14:40 | 14/06/2016 Economy
(VEN) - According to the State Bank of Vietnam (SBV), they would strictly control commercial bank expansion in order to support the restructuring of the banking system.
Commercial banks need to pay great attention to network expansion this year in order to improve competitiveness and strengthen their presence in localities. In the first two months of the year, nearly 100 branches and transaction offices of more than 20 commercial banks were allowed to establish. For example, Vietinbank will open six branches in Hanoi, Da Nang, Ho Chi Minh City and Phu Quoc, while ABBANK will open an additional four branches and 14 transaction offices.
In the coming time, the SBV will allow network expansion for commercial banks that ensure documents and conditions following regulations, and meet requirements in the restructuring project, or in mergers and acquisitions deals. In addition, they must complete the handling of bad debts and plan to sell bad debts to the Vietnam Asset Management Company.
The number of established branches and transaction offices in 2014 and 2015 strongly increased compared to 2013, meaning that commercial banks have met strict regulations and criteria outlined by the SBV. In particular, established branches and transaction offices were located outside Hanoi and Ho Chi Minh City, contributing to ensuring fair competition and creating favorable conditions for its development in rural areas.
The SBV will strictly control network expansion if commercial banks do not follow regulations. For example, a commercial bank that wants to open more branches and transaction offices must make profits and follow regulations in 12 months. The SBV will not consider and approve the opening of new branches and transaction offices, or limit and halt some banking operations if commercial banks violate regulations in terms of deposit interest rates.
Allowing network expansion always engages the great interests of the SBV as it contributes to ensuring efficient banking operations and supporting the restructuring of the banking system.
The SBV will allow network expansion for commercial banks that ensure documents and conditions following regulations, and meet requirements in the restructuring project, or in mergers and acquisitions deals.