NEW REGULATIONS ON CAPITAL ADEQUACY ASSURANCE OF CREDIT INSTITUTIONS
On August 07, 2017, the Government issued the Decree No. 93/2017/ND-CP on the financial regime applicable to credit institutions and foreign bank branches and financial supervision and assessment of efficiency of state capital investment at credit institutions with 100% state-owned charter capital and credit institutions with state capital.
One of the important contents of this Decree is the regulations on capital adequacy assurance of credit institutions and foreign bank branches. Accordingly, credit institutions and foreign bank branches shall comply with regulations on assurance of operating capital adequacy as to manage and use capital and assets, distribute profits and implement the financial management and accounting regimes in accordance with this Decree and relevant laws; to implement regulations on operation safety assurance in accordance with the Law on Credit Institutions and other relevant laws. In case of failing to achieve or being likely to fail to achieve the minimum capital adequacy ratio and guided by the State Bank of Vietnam, within 1 month, a credit institution or foreign bank branch shall report to the State Bank of Vietnam its remedial solutions to ensure the required minimum capital adequacy ratio, including transferring its outward investments; increasing its charter capital or allocated capital; and the solutions.
At the same time, credit institutions and foreign bank branches must buy insurance for assets required to be insured; to participate in deposit preservation and insurance institutions in accordance with the Law on Credit Institutions, the Law on Deposit Insurance and other relevant laws, and disclose such participation at their head offices and branches; to deal with the value of lost assets; To account its risk provisions as expenses for business activities in accordance with the Law on Credit Institution, the law on enterprises and other relevant laws…
This Decree takes effect on September 25, 2017 and replaces Decree No. 57/2012/ND-CP of July 20, 2012.
