At a National Assembly Standing Committee session, the State Bank of Vietnam Governor Nguyen Thi Hong set out the case for using state budget support to increase the charter capital of the Cooperative Bank, aligning with a government proposal to provide VND 5,000bn from the central budget. The stated objective is to strengthen the Cooperative Bank’s financial capacity and safeguard the operations of the system of nearly 1,200 People’s Credit Funds. The Cooperative Bank, established in 2013, acts as the apex institution for the People’s Credit Funds network serving 1.9 million customers across 57 provinces. Its charter capital was VND 3,029.55bn at end-2024, close to the statutory minimum of VND 3,000bn, while its capital adequacy ratio ranged from 9.2% to 12.1% in 2024. The government’s submission estimated that meeting a 13.5% capital adequacy ratio target by 2026 would require own funds of about VND 9,419bn, versus a projected VND 4,416bn without additional capital, and argued the injection is needed to support liquidity and fund-balancing for member funds during peak periods. The National Assembly’s Economic and Financial Committee agreed the support is necessary in principle but raised legal and procedural issues, including that the proposed VND 5,000bn support is not within the National Assembly’s decision-making competence under the Public Investment Law and budget framework. It also asked the government to clarify the funding source and budget balancing capacity, a concrete capital-use and disbursement plan, and measures to ensure the funds are effectively absorbed rather than used solely to meet the capital ratio, noting constraints given the 2025 budget had already been approved.
State Bank of Vietnam 2025-04-26
State Bank of Vietnam supports proposal for VND 5,000bn central budget injection to raise Cooperative Bank charter capital
The State Bank of Vietnam Governor proposed using VND 5,000bn from the state budget to increase the Cooperative Bank's charter capital, aiming to enhance its financial capacity and support nearly 1,200 People’s Credit Funds. The National Assembly’s Economic and Financial Committee agreed in principle but highlighted legal and procedural issues, including alignment with the Public Investment Law and budget framework. The Committee requested clarification on funding sources, budget balancing, and a detailed capital-use plan.