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|State Bank of Viet Nam’s headquarter. New regulation on banking supervision will take effect from December 1 this year. - Photo SBV|
Circular 08/2017/TT-NHNN, which will take effect from December 1, 2017, is also designed to prevent a banking crisis where sudden withdrawal of depositors spreads across the system of credit institutions and can lead to institutions’ bankruptcy.
The circular states that banking inspection and supervision agencies will collect, synthesise and analyse information on supervised credit institutions to promptly prevent, detect and handle risks to banking operations.
The agencies will also consider and monitor the observance of regulations on safety of banking operations and other monetary and banking regulations of credit institutions.
The implementation of inspection conclusions, issuing warnings and making recommendations will be also included in the content of supervision.
The agencies will also analyse and assess the financial status, operation, governance and risk degree of credit institutions, besides annually ranking the institutions.
Further, the circular noted that the banking supervision must comply with current laws and ensure accuracy, objectivity, honesty, publicity and timeliness. It also required not obstructing the normal operation of supervised credit institutions.
The new regulation was issued after many cases of violation in the banking industry were uncovered.
According to SBV Governor Le Minh Hung, reports from the Ministry of Public Security showed that 95 economic cases in the banking sector were detected and prosecuted, with nearly 200 banking employees and officials being accused in the 2011-16 period.