According to Official Dispatch No. 9528/NHNN-TTGSNH dated November 19, 2024 of the State Bank of Vietnam on soliciting opinions on the draft Circular regulating the capital adequacy ratio for credit institutions.
The State Bank said that a number of credit institutions in Vietnam have researched and consulted international practices on Basel III Standards to apply them to risk management and governance at credit institutions.
Therefore, it is necessary to research and promulgate a Circular regulating the capital adequacy ratio for credit institutions to update new regulations in Basel III Standards and to suit the specific operations of credit institutions in Vietnam. From there, it creates an important legal basis for credit institutions in Vietnam to implement.
Accordingly, the State Bank drafted the Circular based on Circular No. 41/2016/TT-NHNN dated December 30, 2016 regulating the capital adequacy ratio for credit institutions (amended and supplemented - abbreviated as TT41) and updated the new regulations in Basel III Standards in 2017, to ensure compliance with the specific operations of commercial banks and foreign bank branches in Vietnam.
Specifically, the draft Circular is built with 08 Chapters with 88 Articles, including: Chapter I on general provisions, including 4 Articles (from Article 1 to Article 4) regulating: Scope of regulation and subjects of application; Interpretation of terms; Organizational structure and control activities for asset quality management and minimum capital adequacy ratio; Data and information technology systems;
Chapter II on capital adequacy ratio and equity capital, including 2 Articles (Article 5 and Article 6); Chapter III on regulations on assets calculated according to credit risk according to the standard method, including 17 Articles (from Article 10 to Article 26), including 3 Sections: Section I on regulations on calculating total assets with credit risk according to the standard method; Section II on credit risk coefficients for asset groups according to the standard method; Section III on the use of independent ratings.
Chapter IV on regulations on assets calculated according to credit risk according to the internal rating method, including 53 Articles (from Article 27 to Article 79), including 6 Sections: Section I on regulations on calculating total assets with credit risk according to the internal rating method; Section II on Classification of assets with credit risk according to the internal rating method; Section III on How to determine components to calculate assets with risk according to the internal rating method; Section IV on Regulations on expected loss and risk provisions; Section V on Minimum requirements of the internal rating method; Section VI on Risk Measurement Model and Risk Measurement Model Management;
Chapter V on Capital Required for Operational Risk, including 1 Article (Article 80); Chapter VI on Capital Required for Market Risk, including 2 Articles (Articles 81, 82); Chapter VII on Reporting and Information Disclosure, including 2 Articles (Articles 83, 84); Chapter VIII on Responsibilities of State Bank Units, including 2 Articles (Articles 85, 86); Chapter IX on Implementation Provisions, including 2 Articles (Articles 87, 88).
For details of the draft Circular, explanatory comparison and appendices, members can see here. VNBA requests member banks to provide comments on this draft.
Please send your comments (including word files) to VNBA (Ms. Minh Thu) at email address: minhthu300999@gmail.com or mobil phone 0339.120.916) before December 13, 2024.
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