Vietnam Daily News

Banks must cover restructuring costs: central bank

Written by Dailynews.vn Saturday, 04 February 2012 16:16

The government will facilitate the restructuring of banks but not fully subsidise the costs involved in the process, State Bank of Vietnam governor Nguyen Van Binh has said.

"During the process of restructuring and dealing with weak credit institutions, state-owned banks and healthy partly-private lenders will play a major role with support from the government and the central bank," he said in an interview to news website VnExpress Monday.

But the costs involved would have to be shared with the government by bank owners, investors and depositors, he said.

"Bank owners will have to take full responsibility for the damages first," the governor said.

The State Bank of Vietnam announced its plan to restructure the banking system last October. Governor Binh has said the central bank will complete reviewing, classifying and reorganising all banks by the end of March 2012.

He told VnExpress that while the restructuring plan is not easy to carry out, it is "totally viable."

The timing is also favourable for such a plan as the country is also restructuring the economy as a whole, Binh added.

He said banks are encouraged to seek merger and acquisition opportunities voluntarily.

Binh said the central bank will also focus on dealing with bad debts of commercial banks and improving their management to meet international standards.

Source: www.intellasia.net/news/articles/finance/111355393.shtml