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Bank director dismissed for collecting fees from borrowersinterest rate management regulation and the governor’s instruction.   2008-07-02 - VTC

The Governor of the State Bank of Vietnam on July 1 sent a dispatch to VIB Bank instructing it to dismiss the director of the VIB Bank HCM City branch as the branch has violated the interest rate management regulation and the governor’s instruction.

According to the HCM City Branch of the State Bank of Vietnam, VIB Bank HCM City branch lent money to the Saigon Shipping Company and asked the client to pay a security on the loan. By requiring security money, the bank is thought to have been attempting to dodge the current regulations in order to lend at an interest rate higher than the ceiling level stipulated by the State Bank of Vietnam at 21%.


The State Bank has asked Chairman and General Director of VIB Bank to dismiss the HCM City Branch director for the law violation. Moreover, the central bank has also asked it to clarify the violations of other officers in this case and apply strict discipline.


VIB Bank has to report to the State Bank about the case prior to July 4, 2008.


VIB Bank yesterday afternoon sent a document to local press agencies, explaining the loan to Saigon Shipping Company.


It said that after checking the loans it made, the bank asked the Saigon Shipping Company to provide more collateral to guarantee the loan. At this time, the shipping company did not have valuable assets suitable to be mortgaged assets. Therefore, the borrower asked VIB Bank to accept the idle money it had on the account at VIB Bank as security money for the loan.


VIB Bank, in its document, emphasised that the bank has always respected the laws and regulations stipulated by the State Bank of Vietnam. It does not collect loaning fees in any form, the bank said.


The bank said that it has reported to the State Bank and it is now awaiting responses and final decisions from competent agencies on the case.


Ho Huu Hanh, Director of the HCM City Branch of the State Bank of Vietnam, said at the press conference yesterday that if the borrowers have to pay additional fees for loans, they can report to the State Bank and the State Bank will investigate. Commercial banks that violate regulations will be heavily punished.

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