Decision No. 137/QD-NH3 On the issuance of the remote supervision regulations for banks and credit institutions operating in Vietnam

Pursuant to …;

On the issuance of the Remote Supervision Regulation for Banks and Credit Institutions operating in Vietnam
Operating in Vietnam

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the State Bank of Vietnam Ordinance promulgated by Decree No. 37/LCT-HĐNN8 dated May 24, 1990 of the Chairman of the State Council;

Pursuant to the Ordinance on Banks, Credit Cooperatives, and Financial Companies promulgated by Decree No. 38/LCT-HĐNN8 dated May 24, 1990 of the Chairman of the State Council;

Pursuant to the Government Decree No. 15/CP dated March 2, 1993 on the tasks, powers, and responsibilities of Ministries and ministerial-level agencies;

At the proposal of the Chief Inspector of the State Bank of Vietnam;

DECISION:

Article 1.- Now hereby promulgates this Decision the remote supervision regulation of the State Bank Inspectorate over banks and credit institutions (referred to as "credit institutions") operating in Vietnam.

Article 2.- The Chief Inspector of the State Bank of Vietnam shall guide the implementation of this Regulation.

Article 3.- This Decision takes effect 15 days from the date of signature. Previous regulations on remote supervision that conflict with this document cease to be effective.

Article 4.- The Director of the Governor's Office, the Chief Inspector of the State Bank of Vietnam, the Chairman of the Board of Directors, the General Director (Director) of credit institutions, the Director of the State Bank Branches in provinces and cities, and the Heads of relevant Departments of the State Bank of Vietnam are responsible for implementing this Decision.

REGULATIONS

REMOTE SUPERVISION OF CREDIT INSTITUTIONS
OPERATING IN VIETNAM

(Issued together with Decision No. 137/QĐ-NH3 dated May 24, 1997 of the Governor of the State Bank of Vietnam)
dated May 24, 1997 of the Governor of the State Bank)

Article 1.- Remote supervision is the indirect inspection through the consolidation and analysis of reports to assess the following activities of credit institutions:

1. Changes in the structure of assets and liabilities;

2. Credit quality, guarantees, joint ventures, partnerships...

3. Ensuring payment capacity;

4. Income, expenses, and business results;

5. Implementation of the safety regulations of the State Bank.

Article 2.- The objects of remote supervision include the following credit institutions:

1. State-owned banks;

2. Joint-stock commercial banks;

3. Branches of foreign banks;

4. Joint venture banks;

5. Financial organizations licensed by the State Bank;

6. People's Credit Funds.

Article 3.- Methods of remote supervision of the activities of credit institutions:

1. Based on balance sheet statements, statistical indicators outside the balance sheet, and other reports sent by credit institutions according to the current information reporting system of the State Bank, the State Bank Inspectorate processes data, consolidates, and analyzes the operational situation of each credit institution and the entire banking system according to the contents stipulated in Article 1 of this Regulation.

2. Periodically (every six months or annually), the State Bank Inspectorate bases its remote supervision results, combines them with on-site inspections and audits (if any) to classify credit institutions according to the State Bank's classification regulation.

3. Monthly, the State Bank Inspectorate informs the credit institutions or dependent branches of credit institutions about the results of remote supervision, along with comments and recommendations for issues that need correction. If serious violations are discovered, the State Bank Inspectorate will send staff to conduct direct inspections at the supervised units and require immediate corrections.

Article 4.- Allocation of responsibility for remote supervision at two levels of the State Bank Inspectorate for credit institutions operating in Vietnam is as follows:

1. The Central Inspectorate of the State Bank supervises the entire system, including state-owned banks, branches of foreign banks, joint venture banks, wholly foreign-owned financial companies, joint venture financial companies, leasing companies; central people's credit funds and regional people's credit funds.

2. Provincial and city branch inspectors of the State Bank supervise the following credit institutions within their jurisdiction: joint-stock credit institutions, dependent branches of state-owned banks, joint-stock financial companies, branches of the financial companies mentioned in Clause 1 of this Article, and grassroots people's credit funds according to the supervision content guided by the Chief Inspector of the State Bank.

Quarterly, provincial and city branches must report the results of supervision to the Central State Bank (State Bank Inspectorate).

This allocation of supervisory responsibilities may be adjusted if necessary.

Article 5.- The Chairman of the Board of Directors and the General Director (Director) of credit institutions are responsible for:

1. Directing strict compliance with timely and complete submission of reports and statistical indicators according to the State Bank's information reporting system.

2. Directing strict and prompt handling of comments and recommendations of the State Bank Inspectorate in the notification of remote supervision results. Within thirty days from the date of receipt of the comments, the credit institution must submit a report on the results of corrective actions and violation handling to the Central State Bank Inspectorate or the provincial and city branch inspectorate, as allocated in Article 4.

Article 6.- Any violation of the provisions of this Regulation will be subject to administrative penalties under Government Decree No. 18/CP dated February 24, 1997 on administrative penalties in the banking sector.

Article 7.- The addition and amendment of this Regulation shall be decided by the Governor of the State Bank./.