Vietnam to Raise Banks Safety Ratio Next Year, Governor Says
The State Bank of Vietnam (SBV) will raise safety ratios at commercial banks further next year in a move to standardize local banking system and help it operate in a safe mode, according to SBV Governor Nguyen Van Giau.
The safety ratios will be lifted gradually to a higher level from January 1, Giau told the Thoi bao Kinh te online newspaper on Aug 14, adding that the move also aims to facilitate local banks to better integrate into global market.
The governor, however, did not specify which safety ratios, including capital adequacy ratio (CAR), would be increased.
The central bank issued the Circular No. 13 in late May, requesting commercial banks to raise the CAR to 9% from October 1. The request came as policy makers urged local banks to boost lending to stimulus economic growth.
A group of lenders has proposed a delay in the Oct. 1 deadline because banks were given too little time to meet the new requirement.
Giau said he didn’t think the new regulation would be taking effect too quickly, noting that credit institutions have up to 130 days to prepare for the implementation of the circular, compared to some 45 days for other legal documents.
Concern that banks have to sell equities to raise funds to meet the CAR requirements sent the benchmark VN-Index ended down 3.17%, or 14.72 points at 448.4, on Aug 12, the lowest level since Dec 18 last year. (Labor)
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