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On June 08, 2022, The Prime Minister issued Decision No. 689/QD-TTg approving the project “Restructuring the system of credit institutions associated with bad debts settlement in the period of 2021 – 2025” in order to reduce the number of credit institutions and handle weak banks.

Specifically, the overall objective of the Project is to create a clear and substantial change in the restructuring of the credit institution system in association with bad debt settlement. The pilot project to apply Basel II according to the advanced method in state-owned commercial banks with controlling shares and joint stock commercial banks with good governance has completed the application of Basel II according to the standard method. standard by the end of 2025; striving that by 2023, the capital adequacy ratio (CAR) of commercial banks will reach at least 10 - 11%; by 2025, reaching at least 11 - 12%.

The credit institutions must take measures to secure the amount of charter capital by 2025 as follows:

- For existing credit institutions (excluding commercial banks, financial companies, financial leasing companies) weak, weak/specially controlled/implementing the restructuring plan issued by the government authorized to approve):

+ For commercial banks: (i) The group of domestic commercial banks with financial potential, competitiveness and large scale: minimum charter capital of 15,000 billion VND; (ii) Group of domestic commercial banks with financial potential, competitiveness, small and medium scale and commercial banks with foreign capital: minimum charter capital of 5,000 billion VND;

+ For financial companies: the minimum charter capital is 750 billion VND;

+ For financial leasing companies: the minimum charter capital is 450 billion VND.

- For weak commercial banks, weak financial companies, weak/ special controlled financial leasing companies of the restructuring plan approved by the competent authority: the capital increase plan shall comply with the approval of the competent authority.

Striving to 2025, the number of credit institutions will be reduced, weak banks will be dealt with, no new weak banks will arise, the system of financial institutions will be healthy and develop sustainably. In addition, the system of credit institutions will develop in the direction that domestic credit institutions play a key role, which is healthy, efficient, public, transparent, and meet standards on banking safety and approach international practices, towards the development level of the Group of 04 leading countries in ASEAN. In addition, the scheme also promotes bad debt settlement, improves financial quality, prevents and minimizes new bad debts. At the same time, improve the financial capacity of credit institutions, prevent cross-ownership investment and manipulative and dominant ownership in relevant credit institutions.

This Decision takes effect from the date of signing and promulgation.


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