The central bank has set a deadline at the end of March 2015 for banks to lower their individual and group ownership to prevent undue control over a credit institution.
Regulations limit individuals to no more than a 5 percent of a single bank’s registered capital; organizations are limited to 15 percent; families are limited to 20 percent.
The State Bank of Vietnam has given lenders 30 days to resolve any violations of ownership regulations--which went into effect in 2011--and until the end of the first quarter of 2015 to fix ownership violations that pre-date the regulations.
Any excess bank holdings could be seized by the central bank or organizations it appoints after the deadlines, the bank said.
The bank said that certain groups and individuals have flouted the limits to manipulate bank operations to serve their interests.
An inspection found at least five banks had violated the individual ownership limit, five violated the organization limit and eight, the group limit.
Economists called the findings the tip of the iceberg--as banks keep much of their operational details secret.
A 2013 report by the Southern Bank showed that its biggest shareholder Tram Be owned 8.36 percent of its registered capital, his son Deputy Board Chairman Tram Trong Ngan 4.42 percent, his daughter Deputy General Director Tram Thuyet Kieu 7.36 percent and Kieu's husband 0.67 percent.
In sum, Be's family owns 20.81 percent of the bank’s capital.
A Tuoi Tre (Youth) newspaper report said several bank executives are making efforts to legalize their ownership rate, either by selling shares or raising the banks’ registered capital.
A recent Vietnam International Bank report said Board Chairman Dang Khac Vy and his wife Tran Thi Thao Hien have sold 37 million of their shares in the bank to meet the ownership regulations.
Vy used to own 9.19 percent of the bank’s capital and Hien 9.39 percent.
Insiders said several depositors have shifted funds to straw men to maintain control in spite of the crackdown.