LEGAL UPDATE RELATING TO FINANCE AND CREDIT (MONTHLY LEGAL UPDATE – 04/2022)
v Name of legal document: Circular No. 27/2021/TT-NHNN issued on 31/12/2022 by the State Bank of Vietnam amending and supplementing a number of articles of the System of accounting accounts of credit institutions promulgated together with Decision No. 479/2004/QD-NHNN dated April 29, 2004 and the Financial reporting regime for credit institutions issued together with Decision No. 16/2007/QD-NHNN dated April 18, 2007 of the Governor of the State Bank of Vietnam (referred to as the “Circular No. 27/2021/TT-NHNN”).v Effective date: 01/04/2022.Some contents should be noted:
· Firstly, replacing some phrases of the System of accounting accounts of credit institutions promulgated together with Decision No. 479/2004/QD-NHNN dated April 29, 2004 by the Governor of the State Bank (amended and supplemented).
Specifically, clause 3 Article 1 of Circular No. 27/2021/TT-NHNN stipulates: “Article 1. Amending and supplementing a number of articles of the System of accounting accounts of credit institutions promulgated together with Decision No. 479/2004/QD-NHNN dated April 29, 2004 by the Governor of the State Bank (amended and supplemented by Circular No. 10/2014/TT-NHNN dated March 20, 2014, Circular No. 49/2014/TT-NHNN dated December 31, 2014, Circular No. 22/2017/ TT-NHNN dated December 29, 2017)
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3. Replacing some phrases of the System of accounting accounts of credit institutions promulgated together with Decision No. 479/2004/QD-NHNN dated April 29, 2004 by the Governor of the State Bank (amended and supplemented) as follows:
a) Replacing the phrase “Balance sheet” with the phrase “Report of financial position” in Decision No. 479/2004/QD-NHNN (amended and supplemented);
b) Replacing the phrase “to ensure that payment and credit service provision activities are performed according to signed contracts and commitments” with the phrase “to ensure the performance of obligations in accordance with regulations of law” in the accounting content of account 427- Deposit in Viet Nam Dong, account 428- Deposit in foreign currency specified in Decision No. 479/2004/QD-NHNN (amended and supplemented);
c) Replacing the phrase “lost” with the phrase “risks have been dealt with”, the phrase “loss debt” becomes “risk-resolved debt” in account 97- Bad debts settled at Section II- System of accounting accounts and accounting contents of accounts 97- Bad debts handled in Section III- Accounting contents of accounts specified in Decision No. 479/2004/QD-NHNN (amended and supplemented).
· Secondly, abrogating a number of provisions in Circular No. 10/2014/TT-NHNN dated March 20, 2014 amending and supplementing a number of accounts in the System of accounting accounts of credit institutions issued under Decision No. 479/2004/QD-NHNN dated April 29, 2004 by the Governor of the State Bank and Circular No. 22/2017/TT-NHNN dated December 29, 2017 amending and supplementing a number of articles of the System of accounting accounts of credit institutions promulgated together with Decision No. 479/2004/QD-NHNN dated April 29, 2004 and Financial reporting regime for credit institutions issued together with Decision No. 16/ 2007/QD-NHNN dated 18/4/2007 of the Governor of the State Bank.
Specifically, Article 3 of
Decision No. 422/QD-NHNN stipulates: “Article 3. Abrogating
1. Abrogating Clauses 5, 14, 25 Article 3 of Circular No.
10/2014/TT-NHNN dated March 20, 2014 amending and supplementing a number of
accounts in the System of accounting accounts of credit institutions issued under
Decision No. 479/2004/QD-NHNN dated April 29, 2004 of the Governor of the State
Bank.
2. Abrogating Point c, point h (i) Clause 2 Article 1 of Circular No. 22/2017/TT-NHNN dated December 29, 2017 amending and supplementing a number of articles of the System of accounting accounts of credit institutions issued together with Decision No. 479/2004/QD-NHNN dated April 29, 2004 and Financial reporting regime for credit institutions issued together with Decision No. 16/2007/QD-NHNN dated April 18, 2007 by the Governor of the State Bank.”
v Name of legal document: Circular No. 24/2021/TT-NHNN issued on 31/12/2021 by the State Bank of Vietnam amending and supplementing to some articles of Circular No. 39/2011/TT-NHNN December 15, 2011 of the Governor of the State bank of Vietnam providing independent audit of credit institutions and foreign bank branches (referred respectively to as the “Circular No. 24/2021/TT-NHNN” and “Circular No. 39/2011/TT-NHNN”).v Effective date: 15/04/2022.
The content should be noted: Amending and supplementing regulations on contents with at least in independent audit of operations of the internal control system of credit institutions and foreign bank branches.
Specifically, Clause 2 Article 1
of Circular No. 24/2021/TT-NHNN stipulates:
“Article 1. Amending and supplementing a
number of articles of Circular No. 39/2011/TT-NHNN
...
2. Amending and supplementing Clause 2, Article 8 as follows:
“2. Independently audit the operation of the internal control system of
a credit institution or foreign bank branch with at least the following
contents:
a) Auditing the internal control system of credit institutions, foreign
bank branches (including internal mechanisms, policies, processes and
regulations) in compliance with current law provisions and regulations of the
State Bank on the internal control system of credit institutions and foreign
bank branches.
For the contents of the internal control system that have been audited
for compliance without any change, such content is not required to be
re-audited;
b) Auditing the operation of the internal control system for the
preparation and presentation of financial statements;
c) In addition to the audit contents specified at Points a and b of
this Clause, the commercial bank or foreign bank branch must audit the operation
of the internal control system for the content of the internal assessment on
the sufficient capital level of commercial banks and foreign bank branches in
accordance with the State Bank's regulations on internal control system.””
v Name of legal document: Decision No. 422/QD-NHNN issued on 18/03/2022 by the State Bank of Vietnam issuing the Action plan of the banking industry implementation of the Government’s Resolution No.11/NQ-CP dated January 30, 2022 (referred to as the “Decision No. 422/QD-NHNN”).v Effective date: 18/03/2022.
The content should be noted: Regulation
on organization of implementation ofr credit institutions and foreign bank
branches.
Specifically, Item 2 Part III of
Decision No. 422/QD-NHNN
stipulates: “III. ORGANIZATION OF IMPLEMENTATION
...
2. Credit institutions, foreign
bank branches
2.1. Continuing to drastically implement measures to support customers
affected by the COVID-19 epidemic to ensure the right regulations and right
subjects. In particular, focusing on classifying customers affected by the
COVID-19 epidemic and assessing the full repayment ability of customers to
ensure that the support is appropriate to the level of impact of the epidemic.
Prioritize and focus on lending to industries and sectors that are encouraged,
serving production, import-export, international payment, etc., according to
the socio-economic development orientation approved by the Party, National
Assembly, Government and the Prime Minister to create favorable conditions for
enterprises and people to access credit sources to restore production and
business after the COVID-19 epidemic.
2.2. Improving financial capacity, strictly implement the direction of the
State Bank in Directive No. 01/CT-NHNN in 2022 and 2023 on minimizing operating
costs, reducing profit targets, paying dividends, increasing strengthen risk
provisioning to strive to continue to reduce lending interest rates as
prescribed in point 1, Section II of this Action Plan, and at the same time
improve resisting ability for negative and unpredictable impacts of the
COVID-19 epidemic.
2.3. Researching and deploying appropriate payment service fee exemption
and reduction policies to support enterprises and people facing difficulties
due to the impact of the COVID-19 epidemic. At the same time, strictly and
regularly supervising and inspecting the observance of the provisions of the
law on interest rates and lending fees. Actively reviewing and promptly
detecting violations to take appropriate handling measures.
2.4. Strictly controlling credit quality, minimizing bad debt arising,
especially in potentially risky fields; promptly detecting and strictly
handling violations of laws and internal regulations in credit extension
activities; balancing capital sources, using capital for medium and long-term
loans, especially strictly controlling credit granting for the purposes of
investment, real estate business, BOT, BT transport, investment in corporate
bonds...; ensure liquidity and strictly comply with regulations on safety
limits and ratios in banking activities and relevant laws.
2.5. Implementing drastically measures to recover bad debts, debts that have used provisions to handle risks, minimize losses for credit institutions, ensure the legitimate interests of the State, shareholders and depositors. Continuing to comprehensively apply solutions to handle bad debts according to Resolution No. 42/2017/QH14 in order to quickly and effectively handle bad debts.”
