The Development Bank issues Internal Regulations on Credit Granting and Loan Management in 2020

According to the provisions of Article 3 of Circular 07/2019/TT-NHNN, the Vietnam Development Bank must promulgate internal regulations on credit provision and loan management to ensure the use of loan capital for the right purposes as stipulated in this Circular and related documents, which at minimum must include the following contents:

Illustrative image (source: internet)

- Criteria for identifying a customer, a customer and related persons as specified in Clause 4 Article 2 of this Circular, credit policies for a customer, a customer, and related persons including regulations on credit granting conditions, credit limits, interest rates, documentation, processes, procedures, appraisal, approval for credit granting, and loan management;- Regulations on the principles of decentralization, authorization for decision-making, credit approval, risk handling within the authority for a customer, a customer, and related persons, including provisions on responsibilities, authority of units, individuals in appraisal, credit granting, credit quality management ensuring the principles of transparency, no conflict of interest and no concealment of credit quality.

In addition, the Vietnam Development Bank must promulgate internal regulations on liquidity management as stipulated in this Circular and related documents, which at minimum must include the following contents:

- Regulations on decentralization, authorization, functions, tasks of related departments in ensuring to maintain the liquidity reserve ratio;- Plans and measures to ensure the liquidity reserve ratio;- Guidelines, inspections, internal controls, internal audits related to maintaining the liquidity reserve ratio.

Notably, the above-mentioned internal regulations must be reviewed, considered for amendment, supplemented at least once a year. Within 10 days from the promulgation, amendment, supplementation or replacement of the internal regulations, the Vietnam Development Bank must send these documents directly or by post to the State Bank (Banking Inspectorate, Banking Supervision Agency), Ministry of Finance.

See further regulations in Circular 07/2019/TT-NHNN effective from January 1, 2020.

Thu Ba

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