The central bank, when reporting plan on preventing circular ownership in credit institutions and settling the cases of ownership ratio excess among banks and between banks and businesses, said that the problems have been gradually controlled.

However, credit institutions and related persons contributing capital and buying into other credit institutions are still issues of concern that may pose risks.

Under the current law, the ownership ratio of one commercial bank in another commercial bank must not be higher than 5 percent of voting share capital of the other bank. 

After many efforts, the problems of a bank owning more than five percent of voting share capital of another bank, and the capital contribution by one bank to other banks have been reduced.

However, the central bank complained that it is difficult to deal with the cases of excessive ownership ratio and cross ownership, if big shareholders and their related persons deliberately conceal the problem.

Shareholders own shares in the name of other individuals/institutions, so it is difficult to discover the violations and attempts to circumvent the law.

Experts warned that the problem may cause serious consequences. Commercial banks may be controlled by the shareholders (who hold more shares than shown in records) which puts banks at risks.

According to SBV, some commercial banks have high concentration levels of shares, which means shares held by a small number of shareholders and related persons. This doesn’t violate current laws, but SBV believes that there are risks that must be controlled.

One of the reasons that makes it difficult for SBV to settle the cross ownership is that related subjects are put under the management of many different ministries, and are out of control of the central bank.

Under the current law, SBV has the right to control credit institutions, which means that SBV doesn’t have information and tools to control ownership in companies in other business fields.

Discovering relations between enterprises is a difficult task because of the lack of information to define the ownership situation of businesses, especially non-public companies.

SBV has also complained about the difficulties in divestment. In most cases, it is difficult to find interested investors, especially after Covid-19. The divestment must be approved by competent agencies, ministries and branches, which are the governing bodies of the companies, and the agencies representing the state’s capital in enterprises.

Manh Ha