Thursday, April 25, 2024 6:11:00 AM - Markets open
VN-INDEX 1,205.61 +28.21/+2.40%
HNX-INDEX 227.87 +5.24/+2.35%
UPCOM-INDEX 88.37 +0.86/+0.98%
VCCI disagrees with bank ownership ratio reduction
Vietnam News - 8/8/2023 11:01:43 AM
 (0 ratings. You must sign in to rate.)
Though the reduction of the ownership ratio for individual and institutional investors at credit institutions can help prevent market manipulation and cross-ownership, it might not be suitable at this time if ratified, according to the Vietnam Chamber of Commerce and Industry (VCCI).
This is one of the VCCI’s comments on the draft of the revised Law on Credit Institutions after consulting firms and experts. The draft law was submitted to the National Assembly for consideration at last month’s meeting and is now awaiting approval.
According to the draft law, regarding the ownership rate limit at credit institutions, Article 54 of the draft proposes to reduce the maximum ownership rate at a credit institution compared to the current regulations. Accordingly, individual investors will be allowed to hold a maximum of 3 per cent of the shares of a credit institution, down from the current 5 per cent. Institutional investors will be limited to a maximum stake of 10 per cent, instead of the current 15 per cent. The maximum stake held by a group of shareholders will fall to 15 per cent from the current 20 per cent.
It is said that the proposal for lowering the bank ownership ratio is aimed at preventing market manipulation and cross-ownership, thereby improving transparency, reducing conflicts of interest, and increasing the safety of the banking system.
However, the VCCI believes it is not appropriate under the current market conditions.
The proposed changes in the ownership ratio have raised concerns in the banking system, as they fear they may hamper economic growth.
According to the VCCI, in fact, the current limits on bank ownership in Việt Nam are relatively low compared to other countries. However, banks frequently grant credit facilities to groups of related customers, posing high risks to the entire system.
The VCCI explained that the issue is not the high percentages of shares held by some shareholders, but rather the potential conflicts of interest. This may lead to credit being granted to customers having connections with major shareholders, rather than being based on standard principles, which could pose risks to the safety of the banking system.
Instead of reducing the percentages of share ownership at banks, the VCCI suggested implementing stricter regulations on conditions and procedures for granting credit to customers related to shareholders.  VNS
Read original article here
Newer News
24/04 VN's economy forecast to grow by 5.5 per cent in 2024
24/04 EVN seeks PM's solutions for solving challenges in PPA negotiations
24/04 Standard Chartered revised down Việt Nam’s 2024 GDP growth forecast to 6%
24/04 Vietnamese PM outlines three key breakthroughs for ASEAN's path to digital excellence
19/04 VN's exports $25.77 billion to the US in Q1
17/04 Vietnamese airlines boost capacity amid holiday rush despite aircraft shortage
16/04 Private sector contributes 45% of GDP
12/04 Việt Nam’s growth projected at 6% in 2024 with policy adjustment: AMRO
12/04 Public investment projects: big push for construction materials sector
10/04 Việt Nam's exports to India maintain growth momentum
Older News
08/08 Power enterprises see bright future despite poor results in Q2
03/08 Wooden products begin to get export orders again after lull
03/08 Opportunities for Việt Nam to boost rice exports: official
03/08 Higher electricity prices aim to boost economic development
02/08 Wooden products begin to get export orders again after lull
01/08 Trade surplus reaches US$15.23 billion in seven months
01/08 Vietnamese rice prices up after rice export ban of India, Russia, UAE
01/08 National CPI up 0.45% in July
25/07 UK to recognise Việt Nam as market economy
24/07 Steel producers await positive results in H2
Newsletter Signup
Top Stories
Businesses concerned about rising exchange rate pressure
Gold bar auction to be resumed after 11 years of suspension
PM Chính requires strengthened gold market management
Bank shareholders to receive high dividends, stock bonuses
Shares sustain gains on strong investor confidence
Market Update
Last updated at 3:05:00 PM
VN-INDEX 1,205.61 +28.21/+2.40%
Real-time chart
Top 5 Actives
Top 5 Gainers
Top 5 Losers
My Favorite Quotes
Your most recently viewed tickers will automatically show up here if you type a ticker in the Get Quotes box on the top of the page.
Company Research
Type in the symbol above for thorough background information, key statistics and financial information.
Stock Sectors
We continuously improve our services, here are the latest updates...
Allow you to monitor a customised group of securities. You can set up multiple Portfolios to help you better manage your investments.
Trigger Alerts
Get up-to-date alerts delivered directly to your email address.
Stock Screener
Allow you to filter the market and find exactly what sort of company you are looking for.
Live Terminal
Get instant access to FREE REAL-TIME streaming quotes for hundreds of stocks from HOSE, HNX and UPCOM exchanges.