Foreign investors can own stakes exceeding the prescribed limit in local banks, says a draft decree prepared by the State Bank of Vietnam (SBV).
The decree is drawn up to replace Decree 69/2007/ND-CP dated April 20, 2007. It has been submitted to the Government.
As per the draft decree, an individual foreigner can own a maximum stake of 20% in a credit institution with no need to get the nod from the Prime Minister. Currently, approval from the Prime Minister is required.
In some special cases, the Prime Minister will specify the combined stake that foreign investors and those persons related to them can hold in a weak bank, which may exceed the above cap, in order to restructure the banking system, according to SBV.
Currently, Decree 69 stipulates the combined stake that foreign investors and those related to them can hold in a Vietnamese bank is 30%, consistent with Vietnam’s WTO commitments to opening the market. A foreign strategic investor can own a maximum stake of 20% in a credit institution with regulatory approval from the Prime Minister.
SBV has compiled the new decree based on the ownership limit for a shareholder (15%) provided in the 2010 Law on Credit Institutions and the policy of encouraging foreign investors to join the restructuring of weak banks under Decision 254 of the Prime Minister.
Many State-owned enterprises have pulled out of credit institutions, says the central bank.
(Sai Gon Times)