INSTRUCTION FOR RATING OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES
On December 31 2018, the State Bank of Vietnam issues the Circular No. 52/2018/TT-NHNN on prescribing credit rating of credit institutions and foreign bank branches.
Accordingly, after determination of scores of qualitative indicators based on regulations, credit institutions and foreign bank branches will be subject to the further score deduction on conditions that the subtrahend point is not greater than 0.9 according to the following principles:
- In case of being in breach of a legislative regulation multiple times, credit institutions or foreign bank branches will get 0.1 point deducted from total score as a penalty for each violation (applicable to the second or subsequent violation);
- In case of committing repeated violation against different legislative regulations, credit institutions or foreign bank branches will get 0.1 point deducted from total score as a penalty for each violation (applicable to the second or subsequent violation);
Principles of rating are:
- For violations detected in a credit rating year:
+ As regards violations for which amounts of fine are regulated in the Decree prescribing administrative penalties in the currency and banking sector: if the average amount of fine for a violation is either less than or equal to VND 100 million - 4 score; if the average amount of fine for a violation is either less than or equal to VND 200 million, and is greater than VND 100 million - 3 score; if the average amount of fine for a violation is either less than or equal to VND 300 million, and is greater than VND 200 million - 2 score; if the average amount of fine for a violation is greater than VND 300 million - 1 score.
+ In case of committing other violations, credit institutions or foreign bank branches will be given the score of 4;
+ In case of committing violations against different regulations (in the same subgroup of qualitative indicators) which result in them being giving different scores, credit institutions and foreign bank branches will have to get the lowest score amongst the above-mentioned scores;
In addition, this Circular gives details on credit rating materials and set of criteria for rating…
This Circular takes effect on April 01, 2019.
