Circular No. 22/2019/TT-NHNN dated November 15, 2019 of the State Bank of Vietnam on prescribing limits and prudential ratios in operations of banks and foreign bank branches

  • Summary
  • Content
  • Status
  • Vietnamese
  • Download
Save

Please log in to use this function

Send link to email

Please log in to use this function

Error message
Font size:

ATTRIBUTE

Circular No. 22/2019/TT-NHNN dated November 15, 2019 of the State Bank of Vietnam on prescribing limits and prudential ratios in operations of banks and foreign bank branches
Issuing body: State Bank of VietnamEffective date:
Known

Please log in to a subscriber account to use this function.

Don’t have an account? Register here

Official number:22/2019/TT-NHNNSigner:Nguyen Thi Hong
Type:CircularExpiry date:Updating
Issuing date:15/11/2019Effect status:
Known

Please log in to a subscriber account to use this function.

Don’t have an account? Register here

Fields:Finance - Banking

SUMMARY

A commercial bank may only purchase, hold stocks of no more than two other credit institutions

On November 15, 2019, the State Bank of Vietnam issues the Circular No. 22/2019/TT-NHNN on limits and prudential ratios in operations of banks and/or foreign bank branches.

In particular, banks and branches of foreign banks are entitled to purchase and invest in government bonds and government-backed bonds against total average liabilities of the preceding month under the maximum ratio of 30%.

In addition, newly established banks and branches of foreign banks (Excluding credit institutions re-organized under the Law on Credit Institutions) whose operation period is under two (02) years from the beginning day of operation and total liabilities are smaller than charter capital or allocated fund are entitled to purchase and invest in government bonds and government-backed bonds under the maximum rate of 30% to their charter capital or allocated fund.

This Circular also prescribes: A commercial bank may only purchase or hold stocks of no more than 02 other credit institutions, except cases where other credit institutions are its subsidiary companies. Concurrently, a commercial bank may only purchase or hold stocks of another credit institution at a ratio of under 5% of the voting equity of such credit institution.

This Circular takes effect on January 01, 2020.

For more details, click here.
Download files here.
LuatVietnam.vn is the SOLE distributor of English translations of Official Gazette published by the Vietnam News Agency
Effect status: Known

THE STATE BANK OF VIETNAM

 

THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness

No. 22/2019/TT-NHNN

 

Hanoi, November 15, 2019

 

CIRCULAR

Prescribing limits and prudential ratios in operations
of banks and foreign bank branches
[1]

 

Pursuant to June 16, 2010 Law No. 46/2010/QH12 on the State Bank of Vietnam;

Pursuant to June 16, 2010 Law No. 47/2010/QH12 on Credit Institutions;

Pursuant to the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the Government’s Decree No. 16/2017/ND-CP of February 17, 2017, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Chief of the Banking Supervisory Agency;

The Governor of the State Bank of Vietnam promulgates the Circular prescribing limits and prudential ratios in operations of banks and foreign bank branches.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Circular prescribes limits and prudential ratios which banks and foreign bank branches must constantly maintain in their operations, including:

a/ Capital adequacy ratio. This ratio is not applicable to banks and foreign bank branches maintaining the capital adequacy ratio prescribed in Circular No. 41/2016/TT-NHNN of December 30, 2016, of the Governor of State Bank of Vietnam, prescribing capital adequacy ratio of banks and foreign bank branches, and amending, supplementing and replacing documents (if any) (below referred to as Circular No. 41/2016/TT-NHNN);

b/ Credit extension limits;

c/ Solvency ratio;

d/ Maximum ratio of short-term capital sources used to provide medium- and long-term loans;

dd/ Government bond or government-guaranteed bond purchase or investment ratio;

e/ Limits on capital contribution and share purchase;

g/ Loan-to-deposit ratio.

2. Based on results of supervision, inspection and examination by the State Bank of Vietnam (below referred to as the State Bank) of banks and foreign bank branches, in case of necessity to secure prudence in operations of these banks and foreign bank branches and depending on the nature and extent of risks, the State Bank may request banks and foreign bank branches to maintain one or several limit(s) or prudential ratio(s) higher than those prescribed in this Circular.

3. Banks subject to special control shall maintain limits and prudential ratios under Article 146dd of the Law on Credit Institutions, which was amended and supplemented.

4. Banks providing support under approved rehabilitation plans shall maintain government bond and government-guaranteed bond purchase or investment ratio under Clause 8, Article 148dd of the Law on Credit Institutions, which was amended and supplemented.

5. For banks and foreign bank branches financing programs or projects under decisions of the Government or Prime Minister, the consideration of capital sources and debit balance of each program or project upon determining limits and prudential ratios must comply with decisions of the Government or Prime Minister.

Article 2. Subjects of application

1. Banks, including state-run commercial banks, cooperative banks, joint-stock commercial banks, joint-venture banks and wholly foreign-owned banks.

2. Foreign bank branches.

3. Institutions and individuals related to limits and prudential ratios in operations of banks and foreign bank branches.
 

[1] Công Báo Nos 921-922 (02/12/2019)

 
Click download to see the full text
Please log in to a subscriber account to see the full text. Don’t have an account? Register here
Please log in to a subscriber account to see the full text. Don’t have an account? Register here
Processing, please wait...
LuatVietnam.vn is the SOLE distributor of English translations of Official Gazette published by the Vietnam News Agency

ENGLISH DOCUMENTS

Official Gazette
Circular 22/2019/TT-NHNN DOC (Word)

This utility is available to subscribers only. Please log in to a subscriber account to download. Don’t have an account? Register here

Circular 22/2019/TT-NHNN PDF

This utility is available to subscribers only. Please log in to a subscriber account to download. Don’t have an account? Register here

* Note: To view documents downloaded from LuatVietnam.vn, please install DOC, DOCX and PDF file readers
For further support, please call 19006192

related news

SAME CATEGORY

loading