Is it compulsory for non-bank credit institutions in Vietnam to establish a risk management committee and a personnel committee?
- What is the organizational and management structure of non-bank credit institutions in Vietnam?
- What are the internal regulations of non-bank credit institutions in Vietnam?
- Is it compulsory for non-bank credit institutions in Vietnam to establish a risk management committee and a personnel committee?
What is the organizational and management structure of non-bank credit institutions in Vietnam?
According to Article 24 of Circular 30/2015/TT-NHNN, the organizational and management structure of non-bank credit institutions is as follows:
- Non-bank credit institutions should have an organizational structure, an apparatus of management, internal audit, risk management and internal control in accordance with types of operation as prescribed in the Law on credit institutions and other relevant law provisions.
- Organizational and management structure of joint-stock non-bank credit institutions comprises: Shareholder general assembly, Board of Directors, the Control Board, General Director (Director);
- Organizational and management structure of limited liability non-bank credit institutions comprises: The Board of Members, the Control Board, General Director (Director);
Accordingly, organizational and management structure of joint-stock non-bank credit institutions comprises: Shareholder general assembly, Board of Directors, the Control Board, General Director (Director)
Organizational and management structure of limited liability non-bank credit institutions comprises: The Board of Members, the Control Board, General Director (Director);
Is it compulsory for non-bank credit institutions in Vietnam to establish a risk management committee and a personnel committee?
What are the internal regulations of non-bank credit institutions in Vietnam?
According to the provisions of Article 23 of Circular 30/2015/TT-NHNN (supplemented by Clause 11 Article 1 of Circular 15/2016/TT-NHNN) this content is as follows:
- Non-bank credit institutions should establish internal regulations as prescribed in Article 93 of the Law on credit institutions. Internal regulations, amendments and supplements to internal regulations shall be adopted by Board of Directors, the Board of Members.
- Right after adoption, non-bank credit institutions should deliver the internal regulations, amendments and supplements to the State Bank (Bank Supervision and Inspection Agency) for inspection and supervision.
- The non-bank credit institution that performs finance lease activities shall promulgate internal regulations on finance lease operations throughout the entire system and ensure availability of a mechanism of internal control and audit, risk management in finance lease operations of a finance lease company. Such regulations must include at least:
+ Criteria for determining a customer, a customer and a relevant person as prescribed, policies on finance lease for a customer, a customer and a relevant person, process of appraising and deciding a finance lease, principles of decentralization, authorization and responsibility of individual members, departments for appraising and deciding a finance lease, re-structuring finance lease payment term for the lessee;
+ Conditions for a finance lease, cases in which a finance lease is not granted, restrictions on finance lease according to laws, types of assets ineligible for a finance lease; finance lease interests and method for determination of lease interests; an application for a finance lease and other documents delivered to the lessor by the lessee in accordance with characteristics of the leased asset and the customer; collection of lease payments; requirements for re-structure of a finance lease payment term, transfer of an overdue debt;
+ Regulations on diversification of risks in finance lease activities; methods for monitoring and management; decisions on a finance lease for a customer, a customer and a relevant person from one percent of the lessor's self-financed capital, ensuring transparency from appraising cases for a finance lease to re-structuring a finance lease payment term, prevention of conflict of interests among the appraiser, decider and customer;
+ Principles and norms for assessment and determination of level of risks in finance lease activities for a customer, areas to which the lessor prioritizes or limits extension of credit as foundations for formulation of annual business plans, measures to manage risks in finance lease activities for the lessee;
+ Process of inspecting and monitoring finance lease activities, use of the leased asset and payment of rentals by the lessee including activities before, during and after the lease; decentralization, authorization and responsibility of individual members, departments for doing so;
+ Decisions on a finance lease and on re-structuring of lease payment term (including extension of payment terms, revision of payment periods) shall be made on the principle that the person who makes decision on the re-structuring of the payment term is not the person who makes decision on the finance lease except in case that the finance lease is passed by Board of Directors, Member Assembly;
+ Termination and settlement of a finance lease contract terminated ahead of time; exemption and reduction of interests, fees;
+ Identification of risks likely to be arising during the lease; process of monitoring, assessing and controlling the risks; risk handling measures.”
Is it compulsory for non-bank credit institutions in Vietnam to establish a risk management committee and a personnel committee?
Pursuant to Clause 1, Article 25 of Circular 30/2015/TT-NHNN on Risk management committee and personnel committee as follows:
Risk management committee and personnel committee
1. Board of Directors, the Board of Members should establish the risk management committee and personnel committee and promulgate the statute on organization of operation including mechanism of judgement on proposals made by these two committees. Within ten days since promulgation, non-bank credit institutions shall deliver these internal regulations to the State Bank (Bank Supervision and Inspection Agency).
As such, Board of Directors, the Board of Members should establish the risk management committee and personnel committee in accordance with the above provisions.
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