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STATE
BANK OF VIETNAM
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No.
48/1999/QD-NHNN5
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Hanoi,
February 08, 1999
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DECISION
REFERRING TO THE ISSUANCE OF REGULATIONS ON CLASSIFYING
ASSETS, ESTABLISHING AND USING RESERVED FUNDS FOR COVERING LOSSES SUFFERED BY
CREDIT INSTITUTIONS
STATE BANK OF VIETNAM GOVERNOR
Pursuant to State Bank Law No.01/1997/QH10
dated December 12, 1997 and Credit Institutions Law 02/1997 dated December 12,
1997;
Pursuant to Government Decree No.15/CP dated March 2, 1993 referring to duties,
powers and State management responsibilities of ministries and bodies at the
ministerial level;
Pursuant to a request from the head of the Department of Banks and Non-banking
Credit Institutions;
Pursuant to an agreement with Minister of Finance,
DECIDES
Article 1: This Decision
is enclosed with regulations on classifying assets, establishing and using
reserved funds for covering losses suffered by credit institutions.
Article 2: This Decision
is effective 15 days after the date of signing.
Article 3: Heads of
member units of State Bank of Vietnam, directors of State Bank of Vietnam’s
branches in different provinces and cities, chairmen of management boards and
general directors (directors) of credit institutions are in charge of
implementing this Decision.
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PP STATE BANK OF
VIETNAM GOVERNOR
DEPUTY GOVERNOR
Tran Minh Tuan
REGULATION
ON CLASSIFYING ASSETS, ESTABLISHING AND USING RESERVED FUNDS
FOR COVERING LOSSES SUFFERED BY CREDIT INSTITUTIONS
(This Regulation is attached to Decision No.48/1999/QD-NHNN5 of the State
Bank of Vietnam dated February 16, 1999)
I. GENERAL PROVISIONS
Article 1: Credit institutions
operating in Vietnam are required to classify assets, establish and use
reserved funds for covering losses according to this regulation.
Article 2:
1. Risks can be seen by
credit institutions (hereinafter called risks) are losses which can probably
seen when implementing banking operations.
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Article 3: Within the
first 25 working days of the year, credit institutions are required to classify
assets and establish reserved funds used for covering losses. In 1999 alone,
the 25 working days commence from when the decision attached to this regulation
is effective.
Article 4: In regards to
losses covered with reserved funds, credit institutions are required to oversee
them and find measures to recover debts.
II. DETAILED PROVISIONS
1. Asset classification
Article 5: Credit
institutions are required to classify assets according to the following
stipulations:
1. Assets related to credit operations are
classified as follows:
Group 1 includes:
- Loans which have not been required to be paid.
- Funds as discounts and re-discounts of
commercial bonds and other short term valuable documentation which have not
been required to be paid.
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Group 2 includes:
- Guaranteed loans exceeding 180 days over the
payment deadline and not guaranteed loans exceeding 90 days over the payment
deadline.
- Funds as discounts and re-discounts of
commercial bonds and other short term valuable documentation which exceed less
than 30 days over the payment deadline.
- Funds paid for the guaranteed party which
cannot be recovered within less than 30 days.
- Financial leases that the leasing party is not
able to pay within less than 180 days.
Group 3 includes:
- Guaranteed loans which exceed 180 to 360 days
over the payment deadline and non-guaranteed loans which exceed 90 to 180 days
over the payment deadline.
- Funds as discounts and re-discounts of
commercial bonds and other short term valuable documentation which exceed 30 to
90 days over the payment deadline.
- Funds paid for the guaranteed party which have
not been recovered within 30 to 90 days.
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Group 4 includes:
- Guaranteed loans which exceed more than 360
days over the payment deadline and not guaranteed loans which exceed more than
180 days over the payment deadline.
- Funds as discounts and re-discounts of
commercial bonds and other valuable short term documentation which exceed more
than 90 days over the payment deadline.
- Funds paid for the guaranteed party which have
not been recovered within more than 90 days.
- Financial leases that the leasing party is not
able to pay within more than 360 days.
2. Assets related to customers' payment services
are listed into one group
2. Reserved fund establishment
Article 6: The rate of
reserved funds which is applicable to assets
1. In regards to credit activities:
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A 20 per cent rate is subject to group 2
A 50 per cent rate is subject to group 3
A 100 per cent rate is subject to group 4
A 0.1 per cent rate is subject to payment
services.
2. Funds required to be reserved by credit
institutions include:
- Funds reserved for credit activities which are
calculated on the basis of the rate of reserved funds and assets stipulated in
specific groups referring to different credit activities.
- Funds reserved for customers' payment services
which are calculated on the basis of the rate of reserved funds and assets
related to customers' payment services.
Article 7:
1. In cases where reserved
funds are not enough for covering losses, the credit institution can inform the
Ministry of Finance and the State Bank of Vietnam for consideration.
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Article 8: In cases
where the establishment of reserved funds according to this regulation causes
losses for a State-owned credit institution, the credit institution is then
required to find a solution to cover the losses which is then submitted to the
Ministry of Finance and the State Bank of Vietnam for consideration and
approval.
3. Reserved fund utilisation.
Article 9: Credit
institutions use reserved funds for covering losses caused during implementing
banking activities after collecting relevant funds, request guaranteeing
parties to complete their duties, liquidate assets as mortgages and loan
securities (if any) and assume other measures to recover debts according to
law.
Article 10: Losses
involved in the following cases are considered:
1. Capital borrowers, loan guarantors, entities
issuing commercial bonds and other short term valuable documentation,
commercial bond guarantees, financial leasing parties, guaranteed entities and
those enjoying payment services are disbanded or bankrupt organisations or
those which are not able to complete their tasks due to uncontrollable reasons
such as natural disasters, fires, diseases or changes in State policies and
regulations.
2. Capital borrowers, loan guarantors, entities
issuing commercial bonds and other short term valuable documentation, financial
leasing parties, guaranteed entities and those enjoying payment services died
or are sentenced for more than one year, or are not able to complete their
tasks due to uncontrollable reasons such as natural disasters, fires, diseases
and changes in State policies and regulations.
Article 11:
1. Credit institutions
are required to establish their councils for dealing with losses which are
chaired by management board chairmen (for credit institutions having management
boards) and include required members as general directors (directors), heads of
supervision departments, chief accountants, heads of credit departments and
local auditing and inspection departments. Other members are decided by the
council's chairman.
2. The council dealing with losses follows
stipulations stated in this regulation, the Regulation on Credit Institutions
and other regulations when dealing with losses stipulated in Article 10 of this
regulation (legal documents stipulated in Article 12 of this regulation are
required), and is responsible by law for its decision(s).
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Legal documents used as a
basis for dealing with losses include:
1. Document(s) related to granting loans,
discounts and re-discounts of commercial bonds and other valuable short term
documentation, guarantee, financial leasing, payment services, and other
documents related to these losses are dealt with according to stipulations in
Article 10 of this regulation.
2. Document(s) certifying financial capabilities
of entities receiving credit funds and payment services from bodies issuing
decisions to establish enterprises and financial management authorities.
3. Apart from the above documents, the following
legal documents are required when dealing with specific cases:
a. For bankrupt or disbanded organisations:
- Copy(ies) of decision(s) including the
statement to let enterprise(s) to go bankrupt by the court or decision(s) to
disband enterprise(s) by State relevant management authorities which is (are)
made according to law.
- Minute(s) to deal with assets of bankrupt
enterprise(s) or minute(s) to liquidate assets of disbanded enterprise(s).
b. For cases where organisations and individuals
are not able to pay debts due to uncontrollable reasons such as natural
disasters, fires, diseases and changes in State policies and regulations:
- State relevant authorities' affirmation that
these organisations and individuals are not able to pay debts due to
uncontrollable reasons such as natural disasters, fires, diseases and changes
in State policies and regulations.
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c. For capital borrowers, loan guarantors,
financial leasing parties and people enjoying payment services which died or
are affirmed by the court as dead (according to stipulations in Article 91 of
the Civil Code) and do not have any assets for paying debts:
- Copy(ies) of dead certificate(s) stamped by local
relevant authorities according to law or decision(s) certifying the dead by the
court according to law.
- Document(s) in which commune or ward People's
Committee(s) affirms (affirm) that the interested individual(s) does (do) not
have any assets for paying debts.
d. For capital borrowers, loan guarantors,
financial leasing parties and people enjoying payment services which are missed
individuals as stipulated in Article 88 of the Civil Code and do not have any
assets for paying debts (the cases where assets of the missed people were
checked according to stipulations in Article 89 of the Civil Code):
- Copy(ies) of decision(s) in which the court
states that the interested individual(s) is (are) missed.
- Document(s) in which commune and ward People's
Committee(s) affirms (affirm) that the interested individual(s) does (do) not
have any assets for paying debts.
e. For capital borrowers, loan guarantors,
financial leasing parties and people enjoying payment services which are
sentenced over tone year by the court:
- Copy(ies) of sentence(s) or quote(s) from the
sentences.
- Document(s) in which the judgement execution
body and People's Committee(s) located in commune(s) or ward(s) where the
interested individual(s) lives (live).
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4. Accounting, reporting and dealing with
relevant violations
Article 14: Credit
institutions are required to account expenditures needed for the establishment
and use of reserved funds, and funds recovered after using reserved funds
according to stipulations by the State Bank of Vietnam.
Article 15:
1. Reports on classifying
assets and establishing and using reserved funds used for covering banking
operations' losses:
a. Credit institutions are required to send
relevant reports to the State Bank of Vietnam and the Ministry of Finance
before the 30th day of the first month every year (according to Form 1A
attached to this regulation).
- Credit institutions are required to send
relevant reports to the State Bank of Vietnam (State bank of Vietnam's
inspectors) and the Ministry of Finance.
- JV credit institutions, non-banking credit
institutions as JVs with foreign partners and 100 per cent foreign capitalised
entities and foreign bank branches operating in Vietnam are required to send
relevant reports to the State Bank of Vietnam (State Bank of Vietnam's
inspectors), the Ministry of Finance, State Bank of Vietnam's branches and
financial bodies located in provinces and cities where the interested credit
institutions are headquartered.
- Other credit institutions are required to send
relevant reports to the State Bank of Vietnam's branches and financial bodies
located in provinces and cities where the interested credit institutions are
headquartered.
b. State Bank of Vietnam's provincial and
municipal branches summarise reports by credit institutions as stipulated in a,
1 of this article and then send the summarisation to State Bank of Vietnam
(State Bank of Vietnam's inspectors) and Ministry of Finance according to Form
1B attached to this regulation before the fifth day of the second month every
year.
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a. Credit institutions are required to send
reports on reserved funds used for covering banking operations' losses to State
Bank of Vietnam and Ministry of Finance (according to Form 2A attached to this
regulation) before the tenth day of the first month of the interested quarter.
State-owned credit institutions are required to
send relevant reports to State Bank of Vietnam (Sate Bank of Vietnam's
inspectors).
JV credit institutions and non-banking credit
institutions as JVs with foreign partners and 100 per cent foreign capitalised
entities and foreign bank branches operating in Vietnam are required to send
relevant reports to the State Bank of Vietnam (State Bank of Vietnam's
inspectors), the Ministry of Finance, the State Bank of Vietnam's branches
located in provinces and cities where the interested credit institutions are
headquartered.
Other credit institutions are required to send
relevant reports to State Bank of Vietnam's branches and financial bodies
located in provinces and cities where the interested credit institutions are
headquartered.
b. The State Bank of Vietnam's provincial and
municipal branches are in charge of summarising reports by credit institutions
as stipulated in a, clause 2 of this article and then sending the summarisation
to the State Bank of Vietnam (Sate Bank of Vietnam's inspectors) and Ministry
of Finance according to Form 2B attached to this regulation.
Article 16:
1. State Bank of Vietnam
(State Bank of Vietnam's inspectors) and Ministry of Finance are in charge of
overseeing the establishment and use of reserved funds for covering banking
operations' losses suffered by credit institutions.
2. Credit institutions and individuals which violate
stipulations of this regulation are administratively punished or prosecuted
according to the violation's nature.
III. IMPLEMENTATION
PROVISIONS
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Form No. 1A
Credit
Institution
SOCIALIST
REPUBLIC OF VIETNAM
Independence-freedom-happiness
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REPORT
ON ASSETS CLASSIFICATION, PROVISIONING FOR RISKS
year....
Unit:
million Dong
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I. ASSETS CLASSIFICATION:
1. Assets which emerged from
credit activities
Group1:
- Undue loans (including the
reschedule period)
- Discount and rediscount of commercial
papers and other short-term valuable papers that are still in due.
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- Finance leases that are
still in due.
Group 2:
- Secured loans that are
overdue less than 180 days; unsecured loans that are overdue less than 90 days.
- The discount and rediscount
of commercial papers and other short-term valuable papers that are unpaid for
a period of less than 30 days.
-The guaranteed sum paid pursuant
to a guarantee that have not been recovered for a period of less than 30 days.
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- Finance leases that are
overdue for a period of less than 180 days.
Group 3:
- Secured loans that are overdue
for a period from 180 days to less than 360 days; unsecured loans that are
overdue for a period from 90 days to less than 180 days.
- The discount and rediscount
of commercial papers and other short-term valuable papers that are overdue for
a period from 30 days to less than 90 days.
-The guaranteed sum paid
pursuant to a guarantee that have not been recovered for a period from 30
days to less than 90 days.
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- Finance leases that are overdue
for a period from 180 days to less than 360 days.
Group 4:
- Secured loans that are
overdue for a period of 360 days or more; unsecured loans that are overdue
for a period of 180 days or more.
- The discount and rediscount
of commercial papers and other short-term valuable papers that are overdue
for a period of 90 days or more.
-The guaranteed sum paid
pursuant to a guarantee that have not been recovered for a period of 90 days
or more.
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- Finance leases that are
overdue for a period of 360 days or more.
2. Assets which emerged from
payment services
II. USE OF PROVISIONS:
Total provisions
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Date...
Drawer
Controller
General
Director (Director)
Form No. 1
State Bank Branch Province,
city....
SOCIALIST
REPUBLIC OF VIETNAM
Independence-freedom-happiness
---------
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ON ASSETS CLASSIFICATION, PROVISIONING FOR RISKS
year.....
Unit:
million Dong
Credit
inst. 1
Credit
inst.
Total
I. Assets classification:
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1. Assets which emerged from
credit activities
Group 1:
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- Discount and rediscount of
commercial papers and other short-term valuable papers that are still in due.
- Finance leases that are
still in due.
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Group 2:
- Secured loans that are overdue
less than 180 days; unsecured loans that are overdue less than 90 days.
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-The guaranteed sum paid
pursuant to a guarantee that have not been recovered for a period of less
than 30 days.
- Finance leases that are
overdue for a period of less than 180 days.
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Group 3:
- Secured loans that are
overdue for a period from 180 days to less than 360 days; unsecured loans
that are overdue for a period from 90 days to less than 180 days.
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-The guaranteed sum paid
pursuant to a guarantee that have not been recovered for a period from 30
days to less than 90 days.
- Finance leases that are
overdue for a period from 180 days to less than 360 days.
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Group 4:
- Secured loans that are
overdue for a period of 360 days or more; unsecured loans that are overdue for
a period of 180 days or more.
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-The guaranteed sum paid pursuant
to a guarantee that have not been recovered for a period of 90 days or more.
- Finance leases that are
overdue for a period of 360 days or more.
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2. Assets which emerged from
payment services
II. Use of provisions:
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Date...
Drawer
Controller
Director
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Form No. 2 A
Credit
Institution
SOCIALIST
REPUBLIC OF VIETNAM
Independence-freedom-happiness
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REPORT
ON THE USE OF PROVISIONS
Quarter....
year....
Unit:
Million Dong
...
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II. THE USE OF PROVISIONS
IN THE QUARTER
of which:
a. For an entity that is
bankrupt
b. For an entity that is
dissolved
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d. For a debtor, guarantor, lessee
or a beneficiary of payment services who is dead or announced by the court as
dead (as provided in Article 91 of Civil Law) and is incapable of making
payments.
dd. For a debtor, a guarantor,
a lessee, a beneficiary of payment services who is missing as provided in
Article 88 of the Civil Law and their assets after solving as in a case of a
missing person as provided in Article 89 of Civil Law are inadequate for
making payment:
e. For a debtor, a guarantor,
a lessee and a beneficiary of payment services who is imprisoned for more
than a year
III. FUNDS RECOVERED THAT
IS RECORDED INTO THE NON-ORDINARY INCOME OF THE QUARTER.
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Date......
Drawer
Controller
General
Director (Director)
Form No. 2 B
State Bank Branch Province, city....
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REPORT
ON THE USE OF PROVISIONS
Quarter....
year....
Unit:
Million Dong
Credit
Inst.
Credit
Inst.
Total
I. TOTAL PROVISIONS FOR THE
YEAR
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II. THE USE OF PROVISIONS
IN THE QUARTER
of which:
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a. For an entity that is
bankrupt
b. For an entity that is
dissolved
c. For an entity or individual
who incapable of observing obligation due to the force majeure such as
natural calamity, diseases, fire or changes of Government's policies.
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d. For a debtor, guarantor, lessee
and a beneficiary of payment services who is dead or announced by the court
as dead (as provided in Article 91 of Civil Law) and is incapable of making
payments.
dd. For a debtor, a guarantor,
a lessee and a beneficiary of payment services who is missing as provided in
Article 88 of the Civil Law and their assets after solving as in a case of a
missing person as provided in Article 89 of Civil Law are inadequate for
making payment,
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e. For a debtor, a guarantor, a
lessee and a beneficiary of payment services who is imprisoned for more than
a year
III. FUNDS RECOVERED THAT
IS RECORDED INTO THE NON-ORDINARY INCOME OF THE QUARTER.
IV. TOTAL PROVISIONS WHICH
HAVE BEEN NOT USED FOR RISK SOLVING BUT NOT BEEN RECOVERED BY THE DATE OF
REPORT (ACCUMULATED FIGURE)
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Date......
Drawer
Controller
Director
...
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