Procedures slow down banks' IPO

Commercial banks complain that they are facing a lot of difficulties fulfilling procedures for making public offering.

Considered a kind of special enterprise, joint stock banks are now being covered by three laws: the Law on Credit Institutions, Enterprise Law and Securities Law.

While other public companies can offer shares to the public after they get approval from the State Securities Commission (SSC), banks must do more to sell their shares to the public. Banks must follow three steps 1. get approval from the State Bank of Vietnam (SBV) to raise chartered capital; 2. get approval and a certificate of public offering from SSC; 3. register the capital increase at the local department of planning and investment.
It takes a lot of time and effort to fulfill all of these formalities.

The director of a joint stock bank said that the bank’s shareholders’ meeting ratified the chartered capital increase three months ago, but the bank still couldn’t call for capital from shareholders. The bank still needs to prepare papers as required by SSC. The official said that under the current mechanism the bank would have to wait another three months to raise capital.

Under the current regulations, commercial banks must get approval for capital raising from SBV before they can apply for the capital raising to SSC. The stock market watchdog then grants a certificate on securities issuance. The document by SBV is considered a business licence, while the document granted by SSC is considered a certificate of business registration.

Commercial banks have asked SBV and SSC to sit together to work out new regulations with more transparent and suitable procedures which can help banks save time in offering securities to the public.

Source: VET