Vietcombank has been allowed to apply Basel II standards (Photo: Vietcombank)Hanoi (VNA) - The State Bank of Vietnam (SBV) has allowed the JointStock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) to applyminimum capital adequacy ratio requirements following Basel II standards oneyear earlier than the deadline initially set by the central bank.
Basel II is the second edition of the Basel Accords, which are recommendationson banking laws and regulations issued by the Basel Committee on bankingsupervision. Basel II comprises minimum capital requirements, supervisoryreview and market discipline. It aims to enhance competition and transparencyin the banking system and make banks more resistant to market changes.
In order to realise the target of being the best risk management bank,Vietcombank’s Board of Directors has since 2014 directed a project to analysethe difference between the Basel II requirements and the status of Vietcombank.On this basis, it offers the Basel II Implementation Roadmap with a total of 82initiatives to meet Basel II standards by the end of 2018 and meet the advancedapproach in 2019.
The extensive Basel II programme has the participation of more than 160 peoplefrom the bank’s headquarters and branches. The implementation of 82 initiativesunder the roadmap has helped Vietcombank qualify to meet Basel II standards. Atthe same time, Vietcombank has basically fulfilled the important conditions forthe application of Basel II according to the advanced method.
Vietcombank has further improved its governance culture and risk managementsystem, adjusting business strategy to ensure the balance between businessdevelopment and risk control in the direction of diversifying products,focusing on retail development and expanding non-credit activities.
The result is a strong demonstration of Vietcombank’s commitment to becomingone of the 100 largest banks in Asia and one of the world’s 300 largestfinancial banking groups.
The SBV has also announced its approval for the VietnamInternational Bank (VIB) to apply minimum capital requirements following BaselII standards.
Three years ago, the SBV selected 10 commercial banks topilot Basel II standards and set the deadline of 2020 for the banks to meet thestandards. It was part of the central bank’s plan to restructure the domesticcredit institution system, as risk management gaps remain a major reason forincreasing bad debts.
The selected banks were Vietcombank, Vietinbank and BIDV, along with MB andSacombank, Techcombank, ACB, VPBank, VIB and Maritime Bank. - VNA
VNA
