What are regulations on information exchange mechanism regarding internal control systems of commercial banks in Vietnam?
Hello Lawnet. I have a question about internal control systems of commercial banks and foreign banks’ branches. I know that there will be new regulations next year. What are regulations on information exchange mechanism regarding internal control systems of commercial banks in Vietnam? Thank you!
Lam Anh - Lam Dong
What are regulations on information exchange mechanism regarding internal control systems of commercial banks in Vietnam? - image from internet
Pursuant to Article 19 of the Circular 13/2018/TT-NHNN on internal control systems of commercial banks and foreign banks’ branches issued by the Governor of the State Bank of Vietnam (effective from 01/01/2019), the regulations on information exchange mechanism regarding internal control systems of commercial banks in Vietnam are as follows:
1. The commercial bank/foreign bank's branch must have an information exchange mechanism, allowing notification, dissemination and propagation of the internal control system to every individual at every level and in every department, hence raising awareness of policies, processes and business goals, enabling those individuals to do well in their responsibilities, tasks and powers.
2. The information exchange mechanism shall be implemented through the management information system and other information exchange mechanisms decided by the commercial bank/foreign bank's branch.
3. The information exchange mechanism must apply the following principles:
a) Information on objectives, strategies, policies and processes shall be passed on from upper to lower levels, and to related individuals/divisions;
b) Information on the internal control system and operational results shall be passed on from lower to upper levels (also including the Board of Directors, Members’ Council, parent bank, Control Board, Director General (Director)) and from the commercial bank’s branches and other affiliates to the headquarters so that the commercial bank/foreign bank's branch can fully grasps its risk positions and business situation.
c) Information on new products, operations in new markets, loss, frauds and the risk of loss/fraud shall be passed on from the risk management and internal audit departments, alongside other related departments, in a timely manner;
d) There is a mechanism for direct, independent and punctual report to competent level on violations against the law, internal regulations and work ethics committed by individuals and divisions in charge of information security and protection for information providers;
dd) The frequency of information exchange must be directly proportional to the risk level.
Above are regulations on information exchange mechanism regarding internal control systems of commercial banks in Vietnam. Please refer to the Circular 13/2018/TT-NHNN for more details.
Best regards!
