Central bank seeks to reduce banks’ loans to their shareholders

By Quynh Trang   March 14, 2023 | 09:03 pm PT
The State Bank of Vietnam is seeking to reduce the amount banks can lend to their shareholders as part of efforts to prevent manipulation and reduce cross-ownership.

It wants to reduce the maximum loan a bank can give a customer to 10% of its capital from the current 15%, and maximum loans to a customer and affiliates to 15% from the current 25%.

Besides, it wants to limit an individual’s ownership in a bank to 3% or less, down from the current 5%, and an organization’s ownership to 10%, down from the current 15%.

But this rule will not apply to banks that are under special control or to the government’s ownership.

The proposals are also meant to enable a more equitable distribution of bank credit.

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