State Bank given go-ahead to buy into struggling credit institutions

The new regulation allows SBV to directly purchase shares of credit institutions or contribute capital to them as designated. Subsequently, SBV can either merge them with other credit institutions or sell those shares to other investors..— Photo vneconomy

Decision No. 48/2013/QD-TTg: State Bank gets nod to purchase shares of ailing banks

Under Prime Minister Decision No. 48/2013/QD-TTg of August 1, the State Bank of Viet Nam (SBV) will be empowered to acquire shares of banks placed under special control.

Besides, SBV can designate certain credit institutions to make capital contribution or purchase shares. A credit institution to be designated must satisfy the following conditions: (i) having a sound financial status and sufficient capital sources to make capital contributions or purchase shares according to the SBV's requirements; (ii) observing all regulations on banking operation prudence ratios; (iii) having an internal control and audit system which satisfies all SBV's regulations; and (iv) being capable of managing and restructuring credit institutions involved in capital contribution or share purchase.

Under the new regulation, based on the actual situation of credit institutions placed under special control, to-be-designated credit institutions may be considered by SBV to receive support, such as refinancing loans, special loans, temporary application of a number of banking operation prudence ratios below those applicable to the normal credit institutions.

This Decision will take effect on September 20.

Circular No. 11/2013/TT-BXD: Real estate projects under stricter monitoring

With a view to improving the management of the real estate sector, the Ministry of Construction on July 31 issued Circular No. 11/2013/TT-BXD prescribing the reporting regime on implementation of investment in construction and commercial operation of real estate projects.

Accordingly, from October 1, real estate projects' investors will have to regularly report on the progress of their projects to enable authorities to improve oversight of the sector.

Four main aspects which need to be reported by investors include basic information about the projects; implementation progress of projects (ground clearance, construction); commercial operation of projects (capital mobilization, sale or lease of houses, land lease, land use right transfer); and project completion procedures.

Reports must be sent to the Housing Management Department or provincial construction departments within fifteen days after occurrence of a change or project completion.

Besides, the construction departments are required to update the Ministry of Construction on a quarterly and annual basis on local real estate projects, land acquisition and clearance and real estate transactions.

Real estate investors that fail to comply with the above regulations will be fined in accordance with law. — Vietnam Law/VNS