THE STATE BANK OF VIETNAM

Circular No. 09/2014/TT-NHNN dated March 18, 2014 of the Vietnam State Bank amending, supplementing a number of Articles of the Circular No. 02/2013/TT-NHNN dated January 21, 2013 of the State Bank of Vietnam on classification of assets, levels and methods of setting up of risk provisions, and use of provisions against credit risk in the banking activity of credit institutions, foreign banks’ branches
Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;
Pursuant to the Law on credit institutions No. 47/2010/QH12 dated June 16, 2010;
Pursuant to the Decree No. 156/2013/ND-CP dated November 11, 2013 of the Government defining the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;
At the proposal of the Chief of Banking Inspection and Supervision,
The Governor of the State Bank promulgates this Circular amending, supplementing a number of Articles of the Circular No. 02/2013/TT-NHNN dated January 21, 2013 of the State Bank of Vietnam on classification of assets, levels and methods of setting up of risk provisions, and use of provisions against credit risk in the banking activity of credit institutions, foreign banks’ branches (the Circular No. 02).
Article 1. To amend, supplement a number of Article under the Circular No. 02 as follows:
1. To supplement Clause 4, Article 1 as follows:
“4. The setting aside and use of risk provisions for special bonds issued by the Viet Nam Asset Management Company of Vietnamese credit institutions to buy bad debts of credit institutions as prescribed under the Circular No. 19/2013/TT-NHNN dated September 06, 2013 of the State Bank Governor providing the purchase, sale and handling of non-performing loans by the Asset Management Company of Vietnamese credit institutions (Circular No. 19) and documents amending, supplementing, replacing the Circular No. 19 (if any)”.
2. To amend, supplement Point h, Clause 2, Article 6 as follows:
“h) Having regulation on the self-valuation of security assets, covering the principle, period, method, process of self-valuation and responsibility of each unit or individual involved in the valuation of security assets in accordance with the law to guarantee that the value of security assets is in accordance with the market value when setting aside specific provisions as stipulated under this Circular;”
3. To amend, supplement Clause 9 and Clause 10, Article 9 as follows:
“9. A credit institution or foreign bank’s branch shall classify a loan granted or credit facility provided under approval or direction of the Government or Prime Minister and set aside and use a provision for handling risks of such loan under a decision of the State Bank Governor on a case-by-case basis. 10. A credit institution or foreign bank branch shall immediately issue the decision to recover the violating balance of loans specified at Point c (iv), Clause 1, Article 10 of this Circular.
For loans that must be recovered according to the inspection and supervision results, credit institutions and foreign bank’s branch must issue the decision to recover the balance of loan according to the inspection conclusions.