Decree 135/2025/ND-CP on the financial regime applicable to credit institutions and foreign bank branches

DECREE

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

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Pursuant to the Law on Organization of the Government dated February 18, 2025;

Pursuant to the Law on Credit Institutions dated January 18, 2024; the Law on Amending and Supplementing a Number of Articles of the Land Law No. 31/2024/QH15, Housing Law No. 27/2023/QH15, Law No. 29/2023/QH15 on Real Estate Business and Law No. 32/2024/QH15 on Credit Institutions dated June 29, 2024;

Pursuant to the Law on Management and Use of State Capital Invested in Production and Business at Enterprises dated November 26, 2014;

Pursuant to the Law on Enterprises dated June 17, 2020; Law on Amending and Supplementing a Number of Articles of the Law on Public Investment, Law on Investment in the Form of Public-Private Partnership, Law on Investment, Housing Law, Bidding Law, Electricity Law, Law on Enterprises, Law on Excise Tax, and Law on Enforcement of Civil Judgments dated January 11, 2022;

Pursuant to the Law on Cooperatives dated June 20, 2023;

Pursuant to the Law on Accounting dated November 20, 2015;

At the proposal of the Minister of Finance;

The Government promulgates the Decree 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.

Chapter I
GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Decree details:

a) Financial regimes, revenues, expenses, and profit distribution applicable to credit institutions and foreign bank branches defined in Clause 3, Article 151; Clause 4, Article 145; Clause 1, Article 148 of the Law on Credit Institutions;

b) The 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 (including credit institutions with between over 50% and under 100% of its charter capital held by the State or cooperative banks).

2. Financial regimes and assessment of operation efficiency of the policy banks shall comply with other regulations of the Government.

Article 2. Subject of application

1. Credit institutions and foreign bank branches established, organized and operating in accordance with the Law on Credit Institutions.

2. Other related organizations and individuals.

Article 3. Principles of financial management

1. Credit institutions and foreign bank branches may enjoy financial autonomy, take responsibility for the results of their business operation and fulfill their obligations and commitments in accordance with law.

2. Credit institutions and foreign bank branches shall implement disclosure of financial statements in accordance with the Law on Credit Institutions and other relevant laws.

Chapter II

 MANAGEMENT AND USE OF CAPITAL AND ASSETS

Article 4. Operating capital of credit institutions and foreign bank branches

1. Equity capital:

a) Charter capital or allocated capital;

b) Differences resulting from asset revaluation, exchange rate differences;

c) Equity capital surplus;

d) The charter capital addition reserve fund of a credit institution or the allocated capital addition reserve fund of a foreign bank branch, financial provision and development investment fund;

dd) Undistributed accumulated profit, unhandled accumulated loss;

e) Other capital owned by credit institutions or foreign bank branches.

2. Raised capital under the Law on Credit Institutions:

a) Raised capital from receiving deposits and raised capital from issuing deposit certificates, bonds;

b) Entrusted investment capital;

c) Loans from domestic and foreign credit institutions, financial institutions and other organization and individuals;

d) Loans from the State Bank of Vietnam in accordance with the law.

3. Other types of capital as prescribed by law.

Article 5. Use of capital and assets of credit institutions and foreign bank branches

1. Credit institutions and foreign bank branches may use their capital for business activities in accordance with the Law on Credit Institutions and other relevant law regulations. Credit institutions with 100% state-owned charter capital and credit institutions with state capital shall also comply with the law on management and use of state capital invested in production and business at enterprises.

2. Credit institutions and foreign bank branches may restructure their capital and assets for business development in accordance with law regulations.

3. Credit institutions and foreign bank branches may procure and invest in fixed assets to directly serve their activities in accordance with Clause 3 Article 144 of the Law on Credit Institutions. Credit institutions with 100% state-owned charter capital and credit institutions with state capital, the procurement and investment in fixed assets shall also comply with the law on management and use of state capital invested in production and business at enterprises.

The transfer of capital and assets among branches of a credit institution must comply with its internal regulations.

4. For holding of real estate as a result of debt handling as defined in Clause 3, Article 139 of the Law on Credit Institutions:

a) For real estate hold by a credit institution for sale or transfer for recovering of capital within the time limit defined in Clause 3 Article 139 of the Law on Credit Institutions, credit institutions shall not account for an increase in assets and shall not make depreciation;

b) For real estate acquired by credit institutions for use as business headquarters, workplaces, or storage facilities directly serving the professional activities of credit institutions, credit institutions shall account for an increase in assets and make depreciation in accordance with law regulations and must ensure compliance with the limits on the purchase and investment in fixed assets as specified in Clause 3, Article 144 of the Law on Credit Institutions.

Article 6. Capital contribution, purchase, sale and transfer of shares or capital contributions of credit institutions

1. The capital contribution, purchase, sale and transfer of shares or capital contributions of credit institutions must comply with the Law on Credit Institutions and other relevant laws.

2. The competence to decide the plans for capital contribution, purchase, sale and transfer of shares or capital contributions of credit institutions must comply with the Law on Credit Institutions and other relevant laws and credit institutions’ charter. Credit institutions with 100% state-owned charter capital and credit institutions with state capital shall also comply with the law on management and use of state capital invested in production and business at enterprises.

Article 7. Capital adequacy assurance

Credit institutions and foreign bank branches shall comply with regulations on assurance of capital adequacy as follows:

1. To manage and use capital and assets, distribute profits and implement the financial management and accounting regimes in accordance with the Law on Credit Institutions, this Decree and relevant laws.

2. To implement regulations on operation safety assurance in accordance with the Law on Credit Institutions and other regulations of relevant laws.

3. To buy insurance for assets required to be insured.

4. To participate in deposit insurance and contribute to the fund for safety assurance of the system of people’s credit funds in accordance with the Law on Credit Institutions.

5. To deal with the asset loss in accordance with Article 9 of this Decree.

6. To account its risk provisions as expenses for business activities in accordance with the Law on Credit Institution and other regulations of relevant laws.

7. To take other capital preservation measures as prescribed by law.

Article 8. Asset inventory and revaluation, fixed asset depreciation

1. Credit institutions and foreign bank branches shall implement asset inventory and revaluation in accordance with the law on accounting and other regulations of relevant laws.

2. Credit institutions and foreign bank branches shall make fixed asset depreciation in accordance with the law on enterprises.

Article 9. Asset loss handling

For lost assets, credit institutions and foreign bank branches shall identify causes and their responsibilities and handle them according to the following order:

1. If the loss is due to a subjective cause, the person who causes the loss shall pay compensation for damages. The responsibility handling and compensation of persons causing the loss must comply with law regulations. Credit institutions and foreign bank branches shall, based on law regulations, define the competence to decide on compensation amounts in their charter.

2. Insured assets shall be handled under the insurance contract.

3. Using provisions set aside from expenses to cover the loss in accordance with law.

4. Any remaining loss value after being covered by compensations of individuals, collectives and/or insurers and provisions set aside from expenses shall be covered by financial provisions of credit institutions or foreign bank branches. If the financial provision is insufficient, the deficient amount shall be accounted as other expenses in the period.

Article 10. Asset lease

Credit institutions and foreign bank branches may lease assets under their management and use in accordance with law, the financial regime and internal regulations of the credit institutions or foreign bank branches. Credit institutions with 100% state-owned charter capital shall also comply with the law on management and use of state capital invested in production and business at enterprises.

Article 11. Asset purchase, sale and transfer

1. Credit institutions and foreign bank branches may purchase, sell and transfer assets to recover capital for more efficient business purposes.

2. The purchase, sale and transfer of assets by credit institutions and foreign bank branches must comply with the Law on Credit Institutions, other regulations of relevant laws, the charters, financial regime and internal regulations of the credit institutions or foreign bank branches. Credit institutions with 100% state-owned charter capital and credit institutions with state capital shall also comply with the law on management and use of state capital invested in production and business at enterprises.

Article 12. Asset liquidation

1. Credit institutions and foreign bank branches may liquidate damaged assets, technically backward assets, assets which are no longer needed or unusable to recover capital, on the principles of publicity and transparency in accordance with law regulations.

2. The asset liquidation and the competence to decide to liquidate assets of credit institutions and foreign bank branches must comply with the Law on Credit Institutions, other regulations of relevant laws, the charters, financial regime and internal regulations of the credit institutions or foreign bank branches. For assets that are required by law to be liquidated through auction, credit institutions and foreign bank branches shall auction such assets in accordance with law. Credit institutions with 100% state-owned charter capital and credit institutions with state capital shall also comply with the law on management and use of state capital invested in production and business at enterprises.

Chapter III

 REVENUES AND EXPENSES

Section 1

REVENUES AND EXPENSES OF COMMERCIAL BANKS, NON-BANK CREDIT INSTITUTIONS, AND FOREIGN BANK BRANCHES

Article 13. Revenues and principles for revenue recognition of commercial banks, non-bank credit institutions, and foreign bank branches

1. Revenues from business activities of a commercial bank, non-bank credit institution or a foreign bank branch include:

a) Revenues from interests and similar revenues: deposit interest, loan interest, profit from debit securities trading and investment, revenue from guarantee operation, profit from financial lease, profit from debt trading operation, other revenues from credit operations;

b) Revenues from provision of services: payment service; cashiering; entrustment and agency; asset custody services, safe deposit box rental, consulting on banking and other business activities, money brokerage; and other services;

c) Revenues from foreign exchange and gold trading: revenue from foreign currency trading; revenue from exchange rate difference; revenue from gold trading; and revenue derivative from financial and monetary instruments;

d) Revenues from trading in securities permitted for trading under the Law on Credit Institutions;

dd) Revenue from capital contribution or transfer of capital contributions and shares;

e) Revenues from other activities: revenue from debts already settled with the risk provision (including written-off debts now recovered); revenue from other derivative financial instruments; revenue from debt trading operation; revenue from asset transfer and liquidation; revenue from reimbursement of provision amount; revenue from reimbursement of the long-term investment devaluation provision; revenue from asset rental; and revenues from other activities as prescribed by law;

g) Other revenues: revenue from payables that are now ownerless or whose creditors cannot be identified as defined by law shall be recorded as increased revenue; fines collected from customers and compensation paid by customers for breach of contract that are accounted for as revenue; insurance proceeds received that are accounted for as revenue after compensating for the insured losses; other revenues as specified by law.

2. Principles for revenue recognition

The principles for revenue recognition for revenues of commercial banks, non-bank credit institutions, and foreign bank branches shall comply with Clauses 2, 3, and 4, article 145 of the Law on Credit Institutions. A number of specific principles for revenue recognition of commercial banks, non-bank credit institutions, and foreign bank branches shall be implemented as follows:

a) For revenues from interests and similar revenues:

a.1) For revenues from credit extension: commercial banks, non-bank credit institutions, and foreign bank branches shall evaluate the ability to collect debts and classify debts in accordance with law on banking for use as a basis for accounting receivable interests, and account receivable interests from credit extension as revenues as follows:

Commercial banks, non-bank credit institutions, and foreign bank branches shall account for the receivable interests arising during the period as revenue for debts classified as standard debts that are not required to make deductions for specific risk provisions as defined by law.

the receivable interests from debts that remain in the standard debt group due to the implementation of state policies, and the receivable interests arising during the period from the remaining debts shall not be accounted for as revenue. The commercial banks, non-bank credit institutions, and foreign bank branches shall monitor such receivables off balance sheet in order to urge the collection and handling thereof in accordance with law; and account received amounts as revenues.

a.2) Revenue from deposit interest: receivable interests from deposit in the period.

b) For revenues from exchange rate differences due to revaluation of foreign currencies and gold: Commercial banks, non-bank credit institutions, and foreign bank branches shall recognize these in accordance with accounting standards and relevant law regulations;

c) Revenues from trading in securities permitted for trading under the Law on Credit Institutions:

c.1) For trading securities: commercial banks, non-bank credit institutions, and foreign bank branches shall account for these as revenue in accordance with the law on enterprise accounting for trading securities;

c.2) For investment securities, excluding types of securities that must be classified as debt and subject to setting aside of provisions like a loan: commercial banks, non-bank credit institutions, and foreign bank branches shall account for receivable interest for the expected interest to be collected.

d) For revenue from capital contributions: dividends and profits distributed from capital contribution activities are recognized as distributed interests when a resolution or decision or notice of dividend or profit distribution is issued

dd) For revenue from remaining activities: revenue is the total amount of money from supplies of goods and services during the period, regardless of whether the money has been collected or not.

Article 14. Expenses and principles for expense recognition of commercial banks, non-bank credit institutions, and foreign bank branches

1. Expenses of a commercial bank, non-bank credit institution or a foreign bank branch include:

a) Paid interests and similar expenses: Expenses for paid deposit interest; expenses for paid loan interest; expenses for paid interests for issued deposit certificates and bonds; and other expenses for credit operations;

b) Expenses for services: payment service; cashiering service; telecommunications service; entrustment and agency services; currency brokerage services; consultancy service on banking activities and other business activities; and commissions paid to agency, brokerage and entrustment services allowed by law, in which the payment of commissions shall comply with the following regulations:

b.1) Brokerage commissions shall be paid to third parties (as intermediaries) and shall not apply to agents of commercial banks, non-bank credit institutions, and foreign bank branches; managers, controllers, members of the supervisory board, and employees of commercial banks, non-bank credit institutions, and foreign bank branches, and related persons of the commercial banks, non-bank credit institutions, and foreign bank branches as defined by the Law on Credit Institutions and its amending, supplementing, or replacing documents (if any);

b.2) The payment of brokerage commissions must be based on a contract or written certification between the commercial bank, non-bank credit institution, or foreign bank branch and the beneficiary of the brokerage commission, which must include the following principal contents: name of the commission beneficiary, expense items, expense levels, payment method, implementation and completion time, and responsibilities of the involved parties;

b.3) For brokerage expenses for lease of assets (including secured assets accepted in lieu of fulfilling secured obligations): The level of brokerage commission for lease of each asset of a commercial bank, non-bank credit institution, or foreign bank branch shall not exceed 5% of the total amount collected from the lease of such asset through brokerage;

b.4) For brokerage commissions for sale of mortgaged or pledged assets (including secured assets accepted in lieu of fulfilling secured obligations): The level of brokerage commission for sale of each mortgaged or pledged asset of a commercial bank, non-bank credit institution, or foreign bank branch shall not exceed 1% of the amount collected from the sale of such asset through brokerage;

b.5) The Board of Directors or the Members' Council or the General Director (Director) of the commercial bank, non-bank credit institution, and foreign bank branch shall issue regulations on expenses for brokerage commissions for unified and public application.

c) Expenses for foreign exchange and gold trading: expenses for foreign currency trading; exchange rate difference; gold trading; and derivative financial and monetary instruments;

d) Expenses for trading in securities permitted for trading under the Law on Credit Institutions;

dd) Expenses for capital contribution and transfer of capital contributions and shares;

e) Expenses for other business activities: interest rate swap, debt trading; financial lease; other derivative financial instruments; and other business activities;

g) Expenses for payment of taxes, charges and fees;

h) Payments to managers, executives, and employees (including controllers and members of the supervisory board): salary, remuneration, bonuses, allowances; salary-based contributions, including social insurance, health insurance, employment insurance (if any), unemployment insurance, and trade union dues; purchase of human accident insurance; expenses for employees’ attire and labor protection devices for individuals required to be equipped with such protection during work; allowances; shift meal allowances (specifically, for commercial banks with 100% state-owned charter capital, the level of shift meal allowances shall comply with the regulations applicable to enterprises with 100% state-owned charter capital); medical care expense including periodic health check-ups, procurement of preventive medicine, and other medical expenses that fall under the enterprises’ responsibilities in accordance with the law; expense for annual leaves; Expense for female laborers in accordance with labor law; and other expenses as prescribed by law;

i) Expenses for activities of management and official duties, including: expenses for printing materials and paper; working mission allowance; expenses for skills training; expenses for research and application of science and technology, including expenses for making of deductions to set aside for the science and technology development fund as prescribed by law and expenses for the deficit in cases where the balance of the science and technology development fund is insufficient to cover research and application of science and technology in the year; expenses for rewards for innovations based on the principle of alignment with the actual effectiveness, disclosure of reward policies and establishment of a council of initiative acceptance; expenses for postage and telephone; expenses for publication of documents, advertising, marketing and sales promotion; expenses for purchase of documents, books and newspapers; expenses for party and mass organization activities; expenses for electricity and water, and for ensuring occupational safety and hygiene at the workplace; expenses for conferences, guest reception, external relations; expenses for consultancy and audit; expenses for hiring of domestic and foreign experts; expenses for fire prevention and fighting; expenses for environmental protection and other expenses as prescribed by law regulations;

k) Asset-related expenses, including fixed asset depreciation (depreciation expenses for fixed assets used for business operations shall comply with the regulations on management, use, and depreciation of fixed assets for enterprises. For a fixed asset purchased on deferred payment, commercial banks, non-bank credit institutions, and foreign bank branches shall account for the difference between the total amount payable and purchase price of the fixed asset as cost according to payment periods except where the difference is included in the original cost of the fixed asset (capitalization) in accordance with the accounting standards); expenses for maintenance, and repair of assets; expenses for purchase and repair of tools and equipment; expenses for asset insurance; and expenses for asset rental, in case the rental of a fixed asset is paid in lump sum for several years, the rental shall be gradually accounted as business expenses by the number of years of asset use; expenses for hiring asset or building management and operation under hire contracts; other asset-related expenses as defined by law regulations;

l) Expenses for setting aside provisions:

l.1) Expenses for setting aside operation provisions under Article 147 of the Law on Credit Institutions and guiding documents;

l.2) Expenses for setting aside risk provisions for special bonds issued by the Vietnam Asset Management Company under Point a, Clause 2, Article 21 of the Government’s Decree No. 53/2013/ND-CP of May 18, 2013, on the establishment, organization and operation of the Vietnam Asset Management Company; guidance of the State Bank of Vietnam and amending, supplementing or replacing legal documents (if any);

l.3) Expenses for setting aside risk provisions which are deductible upon enterprise income tax determination must comply with the law on enterprise income tax.

m) Expenses for payment of deposit insurance under the law on deposit insurance and other capital preservation expenses as prescribed by law;

n) Other expenses: expenses for payment of dues to professional associations of which the commercial banks, non-bank credit institutions, or foreign bank branches are members, at rates defined by these associations; expenses for party and mass organization activities at commercial banks, non-bank credit institutions, or foreign bank branches (expenses outside the budgets of party and mass organizations shall comply with regulations); expenses for the sale and liquidation of assets and residual value (if any) of liquidated or sold fixed assets; expenses for the recovery of written-off debts or collection of non-performing loans; expenses for dealing with the remaining asset loss after being covered by the sources (compensation, insurance proceeds, provisions, etc.) as specified in Clause 4, Article 9 of this Decree; expenses for amounts previously accounted as revenue in prior periods which are assessed by commercial banks, non-bank credit institutions, or foreign bank branches as uncollectable or are actually uncollected; expenses for social work including donations, charities, and sponsorships as specified by the law on enterprise income tax; welfare expenses directly for employees, and other welfare expenses for employees as defined by tax law; expenses for payables to be accounted as revenue due to unidentified creditors, of which the creditors are subsequently identified; expenses for fines and compensation due to breach of economic contracts for which the commercial banks, non-bank credit institutions, or foreign bank branches are responsible; expenses for fines for administrative violations, excluding fines paid by individuals in accordance with law; expenses for court fees and judgment execution fees; and other expenses as prescribed by law.

2. The principles for recognition for expenses of commercial banks, non-bank credit institutions, and foreign bank branches shall comply with Article 146 of the Law on Credit Institutions.

Section 2

REVENUES AND EXPENSES OF COOPERATIVE BANKS

Article 15. Revenues and principles for revenue recognition of cooperative banks

1. Revenues of a cooperative bank include:

a) Revenues from interests and similar revenues: deposit interest; loan interest including loan interest for people’s credit funds being members, loan interest for clients other than people’s credit funds being members; profit from debit securities trading and investment, revenue from guarantee operation, profit from debt trading operation, other revenues from credit operations;

b) Revenues from provision of services: revenue from payment services (including revenue from provision of card services, electronic banking; revenue from opening of payment accounts, provision of payment instruments for member people's credit funds and clients other than member people's credit funds); revenue from treasury services; revenue from entrustment and agency operations; revenue from provision of consulting services on banking activities and other business activities; revenue from support and development of products and services for people's credit funds; revenue from agency activities in banking and insurance business sectors; and revenue from other services as defined by law;

c) Expenses for trading in securities permitted for trading under the Law on Credit Institutions;

d) Revenues from other activities: revenue from debts already settled with the risk provision (including written-off debts now recovered); revenue from debt trading operation; revenue from asset transfer and liquidation; revenue from reimbursement of provision amount; revenue from asset rental; and revenues from other banking business activities permitted by the State Bank of Vietnam;

dd) Other revenues as specified at Point g Clause 1 Article 13 of this Decree.

2. Principles for revenue recognition for cooperative banks shall comply with Clause 2 Article 13 of this Decree.

Article 16. Expenses and principles for expense recognition of cooperative banks

1. Expenses of a cooperative bank include:

a) Paid interests and similar expenses: payment of deposit interest of member people’s credit funds, loan interest for clients other than member people’s credit funds and expenses defined at Point a Clause 1 Article 14 of this Decree;

b) Expenses for services and expenses for trading in securities as specified at Points b and d Clause 1 Article 14 of this Decree;

c) Expenses for other business activities: Expenses related to debt trading operation; expenses for other business activities as defined by law regulations;

d) Expenses for payment of deposit insurance under the law on deposit insurance; contribution to the fund for safety assurance of the system of people’s credit funds in accordance with regulations of the Governor of the State Bank of Vietnam and other capital preservation expenses as prescribed by law;

dd) Expenses for activities of management and official duties: expenses for professional training and coaching (including professional training and coaching for bank staff, and training of banking and information technology for member people's credit funds) and other expenses as specified at Point i, Clause 1, Article 14 of this Decree;

e) Expenses for payment of taxes, charges and fees; payments to managers, executives, and employees; asset-related expenses; expenses for setting aside provisions and other expenses: comply with Points g, h, k, l and n, Clause 1, Article 14 of this Decree.

2. Principles for expense recognition of cooperative banks shall comply with Article 146 of the Law on Credit Institutions.

Section 3

REVENUES AND EXPENSES OF PEOPLE’S CREDIT FUNDS

Article 17. Revenues and principles for revenue recognition of people’s credit funds

1. Revenues of a people’s credit fund include:

a) Revenues from interests and similar revenues: deposit interest, loan interest, profit from debt trading operations, other revenues from credit activities;

b) Revenues from provision of services: revenue from payment services (including revenue from providing money transfer services, performing the operation of collection and payment for their members and clients); revenue from treasury services; revenue from undertaking entrustment and acting as an agent in certain areas related to banking activities, and asset preservation in accordance with the State Bank of Vietnam’s regulations; revenue from acting as an insurance agent under the laws on insurance business and credit institutions; revenue from providing consulting services on banking activities and other business activities to members; and revenue from other service activities as defined by law;

c) Revenue from capital contributions to the Co-operative Bank of Vietnam: interest from capital contributions to the Co-operative Bank of Vietnam;

d) Revenues from other activities: revenue from debts already settled with the risk provision (including written-off debts now recovered); revenue from debt trading operation; revenue from asset transfer and liquidation; revenue from reimbursement of provision amount; revenue from asset rental; and revenues from other activities;

dd) Other revenues as specified at Point g Clause 1, Article 13 of this Decree.

2. Principles for revenue recognition for people’s credit funds shall comply with Clause 2 Article 13 of this Decree.

Article 18. Expenses and principles for expense recognition of people’s credit funds

1. Expenses of a people’s credit fund include:

a) Paid interests and similar expenses: Expenses for deposit interest including payment of deposit interest of their members and payment of deposit interest of other organizations and individuals; expenses for paid loan interest including interest payment for regulatory capital loans, loans from other credit institutions, other financial organizations, and payment of interest of loans from the Co-operative Bank of Vietnam; and other expenses for credit activities;

b) Expenses for services: expenses for payment services include expenses for providing money transfer services, performing the operation of collection and payment for their members and clients; cash transportation expenses; treasury and vault operation expenses; and other expenses as prescribed at Point b, Clause 1, Article 14 of this Decree;

c) Capital contribution expenses: expenses arising from making capital contributions to the Co-operative Bank of Vietnam;

d) Expenses for other business activities: Expenses related to debt trading operation; expenses for other business activities as defined by law regulations;

dd) Expenses for payment of deposit insurance under the law on deposit insurance; contribution to the fund for safety assurance of the system of people’s credit funds in accordance with regulations of the Governor of the State Bank of Vietnam and other capital preservation expenses as prescribed by law;

e) Expenses for payment of taxes, charges and fees; payments to managers, executives, and employees; expenses for activities of management and official duties; asset-related expenses; expenses for setting aside provisions and other expenses: comply with Points g, h, i, k, l and n, Clause 1, Article 14 of this Decree.

2. Principles for expense recognition of people’s credit funds shall comply with Article 146 of the Law on Credit Institutions.

Section 4

REVENUES AND EXPENSES OF MICROFINANCE INSTITUTIONS

Article 19. Revenues and principles for revenue recognition of microfinance institutions

1. Revenues of a microfinance institution include:

a) Revenues from interests and similar revenues: deposit interest, loan interest, profit from debt trading operations, other revenues from credit activities in accordance with law regulations;

b) Revenues from provision of services: payment service; cashiering; provision of services of collection, payment and money transfer for clients of the microfinance institution; receipt of capital entrusted by organizations and individuals; consulting services on banking activities and other business activities; acting as an insurance agent under the laws on insurance business and credit institutions; providing asset preservation and safe keeping services; providing products for community benefit development; and other service activities as specified by law;

c) Revenues from exchange rate difference in accordance with accounting standards and law regulations;

d) Revenues from other activities: revenue from debts already settled with the risk provision (including written-off debts now recovered); revenue from debt trading operation; revenue from asset transfer and liquidation; revenue from reimbursement of provision amount; revenue from asset rental; and revenues from other activities in accordance with law regulations;

dd) Other revenues: revenue from non-refundable grants received by the microfinance institution for implementation of development programs and activities of the microfinance institution; revenue from taxes previously paid that are now reduced or refunded (if any); and other revenues as prescribed at Point g, Clause 1, Article 13 of this Decree.

2. Principles for revenue recognition for microfinance institutions shall comply with Clause 2 Article 13 of this Decree.

Article 20. Expenses and principles for expense recognition of microfinance institutions

1. Expenses of a microfinance institution include:

a) Paid interests and similar expenses: expenses for deposit interest; mandatory savings deposits; other deposit interests; loan interest; and other expenses for credit operations;

b) Expenses for services: expenses for services of collection, payment and money transfer for microfinance clients; expenses for telecommunications services; expenses for capital lending entrustment fees; expenses for consulting services on banking and other business activities; expenses for acting as an agent providing insurance services; commissions paid to agency, brokerage and entrustment services as defined at Point b, Clause 1, Article 14 of this Decree;

c) Expenses for exchange rate difference in accordance with accounting standards and law regulations;

d) Expenses for other business activities: Expenses related to debt trading operation; expenses for other business activities as defined by law regulations;

dd) Expenses for activities of management and official duties: expenses for training and capacity improvement for officers and employees, including training for collaborators and clients within the scope of microfinance activities, and other expenses as prescribed at Point i, Clause 1, Article 14 of this Decree;

e) Expenses for payment of taxes, charges and fees; payments to managers, executives, and employees; asset-related expenses; expenses for setting aside provisions; expenses for payment of deposit insurance and other capital preservation expenses: comply with Points g, h, k, l and m, Clause 1, Article 14 of this Decree;

g) Other expenses: expenses for community development as prescribed by law and other expenses as defined at Point n, Clause 1, Article 14 of this Decree.

2. Principles for expense recognition of microfinance institutions shall comply with Article 146 of the Law on Credit Institutions.

Chapter IV

 PROFIT DISTRIBUTION

Article 21. Incomes liable to enterprise income tax

Revenues, expenses, incomes liable to enterprise income tax and other relevant contents for the purpose of calculation of enterprise income tax for credit institutions and foreign bank branches must comply with the law on enterprise income tax.

Article 22. Profit distribution applicable to credit institutions with 100% state-owned charter capital

Profits of a credit institution, after being used to offset previous years’ losses in accordance with the Law on Enterprise Income Tax and paying enterprise income tax, shall be distributed in the following order:

1. Dividing profits to capital contributors under signed transactions or contracts (if any).

2. Offsetting previous years’ losses after the expiration of the period when they are allowed to be deducted from pre-enterprise income tax profit under regulations.

3. Deducting 10% of after-tax profits into the charter capital addition reserve fund. This fund must not exceed the charter capital of the credit institution.

4. After the amounts specified in Clauses 1, 2 and 3 of this Article are subtracted, the remaining profit shall be further distributed in the following order:

a) Deducting 10% into the financial provision. Such provision must not exceed 25% of the charter capital of the credit institution;

b) Deducting 20% maximum into the development investment fund. This fund must not exceed the charter capital of the credit institution;

c) Making deductions into the reward fund and welfare fund for employees of the credit institution:

Credit institutions which are graded A under this Decree may deduct three months’ actually paid salaries into these two funds;

Credit institutions which are graded B under this Decree may deduct one and a half months’ actually paid salaries into these two funds;

Credit institutions which are graded C under this Decree may deduct one month’s actually paid salaries into these two funds;

Non-graded credit institutions may not make deductions into these two funds.

d) Making deductions into the bonus fund for managers and controllers:

Credit institutions which are graded A under this Decree may deduct one and a half months’ actually paid salaries of managers and controllers;

Credit institutions which are graded B under this Decree may deduct one month’s actually paid salaries of managers and controllers;

Credit institutions which are graded C under this Decree and non-graded credit institutions may not make deductions into this fund.

5. If after setting aside the development investment fund defined in Clause 4 of this Article, the remaining profit is insufficient to allocate to the reward fund, welfare fund for employees, and the bonus fund for managers and controllers at the prescribed levels, the credit institutions may reduce the amount set aside for the development investment fund to supplement the sources for fully making deductions into the reward fund, welfare fund for employees, and bonus fund for managers and controllers at the prescribed levels. However, the maximum reduction shall not exceed the amount deducted into the development investment fund in the fiscal year.

6. After making deductions to set aside the funds specified at Clauses 3 and 4 of this Article, the remaining profit shall be remitted into the state budget.

Article 23. Profit distribution applicable to credit institutions with between over 50% and under 100% of its charter capital held by the State

Profits of a credit institution, after being used to offset previous years’ losses in accordance with the Law on Enterprise Income Tax and paying enterprise income tax, shall be distributed in the following order:

1. Dividing profits to capital contributors under signed transactions or contracts (if any).

2. Offsetting previous years’ losses after the expiration of the period when they are allowed to be deducted from pre-enterprise income tax profit under regulations.

3. Deducting 10% of after-tax profits into the charter capital addition reserve fund. This fund must not exceed the charter capital of the credit institution.

4. After the amounts specified in Clauses 1, 2 and 3 of this Article are subtracted, the remaining profit shall be further distributed in the following order:

a) Deducting 10% into the financial provision. Such provision must not exceed 25% of the charter capital of the credit institution;

b) Deducting 25% maximum into the development investment fund. This fund must not exceed the charter capital of the credit institution;

c) Deducting into the reward fund, welfare fund for employees in the credit institution, and bonus fund for managers in accordance with the Government’s regulations on labor, wages, remuneration, and bonuses for enterprises with between over 50% and under 100% of its charter capital held by the State;

d) After making deductions to set aside the funds under the above-mentioned regulations, the credit institution shall use the remaining profit for paying dividends in cash or in stocks.

5. At least 30 days before organizing the General Meeting of Shareholders, the representative of state capital at the credit institution shall collect the State Bank of Vietnam’s opinions on the distribution of the remaining profit defined at Points b, c and d Clause 4 of this Article before it is voted at the General Meeting of Shareholders. Within 20 days from the date of receiving a complete dossier from the credit institution, the State Bank of Vietnam shall reach an agreement with the Ministry of Finance. Within 20 days after receiving a complete dossier, the Ministry of Finance shall give its official opinion in writing to the State Bank of Vietnam.

6. For cash dividends distributed as specified at Point d, Clause 4 of this Article, the credit institution must remit the cash portion distributed to the state capital contribution in the credit institution into the state budget, in accordance with law regulations.

7. If share dividends are distributed as defined at Point d, Clause 4 of this Article, the State Bank of Vietnam shall reach an agreement with the Ministry of Finance before submitting it to the Prime Minister for consideration and approval of the policy on share dividend distribution. The distribution of share dividends shall apply to credit institutions that meet the following criteria:

a) Be operating effectively, as assessed based on the criteria for assessment of the efficiency of state capital investment at enterprises being credit institutions with state capital as specified in this Decree, ensuring that their rating for three consecutive years prior to the year of determining share dividend distribution is Grade B or higher, according to the rating results announced by the State Bank of Vietnam;

b) Have a non-performing loan ratio of less than 3%.

Article 24. Distribution of profits of credit institutions being cooperatives

Profits of a credit institution being a cooperative, after being used to offset previous years’ losses in accordance with the Law on Enterprise Income Tax and paying enterprise income tax, shall be distributed in the following order:

1. Deducting 10% of after-tax profits into the charter capital addition reserve fund. This fund must not exceed the charter capital of the credit institution.

2. Deducting 10% into the financial provision. Such provision must not exceed 25% of the charter capital of the credit institution.

3. Deducting 25% maximum into the development investment fund. This fund must not exceed the charter capital of the credit institution.

4. After the amounts specified in Clauses 1, 2 and 3 of this Article are subtracted, the remaining profit shall be further distributed as follows:

a) For cooperative banks:

At least 30 days before organizing a members’ general meeting, the representative of state capital at the bank shall collect the State Bank of Vietnam’s opinions on the direction of distribution of the remaining profit before it is voted at the general meeting.

Within 20 days after receiving a complete dossier, the State Bank of Vietnam shall reach agreement with the Ministry of Finance on the distribution of the remaining profit in order to give direction to the representative of state capital at the bank to vote at the members’ general meeting.

Within 20 days after receiving a complete dossier, the Ministry of Finance shall give its official opinion in writing to the State Bank of Vietnam.

Particularly, the profit amount distributed to the member being the State shall be used to increase the charter capital (as support from the State). The authority, order, and procedures for supplementing state capital in cooperative banks shall comply with Article 28 of this Decree for credit institutions with 100% state-owned charter capital.

b) For people’s credit funds: The distribution of remaining profits must comply with the Law on Cooperatives and their charters.

Article 25. Distribution of profits of microfinance institutions

Profits of a microfinance institution, after being used to offset previous years’ losses in accordance with the Law on Enterprise Income Tax and paying enterprise income tax, shall be distributed in the following order:

1. Offsetting previous years’ losses after the expiration of the period when they are allowed to be deducted from pre-enterprise income tax profit under regulations.

2. Deducting 10% of after-tax profits into the charter capital addition reserve fund. This fund must not exceed the charter capital of the microfinance institution.

3. After the amounts specified in Clauses 1 and 2 of this Article are subtracted, the remaining profit shall be deducted 10% into the financial provision. Such provision must not exceed 25% of the charter capital of the microfinance institution.

4. For a microfinance institution with 100% state-owned charter capital, after the amounts specified in Clauses 1, 2 and 3 of this Article are subtracted, the remaining profit shall be further distributed as follows:

a) Deducting 25% maximum into the development investment fund. This fund must not exceed the charter capital of the microfinance institution.

b) The owner's representative agency of the microfinance institution shall, based on regulations on assessment and rating for credit institutions with 100% state-owned charter capital, review the financial plan, assign assessment and rating targets, and perform assessment and rating for the microfinance institution. Based on the rating results, the microfinance institution shall distribute the remaining profit in accordance with regulations applicable to credit institutions with 100% state-owned charter capital.

5. After the amounts specified in Clauses 1, 2 and 3 of this Article are subtracted, other microfinance institutions shall decide by themselves the distribution of the remaining profit in accordance with their charters and relevant law regulations.

Article 26. Distribution of profits applicable to other credit institutions and foreign bank branches

Profits of a credit institution or foreign bank branch, after being used to offset previous years’ losses in accordance with the Law on Enterprise Income Tax and paying enterprise income tax, shall be distributed in the following order:

1. Dividing profits to capital contributors under signed transactions or contracts (if any).

2. Offsetting previous years’ losses after the expiration of the period when they are allowed to be deducted from pre-enterprise income tax profits.

3. Deducting 10% of after-tax profit into the charter capital addition reserve fund of the credit institution or into the allocated capital addition reserve fund of the foreign bank branch. This fund must not exceed the charter capital of the credit institution or the allocated capital of the foreign bank branch.

4. After the amounts specified in Clauses 1, 2 and 3 of this Article are subtracted, the remaining profit shall be further distributed in the following order:

a) Deducting 10% into the financial provision;

b) Credit institutions and foreign bank branches may decide by themselves on the division of the remaining profit in accordance with their charter, financial regime and internal regulations.

Article 27. Management and use of funds

1. The charter capital addition reserve fund or allocated capital addition reserve fund shall be used for increasing the charter capital or allocated capital.

2. The financial provision shall be used for offsetting the remaining asset loss or damage occurring in the course of business operation after being covered by the compensations paid by organizations and individuals causing such loss or damage, the indemnities of insurers and the provisions set aside as expenses; and used for other purposes prescribed by law.

3. The development investment fund shall be used for implementing development investment projects and to increase the charter capital.

4. The bonus fund for managers and controllers of a credit institution shall be used for:

a) Giving bonuses to the chairperson and members of the Board of Directors/ Members’ Council, the director general, director, deputy directors general, deputy directors, controllers, members of the control board and chief accountant;

b) The authority to decide the bonus levels specified at Point a of this Clause shall comply with the Law on Credit Institutions, the charter, and the internal regulations of the credit institution.

5. The reward fund shall be used for:

a) Giving year-end or regular rewards to officers and employees of the credit institution based on the labor productivity and work performance of officers and employees;

b) Giving extraordinary rewards to individuals and collectives in the credit institution that have innovations to improve techniques and operation processes, bringing about business efficiency;

c) Giving rewards to individuals and units outside the credit institution that have contributed to the business operation of the credit institution;

d) The authority to decide the bonus levels specified at Points a, b and c of this Clause shall comply with the Law on Credit Institutions, the charter, and the internal regulations of the credit institution.

6. The welfare fund shall be used for:

a) Building or repairing and adding capital for building welfare facilities of the credit institution, contributing capital to building common welfare facilities in the sector or joining other units in building welfare facilities under agreed contracts;

b) Funding sports, cultural and public welfare activities of officers and employees of the credit institution;

c) Paying regular or extraordinary difficulty allowances for officers and employees of the credit institution, including those who have retired on pension or for loss of working capacity;

d) Funding other welfare activities.

The Board of Directors (Members’ Council) and director general (director) of the credit institution shall coordinate with the trade union’s executive board of the credit institution in managing and using this fund.

7. Credit institutions and foreign bank branches shall be responsible for promulgating regulations on the management and use of funds set aside from after-tax profits. Specifically for credit institutions with 100% state-owned charter capital:

a) They must develop and issue internal regulations for the management and use of the reward fund and welfare fund, in accordance with the law on management and use of state capital invested at production and business at enterprises. Such regulations must ensure democracy and transparency, include the participation of the credit institutions’ trade union executive committee, and be publicized within the credit institution before implementation;

b) During the financial year, the credit institutions shall proactively make provisional allocations to these funds based on their profitable business and production results and after paying enterprise income tax in accordance with regulations, in order to ensure funds for expenditures in line with the prescribed purposes of the funds.

Article 28. Scope, authority, order, and procedures for state capital investment and additional state capital investment in credit institutions

The scope, authority, order, and procedures for state capital investment and additional state capital investment in credit institutions with 100% state-owned charter capital and credit institutions with between over 50% and under 100% state-owned charter capital shall comply with the law on management and use of state capital invested at production and business at enterprises, and other regulations of relevant laws.

CHAPTER V

FINANCIAL PLANS AND FINANCIAL SUPERVISION, ASSESSMENT OF EFFICIENCY OF STATE CAPITAL INVESTMENT IN ENTERPRISES BEING CREDIT INSTITUTIONS WITH 100% STATE-OWNED CHARTER CAPITAL AND CREDIT INSTITUTIONS WITH STATE CAPITAL

Article 29. Financial plans

1. Annual financial plans of a credit institution or foreign bank branch include:

a) Plan on capital sources and capital use;

b) Plan on income, expenses, business results and state budget remittance target;

c) Labor and salary plan.

2. Making of financial plans:

a) For a credit institution with 100% state-owned charter capital:

a.1) Before July 31 every year, the credit institution shall make a financial plan for the subsequent year and send it to the Ministry of Finance and the State Bank of Vietnam for making state budget estimation;

a.2) Before March 1 of the plan year, based on the previous year’s business result, the credit institution shall review and finalize its financial plan and send it to the State Bank of Vietnam and the Ministry of Finance to serve financial supervision and assessment of business efficiency of the credit institution. The forms for capital source and capital use plans; plans on income, expense, business results, and state budget remittance targets; and labor and salary plans, are provided in Appendix I, Appendix II, and Appendix III issued together with this Decree;

a.3) The State Bank of Vietnam shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, reviewing and giving official written opinions on financial plans of credit institutions, and assign targets for assessment and classification of credit institutions before April 30 of the plan year.

b) For a credit institution with between over 50% and under 100% state-owned charter capital:

b.1) Before July 31 every year, the credit institution shall make a financial plan for the subsequent year and send it to the Ministry of Finance and the State Bank of Vietnam for making state budget estimation;

b.2) Before March 1 of the plan year, based on the previous year’s business result, the credit institution shall review and finalize its financial plan and send it to the Ministry of Finance and the State Bank of Vietnam to serve financial supervision and assessment of the efficiency of state capital investment at the credit institution. The forms for capital source and capital use plans; plans on income, expense, business results, and state budget remittance targets; and labor and salary plans, are provided in Appendix I, Appendix II, and Appendix III issued together with this Decree;

b.3) The State Bank of Vietnam shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, reviewing financial plans of credit institutions, and determine specific assessment criteria for assigning tasks to the representative of state capital at credit institutions before April 30 of the plan year.

c) For other credit institutions and foreign bank branches: The making of financial plans shall comply with the charters, financial regime and internal regulations of the credit institutions or foreign bank branches.

Article 30. Financial supervision of enterprises being credit institutions with 100% state-owned charter capital and credit institutions with state capital

1. The financial supervision of enterprises being credit institutions with 100% state-owned charter capital, financial supervision of subsidiary companies and associated companies, capital supervision of credit institutions making offshore investment, special financial supervision of enterprises being credit institutions with 100% state-owned charter capital must comply with regulations applicable to state enterprises and this Decree.

2. The financial supervision of enterprises that are credit institutions with state capital shall be carried out in accordance with the regulations applicable to state-owned enterprises and this Decree.

Article 31. Criteria for assessment of efficiency of state capital investment at credit institutions with 100% state-owned charter capital and credit institutions with state capital

1. Criteria for assessment of the efficiency of state capital investment at credit institutions with 100% state-owned charter capital and credit institutions with state capital include:

a) Criterion 1. Revenue;

b) Criterion 2. After-tax profit and after-tax profit ratio;

c) Criterion 3. Non-performing loan rate and irrecoverable debt rate;

d) Criterion 4. The credit institution’s compliance with the laws on investment, management and use of state capital in credit institutions, law on taxes and other budget remittances, regulations on financial statements and reports for financial supervision;

dd) Criterion 5. Provision of public products and services (if any).

2. The criteria specified in Clause 1 of this Article shall be determined and calculated based on data in audited annual financial statements and periodical statistics reports as prescribed by law.

When calculating criteria 1, 2, 4 and 5 specified in Clause 1 of this Article, the following influential factors may be considered and excluded:

a) Natural disaster, fire, epidemic, war and other objective and force majeure events;

b) Investment to expand business under plan, depreciation increase for quick capital recovery approved by competent authorities, implementation of social security programs under the Government’s regulations;

c) Price adjustments by the State (for products and services priced by the State) which affect the credit institution’s revenues or achievement of socio-economic targets as directed by the Government or the Prime Minister.

3. Method of determining criteria for assessment of efficiency of state capital investment at a credit institution shall be as follows:

a) Revenue: This criterion is determined according to the audited annual financial statements of the credit institution;

b) After-tax profit and return on equity:

After-tax profit: Gross profit from business activities less provisions for credit losses, expenses for the current enterprise income tax and the refundable enterprise income tax;

Return on equity: Is calculated by the after-tax profit divided by the average equity in the year. In which, the average equity in the year is calculated as follows:

The equity is taken from the owner's equity item on the financial situation report of the credit institution, comprising: capital of the credit institution, funds of the credit institution, exchange rate differences, revaluation differences of assets, and retained earnings.

c) Non-performing loan rate and irrecoverable debt rate:

The non-performing loan rate shall comply with the law regulations on asset classification in the operations of credit institutions and foreign bank branches;

The irrecoverable debt rate is the ratio of the outstanding balance of irrecoverable debt (group 5 loans as prescribed by the law regulations on asset classification in the operations of credit institutions and foreign bank branches) to the total outstanding balance.

d) Compliance with the laws:

Compliance with the laws includes compliance with the regimes, policies and laws in the fields of investment, management and use of state capital at credit institutions, taxes (excluding personal income tax), other state budget remittances, and regulations on financial reporting and reporting for the purpose of financial supervision.

The level of sanctioning of administrative violation serving as the basis for evaluation and classification shall be the fines specified in the decision on sanctioning of administrative violation for the violations detected during the fiscal year of assessment and rating, excluding any amounts payable for implementation of remedial measures.

dd) Provision of public products and services (if any):

The provision of public products and services refers to the direct performance of national defense, security tasks, or the provision of public services under State policies through bidding, order placement, or assignment by the State. The evaluation of this indicator shall be based on the level of completion in terms of both quantity and quality of services. Depending on the field of operation, specialization, and specific characteristics, the owner’s representative agency shall establish appropriate evaluation criteria.

1. The assessment of performance of managers of a credit institution must comply with the Government’s regulations and the following criteria:

a) The level of fulfillment of the targets assigned by the State Bank of Vietnam regarding after-tax profit and the return on equity;

b) Rating of the credit institution;

c) The level of fulfillment of the plan on supply of public products and services (for credit institutions engaged in supplying public products and services).

Article 32. Assessment of operation efficiency and classification of state enterprises being credit institutions with 100% state-owned capital

1. The assessment of operation efficiency and classification of state enterprises being credit institutions with 100% state-owned capital must comply with regulations applicable to state enterprises and specific provisions of this Decree.

2. The State Bank of Vietnam shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, reviewing financial plans in order to assign assessment and classification indicators to credit institutions with 100% state-owned capital which are suitable to their business characteristics. These indicators shall be assigned in writing to credit institutions before April 30 of the plan year and may not be adjusted during the plan period, except for force majeure cases.

3. Method of assessment of operation efficiency and classification of credit institutions

The assessment of operation efficiency of credit institutions shall be carried out via the assessment of level of fulfillment of efficiency assessment criteria and its ranking (A, B, C) assigned by the State Bank of Vietnam, as specified in Appendix IV of this Decree.

Article 33. Assessment of efficiency of state capital investment at enterprises being joint-stock credit institutions with between over 50% and under 100% state-owned charter capital

1. The assessment of efficiency of state capital investment at enterprises being credit institutions with between over 50% and under 100% state-owned charter capital must comply with regulations on assessment of operation efficiency applicable to credit institutions with 100% state-owned charter capital and this Decree.

2. Before a credit institution with between over 50% and under 100% state-owned charter capital organizes a General Meeting of Shareholders, the State Bank of Vietnam shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, reviewing financial plans in order to assign assessment indicators for the credit institution in order to assign in writing tasks to the state capital representative in such credit institution before April 30 of the plan year. These assessment indicators may not be adjusted during the plan period, except for force majeure cases.

3. The State Bank of Vietnam shall base itself on the result of assessment of efficiency of state capital investment at credit institutions with between over 50% and under 100% state-owned charter capital and their operation results to assess and reward state capital representatives in these credit institutions and to make plans and assign tasks to these representatives in these credit institutions in the following year; and concurrently report to the Prime Minister for consideration and decision the investment continuation or expansion or divestment of state capital from these credit institutions.

Article 34. Assessment of operation efficiency of cooperative banks

1. The assessment of operation efficiency of cooperative banks shall comply with regulations applicable to credit institutions with 100% state-owned charter capital in this Decree.

2. Before a cooperative bank organizes a General Meeting of Members, the State Bank of Vietnam shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, reviewing financial plans in order to assign assessment indicators for the cooperative bank in order to assign in writing tasks to the state capital representative in such cooperative bank before April 30 of the plan year. These assessment indicators may not be adjusted during the plan period, except for force majeure cases.

3. The State Bank of Vietnam shall base itself on the result of assessment of operation efficiency of the cooperative bank to assess and reward the state capital representative in the cooperative bank and to make plans and assign tasks to the representative in the cooperative bank in the following year.

Chapter VI

 ACCOUNTING, FINANCIAL REGULATIONS AND REPORTING REGIME

Article 35. Accounting

1. Credit institutions and foreign bank branches shall conduct accounting in accordance with Article 150 of the Law on Credit Institutions.

2. Economic and financial operations shall be recorded in Vietnam dong with the national symbol of “đ” and the international symbol of “VND” in accounting books, financial statements and finalization statements.

3. An accounting unit that collects and pays monetary amounts mainly in a foreign currency may use such foreign currency for preparing accounting books and take responsibility before law. When making and presenting financial statements for use in Vietnam, such foreign currency shall be converted into Vietnam dong.

Article 36. Audit

1. Credit institutions shall organize internal audit under Article 58 of the Law on Credit Institutions and other regulations of relevant laws.

2. Credit institutions and foreign bank branches shall implement audit of annual financial statements in accordance with Article 59 of the Law on Credit Institutions and law regulations on accounting.

Article 37. Financial regulations

1. Based on this Decree and relevant law regulations, credit institutions and foreign bank branches shall develop their financial regulations and submit them to the competent authority for approval in accordance with their charter and internal regulations, to serve as a basis for implementation.

2. For credit institutions with 100% state-owned charter capital, the development and issuance of financial regulations shall comply with the regulations applicable to enterprises with 100% state-owned charter capital.

Article 38. Reporting regime

1. Credit institutions and foreign bank branches shall implement the regime of reporting in accordance with Article 152 of the Law on Credit Institutions.

2. Credit institutions and foreign bank branches shall disclose their financial statements in accordance with Article 154 of the Law on Credit Institutions.

3. Credit institutions with 100% state-owned charter capital and credit institutions with state capital shall send their annual financial plan reports in accordance with Article 29 of this Decree.

Chapter VII

RESPONSIBILITIES OF MANAGEMENT AGENCIES, CREDIT INSTITUTIONS, FOREIGN BANK BRANCHES

Article 39. Responsibility of the Ministry of Finance

1. To coordinate with the State Bank of Vietnam in making and implementing plans for supervision of credit institutions with 100% state-owned charter capital and credit institutions with state capital; and for specialized supervision or for supervision requested by the Government or Prime Minister in accordance with the law regulations on management and use of state capital invested in production and business at enterprises.

2. To coordinate with the State Bank of Vietnam in handling financial matters of credit institutions with 100% state-owned charter capital and credit institutions with state capital in accordance with law regulations.

3. To assume the prime responsibility for, and coordinate with ministries and sectors in, report to the Government on reviewing and evaluation of the implementation of this Decree in order to submit to the Government amending, supplementing or replacing decrees in case of necessity.

Article 40. Responsibilities of the State Bank of Vietnam

1. To supervise, examine and inspect the operations of credit institutions and foreign bank branches in accordance with the Law on Credit Institutions; and to periodically send notifications to the Ministry of Finance on the financial status of credit institutions and foreign bank branches as prescribed in Appendix V of this Decree.

2. To act as the representative of the state capital owner at credit institutions with state capital as assigned by the Government:

a) To make decisions and take responsibility therefor within the ambit of competence of the representative of the state capital owner;

b) To assume the prime responsibility for, and coordinate with the Ministry of Finance in, making and implementing plans for financial supervision, assessment of operation efficiency, and classification of state-owned enterprises that are credit institutions with 100% state-owned charter capital; assessment of the efficiency of state capital investment in enterprises that are credit institutions with between over 50% and under 100% of charter capital in accordance with this Decree and other regulations of relevant laws; send reports on the results of financial supervision and classification of enterprises that are credit institutions with 100% state-owned charter capital, and reports on the results of financial supervision of enterprises that are credit institutions with between over 50% and under 100% of charter capital to the Ministry of Finance in accordance with laws on financial supervision and assessment of efficiency of state capital investment in enterprises with more than 50% state-owned charter capital;

c) The State Bank of Vietnam shall, based on this Decree and law regulations on financial supervision and assessment of efficiency of state capital investment in enterprises with state capital, carry out financial supervision and assessment of operation efficiency of cooperative banks. The State Bank of Vietnam shall prepare a report on assessment of operation efficiency of cooperative banks and submit it to the Ministry of Finance in accordance with law regulations on financial supervision and assessment of efficiency of state capital investment in enterprises with state capital.

Article 41. Responsibilities of credit institutions and foreign bank branches

1. Credit institutions and foreign bank branches shall implement the financial regime, management and use of their capital and assets in accordance with the Law on Credit Institutions, this Decree and relevant laws.

2. The Board of Directors or Members’ Council:

a) To conduct, examine and supervise financial activities of their credit institutions within the ambit of their competence prescribed by the Law on Credit Institutions and other regulations of relevant laws;

b) To decide or approve within the ambit of their competence prescribed by the Law on Credit Institutions, other regulations of relevant laws and their charters the following: capital raising plans; plans on investment, purchase and sale of assets of credit institutions; plans on contribution of capital to, purchase and sale of shares or capital contributions of their credit institutions in enterprises and other credit institutions; repurchase of shares of credit institutions according to an approved plan;

c) To examine, supervise and direct their directors general (directors) and directors of credit institutions, representatives of credit institutions’ capital contributions in enterprises and other credit institutions in using, preserving and developing capital, conducting business under approved plans and fulfilling the obligation toward the state budget;

d) To perform other responsibilities prescribed by law and the charters of their credit institutions.

3. Directors general (directors) of credit institutions:

a) To administer operation of their credit institutions and take responsibility before the Boards of Directors or Members’ Councils and law for such administration;

b) To make and submit financial statements to the Boards of Directors or Members’ Councils for approval or report them to the competent authorities for approval; to take responsibility for the accuracy and truthfulness of financial statements, statistical reports, finalization data and other financial information;

c) To perform other responsibilities prescribed by law and the charters of their credit institutions.

4. Directors general (directors) of foreign bank branches shall be responsible for representing the foreign bank branches, for being accountable before the law for all activities of the foreign bank branches, and for managing daily operations in accordance with the rights and obligations consistent with the Law on Credit Institutions and other regulation of relevant laws.

5. Representatives of state capital in credit institutions:

To fully exercise their rights and perform their responsibilities related to the financial management, financial supervision and assessment of the efficiency of state capital investment in credit institutions in accordance with this Decree, the law on management and use of state capital invested in production and business activities in enterprises and other regulation of relevant laws.

Chapter VIII

 ORGANIZATION OF IMPLEMENTATION

Article 42. Transitional provision

For credit institutions with 100% state-owned charter capital and credit institutions with state capital, if, at the time this Decree takes effect, the balance of the financial provision exceeds the level specified in this Decree, the excess amount may be transferred to the charter capital addition reserve fund or the development investment fund. However, the maximum levels of these funds must comply with this Decree. If, after such transfer, the amount still exceeds the level defined in this Decree, it shall be reversed into other revenues.

Article 43. Effect

1. This Decree takes effect on August 01, 2025.

2. This Decree replaces the Government’s Decree No. 93/2017/ND-CP dated August 07, 2017, 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.

Article 44. Implementation organization

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, credit institutions, foreign bank branches, and related organizations and individuals shall implement this Decree.

* All Appendices are not translated herein.