The central bank has taken over the struggling Vietnam Bank for Construction, more than six months after police arrested its top leaders for embezzlement.
Shareholders of the bank, often known as VNBC, met Friday in an attempt to raise the bank's registered capital, but they voted against such a plan.
As a result, the State Bank of Vietnam (SBV) decided to acquire the bank, whose capital is believed to have fallen far below the minimum requirement of VND3 trillion (US$140.6 million).
The central bank did not have to pay anything for the shares. It did not reveal the current capital level of the bank.
The move has made VNBC the second lender fully owned by the government, after Agribank.
Vietcombank, the country’s top listed bank by market value, has been assigned the task of helping VNBC restructure.
The change in ownership will not affect the benefits of the bank’s customers, officials said at the meeting.
Vietnam’s government introduced a new regulation in September 2013, allowing the central bank to restructure a weak bank by purchasing its shares.
VNBC is the first case where the regulation has been applied.
It is formerly known as Trust Bank, which had to restructure with the participation of new investors in May 2013, following consecutive losses since 2011.
But since it became VNBC in May 2013, it has not done any better.
Investigators from the Ministry of Public Security last July arrested its chairman, its CEO and a board member under the charge of economic violations for personal gains.
Their ploy involved more than VND6.6 trillion (US$311 million).