Hanoi, Vietnam: Cases where personnel to be elected or appointed of credit institutions do not meet the standard of professional ethics in Vietnam

Cases where personnel to be elected or appointed of credit institutions do not meet the standard of professional ethics in Vietnam (Internet image)

On 24/6/2024, the Governor of the State Bank of Vietnam issued Circular 10/2024/TT-NHNN amending Circular 22/2018/TT-NHNN providing guidelines for procedures and application for approval for provisional lists of personnel of commercial banks, non-bank credit institutions and foreign banks’ branches in Vietnam

Cases where personnel to be elected or appointed of credit institutions do not meet the standard of professional ethics

The personnel to be elected or appointed as members of the Board of Directors, members of the Members' Council, members of the Supervisory Board, General Director (Director) of credit institutions, or foreign bank branches falling into the following cases are assessed as not ensuring professional ethics:

• Individuals held accountable according to inspection conclusions, leading to administrative penalties imposed on the credit institution or foreign bank branch in the highest fine frame for violations related to licensing, management, administration, shares, stocks, capital contribution, share purchase, credit provision, corporate bond purchase, and safety ratios as per the law on administrative violations in the monetary and banking sector;

• Individuals named in inspection and examination conclusions held responsible for sanctions imposed on credit institutions or foreign bank branches within 06 months from the date of decision issuance, or 01 year from the completion of other administrative sanctions, or 01 year from the end of the validity period of administrative sanction enforcement decisions;

• Individuals administratively sanctioned for violations in the monetary and banking sector within 06 months from the date of decision issuance, or 01 year from the completion of other administrative sanctions, or 01 year from the end of the validity period of administrative sanction enforcement decisions;

• Individuals personally responsible for violations regarding licensing, management, administration, shares, stocks, capital contribution, share purchase, credit provision, corporate bond purchase, safety ratios, asset classification, off-balance sheet commitments, and provisioning for risk management, as mentioned in inspection, examination, and audit conclusions, with unresolved remediation and correction recommendations from competent authorities.

For cases not falling under the above regulations, members of the Board of Directors, members of the Members' Council, members of the Supervisory Board, General Director (Director) of credit institutions, and foreign bank branches must comply with the ethical standards and rules issued by the respective credit institution or foreign bank branch following the State Bank's regulations on internal control systems for commercial banks, foreign bank branches, and non-bank credit institutions, unless newly licensed.

(Article 5a Circular 22/2018/TT-NHNN, supplemented by Circular 10/2024/TT-NHNN)

Authority to approve the list of personnel to be elected or appointed of credit institutions in Vietnam

As per Article 4 Circular 22/2018/TT-NHNN (amended by Circular 10/2024/TT-NHNN) regulating the authority to approve the list of personnel to be elected or appointed of credit institutions and foreign bank branches in Vietnam as follows:

(1) The Governor of the State Bank shall review and approve the list of personnel to be elected or appointed of commercial banks.

(2) The Chief Inspector of the Banking Supervisory Department shall review and approve the list of personnel to be elected or appointed of non-bank credit institutions and foreign bank branches, except as provided in (3).

(3) The Directors of local State Bank branches shall review and approve the list of personnel to be elected or appointed of foreign bank branches based in their locality, subject to microprudential supervision by the local State Bank branch.

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