The State Bank of Vietnam (SBV), under a draft regulation, sets stricter criteria for the establishment of joint stock commercial banks to ensure the health of Vietnamese financial institutions.

Under the SBV's draft, a new commercial bank must have at least 100 shareholders, including at least 3 founding shareholders which are organizations each having total asset of 2 trillion Vietnamese dong (VND) (125 million U.S. dollars) and chartered capital of 500 billion VND (nearly 31.3 million dollars) upwards, according to the Banking Department under the state bank on Thursday.

If founding shareholders are commercial banks, they must have total asset of at least 20 trillion VND (1,250 million dollars), chartered capital of 1 trillion VND (62.5 million dollars), and bad debt ratio below 2 percent.

Within three years since the establishment of a new bank, its shareholders are not allowed to transfer stakes. Institutional shareholders are permitted to hold a maximum 20 percent of its chartered capital, and individual shareholders no more than 10 percent.

Applications for the formation of a new bank must prove its capacity regarding finance, governance, risk management, information technology deployment, market analysis, and development strategy.

It will take 5-6 months for an application to be completed and the same amount of time for it to be approved by the SBV, the department said, noting that over 10 applications have been submitted to the state bank so far.

Source: Xinhua