Hanoi (VNA) –Governor of the State Bank of Vietnam (SBV) Le Minh Hung has called for moreefforts to reshuffle credit institutions and settle bad debts to enhance thebanking system’s safety.

According to recently-signedDirective No.2/CT-NHNN, Hung requested more mergers and acquisitions of creditinstitutions to increase their competitiveness and remove poor-performing ones.

He also ordered the acceleratedrestructuring of State-owned commercial banks to guarantee stability in themonetary market and safety in credit institutions.

Measures to increase theaffordability of commercial banks and to improve the transparency of creditinstitutions’ activities are equally important, he said.

The Governor also askedcredit institutions to draw up measures to handle bad debts and prevent newones while curbing credit growth and quality, and promptly detecting andpunishing violations in the field.

The SBV will not allow creditinstitutions without loan classification and risk provision to open newbranches, transaction offices and ATMs, or share dividends and profits forshareholders, he said.

Instead, credit institutions willbe required to gradually set up a transparent debt trading market for investors.

The directive states thatcredit institutions need to have a full and accurate assessment of creditgrowth in high-risk fields such as real estate, securities,build-operate-transfer (BOT) and build-transfer (BT) transport projects.

Any unhealthy competitionbehaviors in banking activities are banned, especially in capital mobilisation,the Governor said.

He also called for an improvedlegal system to open the financial market, develop the banking system, andensure safety for business activities of credit institutions.-VNA