Press release on the issuance of the Circular No. 22/2017/TT-NHNN

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Giọng Nam

Press release on the issuance of Circular No.22/2017/TT-NHNN

Hanoi, December 29, 2017 – The Governor of the State Bank of Vietnam (SBV) issued Circular No.22/2017/TT-NHNN amending and supplementing a number of Articles in the system of book-keeping accounts of credit institutions as stipulated in Decision No. 479/2004/QD-NHNN dated April 29, 2004, and a number of Articles in the regime on financial statements applicable to credit institutions as stipulated in Decision No. 16/2007/QD-NHNN dated April 18, 2007.

The newly issued Circular is aimed at ensuring compliance with the exchange rate regulations of Accounting Law No.88/2015/QH13; meeting accounting requirements in line with the new regulations on financial regimes, professional mechanism; and matching with the practical operations of credit institutions.

The subjects to the application of this Circular are credit institutions and branches of foreign banks established and operating under the Law on Credit Institutions, with the exception of People's Credit Funds and microfinance institutions.

The Circular consists of 4 Articles, specifically as follows:

Article 1: Amending and supplementing a number of Articles in the system of book-keeping accounts of credit institutions as stipulated in Decision No. 479/2004/QD-NHNN issued by the Governor of the State Bank of Vietnam on April 29, 2004 (3 Paragraphs):

  • The exchange rate policy is used to convert the balances of all accounts belonging to monetary items, which are in foreign currencies, for making reports at the end of a month, a quarter and a year. There are 2 subjects to this: Credit institutions licensed to deal in foreign exchange and credit institutions not licensed to deal in foreign exchange.

    • In order to ensure that monetary items denominated in foreign currencies closely reflect the market rates at the time of conversion, credit institutions authorized to deal in foreign exchange shall use the average exchange rate for buying, selling and transferring money right at the end of the last working day of that month, that quarter or that year, if the exchange rate is less than 1 percent different from the weighted average exchange rate of the last trading day of that month, that quarter or that year; in case the exchange rate is more than 1 percent different from the weighted average exchange rate of the last trading day of that month, that quarter or that year, credit institutions must use the weighted average exchange rate for the conversion.

    Credit institutions not licensed to deal in foreign exchange must use spot exchange rates at the end of the last working day of the month, the quarter and the year of a Commercial Bank that carried out the most transactions in the accounting period.

  • Amending and supplementing the contents and structure of a number of accounts in accordance with the provisions of Circular No. 200/2014/TT-BTC regulating the enterprise accounting regime; in line with the increasingly diversified business operations of credit institutions.

    • Article 2: Amending and supplementing a number of Articles in the regime on financial statements applicable to credit institutions as stipulated in Decision No. 16/2007/QD-NHNN issued by the Governor of the State Bank of Vietnam on April 18, 2007 (2 Paragraphs):

  • Stipulating that the currency used for making financial statements to be publicized and submitted to the State management bodies in Vietnam is the Vietnamese dong.
  • Supplementing a provision on the principle of converting financial statements made in foreign currencies into the Vietnamese dong, because previously, this was not stipulated in the financial reporting regime for credit institutions.

    • Article 3 and Article 4: Responsibilities for the implementation and the Entry into force.

    This Circular takes effect from April 1, 2018.

    Translated by VA