Amending requirements for risk management in banking activities in Vietnam

18:48, 07/01/2019

The State Bank of Vietnam issued Circular No. 40/2018/TT-NHNN amending and supplementing Circular No. 13/2018/TT-NHNN prescribing internal control systems of commercial banks and foreign bank branches.

According to Vietnam’s new regulations, risk management of commercial banks and foreign bank branches is carried out as follows:

- The commercial bank/foreign bank's branch must fulfill the following requirements while carrying out risk management:

+ Manage the material risks of the bank’s business activities;

+ Identify fully, measure accurately, monitor frequently in order to prevent in a timely manner and minimize material risk;

+ Control the risk position, ensuring compliance to the risk limits;

+ The risk-bearing decisions must be clear, transparent and complies with risk management policies and risk limits.

- If a commercial bank has subsidiaries, it may carry out control and oversight through the representative of contributed capital in order to ensure the subsidiaries’ risk management must conform to the commercial bank’s risk management policies, and the commercial bank maintains the prudential ratio of consolidated capital.

View more details at Circular No. 40/2018/TT-NHNN of the State Bank of Vietnam, effective from February 12, 2019.

- Thanh Lam -

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