Crimes at major banks prompt call for oversight
Crimes at major banks prompt call for oversight
The Prime Minister Nguyen Tan Dung told the State Bank of Viet Nam to increase supervision at credit institutions to ensure a safe and sound monetary system.
The PM gave the directive following the arrest for criminal investigation and temporary detention of three former senior officials of the Viet Nam Bank for Construction (VNBC) last week, and the detection of other wrongdoings at some big banks.
According to the Ministry of Public Security's Investigation Police Agency, the three former officials of VNBC were arrested for allegedly violating Viet Nam's Penal Code's Article 165. The Article deals with deliberate acts against the State's regulations on economic management, leading to serious consequences.
The three arrested persons are Pham Cong Danh, 49, former chairman of VNCB; Phan Thanh Mai, 43, former member of VNCB's executive board and general director; and Mai Huu Khuong, 31, former member of VNCB's executive board, in charge of finance.
Thanh Nien Daily's sources said that preliminary investigation found that the accused used a savings book of the Tan Hiep Phat Group to deposit 39 loans at VNBC, and made transactions without the signatures of the account holders for personal gains. The fraud involved more than VND6.6 trillion (US$311 million).
Earlier on July 25, the State Audit of Viet Nam's (SAV) 2013 report hinted at dubious operations being done by big lenders.
Agribank, one of the big four credit institutions in terms of assets, reportedly violated the safety ratio of united capital, which is the ratio of due-date payment capacity to seven-day payment capacity. In 2012, its return on equity (ROE) was 5.39 per cent, a sharp drop compared to 7.11 per cent in the previous year. At the end of 2012, Agribank reported credit growth rate of 10.22 per cent, but its bad debt ratio was 8.16 per cent, surging by one-third year on year.
In terms of deposit activities, three of the big four banks, namely Vietcombank, Vietinbank and Agribank, were marked down for exceeding the deposit cap set by the central bank.
In the July Government Meeting Resolution issued on Monday, PM Dung told the central bank to hasten restructuring at commercial banks and to accelerate the speed of the process of resolving bad debts.
The bad-debt ratio in Vietnamese commercial banks rose in the first half of the year to 4.84 per cent in late June 2014, from 3.61 per cent in late 2013. The SBV reported last week that the total amount of bad debts stood at VND240 trillion ($11.3 billion).
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