DECISION

ON THE ISSUANCE OF THE REGULATION ON OFF-SITE SUPERVISION OF CREDIT INSTITUTIONS OPERATING IN VIETNAM

THE GOVERNOR OF THE STATE BANK

- Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated 12 December, 1997 and the Law on Credit Institutions dated 12 December 1997;
- Pursuant to the Decree No. 15 CP dated 02 March, 1993 of the Government on the assignment, authority and responsibility for the State management of the ministries and ministry-level agencies;
- Pursuant to the Decree No. 91/1999/ND-CP of Government on the organisation and operation of the State Bank Inspectorate;
- Upon the proposal of the Chief of the State Bank Inspectorate.

DECIDES

Article 1. To issue in conjunction with this Decision The Regulation on off-site supervision of Credit Institutions operating in Vietnam.

Article 2. This Decision shall replace the Decision No. 137/QD-NH3 of the Governor of the State Bank on the issuance of the Regulation on off-site supervision of the Banks and Credit Institutions operating in Vietnam and shall be effective after 15 days from the date of signing.

Article 3. The Director of the Administration Department, the Chief of the State Bank Inspectorate, Heads of the State Banks unit, General Managers of the State Bank branches in provinces and cities, Chairman of the Board of Directors and General Directors (Directors) of credit institutions shall be responsible for the implementation of this Decision.

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REGULATION

ON OFF-SITE SUPERVISION OF CREDIT INSTITUTIONS OPERATING IN VIETNAM
(issued in conjunction with the Decision No. 398/1999/QD-NHNN3 of the Governor of the State Bank dated 9 November, 1999)

I. GENERAL PROVISIONS

Article 1. Off-site supervision shall be the indirect examination through the compilation and analysis of reports in order to make assessment on the following aspects of Credit Institutions (abbreviated as CIs)

a. Developments of the Asset and Liability structure;

b. Quality of the Asset:

c. Own capital;

d. Income, Expenditure and business performance;

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f. Other related issues

Article 2. The subjects of off-site supervision shall be the following CIs:

a. State-owned Credit Institutions;

b. Joint-stock Credit Institutions of the State and People:

c. Joint-venture Credit Institutions;

d. Non-bank 100% foreign-owned Credit Institutions;

e. Foreign bank branches:

f. Cooperative Credit Institutions.

II. DETAILED PROVISIONS

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The methodology of off-site supervision of the activities of Credit Institutions: On the basis of the statement of accounts, the statistical reports of off-balance sheet items and other reports submitted by the Credit Institutions in accordance with the statistical reporting regime for Credit Institutions, the State Bank Inspectorate shall review the data, compile and analyze performance of each credit institution and that of the whole banking system under the aspects mentioned in Article 1 of this Regulation.

Article 4.

The State Bank Inspeotorate shall every month, inform the Credit Institutions or branches of Credit Institutions of the results of the off-site supervision, together with comments and recommendations on the issues to be corrected. Upon detecting any violation of applicable laws, the State Bank Inspectorate shall, depending on the seriousness of the violation, send inspectors to the Credit Institutions for on-site inspection and apply corrective measures and impose administrative sanctions (if any).

The results of off-site supervision shall be the basis for the classification of Credit Institutions.

Article 5. The responsibilities for off-site supervision of Credit Institutions operating in Vietnam in the State Bank systems shall be divided as follows:

1. The State Bank Inspectorate shall perform the off-site supervision for:

a. State-owned Credit Institutions:

b. Foreign bank branches:

c. Joint-venture Credit Institutions;

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e. The Central Peoples Credit Fund.

2. State Bank branches in the provinces and cities shall perform the off-site supervision for:

a. Joint-stock Credit Institutions of the State and People;

b. Branches of Credit Institutions:

c. Branches of non-bank 100% foreign owned Credit Institutions:

d. Regional Peoples Credit Funds;

e. Local Peoples Credit Funds.

Article 6.

Units of the State Bank which are responsible for the off-site supervision mentioned in Article 5 shall have to organize the receipt of statistical and accounting reports from the Credit Institutions, to perform regular off-site supervision and timely detection of violations. request for immediate correction and measures to be taken by Credit Institutions to seriously deal with the violation in accordance with applicable laws.

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Article 7. The Chairman of the Board of Director, General Directors (Directors) of Credit Institutions shall be responsible:

1. To guide the strict compliance with the due and sufficient submission of banking statistical and accounting reports in accordance with the regime on statistical reporting by Credit Institutions.

2. To guide the dependent units to correct violations detected through the off-site supervision as concluded and recommended in the information on periodical off-site supervision. The Credit Institutions shall have to report to the State Bank Inspectorate or the State Bank Branches in provinces or cities (depending on the responsibility division as provided for in Article 5 of this Regulation) the correction results and the violation treatment 30 days since the date of receiving the information at the latest.

Article 8. Credit Institutions violating Article 7 of this regulation shall, depending on the seriousness of the violation, be subject to administrative sanction in accordance with applicable laws.

Article 9. The Chief Inspector shall guide the implementation of this Regulation.

Article 10. The amendment, supplement to this Regulation shall be decided upon by the Governor.