It must be stopped, not just restricted.

On the afternoon of June 10th, the National Assembly held a plenary session to discuss the Law on Credit Institutions (amended). The draft Law on Credit Institutions (amended) is one of nine draft laws that the National Assembly considered at its 5th session.

Contributing his opinion to the discussion session, delegate Trinh Xuan An ( Dong Nai delegation) emphasized that the credit sector plays a very important role, related to all fields, so amending the Law on Credit Institutions is extremely necessary, especially at the present time.

Mr. An stated that, during the explanatory and questioning sessions, the Governor of the State Bank of Vietnam frequently mentioned risk prevention, and the draft law also contains many provisions to prevent risks to the banking system.

"This is a very important issue, specifically stipulated in the Law on Credit Institutions. The State Bank of Vietnam has also issued many circulars on this matter, and the designs in the draft also contribute to preventing risks for specific banks and credit institutions," Mr. An said.

Finance - Banking - Cross-ownership of banks: Must be ended, not just restricted. — Delegate Trinh Xuan An (Photo: Quochoi.vn).

However, the delegate suggested adding provisions for risk prevention within the system. Based on the recent events at SCB Bank and other global incidents, the delegate argued that it is necessary to design additional regulations to prevent systemic risks, so that the system can effectively withstand any incidents that may occur.

Notably, delegate Trinh Xuan An emphasized the need to address cross-ownership issues related to credit institutions.

"The issue is not about restricting, but about ending cross-ownership in the credit system. This is a very difficult problem, and the regulations in Articles 55 and 127 of the draft are not strong enough to end cross-ownership," the representative pointed out, adding that the solutions in the draft law are passive and ineffective.

Emphasizing that ending cross-ownership requires transparency, accountability, and strict handling of violations by organizations and individuals, Representative Trinh Xuan An suggested that the model of financial supervisory and inspection agencies related to banks should be reviewed and redesigned to more effectively address this issue.

Similarly, delegate Nguyen Hai Trung (Hanoi delegation) argued that cross-ownership and group interest manipulation in the banking sector remain a worrying issue.

The draft law amending and adjusting the ownership ratio of individuals and organizations to increase the public ownership of credit institutions and expanding the scope of related entities is necessary. However, Mr. Trung believes that the solutions outlined in the draft are merely technical measures to limit large shareholders.

Finance - Banking - Cross-ownership of banks: Must be ended, not just restricted (Figure 2). — Delegate Nguyen Hai Trung (Photo: Quochoi.vn).

Representative Nguyen Hai Trung suggested that two issues need further research. Firstly, additional regulations should be added to strengthen the role of the State Bank of Vietnam to limit the abuse of power by major shareholders and management to manipulate the operations of credit institutions.

Secondly, further research and proposals are needed to manage and control the circumvention of the law and the use of multiple individuals or legal entities to hold shares in their names, creating large shareholder groups to control credit institutions.

Earlier, during a group discussion on the amended Law on Credit Institutions on the afternoon of June 5th, National Assembly Chairman Vuong Dinh Hue noted that the Law on Credit Institutions is like a set of laws that all actions of credit institutions must be based on.

Accordingly, the banking sector's contributions in recent times have been significant; however, reality demands restructuring and addressing weak credit institutions, as well as the issue of cross-ownership within banks.

"This Central Committee resolution states that it will put an end to cross-ownership between banks; it's a strong statement, not just a limitation," the Speaker of the National Assembly clarified .

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