Circular 26/2022/TT-NHNN limits and prudential ratios in operations of banks

CIRCULAR

Amending and supplementing a number of articles of Circular No. 22/2019/TT-NHNN of November 15, 2019, of the Governor of the State Bank of Vietnam, prescribing limits and prudential ratios in operations of banks and foreign bank branches^[1]

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institutions; and 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 Supervision Agency;

The Governor of the State Bank of Vietnam promulgates the Circular amending and supplementing a number of articles of Circular No. 22/2019/TT-NHNN of November 15, 2019, of the Governor of the State Bank of Vietnam, prescribing limits and prudential ratios in operations of banks and foreign bank branches (below referred to as Circular No. 22/2019/TT-NHNN).

Article 1. To amend and supplement a number of articles of Circular No. 22/2019/TT-NHNN

1. To amend and supplement Point a, Clause 4, Article 20 as follows:

“a/ Deposits of domestic and foreign institutions (including also deposits of other credit institutions and foreign bank branches), except:

 (i) Marginal deposits and deposits for specific purposes of clients;

(ii) Demand deposits of the State Treasury;

(iii) Time deposits of the State Treasury, which must comply with the following schedule:

- From the effective date of this Circular through December 31, 2023: 50% of the deposit balance of the State Treasury;

- From January 1, 2024, through December 31, 2024: 60% of the deposit balance of the State Treasury;

- From January 1, 2025, through December 31, 2025: 80% of the deposit balance of the State Treasury;

- From January 1, 2026 onward: 100% of the deposit balance of the State Treasury.”

2. To amend and supplement Clause 2, Article 24 as follow:

“2. To amend and supplement Article 23, Circular No. 41/2016/TT-NHNN as follows:

“Article 23. Effect

1. This Circular takes effect on January 1, 2020, except the cases specified in Clauses 2 and 3 of this Article.

2. Banks and foreign bank branches that can manage to maintain the capital adequacy ratio specified in this Circular before the date specified in Clause 1 of this Article shall send their written registrations for application of this Circular to the State Bank (the Banking Supervision Agency), clearly stating their capability to apply and expected time of application. The time of application of this Circular to banks and foreign bank branches that have sent written registrations must comply with notices issued by the State Bank.

3. Banks and foreign bank branches that cannot manage to maintain the capital adequacy ratio specified in this Circular yet shall send before January 1, 2020, to the State Bank (the Banking Supervision Agency) and the State Bank’s provincial-level branches of the localities where their head offices are located written registrations for application of the capital adequacy ratio under the State Bank’s regulations on limits and prudential ratios in operations of banks and foreign bank branches.

Such a registration must clearly state reason(s) for a bank to further maintain the capital adequacy ratio under the State Bank’s regulations on limits and prudential ratios in operations of banks and foreign bank branches from January 1, 2020, and a plan (specifying solutions and schedule) to ensure compliance with this Circular at least from January 1, 2023, unless the bank follows the schedule stated in the Plan on restructuring associated with settlement of non-performing loans approved under the Prime Minister’s Decision No. 689/QD-TTg of June 8, 2022, approving the Scheme on restructuring of the system of credit institutions associated with settlement of non-performing loans in the 2021-2025 period (below referred to as the Plan on restructuring). If the bank cannot manage to maintain the capital adequacy ratio specified in this Circular yet, it shall formulate a plan (specifying solutions and schedule) to ensure compliance with this Circular and include such plan in the Plan on restructuring, then submit it to a competent authority for opinion under regulations.

The time of application of this Circular is that stated in the written registration or schedule stated in the approved Plan on restructuring. Pending the application of this Circular, the bank shall maintain the capital adequacy ratio under the State Bank’s regulations on limits and prudential ratios in operations of banks and foreign bank branches.””

Article 2. Responsibility for organization of implementation

The Chief of the Office, the Chief of the Banking Supervision Agency and heads of units of the State Bank of Vietnam, banks and foreign bank branches shall organize the implementation of this Circular.

Article 3. Implementation provision

This Circular takes effect on December 31, 2022.-

For the State Bank Governor
Deputy Governor
DOAN THAI SON