| THE STATE BANK OF VIETNAM No. 36/2014/TT-NHNN | THE SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness Hanoi, November 20, 2014 |
CIRCULAR
Prescribing limits and prudential ratios in operations of credit institutions and foreign bank branches
Pursuant to June 16, 2010 Law No. 46/2010/QH12 on the State Bank of Vietnam;
Pursuant to June 16, 2010 Law No. 47/2010/QH12 on Credit Institutions;
Pursuant to the Government’s Decree No. 156/2013/ND-CP of November 11, 2013, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;
At the proposal of the Chief Inspector of the Banking Supervisory Agency;
The Governor of the State Bank of Vietnam promulgates the Circular prescribing limits and prudential ratios in operations of credit institutions and foreign bank branches.
Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation
1. This Circular prescribes limits and prudential ratios which credit institutions and foreign bank branches must constantly maintain in their operations, including:
a/ Capital adequacy ratio;
b/ Credit extension limits;
c/ Solvency ratio;
d/ Maximum ratio of short-term capital sources used to provide medium- and long-term loans;
dd/ Limits on capital contribution and share purchase;
e/ Loan-to-deposit ratio.
2. Based on results of supervision, inspection and examination by the State Bank of Vietnam (below referred to as the State Bank) of credit institutions and foreign bank branches, in case of necessity to secure prudence in operations of these credit institutions and foreign bank branches and depending on the nature and extent of risks, the State Bank may request credit institutions and foreign bank branches to maintain one or several limits lower than or one or several prudential ratios higher than those prescribed in this Circular.
3. In case of necessity, the State Bank Governor may decide on specific limits and prudential ratios for each credit institution or foreign bank branch that is implementing an approved restructuring plan.
Article 2. Subjects of application
1. Credit institutions, including:
a/ Banks: State-run commercial banks, cooperative banks, joint-stock commercial banks, joint-venture banks and wholly foreign-owned banks;
b/ Non-bank credit institutions: Finance companies and financial leasing companies.
2. Foreign bank branches.
Article 3. Interpretation of terms
In this Circular, the terms below are construed as follows:
1. Receivables include deposits at other credit institutions and foreign bank branches, deposits at foreign credit institutions; investments in valuable papers; loans; financial leases; factorings; discounts and re-discounts of negotiable instruments and valuable papers; credit facilities issued in the form of credit cards; amounts payable on others’ behalf according to off-balance sheet commitments.
2. Clients in the credit extension relationship with credit institutions and foreign bank branches (below referred to as clients) means institutions (including also credit institutions and foreign bank branches), individuals and other entities as defined by the civil law.
Client means an institution, an individual or another entity as defined by the civil law.
