Vietnam Central Bank Scrutinizes JS Banks' Capital Increase
The State Bank of Vietnam (SBV) strengthened its management over plans by joint stock commercial banks to increase registered capital in 2007, in an effort to avoid potential risks for the banking sector.
SBV deputy governor Dang Thanh Binh, on February 8 requested directors of SBV branches in cities and provinces to request central bank permission before approving plans to raise capital to over VND500 billion by rural and urban joint stock commercial banks.
Directors of SBV's municipal and provincial branches are also required to get permission before giving the green light for other commercial joint stock banks to raise their capital to over VND1 trillion.
SBV's move is aimed at preventing joint stock commercial banks from massively raising capital without considering the demand, efficiency of capital use, as well as their management capacity, which can expose them to various risks.
SBV Governor Le Duc Thuy had previously announced the state bank had not yet considered licensing any bank start-ups. (VNA)
Vietnamese
