Newest regulations on forms of special control over credit institutions in Vietnam

Regulations on forms of special control over credit institutions in Vietnam

According to Article 4 of Circular 39/2024/TT-NHNN stipulating the forms of special control over credit institutions in Vietnam:

- Based on the actual situation and risk level in the activities of the credit institution, the Governor of the State Bank or the Director of the provincial State Bank branch shall consider and decide:

+ Placing the credit institution under special control in the form of special supervision or comprehensive control;

+ The content, scope, measures, and tasks of controlling activities as specified in the Special Control Decision shall conform to the form of special control and the content stipulated in Clause 1, Article 11 of Circular 39/2024/TT-NHNN.

- Special supervision is placing the credit institution under the direct control of the State Bank through direct or remote directions, on-site inspections by the Special Control Committee over the activities of the specially controlled credit institution.

- Comprehensive control is placing the credit institution under the direct control of the State Bank through on-site directions and control by the Special Control Committee over the daily activities of the specially controlled credit institution.

- The process of changing the form of special control is as follows:

+ Based on the actual situation and risk level in the activities of the specially controlled credit institution, the Special Control Committee shall recommend the Governor of the State Bank (through the Banking Inspection and Supervision Agency) to change the form of special control for the credit institution stipulated in Clause 1, Article 3 of Circular 39/2024/TT-NHNN or recommend the Director of the provincial State Bank branch to change the form of special control for the credit institution stipulated in Clause 2, Article 3 of Circular 39/2024/TT-NHNN;

+ In cases where the specially controlled commercial bank has a mandatory transfer plan approved by the competent authority, the Special Control Committee shall recommend the Governor of the State Bank (through the Banking Inspection and Supervision Agency) to change the form of special control if it is deemed necessary;

+ Within 20 days from the date of receiving the recommendation of the Special Control Committee as stipulated in Points a, b, Clause 4, Article 4 of Circular 39/2024/TT-NHNN, the Governor of the State Bank or the Director of the provincial State Bank branch shall consider and decide to change the form of special control for the credit institution according to the authority stipulated in Article 3 of Circular 39/2024/TT-NHNN.

More details can be found in Circular 39/2024/TT-NHNNN which comes into force in Vietnam from July 1, 2024, and replacing Circular 39/2024/TT-NHNN which stipulates special control over credit institutions, except in cases stipulated in Clause 2, Article 21 of Circular 39/2024/TT-NHNN.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE