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- 06 / 07 / 2018 -
Provisions on the processes and procedures for banking supervisory promulgated by the Governor of the State bank of Vietnam

On March 12, 2018, the Governor of the State Bank of Vietnam issued Circular No.04/2018/TT-NHNN amending and supplementing Circular No.08/2017/TT-NHNN on banking supervisory processes and procedures. This Circular took effect since July 1, 2018.

Accordingly, Circular No.04/2018/TT-NHNN provides some new highlights as follows:

  1. Adding 04 remedial measures for banking supervision, including:

– Recommendations and warnings.

– Administrative penalties prescribed by laws.

– Early intervention action.

– Other banking supervisory actions that are suggested to competent authorities in accordance with laws

  1. Specifying the competence to apply early intervention measure to banking supervisors, namely:

– Banking Inspection and Supervision Chief, and Directors of State Bank Branches of centrally-affiliated cities and provinces where the Banking Inspection and Supervision Department is not located, shall request the State Bank’s Governor to consider issuing the written document on imposition of early intervention action on entities subject to banking supervision;

– Banking Inspection and Supervision Chief shall consider issuing the written document on imposition of early intervention action on entities subject to banking supervision, including people’s credit funds and microfinance institutions within local subdivisions under the control of the Banking Inspection and Supervision Department;

– Directors of State Bank Branches of centrally-affiliated cities and provinces where the Banking Inspection and Supervision Department is not located shall consider issuing the written document on imposition of early intervention action on entities subject to banking supervision, including people’s credit funds and microfinance institutions within these local subdivisions

  1. Regulations on oversight, stimulation and assessment of implementation of recovery and resolution plans of entities subject to banking supervision to whom early intervention action is applied

Thus, with the specific regulations on banking supervisory processes and procedures, Circular No.04/2018/TT-NHNN is expected to be a legal framework to ensure accuracy, objectivity, honesty, timely and uninterrupted operation of this activity, at the same time, does not obstruct the normal operation of entities subject to banking supervision.