Press Release on the issuance of Circular No.19/2017/TT-NHNN
December 28, 2017 – The Governor of the State Bank of Vietnam (SBV) issued Circular No. 19/2017/TT-NHNN amending and supplementing a number of articles of Circular No.36/2014/TT-NHNN dated November 20, 2014 stipulating prudent limits and ratios in the operations of credit institutions and foreign bank branches.
The Circular is composed of 5 articles, specifically as follows:
- Amending and supplementing a number of limits and ratios in compliance with the revised Law on Credit Institutions: credit extension limits for investing in and trading of corporate bonds; ratios of purchase and investment in Government bonds and Government-guaranteed bonds.
- Amending the regulations on the credit extension limits and the limits of capital contributions and share purchase in accordance with the Law on Credit Institutions and the Law on amendments and supplements to the Law on Credit Institutions.
- Amending and supplementing the calculation method and the roadmap for adjusting the maximum ratio of short-term funds for medium and long-term loans.
- Amending and supplementing the components and the calculation method of the capital adequacy ratio: the core capital component, the risk factors of some receivables.
- Amending and supplementing the method of calculating the solvency ratio: Amending and supplementing a number of principles of determining cash outflow and inflow.
- Moreover, the Circular amends and supplements a number of substances with regard to the interpretation, the internal regulations, and the specific guidelines, regulations on the calculation methods and the components of the prudent ratios and the regulation on the transitional period.
The Circular will take effect from February 12, 2018, with the exclusion of the regulations as stipulated in Article 17 of Circular No.36/2016/TT-NHNN, which are amended and supplemented by Circular No.19/2017/TT-NHNN. Those regulations, which are applicable to the determination of and the compliance with the maximum ratio of short-term funds for medium and long-term loans, shall take effect from January 1, 2018.
Translated by Le Hang