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

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Circular No. 26/2022/TT-NHNN dated December 31, 2022 of the State Bank of Vietnam amending and supplementing a number of articles of Circular No. 22/2019/TT-NHNN dated 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
Issuing body: State Bank of VietnamEffective date:
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Official number:26/2022/TT-NHNNSigner:Doan Thai Son
Type:CircularExpiry date:Updating
Issuing date:31/12/2022Effect status:
Known

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Fields:Finance - Banking

SUMMARY

Amend regulations on loan-to-deposit ratios

On December 31, 2022, the State Bank of Vietnam issues Circular No. 26/2022/TT-NHNN amending and supplementing a number of articles of Circular No. 22/2019/TT-NHNN dated 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.

Accordingly, Deposits of domestic and overseas institutions (including also deposits of other credit institutions and foreign bank branches), except: Collateral amounts and special-use capital deposits of clients; Demand deposits of the State Treasury; Time deposits of the State Treasury.

Noticeably, time deposits of the State Treasury shall follow the schedules below: From the effective date of this Circular to December 31, 2023: 50% of the balance amount of deposit of the State Treasury; From January 1, 2024 to December 31, 2024: 60% of the balance amount of deposit of the State Treasury; From January 1, 2025 to December 31, 2025: 80% of the balance amount of deposit of the State Treasury; From January 1, 2026: 100% of the balance amount of deposit of the State Treasury.

This Circular takes effect from December 31, 2022.

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Effect status: Known

 

THE STATE BANK OF VIETNAM

_____

No. 26/2022/TT-NHNN

THE SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness

_______________________

Hanoi, December 31, 2022

CIRCULAR

Amending and supplementing a number of articles of Circular No. 22/2019/TT-NHNN dated 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

______________

 

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

Pursuant to the Law on Credit Institutions dated June 16, 2010, and the Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Government's Decree No. 16/2017/ND-CP dated 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 hereby promulgates the Circular amending and supplementing a number of articles of Circular No. 22/2019/TT-NHNN dated 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 (hereinafter referred to as Circular No. 22/2019/TT-NHNN).

 

Article 1. Amending and supplementing 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 overseas institutions (including also deposits of other credit institutions and foreign bank branches), except:

(i) Collateral amounts and special-use capital deposits of clients;

(ii) Demand deposits of the State Treasury;

(iii) Time deposits of the State Treasury according to the following schedules:

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

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

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

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

2. To amend and supplement Clause 2 Article 24 as follows:

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

Article 23. Effect

1. This Circular takes effect from January 1, 2020, except for provisions in Clauses 2 and 3 of this Article.

2. Banks and foreign bank branches that are able to maintain the capital adequacy ratio prescribed 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 ability and expected time of application. The time of application of this Circular for banks and foreign bank branches that have sent written registrations is stated in written notices issued by the State Bank.

3. Banks and foreign bank branches that are not yet able to maintain the capital adequacy ratio prescribed in this Circular 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 they are headquartered 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 continued maintenance of 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 plan (measures and schedule) to ensure compliance with this Circular no later than January 1, 2023, except banks that follow the schedule stated in the plan on restructuring associated with resolution of non-performing loans approved under the Prime Minister’s Decision No. 689/QD-TTg dated June 8, 2022, approving the scheme on “restructuring of the system of credit institutions associated with resolution of non-performing loans in the 2021-2025 period” (hereinafter referred to as the restructuring plan). Banks failing to maintain the capital adequacy ratio prescribed in this Circular shall formulate a plan (measures and schedule) to ensure compliance with this Circular, include it in the restructuring plan and submit it to the competent authorities for opinions as prescribed.

The time of application of this Circular is that stated in the written registration or schedule stated in the approved restructuring plan. Before the provisions of this Circular are applied, banks shall maintain the minimum 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 implementation organization

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

Article 3. Effect

This Circular takes effect from December 31, 2022./.

 

 

FOR THE GOVERNOR
THE DEPUTY GOVERNOR

 

 

 

Doan Thai Son

 

 

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