Wrongdoing found in Vietinbank's performance from 2009-12
Wrongdoing found in Vietinbank's performance from 2009-12
The Government Inspectorate has found many wrongdoings in the 2009 to 2012 business performance at Viet Nam Joint Stock Commercial Bank for Industry and Trade (VietinBank).
According to a report signed by Deputy Chief Inspector Ngo Van Khanh and released this week, the inspection focused on the bank's credit activities, financial investment and procurement and renting of assets, as well as setting and using funds.
The inspection found that VietinBank had been responsible for violations of regulations in both capital mobilisation and credit activities, including breaking lending regulations and setting higher deposit interest rates than allowed. Serious violations by the bank were sent to the police for further investigation.
Due to an imbalanced capital structure, VietinBank had to use short-term deposits for medium – and long-term credit. Further, some of the bank's branches broke the maximum deposit interest rate of 14 per cent set by the State Bank of Viet Nam from March 2011 to September 2011, and paid brokerage commissions and improper marketing expenses in cash.
The bank's violations were found in almost all stages of the lending process, from the credit appraisal stage to disbursement stage.
The bank also did not classify debts as per proper procedures, leading to inaccurate debt classifications, where some Group l (Standard) debts of the bank actually belonged to Group 2, 3, 4 and 5 (Debt Needing Special Attention, Subprime Debt, Doubtful Debt, Potentially Irrecoverable Debt). It also had violations in regulations outlining debt restructuring, extending disbursement times and grace periods.
Regarding financial investments, VietinBank did not follow the proper rules on using capital from Government bonds and when investing in risky businesses, said authorities.
VietinBank was also found to have many systemic violations in procurement and the renting of its assets, as well as setting and using funds, which impacted its efficiency in using capital.
