Overview of the press conference
Recently, a number of international newspapers reported on the Van Thinh Phat case and the amount of money that the State Bank of Vietnam (SBV) has lent to support Saigon Commercial Bank (SCB). Sharing about this issue at the Press Conference on Banking Results in the first quarter, which took place on the morning of April 19, Deputy Governor Dao Minh Tu said that when SCB fell into a difficult situation, even considered to be in crisis, just like many countries in the world, the function of the Central Bank is that when a commercial bank encounters difficulties, it is necessary to have timely intervention solutions to ensure that the bank does not collapse and does not affect the national financial system and the safety of commercial banking systems. Therefore, SBV must have timely action plans.
For SCB, when a liquidity incident occurred in October 2022, the SBV had the function and the law also stipulated a provision requiring the Central Bank to implement measures to stabilize this bank. According to Mr. Tu, SCB is not the first bank to have an incident. In the past 10 years, there have been weak banks, and some banks have been put under special control. For example, 8 – 9 years ago, 3 commercial banks were put under special control and forced to be handled.
“This is also the law of economic motion. It can happen in countries around the world, not just in Vietnam. Therefore, there must be a policy solution legalized to regulate intervention measures to ensure stability for the operation of that bank, as well as stabilize the system and social order”, the Deputy Governor emphasized.
According to Mr. Tu, SCB is one of the large-scale banks, with large total assets, so the solutions to handle it also require large procedures and support scales. Up to now, SCB is still operating stably and the SBV will continue to build a roadmap to gradually restructure this bank. The SBV is also researching this issue very urgently and actively”, the Deputy Governor added.
In the support measures of the SBV to ensure the stability of SCB, including loans from the Central Bank to weak banks, all of which are implemented in accordance with permitted legal regulations. These measures are very detailed, contributing to ensuring the immediate stability of the system.
According to Mr. Tu, the lending or the provision of money (for SCB – PV), whether much or little will have a regulating tool. “When we see that the amount of money in the economy is large and abundant, the SBV will also have measures to issue credit vouchers to withdraw money as in the recent past”, the SBV leader added.
