Time of classification, setting up and use of provisions against credit risks of credit institutions in Vietnam

According to Article 8 of Circular No. 02/2013/TT-NHNN of the State Bank of Vietnam, the time of classification, setting up and use of provisions against credit risks is as follows:

* At least each quarter for one times, within 15 (fifteen) first days of first month of each quarter, credit institutions, foreign banks’ branches must self-implement classification of debts, off-balance sheet commitments which have arisen until the ending time of final working day of last quarter, based on the capability of customers to pay debts as prescribed in Article 10, Article 11 of this Circular and send results of self-classification of debts, off-balance sheet commitments to the CIC.

- For the last quarter of annual accounting period, within 15 (fifteen) first working days of final month, credit institutions, foreign banks’ branches must implement classification of debts, off-balance sheet commitments which have arisen until the ending time of final working day of second month of final quarter of the accounting period.

- Apart from mentioned-above time of classification, credit institutions, foreign banks’ branches implement classification of debts, off-balance sheet commitments according to internal regulations.

* Within 03 (three) days after receiving result of self-classification of debts, off-balance sheet commitments of credit institutions, foreign banks’ branches as prescribed in clause 1 of this Article, the CIC shall summarize list of customers according to group of debts with highest risk extent which have been self-classified by credit institutions, foreign banks’ branches and supply them at the requests of credit institutions, foreign banks’ branches.

* Within 05 (five) days after the CIS had summarized a list of customers, credit institutions, foreign banks’ branches must request the CIC for supply of the mentioned-above list of customers, use result of classification of customer debt groups supplied by the CIC in order to adjust their result of classification of debts, off-balance sheet commitments according to the principles specified in clause 1 Article 9; setting up sufficient provisions and use provisions for dealing with risks as prescribed in this Circular.

View details at Circular No. 02/2013/TT-NHNN of the State Bank of Vietnam, effective from June 01, 2014.

Thu Ba

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