On November 28th, 2018, at the headquarters of the State Bank of Vietnam (SBV), a Ceremony was held to hand the SBV Governor’s Decisions to the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and Vietnam International Joint Stock Commercial Bank (VIB), permitting the two banks to apply in advance the requirements for the minimum capital adequacy ratio in accordance with Circular No. 41/2016/TT-NHNN, before the effective date of this Circular.
Attending the ceremony were Governor Le Minh Hung, Deputy Governor Doan Thai Son, representatives from the SBV entities, Vietnam Banks’ Association, the Chairpersons and General Directors of both Vietcombank and VIB, representatives from several commercial banks selected for the pilot implementation of Basel II.
Governor Le Minh Hung speaks at the ceremony
In order to achieve the objectives in applying Basel II capital adequacy ratio requirements in the banking sector as stated in the Scheme of Restructuring the system of credit institutions for 2011-2015 period, the SBV, since 2013, has been drastically conducting various measures, such as promulgating specific plans and roadmaps for implementing Basel II in Vietnam; selecting 10 commercial banks for the pilot implementation of Basel II; implementing the gap analysis; establishing the Steering Committee for implementing Basel II capital adequacy ratio in the banking industry; issuing Circular No.41/2016/TT-NHNN stipulating the capital adequacy ratio for the commercial banks and the foreign bank branches in line with Basel II standards…Circular 41 will come into effect from January 1st, 2020, and allows any commercial banks and foreign bank branches with sufficient capabilities to apply the regulations of this Circular before its effective date.
As two out of ten selected banks for the pilot implementation of Basel II, Vietcombank and VIB have demonstrated their determination to apply the requirements of Basel Committee in risk management and banking governance through cooperating with consultancy companies to analyze the current situation, review the gaps in governance, databases,…, thereby formulating an overall roadmap for implementing Basel II and organizing the implementation of a series of projects to facilitate the application of Basel II, including: (i) the IT system, developing a software for risk assessment and management, and capital calculation; (ii) amending and supplementing policies and procedures for banking governance and risk management; (iii) collecting, managing and standardizing data; (iv) restructuring the asset portfolios and implementing measures of recapitalization; (v) other measures regarding the internal audit methods…
Deputy Governor Doan Thai Son hands Decision to representative of Vietcombank
On the basis of the consistent implementation of the above-mentioned measures, Vietcombank and VIB have submitted to the SBV their proposals requesting for the application of Circular 41 before its effective date. On November 23rd, 2018, the SBV Governor issued the Decisions officially permitting Vietcombank and VIB to apply Basel II capital adequacy ratio from January 1st, 2019, one year before the effective date of Circular 41.
Deputy Governor Doan Thai Son hands Decision to representative of VIB
Speaking at the ceremony, Governor Le Minh Hung congratulated and highly appreciated the efforts of the two banks as the first to apply Circular 41 before its effective date. This event marks the efforts of the banking sector over the past time and is an important milestone for the application of the international standards in Vietnam. He hoped that the two banks would continue to concentrate their resources on complying with the SBV’s regulations and enhancing the governance and management for effective operations. Moreover, he requested the other selected commercial banks to urgently complete the necessary dossiers and register with the SBV to apply Circular 41 before its effective date. The SBV would always support and accompany with the commercial banks in order to develop a prudent banking sector, in line with the international standards.
Le Hang