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PM approves Scheme of banking restructuring in 2011 - 2015 period
The Prime Minister (PM) issued Decision No.254/QD-TTg on March 1 to approve the Scheme of restructuring of the banking sector in the 2011-2015 period.
Accordingly, the Decision stipulates the responsibilities of the State Bank of Vietnam (SBV), the Ministry of Finance (MoF), the other relevant ministries, agencies and organizations, and credit institutions in implementing the Scheme. In particular:
SBV is responsible for conducting the following tasks: (1) taking the lead in coordinating with relevant ministries, agencies, organizations and municipal and provincial people’s committees in carrying out the Scheme; (2) assessing and evaluating the operational status, and the quality of assets and non-performing loans of credit institutions; (3) taking the lead in coordinating with the relevant ministries, agencies and organizations in formulating and submitting the plans of “Banking Sector Development Strategy by 2020”, and “De-dollarization in the economy”; (4) taking the lead in coordinating with the relevant ministries, agencies and organizations to formulate the decision on capital contribution and share purchase by the SBV at credit institutions in line with Item 3 of Article 149 of the Law on Credit Institutions to the PM for issuance before July 1, 2012; (5) guiding and monitoring credit institutions in formulating and carrying out the Plan of restructuring each credit institution in accordance with solutions identified in the Scheme enclosed with this Decision; (6) enhancing the state management and supervision of the money market and operations of credit institutions; (7) taking the lead in coordinating with the Ministry of Information and Communication, municipal and provincial people’s committees and the mass media in education and dissemination of the guidelines and policies on monetary and banking operations and restructuring of credit institutions to obtain consensus of the public and avoid adverse impacts on the banking sector and the financial market; and (8) providing guidelines to the relevant ministries, agencies and organizations to implement the Scheme, making semi-annual reports to the PM by July 1st and December 31 on the progress, results, difficulties, obstacles and recommendations in the implementation process, and promptly reporting any arising problems beyond its jurisdiction to the PM for solution.
MoF is required to do the following tasks: (1) coordinating with SBV in formulating and submitting to the PM the Plan on dealing with non-performing loans of credit institutions and recapitalization of state-owned commercial banks until 2015; (2) taking the lead in coordinating with SBV in formulating and submitting the policies and regulations to the relevant authorities for issuance in terms of exemption and reduction of tax, fees and charges related to the trading of non-performing loans and loan-guaranteed assets of the restructured credit institutions; corporate income tax exemption for credit institutions following their M&A; and proper tax and fee remission for people’s credit funds and micro-financial institutions.
The relevant ministries, agencies and organizations are responsible for implementing the Scheme within their jurisdiction in line with law. The Ministry of Information and Communication, and other relevant ministries, agencies and organizations and municipal and provincial people’s committees closely coordinate with the SBV to dessemminate the directives and policies on monetary and banking operations and the banking sector restructuring. The Ministry of Public Security and other relevant ministries, agencies and organizations and municipal and provincial people’s committees closely coordinate with SBV to detect and handle violations on monetary and banking operations. The relevant ministries, agencies and organizations are responsible for assisting credit institutions to complete legal documents related to loan-guaranteed assets so that they could sell and recover their loans as earlier as possible. Economic groups and state-owned corporations as the holding entities of credit institutions are responsible for restructuring their own credit institutions and coping with their aftermaths and working out a reasonable roadmap to withdraw their investment resources from these credit institutions.
Credit institutions have to (1) formulate and implement their restructuring plans; (2) maintain safe and sound operations, and protect the state assets and legitimate rights of residents during the restructuring process; (3) strictly comply with law and directives of PM and SBV on banking restructuring; and (4) promptly and honestly report to SBV the results, difficulties, problems and recommendations (if any) on banking restructuring.
The objective of the Scheme is to restructure the banking sector in a fundamental, comprehensive and thorough manner so that by 2020 the credit institutions will become advanced , prudent and effective universal ones in accordance with international standards and practices in order to better meet the requirements of financial and banking services of the economy. In the 2011-2015 period, the banking sector will focus on financial cleaning and capacity building for credit institutions and heightening the market discipline and principle in banking operations. Enormous efforts will be made to put in place at least one or two commercial banks matching with regional banks by end 2015.
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