0VND.Banks

Abstract

In 2015, SBV forced to acquire three rural joint-stock banks at zero Vietnam Dong as the banks were on the verge of bankruptcy with loss, negative equity, and self-restructuring failure. This move came just when the government and SBV had announced earlier that no bank would be left bankrupt. These banks shared three features. (i) they started as small, rural joint-stock banks that had to increase charter capitals to the regulated VND3 trillion level; (ii) they all had cross-ownership where controlling shareholders took the bank money to lend and invest in their own businesses or other projects; (iii) they were not listed; and (iv) got no foreign shareholders.