Government works to restructure credit institution system

The committee is led by Prime Minister Pham Minh Chinh who will be assisted by Deputy Prime Minister Le Minh Khai and Governor of the State Bank of Viet Nam Nguyen Thi Hong. 

Its members include leaders from several ministries and central agencies.

The committee is responsible for assisting the Prime Minister in directing and implementing solutions to restructure credit institutions and handle bad debts in accordance with Decision 689/QD-TTg, dated June 8, 2022 of the Prime Minister on approving the Scheme for restructuring the credit institution system associated with the handling of non-performing loans for the 2021-25 period.

The committee is also in charge of putting forward solutions to resolve problems, difficulties, and challenges arising in restructuring of credit institutions.

Under Decision 689 , Viet Nam will have two or three commercial banks joining the top 100 powerful commercial banks in Asia. 

The capital adequacy ratio (CAR) of commercial banks is expected to reach at least 10-11 percent by 2023, and at least 11-12 percent by 2025.

Credit institutions are required to secure their law-specified charter capital by 2025. As for operating credit institutions, the charter capital of at least VND 15 trillion is required for the group of large-scale domestic commercial banks with financial potential and competitiveness, or VND 5 trillion for small- and medium-sized commercial banks and foreign-invested commercial banks. 

Meanwhile, the capital adequacy ratio (CAR) of commercial banks will reach at least 10-11 percent by 2023, and at least 11-12 percent by 2025.

For weak credit institutions and those subject to special control or having to implement the restructuring plans approved by competent authorities, capital increase plans must be approved by such competent authorities.

Besides, the rates of on-balance-sheet bad debts, bad debts sold to the Vietnam Asset Management Company (VAMC) that remain unsettled or irrecoverable, or debts likely to become bad debts of credit institutions must be kept at below 3 percent./.