Central bank can take early intervention measures against weak credit institutions from July (Photo: tapchitaichinh.vn)Hanoi (VNA) - The State Bank ofVietnam (SBV) can take early intervention measures against weak creditinstitutions in the supervision process from July this year, according to a newSBV regulation.
Under Circular 04/2018/NHNN-TT, which willreplace Circular 08/2017/TT-NHNN from July 1 this year, the SBVGovernor stipulated orders and procedures for banking supervision, aimedat minimising the weakness of credit institutions and contributing torestricting risks to the banking system.
The new circular is also expected to helpVietnam’s regulations in the banking industry to gradually match internationalrules.
Accordingly, besides making recommendations,issuing warnings or dealing with administrative violations as currently occurs,the SBV chief inspector or directors of SBV’s branches in cities and provincescan submit proposals to the SBV Governor to consider and take earlyintervention actions against ailing credit institutions.
Within 30 days of receiving the earlyintervention application announcement, the ailing credit institutions mustreport to the SBV their status, cause and solutions to resolve the weakness inwritten documents.
SBV inspection bodies will also be permittedto conduct extraordinary inspections on these credit institutionsduring the supervision process.
Assessing this decision, Bao Viet SecuritiesCompany (BVSC) said it was necessary to add early intervention to the existingbanking supervision measures as the costs (of both time and money) to overcomethe weaknesses of these credit institutions would be minimized and at the sametime would contribute to reducing the risk for the whole banking system.
BVSC analysts also proposed that the legalframework related to the supervision should be studied, updated andsupplemented continually to keep up with the reality of banking operations.
According to SBV Governor Le Minh Hung, reportsfrom the Ministry of Public Security showed that 95 economic cases in thebanking sector were detected and prosecuted, with nearly 200 banking employeesand officials being accused in the 2011-2016 period.-VNA
Under Circular 04/2018/NHNN-TT, which willreplace Circular 08/2017/TT-NHNN from July 1 this year, the SBVGovernor stipulated orders and procedures for banking supervision, aimedat minimising the weakness of credit institutions and contributing torestricting risks to the banking system.
The new circular is also expected to helpVietnam’s regulations in the banking industry to gradually match internationalrules.
Accordingly, besides making recommendations,issuing warnings or dealing with administrative violations as currently occurs,the SBV chief inspector or directors of SBV’s branches in cities and provincescan submit proposals to the SBV Governor to consider and take earlyintervention actions against ailing credit institutions.
Within 30 days of receiving the earlyintervention application announcement, the ailing credit institutions mustreport to the SBV their status, cause and solutions to resolve the weakness inwritten documents.
SBV inspection bodies will also be permittedto conduct extraordinary inspections on these credit institutionsduring the supervision process.
Assessing this decision, Bao Viet SecuritiesCompany (BVSC) said it was necessary to add early intervention to the existingbanking supervision measures as the costs (of both time and money) to overcomethe weaknesses of these credit institutions would be minimized and at the sametime would contribute to reducing the risk for the whole banking system.
BVSC analysts also proposed that the legalframework related to the supervision should be studied, updated andsupplemented continually to keep up with the reality of banking operations.
According to SBV Governor Le Minh Hung, reportsfrom the Ministry of Public Security showed that 95 economic cases in thebanking sector were detected and prosecuted, with nearly 200 banking employeesand officials being accused in the 2011-2016 period.-VNA
VNA
