CIRCULAR

AMENDMENTS TO CIRCULAR NO. 12/2018/TT-BTC DATED JANUARY 31, 2018 OF MINISTER OF FINANCE PROVIDING GUIDANCE ON FINANCIAL SUPERVISION, EVALUATION OF EFFICIENCY OF STATE CAPITAL INVESTMENT IN WHOLLY STATE-OWNED CREDIT INSTITUTIONS AND CREDIT INSTITUTIONS OF WHICH OVER 50% CHARTER CAPITAL IS HELD BY THE STATE

Pursuant to the Law on Credits Institutions dated June 16, 2010;

Pursuant to the Law on Amendments to the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Law on management and use of state capital invested in manufacturing and business operations of enterprises dated November 26, 2014;

Pursuant to the Government’s Decree No. 87/2015/ND-CP dated October 06, 2015 on supervision of state capital investment in enterprises, financial supervision, performance assessment and disclosure of financial information of state-owned and state-invested enterprises;

Pursuant to the Government’s Decree No. 93/2017/ND-CP dated August 07, 2017 on the financial regime applicable to credit institutions, branches of foreign banks and financial supervision, assessment of effectiveness of state capital investment in wholly state-owned credit institutions and partially state-owned credit institutions;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance;

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The Minister of Finance promulgates a Circular providing amendments to Circular No. 12/2018/TT-BTC dated January 31, 2018 of Minister of Finance providing guidance on financial supervision, evaluation of efficiency of state capital investment in wholly state-owned credit institutions and credit institutions of which over 50% charter capital is held by the state .

Article 1. Amendments to circular no. 12/2018/TT-BTC dated January 31, 2018 of Minister of Finance

1. Clause 6 Article 4 is amended as follows:

“6. The criteria mentioned in this Article shall be determined and calculated according to data in each audited annual financial statement and periodical statistical reports as prescribed by law.

Determination of the criteria mentioned in Clause 1, Clause 2, Clause 4 and Clause 5 of this Article shall eliminate the impact factors mentioned in Clause 2 Article 30 of the Decree No. 93/2017/ND-CP and its amending documents (if any)”.

2. Point b Clause 1 Article 5 is amended as follows:

 “b) Criterion 2: Net profit after taxes and return on equity (ROE).

- With regard to credit institutions that have planned profits and realized profits:

+ A credit institution is given “A” rating if it has attained a ROE equal to or higher than the planned one;

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+ A credit institution is given “C” rating if it has attained a ROE lower than 90% of the planned one.

- With regard to credit institutions that incur planned losses:  “A” rating is given to the one whose realized loss is lower than its planned one; "B" rating is given to the one whose realized loss is equal to its planned one, and “C” rating is given to the one whose realized loss is higher than its planned one. Loss incurred from performance of additional tasks shall be excluded when determining and comparing the realized loss to the planned one”.

3. Point d Clause 1 Article 5 is amended as follows:

“d) Criterion 4: Compliance with laws as prescribed in Clause 4 Article 4 hereof.

d.1) A credit institution is given “A” rating if it meets all of the following conditions:

d.1.1) Within the evaluation year, it is not reminded in writing or given more than two written reminders by the owner’s representative agency or the financial authority of its invalid or late submission of any of supervision reports, report on credit institution rating, financial statements and other reports.

d.1.2) Within the evaluation year, it is not facing any administrative penalties imposed by competent authorities; if it is facing administrative penalties, it must ensure the followings:

d.1.2.1) For violations in monetary and banking sector:

- It is not facing penalties imposed by competent authorities for fraudulent or forging acts; impersonation; transferring, lending or leasing the license; sabotaging or destroying Vietnamese money; illegal business operations; provision of untruthful information; stealing information; stealing data according to the Government's regulations on penalties for administrative violations in monetary and banking sector. 

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d.1.2.2) For violations in the fields of taxation or invoices:

- It is not facing penalties imposed by competent authorities for tax evasion according to the Government’s regulations on penalties for administrative violations in the fields of taxation and invoices.

- With regard to other violations for which penalties are imposed by competent authorities:

+ The fine it incurs for an administrative violation related to invoices or tax procedures shall not exceed the average fine of the fine bracket;

+ It makes understatement or overstatement of tax eligible for exemption, reduction or refund but, when the violation is self-detected or detected, has fully paid the difference to state budget by the time a competent authority issues a penalty imposition decision, and has fully done bookkeeping as prescribed;

+ It fails to transfer outstanding tax from the taxpayer’s account to the state budget account at the request of the tax authority but, when the violation is self-detected or detected, has fully transferred tax amounts from the taxpayer’s account to the state budget account by the time a competent authority issues a penalty imposition decision.

d.1.2.3) For other violations:  The fine it incurs for each violation shall not exceed the average fine in the fine bracket.

d.1.2.4) The number of branches (including headquarters address) incurring penalties shall not exceed 10% of total branches of the credit institution.

d.2) A credit institution is given “C” rating if it has encountered one of the following circumstances:

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- It has incurred fines in the evaluation year for the following violations:

+ The violations in monetary and banking sector, including: fraudulent or forging acts; impersonation; transferring, lending or leasing the license; sabotaging or destroying Vietnamese money; illegal operations; provision of untruthful information; stealing information; stealing data according to the Government's regulations on penalties for administrative violation in monetary and banking sector;

+ Tax evasion according to the Government’s regulations on penalties for administrative violations in the fields of taxation and invoices;

+ Other violations for each of which the fine incurred is the maximum fine of the fine bracket;

+ It is forced to implement the penalty imposition decision.

- The number of branches (including headquarters address) incurring penalties shall not exceed 20% of total branches of the credit institution.

- In the valuation year, one or some executives of the credit institution (Chairperson and members of the Board of Members, Chairperson and members of the Board of Directors, General Director, Deputy General Director, Chief Accountant) violate the law during their performance of tasks at the credit institution to the extend that they are liable to criminal prosecution.

d.3) A credit institution is given “B” rating if it is not given either “A” rating or “C” rating”.

4. The entry in column (3) of the form in Appendix 1 and Appendix 3 is replaced by “% realized/planned”.

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Article 2. Implementation organization

1. This Circular comes into force from February 15, 2021.

2. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Finance for consideration./.

PP. THE MINISTER
DEPUTY MINISTER




Huynh Quang Hai