- 1Decision No. 381/2003/QD-NHNN of April 23, 2003, amending and supplementing a number of articles and clauses of the regulation on rates of safety in credit institutions'' activities, issued together with Decision No. 297/1999/QD-NHNN5 of August 25, 1999 of the State Bank Governor
- 2Decision No.492/2000/QD-NHNN5 of November 28, 2000 issuing the regulation on capital contribution and share purchase by credit institutions
- 3Decision No. 297/1999/QD-NHNN5 of August 25th, 1999, on the promulgation of the regulation on prudential ratios in the activities of credit institutions.
- 4Decision No. 296/1999/QD-NHNN5 of August 25th, 1999, on the lending limit to a single customer of credit institutions
- 1Law No. 20/2004/QH11 of June 15, 2004 amending and supplementing a number of articles of The Law on credit institutions
- 2Law No. 10/2003/QH11 of June 17, 2003, amending and supplementing a number of articles of the Vietnam State Bank Law
- 3Decree No. 52/2003/ND-CP of May 19, 2003, prescribing the functions, tasks, powers and organizational structure of Vietnam State Bank
- 4Law No. 06/1997/QH10 of December 12, 1997 on The State Bank of Vietnam
- 1Decision No.03/2007/QD-NHNN of January 19, 2007 amending and supplementing a number of articles of the regulation on safety assurance ratios in activities of credit institutions promulgated together with the state bank governor''s Decision No. 457/2005/QD-NHNN of April 19, 2005
- 2Decision No. 03/2008/QD-NHNN of February 1, 2008, on the lending, discount of valuable papers for securities investment and trading.
- 3Decision No. 34/2008/QD-NHNN of December 5, 2008, on the amendment, supplement of several articles of the regulation on prudential ratios in the operation of credit institutions, issued in conjunction with the Decision No. 457/2005/QD-NHNN dated 19 April 2005 of the Governor of the State Bank
- 4Circular No. 15/2009/TT-NHNN of August 10, 2009, providing for maximum ratio of short-term capital source which is used for medium term and long term loan to credit institution
THE STATE BANK OF VIETNAM | SOCIALIST REPUBLIC OF VIETNAM |
No. 457/2005/QD-NHNN | Hanoi, April 19, 2005 |
ON THE ISSUANCE OF THE REGULATION ON PRUDENTIAL RATIOS IN THE ACTIVITIES OF CREDIT INSTITUTIONS
THE GOVERNOR OF THE STATE BANK
- Pursuant to the Law on the State Bank No. 01/1997/QH10 dated 12 December 1997, the Law on the amendment, supplement of several Articles of the Law on the State Bank No. 10/2003/QH11 dated 17 June 2003;
- Pursuant to the Law on the Credit Institutions No. 02/1997/QH10 dated 12 December 1997; the Law on the amendment, supplement of several Articles of the Law on the Credit Institutions No. 20/2004/QH11 dated 15 June 2004;
- Pursuant to the Decree No. 52/2003/ND-CP dated 19 May 2003 of the Government providing for functions, assignments, authorities and organizational structure of the State Bank of Vietnam;
- Upon the proposal of the Director of the Banks & Non-Bank Credit Institutions Department,
DECIDES:
Article 1. To issue in conjunction with this Decision "the Regulation on prudential ratios in the activities of credit institutions.
Article 2. This Decision shall be effective after 15 days since its publication in the Official Gazette. Following Decisions shall cease their effectiveness:
1. The Decision No. 296/1999/QD-NHNN dated 25 August 1999 of the Governor of the State Bank on lending limit to a single customer by a credit institution;
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3. The Decision No. 381/2003/QD-NHNN5 dated 23 April 2003 of the Governor of the State Bank on the amendment, supplement of several Articles, paragraphs of the Regulation on prudential ratios in the activities of credit institutions issued in conjunction with the Decision No. 297/1999/QD-NHNN5 dated 25 August 1999 of the Governor of the State Bank;
4. The Decision No. 492/2000/QD-NHNN5 dated 28 November 2000 of the Governor of the State Bank on the issuance of the Regulation on the capital contribution, share purchase by credit institutions.
Article 3. The Director of the Administration Department, the Director of the Banks and Non-Bank Credit Institutions Department, Heads of units of the State Bank, General Managers of State Bank branches in provinces and cities, Chairman of the Board of Directors, General Directors (Directors) of credit institutions shall be responsible for the implementation of this Decision.
THE GOVERNOR OF THE STATE BANK
Le Duc Thuy
ON PRUDENTIAL RATIOS IN THE ACTIVITIES OF CREDIT INSTITUTIONS
(issued in conjunction with the Decision No. 457/2005/QD-NHNN dated 19 April 2005 of the Governor of the State Bank)
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a. The minimum capital adequacy ratio;
b. The credit limit to customers
c. The liquidity ratio;
d. The maximum ratio of short-term funds used for granting medium-term and long-term loans;
dd. The limit on the capital contribution, share purchase;
2. The prudential ratios provided for in paragraph 1 of this Article do not include those of subsidiary credit institutions.
3. Based on inspection, examination result of the State Bank Inspectorate on the operational performance of credit institutions, the State Bank may request the credit institutions to maintain prudential ratios, which are more restrictive than levels stipulated in Article 4 and Article 8 of this Regulation.
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In this Regulation, following terms shall be construed as follows:
1. The total risk adjusted assets include the value of assets of credit institutions which are adjusted to the risk level provided for in Article 6 and off-balance sheet commitments which are adjusted to the risk level as provided for in Article 5 of this Regulation.
2. Claims are on-balance sheet assets, which are created from deposits, loans, advances, investments, discounts, rediscounts and financial leases.
3. Immovable assets of the borrowing party are houses of the borrowing party, or houses which are leased by the borrowing party and accepted by the lessee to be used as pledged assets during the lease time.
4. A single customer is a legal entity, an individual, a family household, a cooperative group, a private enterprise, a partnership company, or other organizations that have credit relationships with a credit institution.
5. A group of related customers includes 2 or several customers who have credit relationships with a credit institution, belonging to one of following cases:
5.1. Ownership relation:
5.1.1. An individual customer who owns at least 25% of charter capital of another customer, which is also a legal entity; or
5.1.2. A legal entity customer who owns at least 50% of charter capital of another customer, which is also a legal entity.
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5.2.1. For an individual customer:
a. Who is a member of a family household in accordance with provisions in the Civil Code, which is a customer of the credit institution; or
b. Who is a team member of a cooperative group in accordance with provisions in the Civil Code, which is a customer of the credit institution; or
c. Who is a partner of a partnership company, which is a customer of the credit institution; or
d. Who is an owner of a private enterprise, which is a customer of the credit institution; or
dd. Who is holding the post of an administrator, a manager, a controller in the organizational structure of another legal entity customer of the credit institution (such as Chairman of the Board of Directors or General Director (Director), Chief of Controllers Committee in respect of the State owned enterprises, joint stock companies; Chairman of Members Board, General Director (Director), Chief of Controllers Committee in respect of Limited Liability Companies with 2 members and more; Chairman of the Board of Directors or Companys President, General Director (Director) in respect of Limited Liability Companies with one member).
5.2.2. A legal entity customer whose representative is holding the post of an administrator, a manager, controller in the organizational structure of another legal entity customer of the credit institution (Chairman of the Board of Directors, Chairman of Members Board, General Director (Director), Chief of Controllers Committee).
5.3. Credit institutions shall be entitled to issue stipulations, which are more restrictive and specific than provisions in paragraph 5 of this Article to secure the prudence in banking activities.
6. Total outstanding loans (including payment made in lieu of customers) shall include outstanding balance of current debts, outstanding balance of overdue debts, outstanding balance of frozen debts and outstanding balance of debts pending settlement of credit institutions.
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8. Interest rate transaction contract shall include interest rate swap contract, interest rate forward contract and interest rate options contract.
9. Foreign currency transaction contract shall include foreign currency swap contract, foreign currency forward contract and foreign currency options contract.
10. Investment securities shall be the securities hold by the credit institutions for the profit purpose, not for resale on the market to enjoy price difference
11. Undistributed profits shall be the profits, which are determined through auditing by an independent auditing institution after the tax payment and setting up of funds have been completed in accordance with provisions of applicable laws and retained for the credit institutions capital supplement in accordance with provisions of applicable laws. Undistributed profits of joint stock credit institutions must be approved by Shareholders Meeting.
12. Goodwill shall be the positive difference between the amount used for acquiring a financial asset and the book value of that financial asset. This financial asset shall be fully reflected on the balance sheet of the credit institution.
13. OECD is the abbreviation for the Organization for Economic Cooperation Development
14. IBRD is the abbreviation for the International Bank for Reconstruction and Development
15. IADB is the abbreviation for the Inter-American Development Bank
16. ADB is the abbreviation for the Asian Development Bank
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18. EIB is the abbreviation for the European Investment Bank
19. EBRD is the abbreviation for the European Bank for Reconstruction and Development
1. The own capital of a credit institution includes:
1.1. Tier 1 capital:
a. The charter capital (appropriated capital, contributed capital)
b. The reserve fund for supplement of the charter capital
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d. The fund for the operation investment and development
dd. Undistributed profits
The Tier 1 capital shall be used as the basis for the determination of the limit on the purchase of, investment in fixed assets of a credit institution.
1.2. Tier 2 capital:
a. 50% of the increased value of fixed assets, which are revaluated under provisions of applicable laws;
b. 40% of the increased value of investment securities (including investment shares and contributed capital), which are revaluated in accordance with provisions of applicable laws;
c. Convertible bonds or preferred shares, which are issued by a credit institution and satisfy following conditions:
(i) Their initial term, remaining term prior to their conversion into common shares are 5 years at the minimum;
(ii) They are not secured by the assets of the credit institution;
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(iv). The credit institution is entitled to stop the interests payment and transfer the accumulated interests to the following year in the event where the interest payment will result in the loss in the current years business activity;
(v) In case of liquidation of the credit institution, the holder of convertible bonds is only entitled to receive the payment after the credit institution has completed payment to all other secured and unsecured creditors;
(vi) The increase of interest of the securities can only be made after 5 years from the issue date and for one time during the term prior to their conversion into common shares.
d. Other debt instruments, which satisfy following conditions:
(i) Debt instruments, where the creditors are subordinate to other creditors: in any case, the creditors are only be paid after the credit institution has completely made payment to all other secured and unsecured creditors;
(ii) Their initial term is more than 10 years at the minimum;
(iii) They are not secured by assets of the credit institution;
(iv) The credit institution is entitled to stop the interest payment and transfer the accumulated interests to the following year in the event where the interest payment will result in the loss in the current years business activity;
(v). The credit institution is only entitled to repay its debt to the creditors prior to the maturity after it has obtained the written approval from the State Bank;
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dd. General provisions, which are equal to 1.25% of the total risk based assets at the maximum.
2. Limitation on the determination of the own capital:
2.1. Limitation on the determination of tier 1 capital: The tier 1 capital must subtract the goodwill
2.2. Limitation on the determination of tier 2 capital:
a. Total value of items, which are stipulated in item c and d, paragraph 1, 2 of this Article shall be equal to 50% of the value of the tier1 capital at the maximum.
b. During the last 5 year period prior to the maturity date, the date of the conversion of debt instruments into common shares, the value of the convertible bonds in the tier 2 capital shall be deducted by 20% each year from the initial value.
c. The total value of the tier 2 capital shall be 100% value of the tier 1 capital at the maximum.
3. Amounts to be deducted from the own capital:
3.1. The total reduced value of the fixed assets due to the revaluation in accordance with provisions of applicable laws.
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3.3. The total capitals invested by the credit institution in other credit institution in forms of capital contribution, share purchase.
3.4. The amount of the capital contribution, the value of the joint-ventured capital, share purchase in investment funds, other enterprises which exceeds 15% of the own capital of a credit institution.
3.5. The business losses, including accumulated losses.
Section II. Minimum capital adequacy ratio
2. The State owned commercial banks whose minimum capital adequacy ratio as of the effective time of this Regulation is less than the level provided for in paragraph 1 of this Article, shall have to increase their minimum capital adequacy ratio to the stipulated level within a period of 3 years at the maximum. The annual increase shall be at least one third (1/3) of the discrepancy.
3. The determination of the minimum capital adequacy ratio is stated in Appendix A of this Regulation.
Article 5. The risk adjusted assets of the off-balance sheet commitments:
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1.1. Conversion factors:
1.1.1. Conversion factor of 100%: Commitments, which are irrevocable but have the same risk level as a direct credit extension, include
a. Loan guarantee;
b. Payment guarantee.
c. Confirmation of letter of credit; standby letter of credit which provides a financial guarantee for loans, securities issuance; Acceptances, including acceptance in form of endorsement, except for bill of exchange acceptance as stipulated in point 1.1.3.b, paragraph 1 of this Article.
1.1.2. Conversion factor of 50%: Commitments, which are irrevocable in respect of the responsibility by the credit institution for the payment in lieu of others, include:
a. Contract performance bonds;
b. Bid bonds;
c. Other forms of guarantee
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dd. Other commitments with the initial term from one year and more.
1.1.3. Conversion factor of 20%: trade related commitments, including:
a. Irrevocable L/c
b. Acceptance of short term commercial bill of exchange secured by goods
c. Delivery guarantee
d. Other trade related commitments.
1.1.4. Conversion factor of 0%:
a. Revocable L/c
b. Other commitments, which are unconditionally revocable with the initial term of less than one year.
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The risk factors of the value of off-balance sheet commitments after converting under the provisions in paragraph 1.1.1, 1.1.2 and 1.1.3 of this Article shall be as follows:
1.2.1. Where the commitments are fully secured by the Government, the State Bank of Vietnam or secured fully by cash deposits, savings books, deposits, valuable papers which are issued by the Government, the State Bank of Vietnam: the risk factor shall be 0%.
1.2.2. Where the commitments are secured by immovable assets of the borrowing party: the risk factor shall be 50%
1.2.3. For other cases: the risk factor shall be 100%.
2. Interest rate transaction contracts and foreign currency transaction contracts:
2.1. Conversion factors:
2.1.1. In respect of interest rate transaction contracts:
a. With the initial term of less than 1 year: 0.5%
b. With the initial term from 1 to 2 years: 1.0%
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2.1.2. In respect of foreign currency contracts:
a. With the initial term of less than 1 year: 2.0%
b. With the initial term from 1 to 2 years: 5.0%
c. With the initial term of 2 years and more: 5.0% for the term of less than 2 years plus (+) 3.0% for each following year.
2.2. Risk factors: the risk factor for the value of interest rate transaction contracts and foreign currency transaction contracts after conversion as stated in paragraph 2.1 of this Article shall be 100%.
Current assets shall be classified under the risk weights as follows:
1. The group of assets, which have the risk level of 0%, includes:
a. Cash;
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c. Vietnam dong deposits of the State owned credit institutions which are maintained at the Bank for Social Policy in accordance with the Decree No. 78/2002/ND-CP dated 4 October 2002 of the Government on credits to the poor and other underprivileged persons.
d. Loans from funds financed, entrusted for investment in accordance with trust contracts according to which the credit institution only enjoys trust fees and not subject to any risk.
dd. Claims in Vietnam Dong on Vietnam Government, the State Bank of Vietnam
e. Discount, rediscount of valuable papers issued by the credit institution;
g. Claims in Vietnam Dong which are secured by valuable papers issued by the credit institution; Claims fully secured by cash deposits, savings books, deposits, valuable papers issued by the Government, the State Bank of Vietnam;
h. Claims on the central Governments, Central Banks of OECD countries;
i. Claims, which are secured by the securities of the central governments of OECD countries or secured by the central Governments of OECD countries.
2. The group of assets, which have risk level of 20%, includes:
a. Claims on other domestic and overseas credit institutions, in each kind of currency
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c. Claims, which are secured by valuable papers issued by other credit institutions, which are set up in Vietnam
d. Claims on State owned financial organizations; Claims, which are secured by valuable papers issued by the State owned financial organizations.
dd. Precious metal (except for gold), precious stone
e. Cash, which are in collection process.
g. Claims on IBRD, IADB, ADB, AFDB, EIB, EBRD and those secured by these banks or secured by the securities issued by these banks.
h. Claims on the banks, which are set up in countries of OECD and those secured by these banks.
i. Claims on securities companies, which are set up in the OECD countries, which comply with agreements on capital management and supervision on the risk basis and claims which are secured by these companies.
k. Claims on the banks, which are set up outside the OECD countries, with the remaining term of less than 1 year and claims with the remaining term of less than 1 year, which are guaranteed by these banks.
3. The group of assets which have the risk level of 50%, includes
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b. Claims secured by immovable assets of the borrowing party
4. The group of assets which have the risk level of 100%, includes:
a. Amounts of the charter capital, which is appropriated to subsidiary companies which are not a credit institution, have a legal status and perform the independent accounting;
b. Investments made in forms of capital contribution to, share purchase in other enterprises, economic organizations.
c. Claims on banks set up in non-OECD countries with the remaining term of 1 year and more.
d. Claims on the central Government of non-OECD countries, except for the case where the loans are made in local currency and the lending sources are in local currency of those respective countries.
dd. Immovable assets, machines, equipment and other fixed assets.
e. Other claims other than those stipulated in paragraph 1, 2 and 3 of this Article.
Section III. CREDIT LIMIT FOR CUSTOMERS
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a. The criteria to determine a single customer and a group of related customers;
b. The credit limits applicable to a single customer and a group of related customers;
c. The limits, the maximum ratio of lending, guarantee to an economic industry or an economic area to the total outstanding credit;
d. The strategy for the Assets diversification, the policy and the methodology to monitor loans, guarantees which exceed 5% of the own capital of the credit institutions.
dd. A loan and the sum of loans with value in excess of 10% of the own capital of the credit institutions must be approved by the Board of Directors or the Chairman of the Board of Directors or by the person authorized by the Board of Directors, the Chairman of the Board of Directors.
e. Where related customers have dependent economic relations, the credit institutions should assess carefully, strictly to make accurate decisions and secure the prudence in banking activity.
2. The Board of Directors of a credit institution shall, at least every 6 month or in a special, necessary case, review the situation and the implementation of this policy by their credit institution.
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1.1. The total outstanding loans of a credit institution to a single customer must not exceed 15% of the own capital of the credit institution.
The total lending and guarantee level of a credit institution to a single customer must not exceed 25% of the own capital of the credit institution.
1.2. The total outstanding loans of a credit institution to a group of related customers must not exceed 50% of the credit institutions own capital, of which the lending limit to a single customer must not be in excess of the ratio stipulated in paragraph 1.1 of this Article.
The total lending and guarantee level of a credit institution to a group of related customers must not exceed 60% of the credit institutions own capital.
1.3. The total outstanding loans of a foreign bank branch to a single customer shall not be in excess of 15% of the own capital of the foreign bank at the maximum
The total lending and guarantee level of a foreign bank branch to a single customer must not be in excess of 25% of the own capital of the foreign bank.
The total outstanding loans of a foreign bank branch to a group of related customers shall not be in excess of 50% of the own capital of the foreign bank at the maximum, of which the lending limit to a single customer shall not be in excess of 15% of the own capital of the foreign bank.
The total lending and guarantee level of a foreign bank branch to a group of related customers shall not be in excess of 60% of the own capital of the foreign bank at the maximum.
2. Financial leasing limit:
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2.2. The total financial leasing level to a group of related customers must not be in excess of 80% of the own capital of the financial leasing company, of which the financial leasing level to a single customer must not be in excess of the ratio stipulated in paragraph 2.1 of this Article.
Limits stipulated in Article 8 of this Regulation shall not be applicable to following cases:
1. Loans, financial leases from entrusted funds of the Government, other credit institutions.
2. Loans to the Government of Vietnam
3. Loans to other credit institutions, which are operating in Vietnam, with the term of less than 1 year.
4. Loans secured by Government Bonds or Bonds issued by the Government of the OECD countries;
5. Loans fully secured by deposits, including also savings deposits, amounts deposited at the credit institutions
6. Loans fully secured by debt securities, which are issued by the credit institutions
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Section IV. THE LIQUIDITY RATIO
1. To set up an unit (from the division level or similar level upward) in charge of the strategic liquidity management and policy, which is controlled daily by an division Head or equivalent officer and put under the direct management of a member of the Management Board.
2. To make anticipations and plans (including contingency plan) to secure the payment capacity, liquidity in case of temporary shortage of the payment capacity as well as in case of liquidity crisis.
3. To set up an early warning system of the temporary shortage of the payment capacity and optimal solutions.
4. Policies on the treasury management, the management of daily receipt, payment and source of funds and policies on the holding of the highly liquid valuable papers.
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1. The minimum ratio of the value of current assets to the current liabilities, which become due within one month to come, is 25%
2. The minimum ratio of the total current assets, which can be payable within the next 7 working days to the total current liabilities, which must be payable within the next 7 working days is 1.
1. Current Assets shall include:
a. Cash;
b. Gold
c. Deposits at the State Bank
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dd. Time deposits at other credit institutions which have become due
e. Securities issued or guaranteed by the Government of Vietnam:
(i) With the remaining term of 1 year and less: 100% of the book value
(ii) With the remaining term of more than 1 year: 95% of the book value
g. Securities issued or guaranteed by credit institutions which are operating in Vietnam:
(i) With the remaining term of 1 month and less: 100% of the book value
(ii) With the remaining term of more than 1 month to 1 year: 95% of the book value
(iii) With the remaining term of more than 1 year: 90% of the book value
h. Securities issued by the government of OECD countries
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(ii) With the remaining term of more than 1 year: 95% of the book value
i. Securities issued by banks of OECD countries:
(i) With the remaining term of 1 month and less: 100% of the book value
(ii) With the remaining term of more than 1 month to 1 year: 95% of the book value
(iii) With the remaining term of more than 1 year: 90% of the book value
k. Drafts of export documents, which have been accepted for payment by foreign banks with the remaining term from 1 month and less: 100% of the amount stated in the draft.
l. 80% of secured loans, financial leases which become due (principal, interest) within a period of 1 month.
m. 75% of unsecured loans which become due.
n. Other kinds of securities:
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(ii) With the remaining term of more than 1 month to 1 year: 90%
(iii) With the remaining term of more than 1 year: 85%
o. Other due receivables
2. Current Liabilities shall include:
a. The positive difference between deposits of other credit institutions and deposits at those credit institutions, which have become due;
b. 15% of demand deposits of organizations (excluding deposits of other credit institutions), individuals;
c. Value of lending commitments made by the credit institution, which have become due;
d. All other liabilities, which will become due.
3. The credit institutions shall base on provisions in Paragraph 1 and 2 of this Article to comply with the liquidity ratios for each kind of currency as provided for in Article 12 and analyze current assets and liabilities at particular periods stipulated in Article 14 of this Regulation.
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a. In the following day
b. From 2 to 7 days
c. From 8 days to 1 month
d. From 1 to 3 months
dd. From 3 to 6 months
2. The analyzing table of current Assets and current Liabilities for each kind of currency by periods stipulated in paragraph 1 of this Article shall be provided for in Appendix B of this Regulation
Section V. THE MAXIMUM RATIO OF SHORT TERM FUNDS USED FOR MEDIUM, LONG TERM LENDING
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a. Commercial banks: 40%
b. Other credit institutions: 30%
2. Short term funds, which a credit institution uses for medium, long term lending, shall include:
a. Demand deposits, deposits with term of less than 12 months of organizations (including those of other credit institutions) and individuals;
b. Non-time savings deposits, savings deposits with term of less than 12 months of individuals;
c. Funds mobilized by issuing of short term valuable paper.
d. The bigger difference between amount borrowed from other credit institutions and loans to those credit institutions with the term of less than 12 months
3. In case where credit institutions use the short term funds to extend medium, long-term loans in accordance with the designation of the Government, the lending shall be performed under applicable provisions of the State bank.
4. Credit institutions which use short-term funds for extending medium and long-term loans at a ratio higher than the ratio provided for in paragraph 1 of this Article must submit a written request to the State Bank for acceptance, which should clearly state the reasons, the maximum ratio and management measures to satisfy the requirement for the payment capacity. The State Bank may only consider and approve the above -mentioned request from credit institutions, which comply with other prudential ratios in the banking activity, have a bad debt ratio (NPL) lower than 3% of the total outstanding loans, and possess a well functioning Asset/Liabilities management system.
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2. The decision on the commercial investment of the credit institutions must be carefully appraised, assessed by the Management Board and approved by the Board of Directors of the credit institutions.
2. The total commercial investments of a credit institution shall not be in excess of 40% of its charter capital and reserve Fund.
3. Any credit institution which wishes to make a commercial investment in excess of the ratio stipulated in paragraph 1 of this Article must be approved in advance in writing by the State Bank, provided that that investment is reasonable and the credit institution has complied with prudential ratios in the banking activity, has the bad debt ratio (NPL) from 3% of total outstanding loans and less.
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A. The own capital for the determination of the minimum capital adequacy ratio of the commercial bank A:
1. Tier 1 capital
Unit: Billion dong
Item
Amount
a. Charter capital (appropriated capital, contributed capital)
200
b. Reserve fund for the supplement of the charter capital
30
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30
d. Fund for operational investment and development
20
e. Undistributed profits
10
Total
290
- Limit on the determination of the tier 1 capital:
The commercial bank A purchases a financial asset from enterprise B with the amount of VND100 billion
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The tier 1 capital of the commercial bank A shall be VND 290 billion VND 50 billion = VND 240 billion .
2. The tier 2 capital
Unit: billion dong
Item
increased amount
Calculation ratio
Amount to be included into the tier 2 capital
a. The increased value of revaluated fixed assets under provisions of applicable laws
50
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25
b. The increased value of investment securities (including investment share, contributed capital), which are revaluated under provisions of applicable laws
25
40%
10
c. Convertible bonds or preferred shares which are issued by the CI with the remaining term of 6 years
15
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15
dd. General provisions
10
Total
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75
The own capital of the commercial bank A = Tier 1 capital + tier 2 capital
= VND 240 billion + VND 75 billion = VND 315 billion
3. Amounts required to deduct from the own capital:
- The commercial bank A buys shares from 4 other CIs with the total amount of VND 40 billion
- The commercial bank A makes a capital contribution to a joint venture with other enterprises with the total amount of VND 60 billion, equal to 19.04% of the commercial bank As own capital. The level of 15% of the bank As own capital is equivalent to VND 47.25 billion (VND 315 billion x 15%). The excess amount of joint venture capital contribution to other enterprises beyond 15% of the bank As own capital is VND12.75 billion (VND 60 billion VND 47.25 billion)
The own capital for the calculation of the minimum capital adequacy ratio (A) = the own capital - amounts required to deduct from the own capital
A = VND 315 billion VND 40 billion VND 12.75 billion = VND 262.25 billion
B. Value of risk - adjusted Assets on the balance sheet (B)
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Item
Book value
Risk factor
Value of risk adjusted assets
1. Group of assets with the risk level of 0%
a. Cash
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0%
0
b. Gold
45
0%
0
c. Deposits at Bank for Social Policy under the Decree No. 78/2002/ND-CP dated 4 October 2002 of the Government
25
0%
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d. Investment in SBVs Bills
20
0%
0
dd. Loans from funds financed, entrusted for investment of the Government, according to which the CI only enjoys trust fees and not subject to any risk
25
0%
0
e. Loans in VND, secured by the bills of the CIs, to the State owned enterprise B
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0%
0
g. Loans secured by valuable papers issued by the Government of Vietnam, State Treasury
25
0%
0
2. Group of assets, which have the risk level of 20%
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a. Loans in VND to other domestic CIs
400
20%
80
b. Loans to provincial peoples committee
300
20%
60
c. Loans in Foreign currency to the Government of Vietnam
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20%
40
d. Claims, which are secured by the valuable papers issued by other CIs, which are set up in Vietnam
100
20%
20
dd. Claims on the State financial organizations
60
20%
...
...
...
e. Precious metal (except for gold), precious stone
100
20%
20
g. Cash which is in collection process
50
20%
10
3. Group of assets which have the risk level of 50%
...
...
...
a. Investments in projects under contract, in accordance with provisions in the Decree No. 79/2002/ND-CP dated 25 October 20002 of the Government on organization and operation of Finance Companies
100
50%
50
b. Loans secured by immovable assets of the borrowing party
800
50%
...
...
...
4. Group of assets which have risk level of 100%
a. Total charter capital appropriated to subsidiary companies which have legal status and perform independent accounting
300
100%
300
b. Investments in forms of capital contribution to, share purchase from other enterprises, economic organizations
...
...
...
100%
100
c. Machine, equipment
100
100%
100
d. Immovable assets and other fixed assets
200
100%
...
...
...
dd. Other current Assets
400
100%
400
Total (B)
1,792
C. Value of risk adjusted off-balance sheet commitments
...
...
...
Unit: billion dong
Item
Book value
Conversion factor
Risk factor
Value of respective risk Adjusted assets on balance sheet
a. Guarantee to company B for funds borrowing under the designation of the Government
100
100%
...
...
...
0
b. Guarantee to the company B for payment of export amounts
200
100%
100%
200
c. Issuance of standby L/C which provides guarantee to the company A for funds borrowing
150
100%
...
...
...
150
d. Guarantee to the Company B for its contract performance under the designation of the Government
100
50%
0%
0
dd. Bid guarantee to the Company B
100
50%
...
...
...
50
e. Commitments, which are irrevocable in respect of the responsibility by the credit institution for the payment in lieu of others, with the initial term of one year and more
80
50%
10%
40
g. Issuance of irrevocable L/c to the Company B for importing goods
100
20%
...
...
...
20
h. Acceptance of short term commercial bill of exchange secured by goods
80
20%
100%
16
i. Delivery guarantee
50
20%
...
...
...
10
k. Other trade related commitments
50
20%
100%
10
l. At sight L/c which is revocable
30
0%
...
...
...
0
m. Other commitments, which are unconditionally revocable with the initial term of 9 months.
20
0%
100%
0
Total (C1)
...
...
...
496
2. Interest rate transaction contract, foreign currency transaction contract (C2):
Unit: billion dong
Item
Book value
Conversion factor
Value of respective current Assets on balance sheet
Risk factor
Value of respective risk adjusted Assets on balance sheet
...
...
...
800
0.5%
4
100%
4
2. Interest rate swap contract with the initial term of 18 months
600
1%
6
...
...
...
6
3. Interest rate swap contract with the company D, with the initial term of 2 years
500
1%
5
100%
5
4. Foreign currency swap contract with the company Y, with the initial term of 9 months
200
...
...
...
4
100%
4
5. Foreign currency swap contract with the company Y, with the initial term of 18 months
400
5%
20
100%
20
...
...
...
300
8%
24
100%
24
Total (C2)
...
...
...
63
C = C1 + C2 = 496 + 63 = D. 559 billion
D. The minimum capital adequacy ratio
D =
A
x 100% =
262.25
x 100%
B + C
...
...
...
D =
262.25
x 100% = 11.15%
2,351
THE ANALYZING TABLE OF CURRENT ASSETS AND CURRENT LIABILITIES
Unit of currency
...
...
...
Time to maturity
Total
The following day
From 2 to 7 days
From 8 days to 1 month
From more than 1 month to 3 months
From more than 3 months to 6 months
I. Current Liabilities
...
...
...
1. Deposits of State Treasury
...
...
...
2. Deposits of other domestic and oversea CIs
2. Borrowing from the State Bank
...
...
...
2. Borrowing from other domestic and overseas CIs
...
...
...
4. Receipt of funds from co-financing lending
...
...
...
6. Funds financed, entrusted for investment
...
...
...
6. Funds mobilized in forms of issuance of valuable papers
...
...
...
7. Financing commitments
8. Other current liabilities
...
...
...
II. Current assets
...
...
...
1. Cash
2. Deposits at the State Bank
...
...
...
3. Deposits at other domestic and overseas CIs
...
...
...
4. Lending to other domestic and overseas CIs
...
...
...
6. Investments in securities
...
...
...
6. Capital contribution, joint venture participation, share purchase
...
...
...
7. Financing commitments to be received
8. Other assets
...
...
...
- 1Decision No. 03/2008/QD-NHNN of February 1, 2008, on the lending, discount of valuable papers for securities investment and trading.
- 2Decision No. 34/2008/QD-NHNN of December 5, 2008, on the amendment, supplement of several articles of the regulation on prudential ratios in the operation of credit institutions, issued in conjunction with the Decision No. 457/2005/QD-NHNN dated 19 April 2005 of the Governor of the State Bank
- 3Circular No. 15/2009/TT-NHNN of August 10, 2009, providing for maximum ratio of short-term capital source which is used for medium term and long term loan to credit institution
- 4Circular No. 13/2010/TT-NHNN of May 20, 2010, stipulating prudential ratios in operations of credit institutions
- 5Circular No. 13/2010/TT-NHNN of May 20, 2010, stipulating prudential ratios in operations of credit institutions
- 1Circular No. 36/2014/TT-NHNN dated November 20, 2014, stipulating minimum safety limits and ratios for transactions performed by credit institutions and branches of foreign banks
- 2Decree No. 78/2002/ND-CP of October 04, 2002, on credit for poor people and other policy beneficiaries
- 3Decree No. 79/2002/ND-CP of October 04, 2002, on organization and operation of financial companies
- 4Law No. 06/1997/QH10 of December 12, 1997 on The State Bank of Vietnam
- 5Law No. 07/1997/QH10 of December 12, 1997 on credit institutions
Decision No. 457/2005/QD-NHNN of April 19, 2005, on the issuance of the regulation on prudential ratios in the activities of credit institutions
- Số hiệu: 457/2005/QD-NHNN
- Loại văn bản: Quyết định
- Ngày ban hành: 19/04/2005
- Nơi ban hành: Ngân hàng Nhà nước
- Người ký: Lê Đức Thuý
- Ngày công báo: Đang cập nhật
- Số công báo: Đang cập nhật
- Ngày hiệu lực: 15/05/2005
- Ngày hết hiệu lực: 01/10/2010
- Tình trạng hiệu lực: Hết hiệu lực