Many commercial banks have submitted to their shareholders and proposed to increase charter capital in the context that credit growth must ensure capital adequacy ratio (CAR) following the international standards Basel II.

BIDV has just approved a plan to increase its charter capital in 2021 by more than VND8.3 trillion. (Photo: SGGP)

Specifically, BIDV has just approved a plan to increase its charter capital in 2021 by more than VND8.3 trillion. MSB plans to increase its charter capital from VND11.75 trillion to VND15.275 trillion. VIB also submitted to shareholders the plan to increase capital, if successful, its charter capital will increase from more than VND11 trillion to VND16 trillion.

The CARs of many commercial banks are at a safe level. However, if the charter capital is not increased, this criterion will gradually decrease when risky assets increase in the future. At that time, the expansion of credit activities by banks will be limited. Therefore, many commercial banks said that raising charter capital helps banks to cope with potential risks better.

By Nhung Nguyen – Translated by Thuy Doan