HANOI: Banks that acquire weak banks will enjoy various preferential policies, such as refinancing loans with preferential interest rates and a reduction of required reserve ratios.
The State Bank of Vietnam (SBV) completed the compulsory transfer of four vulnerable banks, CB, Oceanbank, DongA Bank and GPBank to Vietcombank, MB, HDBank and VPBank, respectively.
According to the amended Law on Credit Institutions, acquirers Vietcombank, MB, HDBank and VPBank will enjoy many preferential mechanisms including a 50% reduction in required reserve ratios, getting the SBV’s refinancing loans with preferential interest rates and an exemption from consolidating financial statements with transferred banks.
In addition, the acquirers will enjoy many incentives in terms of capital sources and credit quotas to expand their asset scale and outstanding debts.
Without needing to consolidate financial statements with transferred banks, the acquirers will limit the negative impact on their financial statements, safety ratios and other regulatory limits.
Meanwhile, getting the SBV’s refinancing loans with preferential interest rates will help the acquirers maintain liquidity without having to bear higher capital costs. — Viet Nam News/ANN
