move of the government in the context of rising bad debts and falling liquidity of domestic commercial banks, Lich said, emphasizing that banking sector restructuring should be cautiously implemented to avoid collapse.

There are several ways to restructure the local banking system, Lich said, pointing out three approaches: 1) the central bank may encourage large and small banks to collaborate in terms of liquidity, credits, assets or even to purchase each other’s shares to maintain the group; 2) several banks may voluntarily carry out mergers to enhance their capacity; 3) the SBV may exercise its power to acquire banks or to force these banks to go under restructuring.

The central bank will offer supportive measures to those banks who voluntarily perform restructuring well, Lich said, reiterating that the government is trying its utmost to prevent banking system collapse.