Government Inspectorate calls attention to multiple violations at Vietcombank
Government Inspectorate calls attention to multiple violations at Vietcombank
Bank for Foreign Trade of Vietnam (Vietcombank) was found in numerous counts of violations in its credit activity, selling bad debts, financial investments, and property sales and purchases, according to the conclusion of the Government Inspectorate.
Notably, according to newswire Cafeland, Vietcombank had violated in regulations governing approving, expertising as well as disbursing loans. Besides, the bank cannot control the entirety of its loans as well as the customers’ capacity to pay the debt. Vietcombank’s collateral valuation has yet to comply with regulations.
According to the Government Inspectorate’s report, Vietcombank issued unclear guidance for debt trading, causing confusion between stages of transaction. Furthermore, the bank also fails to comply with regulations when it directly sells bad debts to customers via direct negotiation instead of auctions.
Regarding violations in financial investment and M&A activities, Vietcombank has delayed in divesting from enterprises which do not operate in the banking sector or enterprises operating without profit. The effectiveness of investment activities does not match the investment capital.
In addition, the bank has yet to comply with regulations on investment process, the capacity of the project supervisors do not meet the requirements, and it has neglected supervising the contractors’ implementation of projects.
With the above violations, the Government Inspectorate proposed the prime minister to assign the Governor of State Bank of Vietnam (SBV) to discipline branches and individuals responsible according to the Government Inspectorate’s report. Besides, the Government Inspectorate proposed SBV to inspect Vietcombank’s dossiers granting credit for debt selling.
The Government Inspectorate also asked Vietcombank to issue a decision to ban Tecapro and Cpauraca companies from joining bidding on projects under the management of Vietcombank.
Responding to the Government Inspectorate’s report, Vietcombank affirmed that it will remedy these issues in the shortest time.
In 2017, Vietcombank reported the highest increase in term of scale and business effectiveness in the past ten years, with profit over VND10 trillion ($440.35 million), up 20 per cent on-year. Vietcombank set the target to become the No.1 bank in Vietnam and work its way onto the list of the 100 largest banks in Asia as well as become one of the 300 leading financial groups on the world.
At the moment, Vietcombank holds 8.19 per cent of the stakes in Eximbank, 7.16 per cent in MBB, and 5.07 per cent in OCB.
