Preventing cross-ownership in banks:

According to information from the State Bank of Vietnam, the situation of cross-ownership and manipulation in banks has been gradually addressed, but completely eliminating it is not an easy task...

This requires authorities to continue to closely monitor the situation, stay on track, and take strong action in handling violations.

Customers conducting transactions at Saigon Commercial Joint Stock Bank. Photo: Ngoc Mai

Preventing the emergence of "backroom" businesses.

Looking back at the case involving the Van Thinh Phat Group, public opinion has paid particular attention to the relationship between banks and their "front" businesses. In this case, defendant Truong My Lan was prosecuted for embezzlement, bribery, and violations of lending regulations at Saigon Commercial Bank (SCB), including allegations of misappropriating over 304,000 billion VND from the bank… The case partly reflects the situation where the true owners of banks, through numerous acquaintances, establish hundreds of subsidiary companies to hold controlling stakes, and this is still not effectively controlled.

All the negative consequences for the economy from cross-ownership in the banking sector necessitate stricter and more decisive management tools. In fact, addressing and preventing the practice of banks operating as "backdoor" businesses is not a new concern. Many years ago, regulations aimed at controlling this situation were introduced, but many individuals and organizations still exploited legal loopholes for personal gain.

However, with more stringent measures, the practice of exceeding prescribed shareholding limits and cross-ownership within the credit institution system has tended to decrease recently, as the manipulation and control of banks by major shareholders and shareholder groups has decreased compared to before.

According to experts, the significant reduction in cross-ownership is due to the State Bank of Vietnam's gradual improvement of the legal framework since 2024, aiming to establish higher, internationally-standardized benchmarks for governance and risk control in the banking system. For example, the Law on Credit Institutions of 2024 clearly stipulates regulations on granting credit to related parties or the maximum credit limit for a customer or group of customers.

Recently, Circular No. 14/2025/TT-NHNN, issued by the State Bank of Vietnam on June 30, 2025, stipulates capital adequacy ratios for commercial banks and branches of foreign banks. Accordingly, this circular supplements regulations on capital adequacy buffers that commercial banks must comply with.

Can it be completely resolved?

So, what additional solutions are needed to thoroughly address the issue of cross-ownership in banks?

According to Dr. Nguyen Quoc Hung, Vice President and General Secretary of the Vietnam Banking Association, if banks still have cross-ownership groups or are providing credit to related parties, concentrating credit on a specific group of customers, they need to proactively review the situation immediately. Through inspections and audits, the State Bank of Vietnam has initially identified several "backroom" groups related to credit institutions. However, completely resolving cross-ownership is a problem that cannot be solved immediately and requires a specific roadmap. Removing credit caps must go hand in hand with controlling cross-ownership.

Credit institutions can consider inviting other banks to co-finance in order to appropriately diversify risk. Mr. Nguyen Quoc Hung also added: "The Law on Credit Institutions of 2024 has clear regulations on ownership to address cross-ownership and bank manipulation."

However, specifically identifying which groups are "backroom deals" and which groups engage in manipulative cross-ownership remains challenging, as it cannot rely solely on reports from credit institutions; it requires strengthening the central bank's authority in inspection and supervision processes.

Currently, cases of shareholders and related parties owning shares exceeding the prescribed limits mainly occur in state-owned corporations and enterprises. However, state-owned enterprises under the management of ministries and agencies, as well as commercial banks, still face difficulties in requiring these shareholders to divest their shares. Therefore, to truly address the issue of cross-ownership, a stricter and more independent monitoring mechanism is needed to prevent interest groups from continuing to manipulate the system through forms of "legally related" that are essentially a cover for cross-ownership.

Although the Law on Credit Institutions of 2024 has added many regulations to tighten ownership, cross-investment, and control bank manipulation, in reality, detecting cases of concealment or using nominees to hold shares remains a major challenge.

To more effectively monitor cross-ownership in the future, State Bank Governor Nguyen Thi Hong said that the State Bank will continue to supervise the operational safety of credit institutions to prevent risks.

Specifically, the State Bank of Vietnam continues to strengthen inspections on issues related to share ownership ratios; the buying, selling, and transferring of bank shares; and credit granting to large customers/customer groups (lending, corporate bond investments, etc.) in order to detect, direct the handling, and rectify shortcomings and violations, especially violations related to credit granting, investment, capital contribution, and share purchases by credit institutions.

Legally, the State Bank of Vietnam will continue to review, research, and advise on amendments and additions to legal documents if necessary, in order to perfect the legal framework on share ownership as stipulated in the Law on Credit Institutions.

Source: https://hanoimoi.vn/ngan-chan-so-huu-cheo-ngan-hang-can-manh-tay-xu-ly-vi-pham-720363.html