Directive No. 05/2008/CT-NHNN on certain measures to ensure safety and effectiveness in the business operations of credit organizations

DIRECTIVE

on certain measures to ensure safety and effectiveness in business operations

of credit institutions

Currently, the entire banking industry is implementing the Government's policy to curb inflation, stabilize macroeconomic conditions, ensure social welfare, and achieve sustainable growth. However, since mid-September 2008, the financial and credit crisis in the United States has become complex, having a certain impact on the economy and the operations of Vietnamese credit institutions. To ensure safety and effectiveness in business operations during the last months of 2008 and the beginning of 2009, the Governor of the State Bank requests credit institutions to implement the following measures:

1. Closely monitor developments and forecast the impact of the financial and credit crisis in the United States on the economy, the global financial market, and its potential effects on Vietnam's economy, money market, and banking activities to proactively implement measures to prevent possible risks.

2. Develop business operation plans, continue expanding capital mobilization and credit growth for the economy at reasonable interest rates, while ensuring payment capacity for various needs, especially during the Lunar New Year and the Spring Festival in 2009.

3. Strictly control credit quality; specifically, analyze, assess, and classify loans for real estate businesses to develop appropriate solutions for each borrower; continue increasing credit for export sectors, agriculture, rural areas, key national projects, productive capital needs with high efficiency, focusing on expanding loans for small and medium-sized enterprises provided that such loans comply with legal requirements and the credit institution's capital balancing capabilities.

4. Adhere to regulations regarding safety ratios in the operations of credit institutions as stipulated in Decision No. 457/2005/QĐ-NHNN dated April 19, 2005, of the Governor of the State Bank, and Decision No. 03/2007/QĐ-NHNN dated January 19, 2007, of the Governor of the State Bank amending and supplementing certain provisions of the Decision on safety ratios in the operations of credit institutions issued together with Decision No. 457/2005/QĐ-NHNN, Decision No. 1328/2005/QĐ-NHNN dated September 6, 2005, promulgating the Decision on safety ratios in the operations of grassroots People's Credit Funds, and other relevant legal documents.

5. Review, revise, and perfect internal procedures concerning credit activities, monetary transactions, foreign exchange, payments, fund transfers, and information technology applications in accordance with related legal provisions. Assess potential risks in each business process to immediately implement preventive and risk management measures.

6. Timely report difficulties and obstacles in business operations to the State Bank of Vietnam for consideration and resolution; provide information and reports on monetary, credit, and banking activities strictly according to deadlines and accuracy requirements set by the State Bank of Vietnam.

7. Implementation organization:

a) This Directive shall take effect fifteen days from the date of publication in the Official Gazette.

b) The Director of the Office, Heads of the Monetary Policy Department, and Heads of units under the State Bank, Governors of the State Bank branches in provinces and centrally-administered cities; Boards of Directors and General Managers (Directors) of credit institutions are responsible for implementing this Directive.

c) The Office shall take the lead and coordinate with relevant Departments to inspect and urge implementation of this Directive, regularly tracking and summarizing implementation results weekly to report to the Governor of the State Bank./.