When will enhanced supervision measures be applied to the People's Credit Fund of Vietnam from September 1, 2022?
What are the regulations on micro-prudential supervision for branches of credit institutions in Vietnam?
Pursuant to Article 10 of Circular 08/2022/TT-NHNN stipulating as follows:
“Article 10. Contents of micro-prudential supervision of branches of credit institutions
1. Compliance monitoring includes:
a) Monitoring compliance with the law on:
(i) Statistical reporting regime of the branch in accordance with regulations on statistical reporting regime;
(ii) Other provisions of monetary and banking laws applicable to the branch.
b) The micro-prudential supervision unit shall monitor the compliance with the direction and requirements of the competent state agency for the subjects of micro-prudential supervision (if any).
2. Risk monitoring focuses on the following minimum contents:
a) Items of assets, liabilities, incomes, expenses and income and expenditure differences;
b) Credit granting situation and credit quality of subjects subject to micro-prudential supervision. In case of necessity, the micro-prudential supervision unit shall review and evaluate credits and other receivables of great value of the subject of micro-prudential supervision. The director of the State Bank's branch shall decide in detail the large value of these transactions;
c) Make and update the list of personnel information, including at least the branch director of the credit institution;
d) Information that negatively affects the activities of the monitored object.
3. For large-scale transaction offices in the area decided by the Director of the State Bank's branch or for transaction offices that generate information that negatively affects the operation of such transaction office, the unit performing micro-prudential supervision shall conduct the supervision as prescribed in Clauses 1 and 2 of this Article through the branch managing those transaction offices.”
Accordingly, micro-prudential supervision for branches of credit institutions will be carried out through such contents as compliance monitoring, risk monitoring, etc., according to the content of the above regulations.
When will enhanced supervision measures be applied to the People's Credit Fund of Vietnam from September 1, 2022?
Will a People's Credit Fund of Vietnam rated C or D be subject to enhanced supervision?
Pursuant to Article 11 of Circular 08/2022/TT-NHNN stipulating as follows:
“Article 11. Enhanced Supervision
1. Based on the situation and actual operation of the subject of micro-prudential supervision, the unit performing micro-prudential supervision shall consider and report to the Governor of the State Bank and the Director of the State Bank for expenditures. The branch decides to apply enhanced supervision to the subject of micro-prudential supervision when it falls into one of the following cases:
a) Subjects of micro-prudential supervision are rated C or D for People's Credit Fund of Vietnams; or grade D or E for other credit institutions, foreign bank branches according to the State Bank's regulations on rating credit institutions, foreign bank branches;
b) Subjects of micro-prudential supervision may apply early intervention measures as prescribed by law and this Circular;
c) Other subjects as directed by competent state agencies.
2. Based on the situation and actual operation of the subjects of micro-prudential supervision, the micro-prudential supervision unit shall consider and report to the Governor of the State Bank and the Director of the State Bank to pay expenses. branch that decides on enhanced surveillance, which as a minimum includes:
a) Scope of supervision;
b) The subject of supervision;
c) Supervision content, which at least includes monitoring the liquidity situation; credits, receivables and investments, capital contribution, share purchase or investment in the form of capital contribution and share purchase in order to take control of the enterprise;
d) Frequency of reporting by subjects of tissue safety monitoring;
dd) Contents of coordination of relevant units and individuals in enhanced supervision (if any).”
Accordingly, the unit implementing micro-prudential supervision will consider and report on the application of enhanced supervision to the competent authority in accordance with the above regulations.
In particular, for People's Credit Fund of Vietnam's rated C or D, they will be subject to the application of enhanced supervision measures according to the above provisions.
What are the principles for banking supervision in Vietnam?
Pursuant to Article 4 of Circular 08/2022/TT-NHNN stipulating as follows:
“Article 4. Principles of banking supervision
Banking supervision shall comply with the following principles:
1. The principles specified in Article 51 of the Law on the State Bank of Vietnam, Article 4 of Decree No. 26/2014/ND-CP dated April 7, 2014 of the Government (amended and supplemented regulations on organization functions and activities of the Banking Inspectorate and supervision.
2. The principles of combining compliance monitoring with risk monitoring, micro-prudential supervision with micro-prudential supervision.”
Thus, the banking supervision must be carried out in accordance with the above principles.
Circular 08/2022/TT-NHNN will take effect from September 1, 2022.
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