Featured Product

    SBV Releases Measures to Address Impact of COVID-19 Pandemic

    May 08, 2020

    SBV issued Circular No. 01/2020/TT-NHNN directing credit institutions and foreign bank branches to restructure the repayment periods, waive and reduce the interest and fees, maintain the debt classification to support the customers affected by COVID-19 pandemic. The circular took effect from March 13, 2020. Additionally, SBV has released a set of questions and answers (Q&A) to ensure uniform implementation of the Circular. SBV also issued Directive No. 02/CT-NHNN on urgent solutions of the banking industry to address the impact of the COVID-19 pandemic. Additionally, SBV held an online conference, in April 2020, for all State Bank branches in provinces and cities across the country on enhancing bank credit to support businesses and people, with aim of addressing the impact of the COVID-19 pandemic.

    The Circular No. 01/2020/TT-NHNN consists of 03 Chapters and 10 Articles, including the following:

    • Regarding the scope of debt repayment restructuring and criteria for determining debts affected by COVID-19 epidemic—Article 4 of the Circular stipulates that debts subject to rescheduling are the outstanding amounts of principal and/or interest that fully satisfy certain conditions mentioned in the Circular. The credit institutions and foreign bank branches shall be responsible for providing guidance on the criteria to determine the outstanding debt of customers affected by COVID-19 pandemic, in which there must be criteria for customers whose revenues and incomes are reduced because of COVID-19 epidemic. 
    • Regarding the waiver and reduction of interest and fees—Article 5 of the Circular stipulates that credit institutions and foreign banks branches will decide on waiving and reducing their interest and fees according to the internal regulations for the outstanding loans arising from credit extension operations (except for activities of buying and investing in corporate bonds). 
    • Regarding maintaining the debt classifications—Article 6 of the Circular stipulates that credit institutions and foreign bank branches are entitled to maintain classified debt groups in accordance with the provisions of SBV with regard to the debt balances subject to loan repayment rescheduling, interest and fee waiver, and reduction as prescribed in the Circular. 

    The key solutions presented in the Directive No. 02/CT-NHNN include the following:

    • Provide refinancing loans to credit institutions to implement programs under the direction of the Government, and supporting restructuring credit institutions
    • Closely monitor market movements, manage the central exchange rate, and continue to use synchronous measures and monetary policy instruments to stabilize the foreign exchange market
    • Manage interest rates in accordance with market movements and monetary policy targets and closely supervise the implementation of interest rate reduction by credit institutions
    • Regularly monitor and evaluate the impact of COVID-19 on the ability of credit growth of the whole industry to consider adjusting credit targets for credit institutions to fully meet the capital requirements
    • To continue working with the Board of Directors of credit institutions to promote the effective implementation of solutions to overcome difficulties for customers affected by the pandemic
    • Proactively review and reduce operational expenses, strengthen effectiveness of internal inspection and control, and enhance coordination and information-sharing among credit institutions

     

    Related Links (in English and Vietnamese)

    Keywords: Asia Pacific, Vietnam, Banking, COVID-19, Loan Moratorium, Q&A, Governance, Credit Risk, Operational Risk, SBV

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582