Thursday , December 1 2022

Vietnam’s central bank puts SCB under special control

The State Bank of Vietnam has decided to put Saigon Joint Stock Commercial Bank (SCB) under special control to ensure normal operations and liquidity.

The central bank stated Saturday special control of a credit institution is a professional measure to strictly limit negative impacts on that bank and the general system.

As part of the special control measure, the central bank will select experienced and qualified personnel from state-owned commercial banks including Vietcombank, BIDV, Vietinbank and Agribank to join the SCB executive board.

In addition, the central bank will coordinate with relevant ministries and sectors to implement necessary solutions for SCB to ensure smooth and healthy operations.

In the history of the banking industry, many institutions have come under special control but have since recovered and thrived.

The move came after crowds gathered at SCB branches since late last week to withdraw their money after rumors about the impact of a board member’s death and relations with property developer Van Thinh Phat Group spread on social media.

State Bank of Vietnam Governor Nguyen Thi Hong later affirmed the government would protect SCB depositors and customers in all circumstances.

SCB also increased its interest rate for 12-month term deposits by one percentage point to 8.55%, the highest in Vietnam’s banking system.

The bank earlier said that Truong My Lan, chairwoman of property developer Van Thinh Phat Group, who was arrested for alleged fraud related to issuance and trading of bonds worth trillions of Vietnamese dong (VND1 trillion = $41.87 million), does not hold managerial or executive positions at the institution.

It also noted that An Dong Investment Corporation, a real estate firm under Van Thinh Phat Group, which is linked to Truong My Lan’s violations in the issuance and trading of bonds, was not a shareholder of the bank.

SCB, amalgamated by three banks, began official operations in January 2012. It is the biggest private bank by assets.

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