Circular No. 08/2022/TT-NHNN on the procedures and formalities for banking supervision

CIRCULAR

Regulations on the procedures and formalities for bank supervision

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions dated November 20, 2017;

Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Decree No. 26/2014/NĐ-CP dated April 7, 2014 of the Government stipulating the organization and operation of the Banking Inspection and Supervision Agency and Decree No. 43/2019/NĐ-CP dated May 17, 2019 of the Government amending and supplementing certain provisions of Decree No. 26/2014/NĐ-CP dated April 7, 2014 of the Government stipulating the organization and operation of the Banking Inspection and Supervision Agency;

Pursuant to Decision No. 20/2019/QĐ-TTg dated June 12, 2019 of the Prime Minister stipulating the functions, tasks, powers, and organizational structure of the Banking Inspection and Supervision Agency under the State Bank of Vietnam;

At the proposal of the Director of Banking Inspection and Supervision;

The Governor of the State Bank of Vietnam promulgates this Circular stipulating the procedures and formalities for bank supervision.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Circular stipulates the procedures and formalities for bank supervision concerning credit institutions and foreign bank branches.

2. Systemic payment supervision and information security supervision of credit institutions and foreign bank branches shall be carried out in accordance with relevant laws.

3. Anti-money laundering supervision of credit institutions and foreign bank branches shall be carried out in accordance with laws on anti-money laundering.

4. Supervision of compliance with laws on investment, management, and use of state capital at credit institutions shall be carried out in accordance with laws on investment, management, and use of state capital at enterprises.

5. Bank supervision of credit institutions subject to special control shall be carried out in accordance with laws on special control of credit institutions and the provisions of this Circular.

Article 2. Applicability

1. Units implementing bank supervision include:

a) Units implementing micro-prudential safety supervision;

b) Units implementing macro-prudential safety supervision.

2. Objects of bank supervision include:

a) Objects of micro-prudential safety supervision;

b) Objects of macro-prudential safety supervision.

3. Other agencies, organizations, and individuals related to the procedures and formalities for bank supervision.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. Bank supervision includes micro-prudential safety supervision and macro-prudential safety supervision.

3. Macro-prudential safety supervision is a form of safety supervision of the system of credit institutions and foreign bank branches.

4. Objects of bank supervision including:

a) Objects of micro-prudential safety supervision include:

(i) Credit institutions, except policy banks which shall comply with the relevant laws;

(ii) Foreign bank branches;

(iii) Branches of credit institutions. For people's credit fund transaction offices, supervision shall be conducted through the people's credit funds. For transaction offices of other credit institutions, supervision shall be conducted through the branch managing such transaction offices;

(iv) Other objects decided by the Governor of the State Bank of Vietnam.

7. Compliance supervision involves reviewing, monitoring, analyzing, and assessing (hereinafter referred to as analysis and assessment) the situation regarding compliance with laws on banking operations safety, other laws on currency and banking; the implementation of directives and requirements of competent state authorities concerning bank supervision objects as stipulated in Clause 9 of this Article.

8. Enhanced supervision is micro-prudential supervision applied to micro-supervisory objects through additional supervisory contents and reporting frequency as decided by the Governor of the State Bank of Vietnam or the Director of the State Bank of Vietnam branch for specific cases.

9. Directives and requirements of competent state authorities concerning bank supervision objects refer to the State Bank of Vietnam (or the State Bank of Vietnam upon request from another competent state authority) directing and requiring bank supervision objects to implement certain contents and tasks in the following documents:

b) Supervisory recommendations and warnings;

c) Other State Bank of Vietnam documents containing specific requirements and tasks.

10. Risk supervision involves analyzing and assessing the risk situation (including systemic risks) to warn and recommend to bank supervision objects.

11. Risk is the possibility of financial loss (financial loss, non-financial loss) reducing revenue, own capital leading to a decrease in the capital adequacy ratio or limiting the ability to achieve business goals of credit institutions and foreign bank branches.

13. Banking system crisis is a systemic banking collapse occurring when credit institutions and foreign bank branches lose their ability to pay, to settle, or become bankrupt. A systemic banking crisis is often associated with a sudden withdrawal of deposits by depositors spreading throughout the entire system of credit institutions and foreign bank branches.

14. Contact with the supervised bank entity is the act where the bank supervision implementing unit requests the supervised bank entity to explain, provide documents to prove the accuracy and completeness of the documents, information, reports, and clarify issues related to risks and compliance with laws on monetary and banking activities for the purpose of bank supervision.

16. Management of database involves building, updating, maintaining to meet requirements for accessing and using documents, information, data to serve bank supervision activities.

a) Collection, compilation, processing of documents, information, data;

b) Guidance on supervision activities;

c) Supervision support tools;

d) Measures for handling in bank supervision;

đ) Bank supervision dossier.

Article 4. Principles of bank supervision

Bank supervision shall be carried out according to the following principles:

2. The principle of combining compliance supervision with risk supervision, micro-prudential supervision with macro-prudential supervision.

Article 5. Procedure and formalities for bank supervision

1. The procedure and formalities for bank supervision shall be carried out as follows:

a) Step 1: Collecting, compiling, processing documents, information, data;

b) Step 2: Implementing compliance supervision and/or risk supervision contents;

c) Step 3: Preparing a supervision report and proposing handling measures.

Article 6. Management and storage of documents, information, data

Documents, information, data after being compiled and processed must be stored and managed to serve inspection and supervision work according to the following principles:

1. Documents, information, data must be stored scientifically and completely according to each dossier of each supervised bank entity and the entire system.

2. Collected documents, information, data must be stored in accordance with current legal regulations on archiving.

3. The management, storage, and use of documents, information, data containing state secrets must be carried out in accordance with legal regulations on protecting state secrets.

4. The protection of information, data of credit institutions and customer information must be carried out in accordance with legal regulations.

Chapter II

MICRO-PRUDENTIAL SUPERVISION

Section 1

COLLECTION, COMPILE AND PROCESSING OF DOCUMENTS, INFORMATION, DATA

Article 7. Collection of Documents, Information, and Data

1. Sources of documents, information, and data for banking supervision include:

a) Data and reports as prescribed by current laws on statistical reporting systems of the State Bank of Vietnam;

b) Customer data of the supervised banks from the National Credit Information Center (hereinafter referred to as CIC), information and documents for supervision from the Vietnam Rural Commercial Bank, and the Vietnam Deposit Insurance Corporation;

c) Information from inspection, audit, and post-audit activities;

d) Information from licensing activities of the State Bank of Vietnam;

đ) Results of independent audits;

e) Information from the results of ranking and classification by state management agencies;

g) Reports on micro and macro safety supervision, measures for handling in micro and macro safety supervision;

h) Reports as required by the State Bank of Vietnam and other competent authorities;

i) Requirements of state authorities with supervisory power over the supervised banks, including directives and requirements of units under the State Bank of Vietnam;

k) Minutes of meetings, explanatory documents, files, and data provided by the supervised banks;

3. Units implementing micro safety supervision collect documents, information, and data received from the sources specified in points h, i, k, l of Clause 1 of this Article.

Article 8. Processing, Updating, and Consolidating Documents, Information, and Data

Based on the sources of documents, information, and data stipulated in Article 7 of this Circular, units implementing micro safety supervision shall process and consolidate as follows:

1. For documents, information, and data automatically updated from the State Bank of Vietnam's electronic statistical reporting system and from CIC into the remote supervision support information system, units implementing micro safety supervision shall process according to the State Bank of Vietnam's statistical reporting regulations and the Rules on Management, Operation, and Use of the Remote Supervision Support Information System Software issued by the Governor of the State Bank of Vietnam.

2. For other documents, information, and data not covered by Clause 1 of this Article, units implementing micro safety supervision shall act as follows:

a) Review the logical and rationality of the information by comparing and cross-referencing the collected documents, information, and data with historical data to identify unusual, illogical, or unreasonable issues;

b) Update necessary documents, information, and data into the remote supervision support information system according to the Rules on Management, Operation, and Use of the Remote Supervision Support Information System Software issued by the Governor of the State Bank of Vietnam.

3. When discovering missing, erroneous, or inaccurate documents, information, and data that require clarification according to the requirements of micro safety supervision, units implementing micro safety supervision shall request or submit to the competent authority to request the supervised banks to report and explain through the methods of contacting the supervised banks as stipulated in Chapter IV of this Circular.

4. Based on the consolidated and processed information, units implementing micro safety supervision shall implement the contents prescribed in Sections 2 and 3 of this Chapter.

Section 2

CONTENTS OF MICRO SAFETY SUPERVISION

Article 9. Content of micro-prudential supervision for credit institutions and foreign bank branches

1. The unit implementing micro-prudential supervision shall determine the scope and content of information related to the activities of the micro-prudential supervision subject to monitor compliance with laws on banking operations, other laws on currency and banking in the activities of the micro-prudential supervision subject, focusing on one or more or all of the following contents:

d) Monitoring compliance with laws on capital contributions, loans, deposits, and investments of credit institutions in subsidiaries, associated companies, and overseas branches;

(i) Changes in managers and operators as stipulated in Article 50 and Article 89 of the Law on Credit Institutions (amended and supplemented) of the micro-prudential supervision subject;

(ii) Changes in shareholder situations, shareholdings, and stocks of managers, operators, major shareholders, and related parties (including investments in the form of capital contributions and share purchases aimed at controlling credit institutions as joint-stock companies);

(iii) Changes in capital contributions, members contributing capital, and ownership for credit institutions as limited liability companies and credit cooperatives;

c) Based on unfavorable information that may significantly impact the micro-prudential supervision subject, the unit implementing micro-prudential supervision evaluates and assesses the risk situation of the micro-prudential supervision subject;

d) Monitoring credit granting and credit quality towards high-risk sectors, customers, and transactions in the activities of the micro-prudential supervision subject to analyze and evaluate the significant impact on the activities of the micro-prudential supervision subject;

The unit implementing micro-prudential supervision identifies high-risk areas, customer objects, and transactions in each period;

4. For joint-stock commercial banks, if necessary, the unit implementing micro-prudential supervision shall review and assess compliance with laws, credit quality, and risks of large-value transactions (including credit grants, investments, capital contributions, share purchases, and other receivables). The unit implementing micro-prudential supervision considers and decides specifically on the threshold value of these transactions;

5. The unit implementing micro-prudential supervision decides or submits to competent authorities for decision on other supervisory contents for micro-prudential supervision subjects within its assigned supervisory scope, in line with the needs and resources of the unit.

Article 10. Content of micro safety supervision for branches of credit organizations

1. Compliance monitoring includes:

a) Monitoring compliance with legal provisions on:

(i) The reporting system of the branch in accordance with the reporting regulations;

(ii) Other legal provisions on currency and banking applicable to the branch.

b) The unit responsible for micro safety supervision shall monitor compliance with directives and requirements issued by competent state agencies towards the subject of micro safety supervision (if any).

2. Risk monitoring focuses on the following minimum contents:

a) Asset items, liabilities, income, expenses, and revenue-expenditure differences;

b) Credit granting situation and credit quality of the subject of micro safety supervision. In necessary cases, the unit responsible for micro safety supervision shall review and assess credit grants and other receivables of significant value of the subject of micro safety supervision. The Governor of the State Bank of Vietnam's branch shall decide specifically on the threshold value of these transactions;

c) Establishing and updating personnel information lists, which must minimally include the branch manager of the credit organization;

d) Information negatively impacting the operations of the subject of micro safety supervision.

3. For transaction offices with large scale as determined by the Governor of the State Bank of Vietnam's branch or transaction offices that have generated information negatively impacting their operations, the unit responsible for micro safety supervision shall conduct supervision according to Articles 1 and 2 of this Decree through the branch managing those transaction offices.

Article 11. Enhanced Supervision

a) The subject of micro safety supervision is rated C or D for people's credit funds; or D or E for other credit organizations and foreign bank branches according to the State Bank of Vietnam’s rating regulations for credit organizations and foreign bank branches;

c) Other subjects as directed by competent state agencies.

a) Scope of supervision;

b) Supervisory entities;

c) Supervisory content, which must minimally include liquidity monitoring; credit grants, receivables, investments, capital contributions, share purchases, or investments in the form of capital contributions and share purchases aimed at controlling enterprises;

d) Reporting frequency of the subject of micro safety supervision;

đ) Coordination content among related units and individuals during enhanced supervision activities (if any).

Section 3

PREPARATION OF SUPERVISION REPORTS AND FILES

PROPOSAL AND IMPLEMENTATION OF REMEDIAL MEASURES

Article 12. Establishing Micro Safety Monitoring Reports and Proposing, Implementing Measures for Handling

1. Based on the results of compliance monitoring, risk monitoring as stipulated in Section 2 of this Chapter, and according to current laws and regulations, the micro safety monitoring unit shall carry out:

a) Establishing ad hoc or periodic micro safety monitoring reports as prescribed in Clauses 2 and 3 of this Article;

b) Proposing and implementing handling measures as stipulated in Chapter V of this Circular (if necessary).

2. Principles for establishing, approving, and submitting ad hoc micro safety monitoring reports:

a) An ad hoc micro safety monitoring report must be established when the micro safety monitoring unit detects violations, risks of violating laws, or risks affecting the safe operation of the supervised banking entity, or upon request from the competent authority;

b) The approval and submission of ad hoc micro safety monitoring reports shall be carried out as follows:

(i) Ad hoc micro safety monitoring reports must be approved by the leadership of the micro safety monitoring unit;

(ii) Based on recommendations in the ad hoc micro safety monitoring report and the authority to resolve such recommendations under the law, the ad hoc micro safety monitoring report must be submitted to the competent authority for review and decision;

(iii) Any ad hoc micro safety monitoring report established at the request of a particular competent authority must be submitted to that authority for review and resolution.

a) The mid-year micro safety monitoring report must be completed before August 31 of the same year. The annual micro safety monitoring report must be completed before April 15 of the following year;

b) The micro safety monitoring report for banking entities, which are credit institutions or foreign bank branches, shall be established according to Appendix II issued together with this Circular, while for banking entities which are branches of the same credit institution within the jurisdiction, it shall be established according to Appendix III issued together with this Circular;

c) The approval and submission of periodic micro safety monitoring reports shall be carried out as follows:

(i) For the micro safety monitoring units within the organizational structure of the State Bank branch, the mid-year and annual micro safety monitoring reports must be approved by the leadership of the micro safety monitoring unit and must be submitted to the leadership of the State Bank branch for reporting;

(ii) For the micro safety monitoring units within the organizational structure of the Inspection and Supervision Units of the State Bank branch in Hanoi City or Ho Chi Minh City, the mid-year and annual micro safety monitoring reports must be approved by the leadership of the micro safety monitoring unit and must be submitted to the leadership of the Inspection and Supervision Unit of the State Bank branch and the leadership of the State Bank branch for reporting;

(iii) For the micro safety monitoring units within the organizational structure of the Inspection and Supervision Agency, the mid-year and annual micro safety monitoring reports must be approved by the leadership of the micro safety monitoring unit and must be submitted to the leadership of the Inspection and Supervision Agency and the leadership of the State Bank for reporting;

(iv) In cases where the micro safety monitoring report recommends handling measures to the competent authority as prescribed by law, the micro safety monitoring report must be submitted to that authority for review and decision.

Article 13. Micro Safety Supervision File

1. The micro safety supervision file includes periodic and ad hoc micro safety supervision reports, documents related to the supervised banking objects, and files on measures taken during micro safety supervision.

3. In cases where enhanced supervision measures are applied to the supervised banking object, the micro safety supervision file must be supplemented with the Decision on Enhanced Supervision and information, documents, data, and measures regarding enhanced supervision.

Chapter III

PROCEDURES AND FORMS OF MACRO SAFETY SUPERVISION

Section 1

COLLECTION, COMBINATION, AND PROCESSING OF DOCUMENTS, INFORMATION, AND DATA

Article 14. Collection, Combination, and Processing of Documents, Information, and Data

1. The unit responsible for macro safety supervision collects documents, information, and data from the supervised banking object from the following sources:

a) Sources specified in Clause 1 of Article 7 of this Circular;

b) Micro safety supervision reports, files on measures taken during micro safety supervision (excluding people's credit funds);

c) Based on banking supervision requirements, the unit responsible for macro safety supervision requests or submits a request to the competent authority to require the supervised banking object to provide additional documents, information, and data beyond those specified in points a and b of Clause 1 of this Article.

2. The unit responsible for macro safety supervision combines and processes collected documents, information, and data from the sources specified in Clause 1 of this Article and organizes a database to serve macro safety supervision activities.

3. When discovering missing, erroneous, or unclear documents, information, or data according to macro safety supervision requirements, the unit responsible for macro safety supervision collaborates with the unit responsible for micro safety supervision to request the supervised object to submit reports and explanations.

Section 2

CONTENTS OF MACRO SAFETY SUPERVISION

Article 15. Contents of Macro Safety Supervision for Systems of Credit Organizations and Foreign Bank Branches

The unit responsible for macro safety supervision monitors risks through one or more of the following contents:

a) Analysis and assessment of equity capital situation, capital safety level, capital raising, and utilization;

b) Analysis and assessment of liquidity;

c) Analysis and assessment of non-performing loans and asset quality;

d) Analysis and assessment of interbank operations;

đ) Analysis and assessment of business results and anticipated interest income. The unit responsible for macro safety supervision uses appropriate thresholds based on the characteristics of the macro safety supervision object to evaluate risks affecting system safety. The Director of Banking Inspection and Supervision decides on the thresholds for the above items.

2. Analyzing and assessing macroeconomic developments and the impact of other sectors in the economy that pose a risk to the stability of the credit organization system and foreign bank branches.

3. Conducting regular annual or ad hoc stress tests at the request of the Governor of the State Bank of Vietnam, including the following minimum contents:

a) Stress testing for credit risk through analysis and forecasting of non-performing loan trends under various macroeconomic scenarios and assumptions about changes in loan classification and large customer default;

c) Stress testing for contagion risk among interbank operations;

d) Stress testing for liquidity risk through analysis of liquidity capacity in case of mass withdrawals.

4. In necessary cases or at the request of the Governor of the State Bank of Vietnam, the unit responsible for macro safety supervision conducts analysis and assessment of the possibility of a systemic banking crisis and response measures.

The unit responsible for macro safety supervision bases its criteria on scale, interconnectedness, and substitutability to compile a list of credit organizations and foreign bank branches with systemic importance to submit to the Governor of the State Bank of Vietnam for issuance before March 31 each year.

7. The unit responsible for macro safety supervision decides or submits to the competent authority for decision on other supervisory contents suitable to the needs and resources of the unit.

Section 3

PREPARATION OF SUPERVISION REPORTS AND FILES AND IMPLEMENTATION OF REMEDIAL MEASURES

Article 16. Establishing Macro Safety Supervision Reports and Proposing Measures for Handling

1. Based on the results of risk monitoring as stipulated in Section 2 of this Chapter and according to current laws and regulations, the entity responsible for macro safety supervision shall carry out:

b) Proposing that the entity responsible for micro safety supervision study and consider applying measures for handling as prescribed in Chapter V of this Circular for supervised banks (if necessary).

b) Ad hoc macro safety supervision reports must be approved and submitted to the competent authority according to the following principles:

(i) Ad hoc macro safety supervision reports must be approved by the leadership of the entity responsible for macro safety supervision;

(ii) Ad hoc macro safety supervision reports established at the request of the Governor must be sent to the Governor of the State Bank for consideration and resolution;

(iii) Based on recommendations in the ad hoc macro safety supervision report and the authority to resolve such recommendations under the law, the ad hoc macro safety supervision report must be sent to the competent authority for consideration and decision.

a) The mid-year macro safety supervision report must be completed before August 31 of the same year. The annual macro safety supervision report must be completed before April 15 of the following year;

b) Periodic macro safety supervision reports must be approved and submitted to the competent authority according to the following principles:

(i) The macro safety supervision report must be approved by the leadership of the entity responsible for macro safety supervision and sent to the leadership of the Banking Inspection and Supervision Authority and the Board of Directors of the State Bank for reporting;

(ii) In cases where the macro safety supervision report recommends measures for handling by the competent authority as prescribed by law, the macro safety supervision report must be submitted to that authority for consideration and decision.

Article 17. Macro Safety Supervision Files

Macro safety supervision files include macro safety supervision reports (periodic and ad hoc) and files on measures for handling in macro safety supervision.

Chapter IV

CONTACT WITH THE OBJECTS OF BANK SUPERVISION

Article 18. Forms of Contact with the Objects of Bank Supervision

Contact with the objects of bank supervision shall be carried out through the following forms:

1. Written explanations.

2. Direct meetings.

Article 19. Written Explanations

2. Based on the deadline for providing explanations specified in the request for explanation, the objects of bank supervision must provide a written explanation, including at least the following contents:

a) Explanation content according to each specific requirement, including analysis of the current situation and causes;

b) Proposals for corrective measures (including implementation schedule) if requested by the entity responsible for bank supervision.

Article 20. On-site Work

2. Prior to on-site work, the supervising unit must notify the supervised bank entity in writing at least three working days in advance; the notification must clearly specify the composition of the working group, the content, time, and location of the work.

3. The results of direct work with the supervised bank entity must be recorded in a protocol according to Appendix I issued together with this Circular and signed for confirmation by representatives of the working group and the supervised bank entity.

Chapter V

MEASURES FOR HANDLING IN BANK SUPERVISION

1. Based on the results of bank supervision, the supervising unit implements warnings and recommendations to the supervised bank entity; depending on the level of safety, soundness, and violations of laws by the supervised bank entity, administrative penalties may be imposed according to legal provisions (if applicable); submit to the Governor of the State Bank or the Branch Director of the State Bank within their authority:

a) Apply handling measures prescribed in Article 25 of Decree No. 26/2014/NĐ-CP dated April 7, 2014 of the Government (amended and supplemented) regarding the organization and operation of the State Bank Inspection and Supervision Department;

b) Apply enhanced supervision measures to the supervised bank entity;

c) Recommend conducting inspections and audits when signs of law violations, risks, and lack of safety in operations are discovered;

d) Amend, supplement, or replace legal documents on currency and banking (if applicable).

2. In necessary cases, to comprehensively assess the operational status of the supervised bank entity, the supervising unit requests the Director of the State Bank Inspection and Supervision Department to require the supervised bank entity (excluding branches of credit organizations) to hire independent auditing organizations to audit one, some, or all aspects of operations as stipulated by law.

Article 22. Recommendations and Warnings for Supervised Bank Entities

2. Recommendations and warnings to the supervised bank entity are based on one or a combination of the following contents:

a) When the results of supervision indicate that quantitative indicators of the supervised bank entity exceed warning thresholds;

c) When there is a request from the Governor of the State Bank arising from practical state management in the field of currency and banking.

3. Upon receiving recommendations and warnings, the supervised bank entity must promptly report and explain the recommendations and warnings according to the requirements of the supervising unit, including at least the current situation, causes, and plans for rectification. The deadline for submitting reports and explanations by the supervised bank entity is specified in the recommendation and warning document sent to the supervised bank entity. The supervising unit has the responsibility to monitor and urge the implementation of recommendations and warnings by the supervised bank entity.

4. If the supervised bank entity continues to pose risks and has a risk of violating laws on currency and banking after implementing the rectification plan, the supervising unit recommends the competent authority to apply handling measures in bank supervision as prescribed in Article 21 of this Circular.

1. The authority to decide on early intervention measures as stipulated in Article 130a of the Law on Credit Institutions (amended and supplemented):

a) The Governor of the State Bank of Vietnam shall examine and decide on early intervention measures for banking supervision subjects under the responsibility of the Banking Inspection and Supervision Authority;

b) The Director of the State Bank of Vietnam branch shall examine and decide on early intervention measures for banking supervision subjects (excluding branches of credit institutions) under the responsibility of the Banking Inspection and Supervision Branch.

2. Based on the results of banking supervision and the provisions of Clause 1 and Clause 2 of Article 130a of the Law on Credit Institutions (amended and supplemented), the unit responsible for micro-prudential supervision shall perform:

a) Submitting to the Head of the Banking Inspection and Supervision Authority for examination by the Governor of the State Bank of Vietnam to issue a document applying early intervention measures as provided in Point a of Clause 1 of this Article;

b) Submitting to the Director of the State Bank of Vietnam branch for examination to issue a document applying early intervention measures as provided in Point b of Clause 1 of this Article.

3. Within thirty days from the date of receipt of the document applying early intervention measures, the banking supervision subject shall be responsible for submitting a written report to the State Bank of Vietnam (Banking Inspection and Supervision Authority, State Bank of Vietnam branch) regarding the current situation, causes, remediation plans, and implementation organization. The State Bank of Vietnam may issue a document requiring credit institutions and foreign bank branches to adjust their remediation plans if deemed necessary.

The construction and adjustment of remediation plans by banking supervision subjects must be based on the actual operation of the banking supervision subjects and must ensure compliance with the provisions of Clause 3 and Clause 4 of Article 130a of the Law on Credit Institutions (amended and supplemented).

4. Within thirty days from the date of receipt of the document requesting adjustments and supplements to the remediation plan, the banking supervision subject shall be responsible for submitting to the Banking Inspection and Supervision Authority, State Bank of Vietnam branch the adjusted and supplemented remediation plan and organizing its implementation.

5. In cases where the banking supervision subject cannot develop a remediation plan as prescribed in Clause 3 of Article 130a of the Law on Credit Institutions (amended and supplemented) or fails to rectify the situation specified in Clause 1 of Article 130a of the Law on Credit Institutions (amended and supplemented) within the implementation period, the unit responsible for micro-prudential supervision shall submit:

a) To the Head of the Banking Inspection and Supervision Authority for examination by the Governor of the State Bank of Vietnam to issue a document requiring the banking supervision subject under the responsibility of the Banking Inspection and Supervision Authority to implement one or more measures prescribed in Clause 4 of Article 130a of the Law on Credit Institutions (amended and supplemented);

b) To the Director of the State Bank of Vietnam branch for examination to issue a document requiring the banking supervision subject under the responsibility of the Banking Inspection and Supervision Branch to implement one or more measures prescribed in Clause 4 of Article 130a of the Law on Credit Institutions (amended and supplemented).

6. After the banking supervision subject has rectified the situation specified in Clause 1 of Article 130a of the Law on Credit Institutions (amended and supplemented) or when the banking supervision subject is placed under special control, the unit responsible for micro-prudential supervision shall submit:

a) To the Head of the Banking Inspection and Supervision Authority for examination by the Governor of the State Bank of Vietnam to issue a document terminating the application of early intervention measures for the banking supervision subject under the responsibility of the Banking Inspection and Supervision Authority;

b) To the Director of the State Bank of Vietnam branch for examination to issue a document terminating the application of early intervention measures for the banking supervision subject under the responsibility of the Banking Inspection and Supervision Branch.

7. During the process of developing and implementing early intervention measures and remediation plans, if necessary, to clarify existing issues, limitations, and appropriate solutions, the unit responsible for banking supervision shall submit to the Governor of the State Bank of Vietnam (through the Banking Inspection and Supervision Authority) or the Director of the State Bank of Vietnam branch to request the banking supervision subject (excluding branches of credit institutions) to engage an independent auditing organization to conduct an audit of one, several, or all contents as prescribed by law.

8. Reporting and banking supervision on remediation plans:

a) Regularly monthly or at the discretion of the unit responsible for micro-prudential supervision, the banking supervision subject shall report progress and results of the implementation of the remediation plan to the State Bank of Vietnam (Banking Inspection and Supervision Authority or State Bank of Vietnam branch) before the tenth day of the following month for banking supervision as stipulated in this Circular;

b) The micro-prudential supervision report as prescribed in Article 12 of this Circular must include banking supervision on the remediation plan for the Banking Inspection and Supervision Authority, State Bank of Vietnam branch;

c) Based on the results of the implementation of the remediation plan by the banking supervision subject, if delays or lack of effectiveness are detected during the implementation process, the unit responsible for micro-prudential supervision shall submit to the Head of the Banking Inspection and Supervision Authority or the Director of the State Bank of Vietnam branch for issuance of a document requiring the banking supervision subject to report and explain the reasons and corrective measures.

Chapter VI

RESPONSIBILITIES OF ORGANIZATIONS AND INDIVIDUALS INVOLVED IN BANKING SUPERVISION ACTIVITIES

IN BANKING SUPERVISION ACTIVITIES

1. Implement state management responsibilities for banking supervision activities throughout the entire banking inspection and supervision system.

2. Take the lead and coordinate with the State Bank of Vietnam branch and other units under the State Bank of Vietnam, and related organizations to carry out banking supervision activities.

3. Take the lead and coordinate with the State Bank of Vietnam branch to conduct enhanced supervision according to the provisions of this Circular and the Decision of the Governor of the State Bank of Vietnam on entities subject to supervision within the scope of responsibility assigned to the Banking Inspection and Supervision Authority.

4. Based on the provisions of this Circular, take the lead and coordinate with relevant units to build and submit to the Governor of the State Bank of Vietnam for issuance of the Handbook on Banking Supervision to guide banking supervision business as stipulated in this Circular and the List of credit institutions, foreign bank branches that are systemically important.

5. Take the lead and coordinate with the Information Technology Department and related units of the State Bank of Vietnam to research, invest, build, apply, manage databases, and develop information technology systems to support unified banking supervision activities in the banking sector in accordance with the law.

6. In cases where necessary, propose to the Governor of the State Bank of Vietnam to implement macro-prudential supervision activities as stipulated in Clauses 3, 4, and 5 of Article 15 of this Circular.

7. Decide on thresholds for micro-prudential and macro-prudential supervision in each period.

8. Submit to the Governor of the State Bank of Vietnam for issuance of models and methods for risk analysis in each period.

9. Other responsibilities as prescribed by law.

1. Take the lead and coordinate with the Banking Inspection and Supervision Authority, units under the State Bank of Vietnam, and related organizations in micro-prudential supervision activities within the assigned scope.

2. Conduct enhanced supervision of banking supervision entities according to the provisions of this Circular and the Decision of the Governor of the State Bank of Vietnam or the Director of the State Bank of Vietnam branch for specific cases.

3. Other responsibilities as prescribed by law.

1. Carry out, advise, and propose to the Chief Inspector and Supervisor of Banking, and the Director of the State Bank of Vietnam branch on implementing tasks as stipulated in this Circular.

2. Assign civil servants to perform micro-prudential supervision tasks as stipulated in this Circular.

3. The unit implementing micro-prudential supervision may consider and decide on a dedicated staff mechanism for each banking supervision entity according to the following principles:

a) Dedicated staff have access to comprehensive information about the banking supervision entity they oversee, including information from banking inspection activities and licensing activities.

b) Dedicated staff may be considered for participation in inspection teams where the inspected entity is a banking supervision entity overseen by that dedicated staff member.

4. Conduct enhanced supervision of banking supervision entities according to the Decision of the Governor of the State Bank of Vietnam or the Director of the State Bank of Vietnam branch for specific cases.

5. Regularly and urgently provide results of micro-prudential supervision (including micro-prudential supervision reports but excluding micro-prudential supervision reports for banking supervision entities that are credit institution branches or people's credit funds) to the unit implementing macro-prudential supervision.

6. Coordinate with the unit implementing macro-prudential supervision to determine micro-prudential supervision thresholds for each type of credit institution.

1. Implement, advise, and propose to the Head of Banking Inspection and Supervision on the performance of tasks stipulated in this Circular.

2. Assign civil servants to perform macroprudential supervision tasks as prescribed in this Circular.

3. Regularly and urgently provide results of macroprudential supervision (including macroprudential supervision reports) to units implementing microprudential supervision.

4. Serve as the focal point and coordinate with units implementing microprudential supervision to determine microprudential supervision thresholds for each type of credit organization, to be submitted to the Head of Banking Inspection and Supervision for decision.

5. Determine macroprudential supervision thresholds to be submitted to the Head of Banking Inspection and Supervision for decision.

6. Compile a list of credit organizations and foreign bank branches of systemic importance to be submitted to the Head of Banking Inspection and Supervision.

1. Provide information, documents, and data as required by the Banking Inspection and Supervision Authority and the State Bank of Vietnam branch in accordance with this Circular and relevant laws.

2. Coordinate with the Banking Inspection and Supervision Authority and the State Bank of Vietnam branch in banking supervision activities.

3. Coordinate with the Banking Inspection and Supervision Authority and the State Bank of Vietnam branch in reviewing internal regulations of supervised entities issued based on normative legal documents drafted by that unit, to be submitted to the competent authority for issuance.

Article 29. Responsibilities of Banking Supervised Entities

1. Fulfill the provision of documents, information, and data as stipulated in Articles 7 and 14 of this Circular and bear full responsibility for the accuracy and truthfulness of such provided documents, information, and data.

2. Comply with the content and requirements of the unit implementing banking supervision upon receipt of a request for explanation in writing or during direct work as stipulated in Chapter IV of this Circular.

3. Fully comply with measures for handling in banking supervision activities as stipulated in Chapter V of this Circular.

4. Other responsibilities as prescribed by law.

Chapter VII

IMPLEMENTING PROVISIONS

Article 30. Effective Date

1. This Circular takes effect from September 1, 2022, except for the provisions of Clause 2 of this Article.

2. The processing and updating of documents, information, and data automatically into the remote supervision support information system of microprudential supervision subjects, which are people's credit funds and microfinance organizations, as stipulated in Clause 1, Point b Clause 2 of Article 8 of this Circular shall be implemented when there is a corresponding remote supervision support information system. During the period without a corresponding remote supervision support information system, the unit implementing microprudential supervision shall act as follows:

a) Based on the sources of documents, information, and data stipulated in Clauses 1 and 4 of Article 7 of this Circular, the unit implementing microprudential supervision shall collect and review the logical and rationality of the information through comparing and cross-referencing collected documents and information with historical data to identify abnormal, illogical, or unreasonable issues.

b) The unit implementing microprudential supervision shall process and compile documents, information, and data as stipulated in Clauses 3 and 4 of Article 8 of this Circular.

3. This Circular replaces Circular No. 08/2017/TT-NHNN dated August 1, 2017, on the procedures and formalities for banking supervision and Circular No. 04/2018/TT-NHNN dated March 12, 2018, amending and supplementing certain articles of Circular No. 08/2017/TT-NHNN dated August 1, 2017, issued by the Governor of the State Bank of Vietnam.

Article 31. Implementation Organization

The Director of the Office, the Head of Banking Inspection and Supervision, the Heads of units under the State Bank of Vietnam, and credit organizations and foreign bank branches are responsible for organizing the implementation of this Circular.