Cross-ownership in the country’s banking system had almost been eliminated, a recent report by the State Bank of Vietnam (SBV) showed.

VietNamNet Bridge - Under the State Bank’s Circular No 06, a commercial bank can hold less than 5 percent of shares of another credit institution.

VietNamNet Bridge - The State Bank of Vietnam is determined to get rid of cross-ownership status at banks, but  the achievements remain modest.

The State Bank, while admitting that it is difficult to eliminate cross-ownership in commercial banks, said in many cases, institutions and individuals borrow money from credit institutions to buy bank stakes or contribute capital to banks.

VietNamNet Bridge - The State Bank of Vietnam (SBV) has decided that banks’ cross-ownership must end by February 2016. However, according to banking experts, the bank network remains ‘as interlaced as a spider’s web’.

VietNamNet Bridge - The State Bank of Vietnam’s (SBV) compulsory restructuring policy has put many commercial banks under pressure because they have to withdraw capital from investment projects within a short time.

 VietNamNet Bridge – Cross ownership turns out to be not only a problem of the banking system as complex connections have been found in many other business fields.

Under the government’s Resolution No. 15, state owned commercial banks can buy the stakes of finance companies and banks to be sold by State owned enterprises (SOEs) during their capital withdrawal process.

The State Securities Commission (SSC) and the State Bank of Vietnam (SBV) have urged commercial banks to list their shares on the bourse to make it easier to control the banks’ finance situation.

 VietNamNet Bridge – A lot of commercial banks have successfully increased their chartered capital by dodging the laws.