Vietnam to Revise Chartered Capital Roadmap for Banks
The State Bank of Vietnam, the country’s central bank, said recently that it has set up a working group which will revise legal capital requirements for credit institutions under the Decree No. 141/2006/ND-CP.
The move came after many analysts have raised concerns over low liquidity of the economy since local small banks must consume a huge volume of funds to scale up their registered capitals to VND3 trillion by end-2010, as stipulated in the decree.
The online newspaper VnEconomy has estimated that undercapitalized lenders will need VND30.26 trillion to complete the capital increases, equal to the average monthly trading value on the Hochiminh Stock Exchange.
Vietnam currently has 39 joint stock commercial banks, excluding two partly-privatized Vietcombank and Vietinbank. Up to 30 out of them have registered capital of less than VND3 trillion, including 21 lenders with capital of below VND2 trillion each.
Under the decree, local banks are also requested to boost their registered capital to VND5 trillion in 2012 and VND10 trillion in 2015.
Recently, the SBV has been asked to recheck the Circular No. 13 that stipulates commercial banks to raise their capital adequacy ratios (CAR) to 9% from Oct 1 versus current 8%. (SBV, VnEconomy)
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