VCCI against lowering ownership limit at banks

A bill drafted by the State Bank of Vietnam (SBV) that is being reviewed by government agencies now seeks to limit other organizations’ ownership of a bank to 10%, down from the current 15%.

In the cases of individual shareholders and groups of shareholders, it proposes reducing the caps from 5% to 3%, and from 20% to 15%.

VCCI, which represents Vietnamese companies, said this is not optimal in the current context, claiming that the ownership cap is not the problem plaguing the banking system but conflict of interest.

It was referring to the fact that banks are allowed to lend large sums to affiliates of major shareholders.

Reducing the cap would discourage shareholders from journeying in the long run with a bank to make them more efficient, it said.

It instead proposed having more stringent regulations to preclude conflicts of interest.