LEGAL DOCUMENTS ARE ISSUED IN 11/2023
1. Circular No. 20/VBHN-NHNN regulations on licensing and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations with banking activities in Vietnam
- Name of legal document: Circular No. 20/VBHN-NHNN issued on 10/11/2023 by the State Bank of Vietnam regulations on licensing and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations with banking activities in Vietnam.
- Consolidation date: 10/11/2023.
The content should be noted: Consolidating the following circulars: Circular No. 40/2011/TT-NHNN dated December 15, 2011 of the Governor of the State Bank of Vietnam, Circular No. 17/2017/TT-NHNN dated November 20, 2017 of the Governor of the State Bank of Vietnam, Circular No. 17/2018/TT-NHNN dated August 14, 2018 of the Governor of the State Bank of Vietnam, Circular No. 28/2018/TT-NHNN dated November 30 2018 of the Governor of the State Bank of Vietnam, Circular No. 25/2019/TT-NHNN dated December 2, 2019 of the Governor of the State Bank of Vietnam, Circular No. 28/2021/TT-NHNN dated December 31 December 2021 of the Governor of the State Bank of Vietnam, and Circular No. 13/2023/TT-NHNN dated October 31, 2023 of the Governor of the State Bank of Vietnam.
2. Circular No. 21/VBHN-NHNN prescribing application and procedures for approval of changes of commercial banks and foreign bank branches
- Name of legal document: Circular No. 21/VBHN-NHNN issued on 10/11/2023 by the State Bank of Vietnam prescribing application and procedures for approval of changes of commercial banks and foreign bank branches.
- Consolidation date: 10/11/2023.
The content should be noted: Consolidating the following circulars: The Circular No. 50/2018/TT-NHNN dated December 31, 2018 of the Governor of the State Bank of Vietnam (SBV), The Circular No. 06/2022/TT-NHNN dated June 30, 2022 of the SBV’s Governor and The Circular No. 13/2023/TT-NHNN dated October 31, 2023 of the SBV’s Governor.
3. Circular No. 14/2023/TT-NHNN internal control system of non-bank credit institution
- Name of legal document: Circular 14/2023/TT-NHNN issued on 20/11/2023 by the State Bank of Vietnam internal control system of non-bank credit institution (referred to as the “Circular No. 14/2023/TT-NHNN”).
- Effective date: 01/10/2024.
The content should be noted: Stipulating on requirements for internal control system.
Specifically, Article 4 of Circular No. 14/2023/TT-NHNN stipulates: “Article 4. Requirements for internal control system
1. The internal control system of a non-bank credit institution shall fulfill the following requirements:
a) Meeting requirements according to regulations of the Law on Credit Institutions;
b) Being appropriate for the scale, conditions and complexity of the non-bank credit institution’s business activities;
c) Having sufficient financial, human and IT resources in order to ensure the internal control system’s effectiveness;
d) Creating and maintaining control culture and work ethics for the non-bank credit institution.
2. The non-bank credit institution shall have internal regulations in compliance with regulations of the Law on Credit Institutions, in which the following requirements shall be met:
a) Being consistent with regulations in this Circular and relevant laws;
b) The Board of Directors or the Council of Members promulgates regulations on the non-bank credit institution ‘s organization, management and activities, except for matters under the competence of the Shareholders’ Council and owner; the Board of Controllers promulgates its own internal regulations; the Director General (Director) promulgates work regulations, processes and procedures (hereinafter referred to as “internal process”);
c) Being subject to regular assessments specified in this Circular and the non-bank credit institution’s regulations on appropriateness of and compliance with the law, and making amendments if necessary.
3. The internal control system shall have three lines of defense as follows:
a) The first line of defense has functions of risk identification, control and minimization carried out by the following departments: business departments (including product development department), other revenue-generating departments; departments responsible for making risk-bearing decisions; departments responsible for risk limit allocation, risk management and risk minimization (affiliated to a business department or an independent department) in each type of transactions and business activities; human resource department, accounting department;
b) The second line of defense has functions of formulation of risk management policies and issuance of internal regulations on risk management and monitoring in accordance with regulations of law, carried out by the following departments: Departments conforming to the regulations in Article 16 of this Circular and risk management department specified in Article 18 of this Circular;
c) The third line of defense has the function of internal audit carried out by the internal audit department specified in the Law on Credit Institutions and this Circular.
4. Discussions and conclusions on the internal control system in meetings held by the Board of Directors, Council of Members, Board of Controllers, Risk Management Committee, and Human Resource Committee shall be recorded in writing, in which agreements and disagreements of members shall be specified.
5. Independent assessment of the internal control system shall be carried out in accordance with the State Bank’s regulations on independent audit in non-bank credit institutions and foreign bank branches.”
