The State Bank of Vietnam (SBV) said it has conducted spot inspections on 11 banks over their investments in corporate bonds, and fined those that were found to have violated regulations.
However, the regulator did not disclose names of the banks. The central bank said it had made the inspections following a request by the Prime Minister and issued conclusions on the 11 inspections.
The SBV added that it has instructed its inspection and supervision agency to focus on the areas of currency, banking, and the restructuring and handling of bad debts.
The agency was required to warn banks in advance and strictly handle violations in credit supplies to risky areas, debt classification, and risk provisions.
Currently, banks in Vietnam are not allowed to buy corporate bonds to restructure issuers’ debts or for issuers to increase their working capital. Banks are also not allowed to buy corporate bonds to make capital contributions or to buy shares in other enterprises. They are not permitted to sell corporate bonds to their own subsidiaries.