VNCB nationalization deal raises controversy
VNCB nationalization deal raises controversy
The news that the Vietnam Construction Bank (VNCB) has been sold to the State Bank, an unprecedented action in the country, has caused concern among the public.
There have not been many details disclosed about the deal except information in a one-page press release which says SBV bought VNCB for zero dong and assigned Vietcombank to manage the bank.
As VNCB is a public bank with over 500 shareholders, the details about the shareholders’ meeting discussing the sale of VNCB to SBV was not published in local newspapers.
Three out of six bankers whom reporters consulted said many issues related to the deal have not been clarified.
The first question is whether it is called nationalization of a bank. Or is the sale of VNCB to SBV at zero dong just a change of shareholders/investors?
“The word ‘nationalization’ implies ‘coercion’ or ‘appropriation’. Therefore, I think the world should not be used in this case,” a banker said. “Meanwhile, I believe that the SBV does not want to take over the commercial bank, and it has to buy VNCB because it has no other option.”
If this is just a change of shareholders/investors, then, which mode of business will VNCB be operating under.
The banker admitted that he was not sure about the legal framework on shifting a public company into a company with a single shareholder (the State Bank) or one-member limited company.
In principle, SBV, or the buyer, will have to inherit all the responsibilities and interests of VNCB. How will it do this? This question concerns VNCB’s partners and creditors.
The six bankers are only sure of one thing: that the State Bank will have to intervene to protect depositors’ benefits and restore people’s confidence in the banking system.
The director of a joint stock bank commented that SBV took a “wise move” in dealing with VNCB, because the treatment did not cause any stir in the society.
“Under current conditions, consolidating depositors’ confidence must be set as the top priority,” he said. “The message of protecting depositors’ benefits has been repeated in statements made by SBV’s high-ranking officials.”
Regarding the legal platform, an economist noted that the 2010 Law on Credit Institutions, in anticipation of possible happenings, allows SBV to buy commercial banks coercively, considering this a measure to treat weak banks to ensure the security of the entire banking system.
SBV’s Deputy Governor Nguyen Phuoc Thanh, at a meeting with the local press, emphad that “curing banks’ diseases to the very root, and not letting banks die” to ensure political and social stability is the motto the SBV has been pursuing.
