Vietnam: Requirements for control activities for credit extensions

11:46, 17/06/2018

Circular No. 13/2018/TT-NHNN on internal control systems of commercial banks and foreign banks’ branches was promulgated by the State Bank of Vietnam.

According to Vietnam’s new regulations, control activities for credit extensions of commercial banks and foreign banks’ branches are conducted as follows:

- Control activities for the commercial bank’s/foreign bank's branch’s credit extensions must comply with Clauses 1 and 2, Article 15 of this Circular.

- Credit extensions must have conflict of interest controlled, based on the principle that the individual/department doing credit appraisal is independent with individuals/departments doing:

+ Customer relations;

+ Reappraisal (if any);

+ Credit extension approval;

+ Credit risk limit control; management of credit extensions requiring attention; ratio and method of establishment of provisions for credit losses and use of provisions for credit losses.

View other requirements at Circular No. 13/2018/TT-NHNN of the State Bank of Vietnam, effective from January 01, 2019.

- Thanh Lam -

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