In the afternoon of May 9, at the 23rd session of the National Assembly Standing Committee, Governor Nguyen Thi Hong of the State Bank of Vietnam provided a briefing on the draft Law on Credit Institutions (amended).
Governor Nguyen Thi Hong provides the Government's briefing on the draft Law on Credit Institutions (amended) – Photo: quochoi.vn
Delivering the Government's briefing on the draft Law on Credit Institutions (amended), Governor Nguyen Thi Hong mentioned that the formulation of the draft Law on Credit Institutions (amended) is in line with the policy of the Party and the resolutions of the National Assembly, is also aligned with the directions and guidance of the Government and the Prime Minister.
The formulation of the draft Law on Credit Institutions (amended) is aimed to improve the legal framework on the credit institutions, address the shortcomings and limitations of the current Law on Credit Institutions; codify the resolution of non-performing loans (NPLs) and the collaterals for NPLs; continue to create a legal corridor for the resolution of NPLs by the credit institutions after the termination of the effectiveness of Resolution No. 42 on December 31, 2023. The draft Law also amends and supplements regulations on risk prevention, further enhancing the self-inspection, the internal control and the self-accountability of the credit institutions; develop tools for the management of the credit institutions, with specially strict control over the management and administrative personnel of the credit institutions; detect at an early stage any violations and ensuring the liability of the management and administrative personnel at the credit institutions, etc.
The Draft Law is composed of 13 Chapters and 195 Articles, amending and supplementing a number of regulations on the governance and administration of the credit institutions, such as the amendments and supplementations of regulations on the related persons; the cases of related persons who are not allowed to hold senior positions at a credit institutions; reduce the maximum ownership ratios of a shareholder, a shareholder and their related persons at a credit institutions, etc.
The draft Law also amends and supplements regulations on the duties and powers of the owner and the Board of Members of a credit institution being a one-member limited liability company in order to be consistent with the laws on the management and the use of the state capital invested into enterprises. In addition, the draft Law also amends and supplements regulations on the banking services via electronic means, such as the supplementation of a regulation on the credit granting operations via electronic means; assigns the Government to provide specific regulations for the regulatory sandbox framework for fintech in the banking sector, etc.
In order to limit the risks from the credit concentration and the cross-ownership, according to Governor Nguyen Thi Hong, the draft Law also amends and supplements regulations on the limits of credit granting in the direction of reducing the ratios of credit limits applied to a customer, as customer and their related persons; amends and supplements regulations on the limits of capital contributions and share purchases at a credit institution, etc. The draft Law has also reviewed and amended a number of substances to ensure the clarity and consistency with the applicable Laws.
Based on the practical experience of a number of countries and in order to ensure that there is a timely response mechanism in case a credit institution is subject to mass withdrawals, threatening the safety of the banking sector, the draft Law has supplemented regulations on response measures in an event of mass withdrawals.
In addition, the draft Law has codified a number of measures mentioned in Resolution No. 42 on the pilot resolution of NPLs by the credit institutions regarding the definition of NPLs, the sale of NPLs and their collaterals; the trading of NPLs with collaterals being land use rights, land-based assets, and future land-based assets, etc.
At the session, the NA deputies agreed with the Government's briefing on the draft Law on Credit Institutions (amended) and the preliminary appraisal report of the NA’s Committee for Economic Affairs. Besides, the NA deputies also discussed and provided comments on the specific substances that need to be further studied and clarified before finalizing the draft Law.
Le Hang