What are internal rules and regulations on extend credit and loan management of banks and foreign bank branches (FBBs) in Vietnam?

Pursuant to Clause 1 Article 4 of the Circular 22/2019/NHNN (takes effect from 01/01/2020) stipulating as follows:

Banks and FBBs shall issue their own rules and regulations on extend credit and loan management to ensure proper use of loans in accordance with this Circular and relevant documents. The rules and regulations shall include:

a) Criteria for identification of a client, a client and related persons defined in Clause 14 Article 3 of this Circular, credit policies for a client, a client and related persons, the power to approve credit extension, debt restructuring for a client, a client and related persons;

b) Regulations on dispersion of risks to credit extension; methods for monitoring and management of credit extension to a client, a client and related persons if the credit extended is worth at least 1% of the equity of the bank or FBB. The regulations shall be made public, especially those on appraisal, credit extension, debt restructuring, prevention of conflict of interest between the appraiser, the approver and the client if they are related;

c) Rules and criteria for assessment of risks posed by groups of clients and fields in which credit extension is favored or limited, as the basis for preparation of annual business plans and strategies;

d) Regulations that consideration of credit extension and debt restructuring (including deferral and adjustment of repayment terms) has to be transparent, free of conflict of interest and must not conceal information about credit quality. The decider of debt restructuring must be different from the decider of credit extension, unless the credit extension is approved by the Board of Directors, the Board of members, General Director (Director), parent bank (of the FBB). In case credit extension and debt restructuring are considered by a council, the chairperson of the credit extension council shall be different from the chairperson of the debt restructuring council, and at least two thirds of the members of one council shall be different from those of the other;

dd) Regulations on risk management in credit extension for investment in shares, corporate bonds, real estate; credit extension for PPP projects;

e) Regulations on credit extension by directors and deputy directors of branches, affiliated units and equivalent positions of banks and FBBs according to the rules specified in Point a, b, c, d, dd of this Clause. Equivalent positions shall be determined according to rules and regulations of the banks and FBBs.

Above internal rules and regulations on extend credit and loan management of banks and foreign bank branches (FBBs) in Vietnam.

Best regards!