What are the bases for the micro-prudential supervision unit to judge the risk situation of credit institutions, foreign bank branches in Vietnam?
- What are the regulations for banking supervision for credit institutions, foreign bank branches in Vietnam?
- What are the bases for the micro-prudential supervision unit to judge the risk situation of credit institutions, foreign bank branches in Vietnam?
- How to implement micro-prudential supervision with joint stock commercial banks in Vietnam?
What are the regulations for banking supervision for credit institutions, foreign bank branches in Vietnam?
Pursuant to Clause 1, Article 9 of Circular 08/2022/TT-NHNN stipulates as follows:
“Article 9. Contents of micro-prudential supervision of credit institutions, foreign bank branches
1. The micro-prudential supervision unit shall determine the scope and content of information related to the operation of the micro-safety-monitoring subject to monitor compliance with the law on operational safety. banking activities, other provisions of the monetary and banking laws in the activities of micro-prudential supervision subjects, which focus on one or some or all of the following contents:
a) Monitoring compliance with the statistical reporting regime, the information reporting regime in accordance with the provisions of the Law on Credit Institutions (amended and supplemented) and relevant guiding documents within the scope of their competence. the rights and responsibilities of the micro-prudential supervision unit;
b) Monitoring compliance with the restrictions, limits and prudential ratios in the operations of the credit institutions specified in Articles 126, 127, 128, 129, 130 of the Law on Credit Institutions (amended as amended). change, supplement); classifying debts, setting up risk provisions of credit institutions, foreign bank branches on the basis of results from the information system supporting remote supervision, electronic statistical reporting system of State bank;
c) Monitoring compliance with conditions and standards of managers and executives specified in Articles 50 and 4, Article 89 of the Law on Credit Institutions (amended and supplemented); and the compliance with the governance, administration and control structure of the supervised subjects as prescribed in Chapter III of the Law on Credit Institutions (amended and supplemented);
d) Monitoring compliance with regulations of law on capital contribution, lending, depositing, the credit institution's investment in its subsidiaries, affiliates and branches in foreign countries;
dd) Review the internal regulations of the subject of micro-prudential supervision promulgated according to the provisions of Article 93 of the Law on Credit Institutions (amended and supplemented): Every year, the unit performs the micro-prudential supervision selects a number of internal regulations for review.”
Accordingly, the unit performing micro-prudential supervision needs to determine the scope and content of relevant information on the provisions of the law on banking safety, other provisions of the law on banking safety, and other relevant regulations. currencies and banks in the operations of credit institutions and foreign bank branches shall comply with the above provisions.
What are the bases for the micro-prudential supervision unit to judge the risk situation of credit institutions, foreign bank branches in Vietnam?
What are the bases for the micro-prudential supervision unit to judge the risk situation of credit institutions, foreign bank branches in Vietnam?
Pursuant to Clause 3, Article 9 of Circular 08/2022/TT-NHNN stipulates as follows:
“Article 9. Contents of micro-prudential supervision of credit institutions, foreign bank branches
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3. The micro-prudential supervision unit conducts risk monitoring through the use of risk analysis models and methods issued by the Governor of the State Bank from time to time and/or implemented analysis and assessment of risks of the subject of banking supervision through one or some or all of the following contents:
a) Analyzing and commenting on material changes and unusual fluctuations through the use of thresholds for changes in assets, liabilities, equity, revenue, accrued interest, costs, business results, limitations, limits, and safety ratios on the basis of results from the State Bank's electronic statistical reporting system, the information system supporting operations remote monitoring. Chief Inspector, bank supervisor shall decide the thresholds for change of the above items.
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c) On the basis of the adverse information that may materially affect the micro-prudential supervision object received, the micro-prudential supervision unit evaluates and comments on the risk situation of the micro-prudential supervision for entity protection safety monitoring object;
d) Monitoring the situation of credit granting, credit quality for sectors, customers and high-risk transactions in the activities of micro-prudential supervision subjects to analyze and assess the level of impact to the activities of tissue safety monitoring subjects.
The unit performing micro-prudential supervision identifies high-risk areas, customers and transactions from time to time.”
Thus, the unit implementing micro-prudential supervision will conduct risk monitoring through the risk analysis model and method promulgated by the Governor of the State Bank from time to time according to the content of this regulation specified above.
Accordingly, to assess and comment on the risk situation of For credit institutions and foreign bank branches, the micro-prudential supervision unit must rely on adverse information that may materially affect the credit institution or foreign bank branch.
How to implement micro-prudential supervision with joint stock commercial banks in Vietnam?
Pursuant to Clause 4, Article 9 of Circular 08/2022/TT-NHNN stipulates as follows:
“Article 9. Contents of micro-prudential supervision of credit institutions, foreign bank branches
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4. For joint-stock commercial banks, in case of necessity, the unit performing micro-prudential supervision shall review and assess the observance of the law, credit quality and risks of large value transactions (including credits, investments, capital contribution, share purchase, other receivables). The unit performing micro-prudential supervision considers and decides specifically the large value of the above transactions.”
Accordingly, the micro-prudential supervision for joint stock commercial banks will be carried out in accordance with the above regulations.
Circular 08/2022/TT-NHNN will take effect from September 1, 2022.
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