What are methods for assessment of business performance of Vietnam Development Bank (VDB)?

What are methods for assessment of business performance of VDB?

Pursuant to Article 9 of the Circular 128/2021/TT-BTC stipulating methods for assessment of business performance of VDB as follows:

1. Criterion 1: State investment credit

a) VDB shall be given A rating if it achieves at least 90% of the State investment credit plan and the principal and interest collection plan annually allocated by the Prime Minister and the Ministry of Finance respectively;

b) VDB shall be given B rating if it achieves from 80% to less than 90% of the State investment credit plan and the principal and interest collection plan annually allocated by the Prime Minister and the Ministry of Finance respectively;

c) VDB shall be given C rating if it achieves less than 80% of the State investment credit plan and the principal and interest collection plan annually allocated by the Prime Minister and the Ministry of Finance respectively.

2. Criterion 2: Bad debt ratio

a) VDB shall be given A rating if its achieved bad debt ratio is equal to or lower than the planned one;

b) VDB shall be given B rating if its achieved bad debt ratio is up to 110% higher than the planned one;

c) VDB shall be given C rating if its achieved bad debt ratio exceeds 110% of the planned one.

3. Criterion 3: Financial performance

a) VDB shall be given A rating if its achieved financial performance is equal to or higher than the planned one;

b) VDB shall be given B rating if its achieved financial performance is at least 90% of the planned one;

c) VDB shall be given C rating if its achieved financial performance is less than 90% of the planned one.

4. Criterion 4: Compliance with regulations on investment, management and use of state capital in VDB with regard to operations performed in the assessment year.

a) VDB shall be given A rating, if, in the assessment year, it is not facing any administrative penalties imposed by competent authorities; if it is facing administrative penalties, it must ensure the followings:

a1) For violations in monetary and banking sector:

- It is not facing penalties imposed by competent authorities for fraudulent or forging acts; impersonation; sabotaging or destroying Vietnamese money; illegal business operations; provision of untruthful information; stealing information; stealing data as defined in the Government's regulations on penalties for administrative violations in monetary and banking sector;

- With regard to other violations, the penalty it incurs for each violation shall not exceed the average penalty in the penalty bracket;

a2) For violations in taxation or invoice sector: It is not facing penalties imposed by competent authorities for tax evasion as defined in the Government’s regulations on penalties for administrative violations in taxation or invoice sector;

a3) For other violations: The penalty it incurs for each violation shall not exceed the average penalty in the penalty bracket;

a4) The number of branches (including headquarters address) incurring penalties shall not exceed 10% of total branches of VDB.

b) VDB shall be given C rating if it commits violations in one of the following cases:

b1) It has incurred fines in the assessment year for the following violations:

- The violations in monetary and banking sector, including: fraudulent or forging acts; impersonation; sabotaging or destroying Vietnamese money; illegal operations; provision of untruthful information; stealing information; stealing data as defined in the Government's regulations on penalties for administrative violations in monetary and banking sector;

- + Tax evasion as defined in regulations of law on penalties for administrative violations in taxation and invoice sector;

- Other violations for each of which the fine incurred is the maximum fine of the fine bracket;

- It is forced to implement the penalty imposition decision.

b2) The number of branches (including headquarters address) incurring penalties exceeds 20% of total branches of VDB;

b3) In the assessment year, VDB’s executives commit violations against law during their performance of tasks of VDB to an extent that they are liable to criminal prosecution;

c) VDB shall be given B rating if it is given neither A rating nor C rating.

5. Criterion 5: Compliance with reporting regime laid down in Article 31 of the Decree No. 46/2021/ND-CP dated March 31, 2021:

a) VDB shall be given A rating if it is not reminded in writing or is given no more than 02 written reminders by competent authorities of its invalid or late submission of any type of reports prescribed in Article 31 of the Decree No. 46/2021/ND-CP in the assessment year;

a) VDB shall be given A rating if it is not reminded in writing or is given no more than 03 written reminders by competent authorities of its invalid or late submission of any type of reports prescribed in Article 31 of the Decree No. 46/2021/ND-CP in the assessment year;

c) VDB shall be given B rating if it is given neither A rating nor C rating.

6. When calculating business performance assessment criteria, VDB shall calculate and qualify any factors that affect assessment results of any criteria as prescribed in Clause 3 Article 32 of the Decree No. 46/2021/ND-CP for adjusting assessment results.

What are regulations on consolidation of assessment results of VDB?

Pursuant to Article 10 of the Circular 128/2021/TT-BTC stipulating consolidation of assessment results of VDB as follows:

1. VDB shall be rated A if it has no criterion rated C, and has criterion 1 and criterion 2 rated A as prescribed in Article 9 of this Circular.

2. VDB shall be rated C if it has criterion 1 and criterion 2 rated C, or criterion 1 and criterion 2 rated B and the other criteria rated C as prescribed in Article 9 of this Circular.

3. VDB shall be rated B in other cases.

4. Based on performance assessment criteria laid down in this Circular and planned targets assigned by the Ministry of Finance, VDB shall submit annual report on performance assessment and rating results to the Ministry of Finance for appraisal and approval of rating of VDB. This report must be submitted within 60 (sixty) days from the issue date of financial statement audit report.

5. The Ministry of Finance shall appraise and give its opinions about rating results of VDB within 30 working days from the receipt of adequate report from VDB.

Best regards!