The Ministry of Finance sets objectives for the banking system | Company

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Hanoi (VNS/VNA) – The Ministry of Finance (MoF) has published targets for bank restructuring in order to strengthen the strength of The Vietnamese financial sector.

The Ministry of Finance will coordinate with other ministries to establish regulations on capital increases for state-owned credit institutions, especially the Bank for Agriculture and Rural Development of Vietnam (Agribank).

The Ministry of Finance will also coordinate with the State Bank of Vietnam to apply International Financial Reporting Standards (IFRS) in accordance with financial reporting standards in Vietnam.

In addition, it will study and develop standards for debt assessment, including bad debts, with the aim of creating a legal basis for debt assessment activities to ensure objectivity of assessment. debt.

Ministries and agencies will be required to report their results to the Department of Banking and Financial Institutions of the Ministry of Finance by November 15 each year so that the department can compile the results to send to the SBV by November 30 each year.

The government issued Decision No. 689/QĐ-TTg in June this year, which approved the project for the restructuring of the system of credit institutions associated with the settlement of bad debts in 2021-25. The project aims to create a clear and substantial change in the restructuring of the banking system.

Under the decision, Vietnam will reduce the number of credit institutions and basically complete the settlement of underperforming banks by 2025 to make the banking system healthier and more sustainable.

The project encourages investors to voluntarily participate in the purchase, sale, consolidation and merger of credit institutions in order to increase the size and competitiveness of institutions to make the country’s banking system one of of the top four in ASEAN by 2025.

Under the project, Vietnam also aims to have at least two to three commercial banks among Asia’s 100 strongest banks by 2025.

The project stipulates that the capital adequacy ratio of commercial banks will reach at least 10-11% by 2023 and at least 11-12% by 2025.

Large banks, excluding weaker ones, must have a minimum registered capital of VND 15 trillion, and the number for small and medium banks will be VND 5 trillion by 2025. The minimum registered capital required for finance companies and finance leasing companies is VND 750 billion and VND 450 billion, respectively.

For weak banks under the special control of the central bank, the capital increase will be implemented according to plans approved by the competent authority.

The draft also directs Vietnam Asset Management Company to submit to relevant authorities for review a plan to increase its capital to VND 10 trillion in 2022-25 to improve the financial capacity and operational efficiency of the company. agency in the treatment of bad debts.

According to the project, the rate of bad debts on the balance sheets of credit institutions, excluding those of fragile commercial banks, will be less than 3% at the end of 2025./.

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