VIETNAM TRIES TO HAVE AT LEAST 1 OR 2 COMMERCIAL BANKS RANKED IN THE ASIA’S 100 LARGEST BANKS
On July 20, 2017, the State Bank of Vietnam issued the 06/CT-NHNN dated July 20, 2017 of the State Bank of Vietnam on implementing the Resolution No. 42/2017/QH14 on pilot settlement of bad debts of credit institutions and Decision No. 1058/QD-TTg on approving Scheme for “Restructuring system of credit institutions associated with settlement of bad debts in the period of 2016-2020”.
At the Directive, the State Bank of Vietnam emphasizes the objectives for the measures for restructuring of system associated with settlement of bad debts as mentioned in Scheme 1058 will be synchronously initiated, financial situation will be made healthier, administration capacity of credit institutions will be improved as per the law and in conformity with international practice; commercial banks, by 2020, are basically expected to have regulatory capital as required by Basel II; and at least 1 or 2 commercial banks is/are ranked in the Asia’s 100 largest banks. By 2020, bad debt ratio of the system, bad debt ratio to be sold to VAMC and bad debt ratio having undergone classification measures is expected to account for less than 3%.
For above objectives, the State Bank of Vietnam requires credit institution to formulate a structural plan associated with settlement of bad debts; adopt measures for improving internal administration capacity, especially risk management, improving credit appraisal quality, improving qualifications of personnel in charge of credit appraisal and debt settlement; and effectively adopt measures for avoiding incurring bad debts by violations of law at individual credit institutions.
