Stricter regulations on share holding limits

With a view to making the banking sector more safe and transparent, the State Bank of Vietnam (SBV) will take bold actions against breaches of its regulations on bank share ownership restriction.

In Circular No. 06/2015/TT-NHNN issued on June 1, the SBV requests credit institutions to coordinate with shareholders or groups of shareholders with holding rates exceeding the prescribed limits in working out plans to remedy their violations by December 31 this year, except cases approved by the Prime Minister or to be handled under the SBV-approved restructuring plans.

The SBV will not consider appointing those who hold shares in a credit institution exceeding the permitted limits as well as representatives of their capital contributions to become members of the Management Board or Supervisory Board or director general of such credit institution unless their stakes are reduced to the prescribed limits.

From mid-July this year, credit institutions may not extend or additionally extend credit to shareholders or their affiliated persons that violate the SBV’s regulations.

According to the SBV’s statistics, out of 33 operating joint-stock commercial banks, five banks still have individuals with holding rates exceeding five percent, five banks holding shares exceeding 15 percent, and eight banks have groups of shareholders and affiliated persons with holding rate exceeding 20 percent, of the charter capital.-

Source: http://vietnamlawmagazine.vn/