The State Bank of Vietnam (SBV) should establish Steering Committee for Banking System Restructuring.

The State Bank of Vietnam (SBV) should establish Steering Committee for Banking System Restructuring, the local online newspaper Dau Tu Chung Khoan quoted Vu Dinh Anh, Deputy Head of the Institute for Scientific Research, Market and Price (ISRMP), as saying.

The Committee will help to coordinate restructuring activities among related parties; focus on dealing with arising problems timely during the restructuring process; guide, receive and process documents for merger, consolidation, acquisition, license revocation or asset liquidation; monitor and make adjustments for the restructuring process, Anh added.

The State Bank of Vietnam previously announced four fundamental principles in restructuring the local banking system: (1) Restructuring the banking sector involves developing a banking industry with diversified ownership structure, scales and types to meet various demand for banking services of the whole economy; (2) Restructuring the banking sector must ensure to strengthen the health and safety of the banking sector; (3) Mergers and acquisitions of banks are to be carried out on voluntary basis and must ensure the rights of the depositors as well as the rights and responsibilities of other related parties; (4) Restructuring the banking system must be implemented via an appropriate roadmap with multiple measures and approaches.

“[Abovementioned] Four principles of the government are essential”, Anh added, proposing another four important principles to restructure the banking sector as follows.

(1) Restructuring the banking system must be carried out together with restructuring investments and corporations.

(2) Restructuring the banking system must be carried out along with restructuring the entire financial system.

(3) It is essential to have the participation of foreign investors in Vietnam’s financial system as a basis for local commercial banks to conduct restructuring.

(4) The central bank needs to set out principles for tackling bad debts and liquidity shortage, both before and after restructuring.

Source Sophie/ StoxPlus