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Vietnam tightens bank ownership rules

Vietnam’s legislature has passed a law reducing the maximum stake investors can hold in domestic banks from 15% to 10%, effective from July. This decision, supported by over 90% of the National Assembly deputies, aims to minimise risks of market manipulation. The move comes after Vietnam’s largest financial fraud involving Truong My Lan, who allegedly siphoned off USD12.5bn from Saigon Joint Stock Commercial Bank (SCB). While the reform seeks to prevent similar frauds, critics argue it might deter bank investments, especially during Vietnam’s increasing bad loans and property sector crisis. The law does not change the existing 30% cap on total foreign bank ownership but tightens institutional shareholding limits, potentially impacting foreign investment.


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