Banking Groups Seek Legal Recognition in Vietnam

Many banking groups have not been legally recognized in Vietnam despite being made presence and operating for a long time, Thoi Bao Kinh Te reported.

 

The paper said Vietnam has so far witnessed announcement by Sacombank, Vietcombank, BIDV, Vietinbank, and ACB on operation under the mode of conglomerates, admitting that these banking groups, however, still do not have legal status.

 

Pham Huyen Anh, vice director of the Banks and Non-bank Credit Institutions Department under the State Bank of Vietnam (SBV) is quoted as saying the model of a banking group is popular in Vietnam, and that a legal framework to stipulate the operations of banking groups needs to be set up.

 

If state management agencies do not promulgate suitable measures to supervise banking holding companies, members of banking groups (subsidiary companies, joint ventures, the organizations that have the power to control banks) could cause the collapse of banks and cause instability in the banking system as a whole.

 

At present, SBV, the country's central bank, is drafting a legal document stipulating the organization and operations of the subsidiaries belonging to commercial banks.

 

The central bank has been collecting suggestions on the draft document, which is hoped will be promulgated before the end of the year. (VnEconomy)