Vietnam: The power to decide banking inspections

According to Circular No. 36/2016/TT-NHNN of the State Bank of Vietnam, the Chief Inspector has the power to:

- issue the decision on consolidated inspection of a credit institution, extensive inspection, inspection of the affiliate of a credit institution and inspection of a branch of a foreign bank under the management of the State Bank as assigned by the Governor of the State Bank or at the request of the Governor of the Stated Bank;  

- decide to carry out an inspection in case violations of law are suspected or there are risks to the operational safety of the credit institution and branch of a foreign bank and shall be responsible to the Governor of the State Bank for such decision;

- In case violations of law are suspected or there are risks to the operational safety of the credit institution or branch of a foreign bank, request the Director of the branch of the State Bank to inspect the inspected entity as assigned by the Governor of the State Bank; in the event the Director of the branch of the State Bank rejects the request, the Chief Inspector may issue an inspection decision, inform the Governor of the State Bank and shall be responsible to the Governor of the State Bank for such decision;

- decide to re-inspect the case that has been concluded by the Director General of the Provincial Department of Banking Inspection and Supervision and the Chief Inspector of the provincial banking inspection and supervision authority, but violations of law are suspected; the case that has been concluded by the President of the People’s Committee of the province and the Director of the branch of the State Bank but violations of law are suspected as assigned by the Governor of the State Bank

The Director General of the Provincial Department of Banking Inspection and Supervision shall issue the decision on extensive inspection, inspection of the affiliate of a credit institution under the management of the Provincial Department of Banking Inspection and Supervision or at the request of the Chief Inspector. 

Besides, Circular No. 36/2016/TT-NHNN also stipulates that when necessary, the Director of the branch of the State Bank shall issue the decision on consolidated inspection of a credit institution, extensive inspection at the headquarters of the credit institution, inspection of the affiliate of a credit institution, and inspection of branch of a foreign bank under the management of the branch of State Bank.

Moreover, the Chief Inspector of the provincial banking inspection and supervision authority has the power to:

- issue the decision on consolidated inspection of a credit institution, extensive inspection of the credit institution where its headquarters is located; inspection of the affiliate of a credit institution, inspection of branch of a foreign bank under the management of the branch of the State Bank or at the request of the Chief Inspector and the Director of the branch of the State Bank;

- decide to carry out an inspection in case the inspected entity's violations of law are suspected or there is a threat to the operational safety of a credit institution and branch of a foreign bank under his/her management and be responsible to the Director of the branch of the State Bank for such decision.

Notably, when necessary, the Governor of the State Bank shall issue the decision on consolidated inspection of a credit institution, extensive inspection, inspection of the affiliate of a credit institution, and inspection of a branch of a foreign bank.

View more details at Circular No. 36/2016/TT-NHNN of the State Bank of Vietnam, effective from February 18, 2017.

-Thao Uyen-

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