Stock market tumbles on bank executive’s arrest
- Banks lack social risk management
On August 20, Nguyen Duc kien, one of the founders of the Asia Commercial Joint Stock Bank (ACB), and also one of the richest tycoons in Vietnam’s banking industry, was arrested for conducting alleged” illegal business”.
Three days after, the police also detained ACB chief executive Ly Xuan Hai on suspicion of “deliberately acting against state regulations on economic management”.
These events have sent shock waves through the country’s financial market and many customers to the extent that they rushed to get their money out of ACB.
Fearing that the public lack of confidence could spread beyond ACB, Vietnam’s central bank pumped more than US$1 billion to ensure the stability of the local banking sector.
Speaking about these events with the media on August 25, the central banks’ Governor Nguyen Van Binh said that a huge amount of money was withdrawn from the ACB on August 21, 22 and 23 but it dropped significantly on August 25.
He said that activities of the ACB and the banking sector have returned to normal.
The governor affirmed that the central bank has taken sufficient measures to ensure stable operations of the banking sector and the ACB. From August 21-27, total deposits at the bank reached VND33.44 trillion (US$1.59 billion), including more than VND5 trillion (US$238 million) redeposited.
Transactions at the bank have returned to normal, according to Nguyen Thanh Toai, the bank’s deputy director.
By the end of August, there had been wide fluctuations in the price of gold and exchange rate between the dong and the US dollar in the domestic market.
Independent market watchdogs said the gold market became hot over the last week with the gold price jumping to VND44.7 million per tael on August 23 from VND42.6 million in March, while the global price remained stable.
The exchange rate between the dong and US dollar also climbed to over VND21,000 per dollar on August 27, up by over VND100 compared with August 23.