Police Lieutenant General offers advice on limiting banks' 'backyards'

On the afternoon of June 10, the National Assembly discussed in the hall the draft Law on Credit Institutions (amended).

Lieutenant General Nguyen Hai Trung, Director of Hanoi Police Department, expressed concern about cross-ownership, manipulation, and group interests in the banking sector, especially capital mobilization for lending among enterprises in the ecosystem of private economic groups.

According to him, the draft law adjusts the reduction of ownership ratio of individuals, public organizations, credit institutions, etc. to help the bank shareholder structure become more open and healthy. This avoids the power of self-determination being concentrated "in a certain boss", limiting the organization's management to serve backyard companies and interest groups, which harms the bank or small shareholder groups.

However, according to Mr. Trung, in reality there are still major shareholders who are either named or not on the Board of Directors to manage, hold controlling shares and operate banking operations.

Therefore, "the regulations in the new draft are only technical in nature," Lieutenant General Nguyen Hai Trung commented, adding that it is necessary to add more regulations and strengthen the role of the State Bank to limit the abuse of major shareholders' power and management rights to manipulate the operations of credit institutions.

In addition, it is necessary to research and propose additional measures and solutions to manage and control the circumvention of the law and the use of many other legal entities to stand in the name of shareholders to create large shareholder groups to operate credit institutions.

Commenting on the regulations on providing information to specialized crime prevention agencies, Deputy Nguyen Hai Trung said that the provisions of the draft Law do not meet the time requirements in practice of crime prevention, especially the prevention of crimes using high technology to commit fraud in cyberspace today.

The situation of criminals using cyberspace and high technology to defraud, appropriate property, gamble, organize gambling, and launder money is very complicated, causing extremely serious consequences. When crimes occur, the police force must quickly deploy to investigate the money flow and freeze accounts.

However, the current legal regulations do not meet the requirements for timely prevention of money transfers to the subjects. Therefore, General Nguyen Hai Trung said that it is necessary to issue regulations and shorten the time for blocking customer accounts to serve the fight against crime and the Government can study detailed regulations.

In addition, Deputy Nguyen Hai Trung said that in order to improve the effectiveness of crime prevention, it is necessary to review and legalize regulations on account legitimacy in relevant legal documents; complete and synchronously implement guidance documents to ensure effective implementation...

At the same time, this law needs to specifically stipulate the conditions requiring credit institutions to have a technological platform and physical facilities in customer identification to ensure legitimacy; requiring credit institutions to be responsible for reviewing, detecting and coordinating with the police and relevant agencies to strictly handle violations of illegitimate accounts.

According to Mr. Trung, in the recent fight against high-level crimes, the trick of using fake documents to open accounts has become prominent, in order to cause difficulties and avoid crime.

In addition, Mr. Nguyen Hai Trung also proposed not to stipulate that the State Bank has the authority to investigate violations of the law in the banking sector.

Cross-ownership of banks must be ended.

Referring to the recent incidents at SCB Bank in the country and other US banks, Deputy Trinh Xuan An (Dong Nai) suggested that it is necessary to clearly define the content of systemic risk prevention.

Mr. An said that although the Governor of the State Bank often mentioned risk prevention, the draft law also has many regulations to prevent risks for the banking system, but "the problem of cross-ownership must end, not just be limited".

“Everyone knows, everyone recognizes, but it is difficult to name and shame because of the roundaboutness. The specific policies in the current Law on Credit Institutions are not strong enough. We focus on reducing the shareholding ratio and credit limit but are very passive,” Mr. An said.

He suggested that it is necessary to reset the model of independent financial and audit supervision to supervise credit institutions.

With about 50 banks today, it is also necessary to re-evaluate whether this number is too many or not, clearly quantify how many banks are needed for an economy of what size, and create technical regulations in the law to limit the number.

Closely monitor banks to prevent money from flowing into 'backyard' projects . Delegate Ha Sy Dong warned that if supervision is not tight, owners can control the flow of money into their "backyard" projects.

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