Vietnam: Oversight of implementation of recovery and resolution plans of banks to whom early intervention action is applied

According to Circular No. 04/2018/TT-NHNN of the State Bank of Vietnam, the oversight of implementation of recovery and resolution plans of entities subject to banking supervision to whom early intervention action is applied shall be carried out as follows:

- Entities subject to banking supervision shall, upon the request of the banking supervisory unit, prepare monthly or ad-hoc status reports on progress and results of implementation of recovery and resolution plans.

- The banking supervisory unit shall be responsible for regularly overseeing, stimulating and assessing progress, results, difficulties and issues related to implementation of recovery and resolution plans of entities subject to banking supervision.

- If there is any delay or ineffectiveness in implementation of these plans that is found after carrying out the monitoring process:

+ Banking Inspection and Supervision Chief, and Directors of State Bank Branches of centrally-affiliated cities and provinces where the Banking Inspection and Supervision Department is not located, shall appeal the State Bank’s Governor to consider requesting entities subject to banking supervision in writing to give their explanations and recommended solutions, except for cases specified below;  

+ Banking Inspection and Supervision Chief shall consider issuing the written request to entities subject to banking supervision, including people's credit funds and microfinance institutions operating within local subdivisions under the control of the Banking Inspection and Supervision Department, to give their explanations and recommended solutions;  

+ Directors of State Bank Branches of centrally-affiliated cities and provinces where the Banking Inspection and Supervision Department is not located shall request entities subject to banking supervision, including people's credit funds and microfinance institutions operating within these local subdivisions, in writing to give their explanations and recommended solutions.

- Concurrently, Circular No. 04/2018/TT-NHNN also stipulates that in the course of monitoring, based on results of implementation of recovery and resolution plans of entities subject to banking supervision and depending on the nature and level of risk, the banking supervisory unit may appeal competent authorities to work directly with, carry out examination and inspection of entities subject to banking supervision in accordance with enforceable laws.

View more details at Circular No. 04/2018/TT-NHNN of the State Bank of Vietnam, effective from July 01, 2018.

-Thao Uyen-

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