The State Bank of Vietnam (SBV) said on Friday it would place DongA Bank (DAB) under "special surveillance" and remove many of its key officials after finding a series of violations at the unlisted lender.
The central bank is restructuring Vietnam's fragmented and once bad-debt-laden banking sector by pushing for stricter lending and debt classification rules, takeovers of weak lenders and fraud investigations.
SBV said it would "dismiss and suspend many key positions of DAB and work closely with law enforcement agencies to strictly handle groups and individuals at DAB violating the law and causing losses to the state and the people's assets".
DongA officials were not available for comment.
Investigations showed DAB's violations before 2012 have seriously hurt its financial and operational performances, SBV said in a statement on its website, adding it would appoint officials from BIDV to join DAB's leadership.
DongA Bank's ex-chairman Cao Si Kiem, a former central bank governor who joined in 2012, resigned from his position at the Ho Chi Minh City-based lender's annual general meeting in July.
The SBV announcement came a day after it said it would take control of all Sacombank shares owned by Sacombank Deputy Chairman Tram Be and a month following its acquisition of Global Petro Bank, the third of its takeovers this year.
Last month, police detained an ex-general manager of Ocean Group's banking unit, having detained the group's founder and ex-chairman, banking tycoon Ha Van Tham, in late 2014 for suspicion of financial irregularities.
Tham remains in detention and under investigation and was not available for comment on Friday.