Shareholders with 1% in banks must be disclosed

The latest changes in the Law of Credit Organizations, which were approved by the National Assembly last Thursday, aim to tighten regulations on share ownership at banks. For now, banks only need to disclose the information of shareholders with a 5% stake minimum.

The new regulations also expanded the definition of the term “associates.” Bank shareholders will need to disclose the information of their family members and relatives starting from July.

Any person or organization that has a relationship with the bank that can leads to operational risks will also be considered an associate.

Also from July, organizations cannot own more than a 10% stake in a bank, down from 15%. The rate will also fall from 20% to 15% for individuals and their associates. Each individual will be allowed to own only 5% of a bank, same as now.

The new rules seek to prevent companies from taking advantage of a loose operations at a bank, which was what happened in the current high-profile fraud case at Saigon Commercial Bank, in which the real owner did not reveal herself but asked others to act on her behalf.