Directive 02/2007/CT-NHNN on the intensification of measures of improving statistic reporting quality in banking area

DIRECTIVE

ON THE INTENSIFICATION OF MEASURES OF IMPROVING STATISTIC REPORTING QUALITY IN BANKING AREA

Decision No.477/2004/QD-NHNN dated 28/4/2004 of the Governor of the State Bank on the issuance of the Statistic Reporting Regime applicable to units of the State Bank and credit institutions has been effective from 01/01/2005 (hereinafter referred to as Decision No.477) and the Decision No.1747/2005/QD-NHNN dated 01/12/2005 on the amendment, supplement of several articles of the Statistic Reporting Regime applicable to units of the State Bank and credit institutions issued in conjunction with the Decision No.477, has been effective from 01/06/2006 (hereinafter referred to as the Decision No.1747), until now it can be seen from the implementation of these two Decisions that the Statistic Reporting Regime is basically appropriate to renovation requirement of the banking technology and the guideline, management of the State Bank. With the efforts and initiatives in overcoming difficulties in the organization of database and application of informatics technology of the State Bank and credit institutions, statistic activity in banking branch has made basic reform, making gradual contribution to the improvement of the statistic report quality of the branch, helping to minimize the coincidence and facilitate information supply of units.

However, from the aspect that information is an effective instrument to serve the conduct, management of the State Bank, quality of the information periodically reported by credit institutions to the State Bank still has some certain drawbacks relating to the accuracy, sufficiency and timeliness. The investigation result of the performance of the reporting on credit activity by some credit institutions in area of Ha Tay, Hung Yen, Phu Tho, Hoa Binh in Quarter III/2006 shows that basis for the branch classification of credit institutions has not been unified, report on the sale of extension and collection of credit debt still includes abstract amounts due to the transfer from this debt group to another one, credit report by debt groups in some credit institutions (especially in the Bank for Agriculture and Rural Development) is not in conformity with provisions in the Decision No.493/2005/QD-NHNN dated 22/4/2005 of the Governor of the State Bank on the issuance of the Regulation on the debt classification, setting up and use of provisions to deal with credit risk in banking activity of credit institutions

The main reason of the above situation is that many credit institutions have not really paid attention to the information, reporting work to the State Bank, the performance, therefore has not been closely conducted, statistic officers have not been properly taken care, many statistic officers have not truly understood the reporting requirement, the data entry has still been done by feeling. As a result, quality of the statistic report still depends much on the awareness of the officers who enter data. Many credit institutions have not taken initiative in closely coordinating with functional units of the State Bank to properly understand of the nature of the statistic reporting norms and reporting requirement for these norms. Besides, many units of the State Bank have not well performed the followings: following up, speeding up as well as guiding credit institutions to well implement requirements of statistic reporting of the State Bank. Moreover, in the situation of the international economic integration, changes of the monetary, financial market have become more complicated, requiring the information quality serving the macro economic management in general, State management in monetary and banking activities as well as monetary policy management in particular to be improved.

Thus, in order to improve the quality of the statistic report, definitively settle any query relating to the reporting requirements as stipulated in the Decision No.477 and the Decision No.1747 of the Governor of the State Bank, to well perform the function of an all-sided, full, timely information channel which satisfies the conduct requirement of the State Bank, the Governor of the State Bank would like to request:

1. General Directors (Directors) of credit institutions: to conduct their units to perform following contents:

a. Seriously performing the requirements of statistic reporting of the Governor of the State Bank as provided for in the Decision No.477 and Decision No.1747. Determining that improvement of the quality of reporting information is one of key tasks of the unit in 2007.

b. Valuating the performance of the Decision No.477 and Decision No.1747 by their units up to 31/3/2007, stating clearly the implementing situation, condition of informatics technology, human resource, difficulties, queries in the implementation, overcoming solution, proposals The valuation report shall be sent to the State Bank (Monetary Policy Department) prior to 05/5/2007.

c. Abolishing any abstract amount and turnover arising from the classification of this debt group to another one, ensuring to reflect the due turnover of the credit extension, the actual turnover of debt collection. Reporting to the State Bank (Monetary Policy Department) on 25/4/2007 at the latest on measures and possibility of the abolishment of the abstract amount hereof.

d. Guiding the entire system to perform the debt classification in compliance with the current provisions of the State Bank in order to duly reflect the credit quality of the banks system through the statistic reports.

e. Assigning specific task to the Divisions, Department in the inspection to the accuracy of the reporting norms before sending to the State Bank, strictly dealing with the case of sending reporting data with wrong calculation unit (like the case of the Bank for Social Policy).

g. Paying attention to the proper investment in the officers staff who are involved in statistic work in the units (including those who directly perform and those who are in charge of):

- Building a plan on training and carrying out the training to officers who directly enter the reporting data. Officers who are assigned to undertake the statistic work must attend professional training course in order to understand the nature of the statistic norms as a basis for the good performance of the Statistic Reporting Regime to the State Bank.

- Specifically stipulating the responsibilities, rights and interests as well as obligation of the statistic officers.

h. Informing the list of officers who are responsible for making report to the State Bank by groups of norms, forms as stipulated in the Decision No.477 and amended, supplemented in the Decision No.1747 (clearly stating the name of the officer who directly makes report, officer in charge, units and phone number of that officer) so that related units of the State Bank can take the initiative in exchanging, examining, reconciling data where it is necessary. The list shall be sent to the State Bank (Monetary Policy Department) prior to 25/4/2007.

2. Heads of units at the Head Office of the State Bank:

a. Focusing on definitively settling all the queries relating to the performance of the reporting requirements as provided for in the Decision No.477 and Decision No.1747, considering the target of improving statistic reporting quality as a key task in 2007. Assigning officers to take direct responsibility for the information area undertaken by the unit in order to regularly reconcile, inspect, clearly define the reason why credit institutions have not performed or fail to well perform the norm groups undertaken by the unit.

b. Regularly operating, exploiting the statistic reporting software and timely informing technical queries to the Banking Informatics Technology Department for timely settlement, any case of informing errors too late due to the failure of operation, inspection of the system should be avoided.

c. In respect of the information reported by the State Bank Branches in provinces, cities to the State Bank of Vietnam, functional units shall take initiative in closely coordinating with the Banking Informatics Technology Department in order to definitively settle all the problems relating to the technology of entry, transmission, receipt and exploitation of information via network, solving queries of the reporting units, ensuring that the data is fully, accurately and timely transmitted.

d. Based on the consideration of the demand for information which is necessary for the performance of the function, duty of the unit, carrying out the examination of information demand of the units, abolishing the reporting requirements which are not really necessary to reduce the reporting volume of the credit institutions. Examination result shall be sent to the Monetary Policy Department prior to 20/5/2007for collection and draft of the Decision on the amendment of, supplement to the Decision No.477 and Decision No.1747.

e. The State Bank Inspectorate shall coordinate with related units of the State Bank to build up a plan, carry out the inspection, deal with the units which have been reminded but still keep violating the implementation of the statistic reporting regime in accordance with the Decision No.477 and Decision No.1747.

g. The Monetary Policy Department shall coordinate with the Ministry of Planning and Investment to organize a training course for the units to provide unanimous guidance on the credit classification by the economic branches system of Vietnam issued in conjunction with the Decision No.10/2007/QD-TTg dated 23/01/2007 of the Prime Minister.

h. Credit Institutions Department shall coordinate with the Banking Informatics Technology Department and related units to valuate the informatics software which has been completed by the Central Peoples Credit Fund and applied in the system of Peoples Credit Funds for giving assistance to the funds in well performing the reporting activity to the State Bank.

i. Banks and Non-banking Credit Institutions Department shall timely inform the Monetary Policy Department and Banking Informatics Technology Department of the list of the credit institutions which are newly issued, revoked the establishment and operation license, credit institutions which are subject to special control, or are dissolved, integrated, transform the type of credit institution for timely updating the list of credit institutions in the reporting information program.

k. The Banking Informatics Technology Department:

- Coordinating with the State Bank branches in provinces, cities, functional units of the State Bank to ensure that the receipt, settlement of information is performed thoroughly, solving technical queries of reporting units and receiving reports in accordance with the Decision No.477 and Decision No.1747.

- Coordinating with the Monetary Policy Department to timely update the list of credit institutions which are operating in Vietnam in the reporting information program.

3. Managers of State Bank Branches in provinces, cities under the Central Governments management:

a. Seriously performing their function of following up, speeding up units to send report in compliance with provisions in the Statistic Reporting Regime issued in conjunction with the Decision No.477 and Decision No.1747.

b. Taking initiative in inspecting, examining credit institutions in the local area about the performance of the provisions on reporting of the State Bank at the Decision No.477 and Decision No.1747, defining the basic reason of the case where credit institutions fail to well perform the Statistic Reporting Regime and reporting the State Bank for settlement coordination. Firstly, carrying out the inspection to the reporting implementation in March 2007 by credit institutions in the local area and consolidating for reporting the inspection result to send to the State Bank (Monetary Policy Department) in May 2007 for settlement coordination.

c. Examining the statistic reporting norms which are subject to the responsibility of the State Bank Branches in provinces, cities to report the units of the Head Office of the State Bank timely, sufficiently in terms of norms and accurately. Reconciling with relevant divisions to ensure the matching of the reported data before transmitting report to the Banking Informatics Technology Department.

d. Examining the statistic reporting program in accordance with the Decision No.477 and Decision No.1747 and timely informing the Banking Informatics Technology Department of technical queries for correction.

4. Rewarding and dealing with violation

- General Manager (Manager) of credit institutions shall build up a mechanism on the reward and dealing with violation of the unit for the Divisions, Departments and individuals that make good achievements or violate provisions in the Statistic Reporting Regime in order to encourage the statistic officers.

- The reward to individuals, units making achievement in the performance of the requirement of statistic reporting of the State Bank as stipulated in the Decision No. 477 and amended, supplemented in the Decision No.1747 shall be implemented in accordance with provisions in the Regulation on the emulation, reward in Banking branch issued in conjunction with the Decision No. 40/2006/QD-NHNN dated 17/8/2006 of the Governor of the State Bank.

- Units, individuals violating the performance of the statistic reporting requirement of the State Bank as stipulated in the Decision No. 477 and amended, supplemented in the Decision No.1747 shall be punished in accordance with provisions in the Decree No.202/2004/ND-CP dated 10/12/2004 of the Government on the punishment to the administrative violation in monetary area and banking activity.

5. Implementing organization

a. This Directive shall be effective after 15 days since its publication on the Official Gazette.

b. Director of Administrative Department, Director of the Monetary Policy Department, Heads of units of the State Bank, Managers of the State Bank Branches in provinces, cities under the Central Governments management, General Managers (Managers) of credit institutions shall be responsible for the implementation of this Directive.