Stop the State Bank from buying banks for 0 VND

This is the information just released by the Government Electronic Information Portal, according to the conclusion agreed at the Government meeting on law-making on April 11, with the content of discussing the draft Law on Restructuring Credit Institutions and Handling Bad Debt.

Stop the State Bank from buying banks for 0 VND

The draft, which is being consulted for completion, includes provisions on detecting and handling credit institutions under special control, with the following handling options: recovery plan; legal entity handling plan (merger, consolidation, sale of entire charter capital, dissolution, bankruptcy); and compulsory transfer plan for credit institutions under special control.

One of the issues discussed at the above meeting was about compulsory purchasing measures.

According to the State Bank, the compulsory transfer plan is the plan in which the owner, capital contributor, and shareholder of a credit institution under special control must transfer all capital contributions and shares to the designated credit institution or the State Bank.

This is a measure applied to credit institutions with the weakest status, and the conditions, procedures, and authorities are also most strictly regulated.

However, at the meeting, there were opinions that this measure should not be regulated because it could violate shareholders' rights and citizens' rights.

Ocean Bank is one of the banks that was acquired by the State Bank for 0 VND.

According to the State Bank's explanation, in principle, compulsory transfer is the last resort when a weak commercial bank cannot implement a recovery plan, cannot implement a dissolution plan (due to the inability to fully pay its debt obligations) and cannot implement a bankruptcy plan due to the huge impact on financial security, the economy, and social order and safety.

Through discussion, Government members agreed with the State Bank's proposal that there should be regulations on this measure.

Along with other measures mentioned in the draft law, opinions also agreed that from now on, there will be no issue of the State Bank buying back banks at 0 VND.

Accordingly, weak banks will be put under special control without the State Bank buying them back at zero dong, then taking financial measures, and finally applying compulsory purchase measures.

The draft also states that banks that have been acquired by the State Bank at a price of 0 VND will be handled according to the options prescribed in the draft law.

In the recent period, in restructuring the commercial banking system, in the option of not allowing bankruptcy, the State Bank has successively acquired three commercial banks at zero dong, after these cases could not implement recovery measures. These three cases include: Construction Bank, Ocean Bank and Global Petroleum Bank.

According to VnEconomy