STATE BANK OF VIETNAM ------	SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness ----------------
No. 01/CT-NHNN	Hanoi, January 3, 2020

 

DIRECTIVE

IMPLEMENTATION OF PRIMARY TASKS OF BANKING SECTOR IN 2020

2020 holds a particularly special meaning as it is the last year in the 5-year plan for socio-economic development of 2016-2020, prepares and builds up momentum for the next 5-year plan of 2021-2025 and 10-year strategy of 2021-2030 and is the year in which many major events and ceremonies of the country and the sector are held. Domestic and international situations continue to pose challenges and unexpected movements which require consensus and determination in direction of the heads of State Bank of Vietnam (hereinafter referred to as “SBV”) and of banking officials, employees and public employees.

Implement Resolution No. 85/2019/QH14 dated November 11, 2019 of National Assembly on socio-economic development plan in 2020, Resolution No. 01/NQ-CP dated January 1, 2020 of Government on primary tasks and solutions for implementing socio-economic development plan and state budget estimates in 2020 (Resolution 01), Resolution No. 02/NQ-CP dated January 1, 2020 on continuing implementation of primary tasks and solutions for improving business environment and improving national competitive capacity in 2020, Governor of State Bank of Vietnam requests entities affiliated to the SBV and credit institutions, branches of foreign banks (hereinafter referred to as “credit institutions”) to thoroughly comprehend action policies of the Government in 2020 which is “Discipline, honest, active, responsible, creative, effective”, successfully implement solutions for operating monetary policies and banking activities to control inflation, sustain macroeconomic development, assist economic development, ensure safety and healthy development of credit institution systems, to be specific:  

I. GENERAL OBJECTIVES AND TASKS

1. Operate monetary policies actively, flexibly, cautiously and consistently with fiscal policies and other macroeconomic policies to control average inflation below 4%, sustain macroeconomic development, assist economic development according to defined objections, stabilize monetary and foreign exchange market. In 2020, total payment facilities increase by approximately 13%; credit increases by approximately 14%, with adjustment in accordance with practical situations. Implement solutions for monetary and credit following the principles of expanding credit together with safety, efficiency and guaranteeing capital provision for the economy.

2. Stringently and effectively implement scheme for restructuring systems of credit institutions associated with bad debts in 2016-2020 (according to Decision No. 1058/QD-TTg of the Prime Minister), focus on dealing with bad debts of credit institutions (according to Resolution No. 42/2017/QH14 of National Assembly on pilot implementation of dealing with bad debts) to ensure safety of banking operation; Strive to reduce non-performing loan ratio to less than 2%; non-performing loan ratio of credit institutions and bad debts sold to Vietnam Asset Management Company (VAMC) and debts already subject to classification reduce to less than 3% (excluding bad debts of underperforming commercial institutions) in 2020.

3. Continue to develop legal framework, mechanisms and policies satisfactory to international regulations and practices; ensure consistency and satisfaction of legislative documents to state management requirements for monetary and banking activities in times to come. Stringently implement strategy for developing banking sector of Vietnam until 2025 with orientation to 2030.

4. Promote non-cash payment especially payments made via banks with respect to public services; ensure stability, safety and efficiency of intermediate payment systems and service provision.  Renovate and develop information technology and apply modern technology to develop digital banking services. Enhance security, safety and privacy in banking operations.

5. Promote administrative reform to exceed task quotas according to general program for state administrative reform and plans for administrative reform of SBV during 2016-2020 to improve business environment and enhance national competitive capacity. Strive to maintain position in group of ministries leading in Par Index rankings and ranks in access to credit indicator within 25 leading countries in 2020.

II. FOR ENTITIES IN HEAD OFFICES OF STATE BANK OF VIETNAM

Actively provide Governor of the State Bank of Vietnam with advice on implement solutions according to functions and tasks of the entities, which focus on following primary tasks:

1. Develop legal framework in monetary and banking sectors

1.1. Expeditiously conclude and propose revision to Law on State Bank of Vietnam and the Law on Credit Institutions, focus on matters that require to be legalized relating to dealing with bad debts according to Resolution No. 42/2017/QH14, new regulations relating to payment and foreign exchange management; conclude and propose revision to Law on Deposit Insurance.  

1.2. Continue to develop mechanisms and policies on banking inspection and supervision, regulations on safe banking operations, policies and mechanisms for reinforcing organization of cooperative credit institutions and microfinance institutions.

1.3. Continue to provide advice on issuance of regulations on applying new and modern payment facilities utilizing advanced technology. Review and amend regulations on non-cash payments and restriction on cash payments; regulations on security, safety and privacy in payment satisfaction to trend of developing digital banks.

1.4. Develop policies, facilitate and control hidden risks to enable credit institutions to fully provide financial service products in a diversified manner, especially non-credit banking service products and develop new highly creative products and services.

1.5. Continue to develop and finalize legal framework and regulations on financial stability, macroprudential and microprudential policies, macroprudential instruments to prevent systematic risks and reduce negative impact on the economy.

1.6. Implement and supervise Development strategy for banking sector in Vietnam until 2025 and orientation until 2030, National financial inclusion strategy until 2025 and orientation until 2030 and issued action programs, schemes and plans for development of the sector.

2. Regulate monetary policies and banking operations

2.1. Monitor development of macroeconomic, domestic and international monetary situations to operate appropriate tools and solutions in a synchronized manner to stabilize monetary and foreign exchange markets, control development speed of total payment facilities and credit according to declared orientation.

Flexibly operate open markets to maintain liquidation in appropriate value and assist in stabilizing monetary market. Refinance credit institutions to assist liquidation and granting loans under programs approved by the Government and Prime Minister, assist restructuring of credit institutions and dealing with bad debts. Regulate interest rates, conversion rates and compulsory reserve instruments satisfactory to macro-monetary balances, inflation, market development and monetary policy objectives; increase state foreign exchange reserve during favorable market conditions.

2.2. Prescribe credit solutions to control credit scale and development according to defined orientation together with improving credit quality and restructuring of credit institutions. Inform and periodically review, consider revision to credit development quota for each credit institution based on operation, financial capacity and healthy credit development capacity; in which, consider prioritizing higher credit development quota with respect to credit institutions assisting disposal of people’s credit funds, credit institutions with low bad debt ratios (non-performing debts and hidden debts turning into bad debts) and credit institutions reducing lending interest rates. Direct credit institutions to develop credit effectively and concentrate credit on business sectors prioritized according to policies of the Government. Closely control credit in sectors with high potential risks namely investment, immovable property, stock, build-operate-transfer and build-transfer in traffic; increase risk management for consumer credit and grant loans.

- Continue to implement measures to improve accessibility of banking credit, satisfy legal needs of the general public and prevent black credit.

- Successfully implement incentive credit programs and policies according to direction of the Government and Prime Minister. Cooperate with relevant ministries in continuing review and development of legal framework to facilitate implementation of credit programs for poor households, near-poor households, households recently escaping poverty and beneficiaries of other policies.

2.3. Closely and effectively cooperate with ministries and relevant entities in providing information and figures to improve quality of preparation, analysis and prediction of international payment balance serving regulation of monetary policies of SBV and macroprudential regulations of the Government. Continue to improve quality of inventory, analysis and prediction serving planning, directing and regulating monetary policies and banking operations.

3. Improve capacity and effectiveness of inspection and supervision; prevention of violations in banking sector

3.1. Effectively implement Inspection plan in 2020 of SBV satisfactory to state management requirements regarding monetary and banking affairs, assist restructuring, disposing bad debts and ensuring safe and legitimate operation of credit institution systems. In which, prioritize inspecting juridical person; administration, operation and risk management of credit institutions, issuance of localized regulations; sectors more vulnerable to emergence of risks, negativity, corruption and violations; implementation of restructuring plans together with disposal of bad debts of credit institutions, compliance with regulations and law on anti-money laundering, terrorism financing, payment and foreign exchange management.

3.2. Improve quality of inspection affairs and inspectorate; Identify and clarify violations, provide specific conclusions on violations and responsibilities of relevant individuals for stringent actions as per the law; issue warnings and recommendations for credit institutions for measures to deal with and prevent risks; discover difficulties to propose amendments and issuance of new regulations.

3.3. Increase macroprudential and microprudential supervision, especially supervising credit quality and disposal of bad debts of credit institutions, granting of credit in sectors highly vulnerable to potential risks, consumer credit and investment of enterprise bonds; monitor and acknowledge any irregularity posing potential risks to recommend, propose and warn credit institutions to promptly prevent and minimize risks in operations of credit institutions.   Expeditiously stabilize organizations and implement microprudential supervision model for each credit institution, each branch and offices of credit institutions (apply model of operating officials).

3.4. Stringently take actions as per the law in case credit institutions continue to allow reoccurrence of warned violations, especially disciplining heads of entities for allowing occurrence of violations and bank employees for aiding criminals; Stringently impose administrative penalties against violations of organizations and individuals. Promote monitoring, expediting, examining, conducting post-inspection actions and supervising to ensure stringent implementation of conclusion, recommendations and decisions on disposal of credit institutions.

3.5. Continue to improve quality and effectiveness of anti-money laundering, especially analyzing and dealing with suspicious transactions. Actively cooperate closely with ministries in completing reports and explanation related to multilateral assessment of Asia/Pacific Group (APG) on anti-money laundering on Vietnam.

3.6. Increase capacity and effectiveness of inspection and banking supervision mechanisms, satisfy task demands in recent times; improve specialized and professional capacity and responsibilities of officials who perform banking inspection and supervision. Promote provision of professional guidelines for inspection, supervision and quality control of inspection and supervision of Bank Supervision and Inspection Agency for the entire supervision and inspection systems; implement pilot execution of inspecting entities within inspection responsibilities of inspectors and supervisors of SBV in other provinces and cities.

3.7. Promote responsibilities of organizations and entities in banking sector for complying with regulations and law, directions and policies of the Communist Party and the Government.  Thoroughly encourage officials and public officials to maintain occupational ethics, do not allow negativity and/or corruption to occur, especially during period of inspection, examination and accounting.

4. Implement scheme for restructuring credit institution systems together with disposing bad debts during 2016-2020

4.1. Direct credit institutions to intensively and effectively implement approved measures for restructuring together with disposing bad debts during 2016-2020;  Implement measures for disposing 3 banks subject to compulsory purchase and underperforming banks according to regulations and law, direction and approval of the Government and competent agencies. Enhance close monitor and supervision to promptly deal with difficulties during implementation; direct credit institutions to revise the measures based on inspection and accounting conclusions or based on operation facts of the credit institutions to ensure effective and concise implementation capable of achieving defined objectives.

4.2. Conclude scheme for restructuring credit institution systems together with disposing bad debts during 2016-2020 approved under Decision No. 1058/QD-TTg while developing scheme for restructuring credit institution systems during 2021-2026.

4.3. Closely cooperate with agencies affiliated to the National Assembly and ministries in dealing with difficulties related to increased charter capital of joint-stock commercial banks over 50% of charter capital of which is held by the Government and Vietnam Agriculture and Rural Development Bank (Agribank) as per the law.

4.4. Equitize Agribank according to regulations and law and direction of the Government and Prime Minister.

4.5. Dispose underperforming non-bank credit institutions based on regulations and law and restructuring properties of each institution; closely cooperate with presiding ministries in managing and restructuring underperforming non-bank credit institutions whose owners/major shareholders are state groups/corporations according to direction of the Prime Minister.

4.6. Direct credit institutions to utilize resources to boost bad debt disposing process, minimize new bad debts from arising; intensively and completely implement measures specified under Resolution No. 42/2017/QH14 to reduce bad debt rates to safe level according to defined objectives. Closely cooperate with ministries and local governments to promptly deal with difficulties in adopting bad debt disposing measures according to Resolution No. 42/2017/QH14.

4.7. Direct VAMC to promote procurement and disposal of bad debts based on market mechanisms according to regulations and law and approved measures; implement appropriate measures to collect debts, continue to cooperate with credit institutions in disposing bad debts and collateral of bad debts purchased by special bonds.

4.8. Promote roles of Deposit Insurance of Vietnam in protecting benefits of persons making deposits; inspect and supervise operation of organizations participating in deposit insurance as per the law; finalize deposit insurance development strategy; request Prime Minister to raise payment limits of deposit insurance and propose measures for effectively using the residual insurance premiums.

5. Direct, rectify and reinforce operation of people’s credit fund systems and enhance managing and supervising microfinance institutions

5.1. Direct and instruct branches of SBV in provinces and cities in managing, approving, inspecting, supervising and restructuring local people’s credit funds; especially improve quality of supervision operation to promptly detect and take actions against violations and apply information in managing and supervising people’s credit fund systems.

5.2. Prioritize disposing underperforming people’s credit funds by appropriate measures according to regulations and law while following principles of conservatism, guaranteeing legal benefits of persons making deposit and maintaining stability and safety of the systems. Utilize roles of Cooperative banks and Deposit Insurance of Vietnam in disposing underperforming underperforming people’s credit funds.

5.3. Carry out pilot implementation of cross-inspection of branches of SBV in provinces and cities to people’s credit funds and entrust Cooperative banks and Deposit Insurance of Vietnam to inspect people’s credit funds in provinces and cities where multiple people’s credit funds are situated to improve effectiveness of state management of mobilizing deposits, granting loans and safe regulations of the funds. 

5.4. Enhance managing and supervising operations of microfinance institutions, ensure compliance with regulations and law, principles and objectives and prevent risks potentially cause unsafe in operations.  Conclude Decision No. 20/2017/QD-TTg of Prime Minister on operation of the programs, microfinance projects of political organizations, socio-political organizations and non-governmental organizations and rapidly develop legal framework for operation of microfinance institutions.

6. Develop non-cash payments; Ensure security and safety in information technology operations, electronic payments and card payments

6.1. Continue to promote non-cash payment, especially payments made via banks with respect to public services. Produce intermediate, final reports and assessment for programs and strategies in payment sectors: implementation results of non-cash payments during 2016-2020, propose measures to promote non-cash payments during 2021-2025; implementation of strategy for supervising payment systems in Vietnam during 2014-2020; scheme for promoting payments via banks for public services according to Decision No. 241/QD-TTg .

6.2. Develop mechanisms and carry out pilot implementation of using telecommunication accounts to pay for other small services (Mobile Money services) and new payment services approved by Prime Minister.

6.3. Enhance security, safety and privacy in payment operations. Direct payment service providers to convert from magnetic cards to chip chards according to defined roadmap. Enhance supervising payment systems and provision of intermediate payment services; issue warnings and recommendations on risks in electronic payments. Regularly inspect, detect and take actions against violations in payment and intermediate payment affairs.

6.4. Cooperate with authorities specialized in cyberinformation security of Ministry of Public Security, Ministry of National Defense, Ministry of Information and Communication, domestic and international cyber security organizations in exchanging and sharing experience and information via cyber environment, provide drills and organize response to information security incidents of banking sector; cooperate in inspecting and assessing safety and security of important information of entities in banking sector.

6.5. Direct payment service providers and intermediate payment service providers to review and revise internal procedures to ensure compliance with applicable regulations and law; actively conduct research and apply new technology to improve security and privacy in payment; enhance controlling, supervising and promptly detecting violations and frauds regarding payments and intermediate payment affairs; stringently implement regulations on anti-money laundering.

7. Promote administrative reforms to improve business environment in monetary and banking sectors; enhance administrative discipline and regulations; reform public affairs, streamline a system and downsize

7.1. Promote administrative reforms, develop structure of electronic Government of SBV and modernize administrative operations to increase effectiveness of direction and command in banking sector. Adopt measures to increase coverage of information application and maintain depth of credit information. Cooperate with Ministry of Justice and relevant ministries in developing legal framework on registering secured transactions and protect creditors’ rights to improve credit accessibility index.

7.2. Develop organizational structure of entities affiliated to SBV to ensure compactness, conformance with functions and tasks, continuous and effective operation, do not allow overlap, repetition or abandonment of responsibilities; Continue to stringently implement downsizing and successfully downsize by 10% during 2016-2020.

7.3. Continue to develop and issue documents providing guidelines and elaborating new regulations of the Communist Party and Government on official affairs.  Stringently implement assessment, selection, planning, allocation, use and assignment based on title standards, official assessment criteria, procedures, regulations and democracy principles to ensure openness, transparency and effectiveness.  Implement official rotation within SBV systems from central level to local levels to enhance managing officials of branches and train planning officials of all levels.

7.4. Enhance administrative discipline and regulations, emphasize responsibilities of heads of entities; improve public affair culture and ethics of officials, public officials and employees in SBV; improve training and education quality to produce high quality personnel resources to ensure effective implementation of tasks of the sector.

8. Other primary tasks

8.1. Actively and flexibly circulate amount of cash in SBV systems; continue to increase reserve rates reasonably to satisfy monetary security requirements and cash requirements for circulation in terms of amount and face value structure; effectively implement measures to increase money quality in circulation and continue to enhance anti-money laundering measures and protection of Vietnamese currency; ensure money printing manufacturing plans and quality.

Promote vault safety operations, enhance direction, rectification and post-inspection processing. Continue to develop managing and operating mechanisms to initiate operations in transshipment warehouses. Continue to conduct research in developing cash supply models and mechanisms for the purpose of steady commercialization with respect to credit institutions.

8.2. Actively and positively cooperate and implement international integration in banking sector. Closely cooperate with ministries in successfully implementing roles of ASEAN Chairmanship 2020 of Vietnam. Positively participate in policy, concept development and programs for increasing capital, restructuring and reforming of international organizations to increase standing of Vietnam. Focus on providing technical assistance related to green finance, financial inclusion, infrastructural finance, digital banks and regional payment connection. Effectively implement cooperation programs with Bank of the Lao P.D.R and National Bank of Cambodia.

8.3. Promote scientific and technological activities in banking sector while complying with primary objectives of the sector, focus on conducting research on application and propose policies directly serving state management of SBV.

8.4. Successfully organize implementation of accounting works, financial asset and construction investment management of SBV, ensure close management and thorough use to ensure efficiency and effectiveness. Increase effectiveness of managing and implementing public investment capital plans and boost implementation and disbursement progress from the first few months of the year. Enhance renovation and operation effectiveness of public service providers in banking sector; increase autonomy and promote private sector involvement of public service providers according to Resolution No. 19-NQ/TW of the 12^th Central Executive Committee of the Communist Party. Successfully act as agencies representing state capital in credit institutions, financial organizations and partially state-owned enterprises under management of SBV.

8.5. Enhance internal control and accounting operations in entities of SBV; focus on controlling and accounting operations with high potential risks, supervising asset safety and ensuring safe and effective operations of SBV; stringently implement post-accounting propositions.

8.6. Promote effective solutions and measures in communication regarding implementing monetary policies and banking operations; consider communication as channels for transmitting policies and providing information to ensure transparency and conformance to international agreements and regulations and law. Enhance directing, orienting, promptly providing topics and details, creating consensus from central SBV to branches of SBV in provinces and cities, between SBV and credit institutions regarding communicating policies in each month/quarter/period related to banking operations. Increase initiative, professionalism and effectiveness in order to provide information rapidly and promptly to satisfy requirements of communication operations of SBV and execute international agreements. Promptly acknowledge, respond and effectively deal with issues highly concerned by the media, create consensus and support for policies and mechanisms of SBV. Effectively implement financial education communicating program to increase accessibility to financial services.

8.7. Promptly provide information and explanation for issues related to monetary and banking operations within the concern of National Assembly, members of National Assembly and voters. Direct branches of SBV in provinces and central-affiliated cities to cooperate with local branches of credit institutions in successfully providing adequate information serving operations of National Assembly in provinces and central-affiliated cities, acknowledge feedback for timely solutions.

III. FOR BRANCHES OF STATE BANK OF VIETNAM IN PROVINCES AND CITIES

1. Organize implementation of monetary policies and banking operations

1.1. Acknowledge policies of the Communist Party, the Government and the sector to actively publicize and instruct local credit institutions to stringently implement monetary and credit solutions and banking operations of the Government, SBV, policies assisting local socio-economic development.

1.2. Monitor and acknowledge local socio-economic conditions and banking operations to promptly deal with difficulties and issues arising during implementation period; report and propose committee levels, local governments and Governor of SBV with measures to manage operations of credit institutions, deal with issues that arise in practical operations, difficulties of policies and mechanisms that need to be revised satisfactory to practical conditions; enhance cooperation in exchanging information with entities in head offices of SBV.

1.3. Actively provide advice for People’s Committees of provinces and cities on cooperating with relevant ministries in promoting local non-cash payments while ensuring security, safety and privacy in payment operations.

1.4. Cooperate with local ministries and socio-political organizations in promoting implementation of credit programs and policies serving business operations, satisfying consumption demands of the general public, especially in remote and isolated areas, ethnic minorities and restricting black credit.

1.5. Cooperate with ministries in providing advice for People’s Committees of provinces and cities on enhancing effectiveness of operations of local credit secure funds to assist small and medium enterprises in accessing funds for business operations.

1.6. Act as contact point to closely connect with local credit institutions during implementation of tasks of local banking sector, promote implementation of bank – enterprise connection program; take charge working with credit institutions to promptly publicize credit programs and policies of banking policies for dealing with issues and difficulties in monetary and banking operations as per the law. Focus on citizen reception, processing documents, complaints, accusations, propositions and feedback as per the law.

2. Implement scheme for restructuring credit institution systems together with disposing bad debts during 2016-2020

2.1. Direct branches of local credit institutions to stringently implement direction of head offices regarding execution of approved measures for restructuring and disposing bad debts.

Continue to direct credit institutions with high bad debts to actively develop measures and plans for disposing bad debts and preventing further bad debts; review debt classification, ensure accurate representation of debt quality and prepare adequate provisions as per the law.

2.2. Stringently inspect implementation of measures for restructuring together with disposing bad debts of local credit institutions, especially implementation of measures for improving financial capacity, credit quality, administration, operation, internal control and accounting operations. Enhance communicating and working with credit institutions and branches thereof to assess and clarify issues related to operations of credit institutions; promptly deal with difficulties of credit institutions and ensure compliance of implementation of restructuring measures with defined objectives and roadmap.

2.3. Focus on implementing measures for disposing underperforming credit institutions and credit institutions that have flaws and defects during operations. Continue to implement and direct credit institutions to implement measures specified in scheme for reinforcing and developing credit institution systems until 2020 with orientation until 2030, regulations in Circular No. 21/2019/TT-NHNN dated November 14, 2019 and recently issued relevant documents on enhancing overall management of credit institutions.

2.4. Closely cooperate with committee level, local governments and local competent agencies, assist credit institutions in dealing with difficulties in implementing Resolution No. 42/2017/QH14 and Decision No. 1058/QD-TTg , especially disposing and liquidating collateral in order to boost process of disposing bad debts and restructuring credit institution systems.

3. Organize implementation of inspection and supervision; prevention of violations in banking sector

3.1. Actively develop plans and conduct irregular inspections with respect to credit institutions whose head offices are located locally, branches of commercial banks, branches of foreign banks and people’s credit funds that have not been inspected for at least 3 years with poor financial conditions, high accumulated losses, unusually high outstanding credit debts, increased bad debts, signs of irregularity via remote supervision, potentially risky operations or prolonged negativities that have not been rectified.

3.2. Intensify irregular inspection, supervision and examination of people’s credit funds, especially underperforming people’s credit funds to promptly detect and rectify violations in operations. People’s credit funds in provinces and cities shall inspect each other according to instruction of SBV.

3.3. Promote and improve microprudential supervision of branches of SBV in provinces and cities with respect to people’s credit funds and local branches of credit institutions to promptly warn and prevent flaws and/or violations. Stringently take actions against people’s credit funds and branches of credit institutions, especially violations that have been warned against, repeated or slow to be rectified to enforce intimidation and strictness of regulations and law.

3.4. Stringently implement documents prescribing, amending and providing guidelines of central SBV on permitting, inspecting, supervising and ensuring safety and security in banking operation; issue warnings on operation for local credit institutions; organize trainings on regulations on anti-money laundering.

3.5. Increase anti-corruption, anti-negativity and anti-criminal activities on a local scale, especially newly emerged violations namely money laundering, illegal money transfer overseas and high-tech crime.

3.6. Closely cooperate with committee level, local governments and relevant agencies in promptly dealing with issues related to local credit institutions as per the law, ensure safe operations of credit institutions.

4. Develop plans and organize implementation according to direction of Governor of SBV to promote non-cash payments, ensure security and safety in information technology activities, electronic payments and card payments; Monitor, expedite and direct local payment service providers, intermediate payment service providers to implement. Regularly inspect, detect and take actions against violations in local payment and intermediate payment affairs.

5. Other primary tasks

5.1. Promptly satisfy cash requirements in terms of amount and face value of local credit institution and State Treasury. Stringently comply with regulations of SBV on vault safety; enhance inspection and supervision in local entities and credit institutions to promptly rectify drawbacks and reduce risks of vault unsafety.

5.2. Actively communicate and provide explanation for issues related to monetary policies and banking operations for committee levels, local government and members of the National Assembly; Fully participate in contacting local voters to direct deal with issues and difficulties concerned and/or proposed by voters. Actively provide accurate and timely information for local press on mechanisms and policies of SBV and operation results of banking systems. Promptly acknowledge and report issues within the concern of general public or issues arising locally to provide information objectively, adequate and create consensus among local agencies, enterprises and general public.

5.3. Positively and adequately implement tasks according to plans of SBV regarding performing administrative reform, controlling administrative procedures, implementing single-window system, implementing ISO in processing administrative procedures; continue to effectively implement tasks of branches of SBV under action programs of the sector to improve business environment, enhance national competitive capacity, assist and develop enterprises.

5.4. Continue to stringently implement official-related affairs, especially planning to ensure adequate sources of officials to select and assign as managerial or leading positions. Enhance administrative discipline and regulations; emphasize responsibilities of leaders; increase public affair culture and official ethics.

IV. FOR CREDIT INSTITUTIONS

1. Organize implementation of monetary policies and banking operations

1.1. Develop and implement business plans for 2020 according to solutions for economic administration, monetary and credit policies and banking operations of the Government and SBV.

1.2. Actively balance funding sources and use thereof to ensure liquidation and timely satisfaction of credit and payment demands of the economy.

1.3. Stringently and regularly inspect and supervise compliance with regulations and law and direction of SBV on interest of mobilizations, loans and service charges; submit reports to SBV adequately, promptly and accurately on interest figures according to regulations and law on statistical report regime; actively review and detect violations to take appropriate actions depending on responsibilities of organizations and individuals.

1.4. Implement effective and sustainable credit development solutions together with control and improve credit quality, appropriately allocate loan capital to control inflation, restructure credit institutions and create favorable environment for business operations:

- Perform credit control conforming to credit development quota of 2020 and credit control measures according to direction of SBV; focus capital on granting loans in prioritized business sectors. Closely control credit in sectors with potential risks, enhance risk management in consumer credit and loan credit for non-business purposes; continue to closely control loans in foreign currency according to policies of the Government and SBV on limiting dollarization in the economy.

- Allocate necessary capital to develop loan products serving non-business purposes to meet reasonable demands of the general public; consider and implement measures to deal with difficulties of customers who cannot pay debts within the deadline, help customers access bank loan capital with ease and restrict black credit.

- Direct branches of credit institutions to cooperate with branches of SBV in provinces and cities in effectively implementing bank – enterprise connection program to deal with difficulties in credit relationship with customers, enable customers to access bank loan capital as per the law.

1.5. Actively conduct research and develop loans with reasonable interest rates together with simplifying procedures for granting capital loan while ensuring capital adequacy and compliance with regulations and law, enhance appraisal capacity to shorten loan processing time

1.6. Publicize and provide customers with guidelines on policies of the Government, services and products to inform the customers about benefits and obligations in performing transactions with banks.

2. Implement scheme for restructuring together with disposing bad debts during 2016-2020

2.1. Organize intensive and effective implementation of contents and solutions in approved restructuring measures together with bad debt disposal until 2020, adopt measures specified under Resolution No. 42/2017/QH14 to promote process of disposing bad debts and collateral of bad debts according to defined roadmaps and plans. Strive to reduce at least 25% of total non-performing loans and bad debts sold to VAMC and loans subject to debt classification measures1 in 2020 compared to those at the end of 2019.

2.2. Stringently comply with regulations and law and direction of SBV on classifying debts and provisions; review and reduce expenditure on operation to focus financial resources on disposing bad debts in 2020, especially for credit institutions with moderate credit quality, high restructured debts and hidden debts potentially turning into bad debts.

2.3. Closely control credit development speed, credit structure and credit quality, enhance credit risk management in sectors vulnerable to hidden risks, customers with high outstanding loans and enterprise bond investment.  Stringently comply with regulations and law on credit extension and methods of disbursing loan capital utilizing non-cash payment services; Closely control use purposes of loans of customers and minimize increase of bad debts of credit extensions.

2.4. Estimate revenues conforming to debts to ensure compliance with regulations and law and accurate depiction of financial performance; regularly review practical situations of debts subject to revenue estimation, especially debts with high estimated revenues to promptly withdraw interest if recall is improbable, ensure compliance with regulations and law and instructional documents of SBV.

2.5. Closely cooperate with VAMC in reviewing and specifically assessing each bad debt granted to VAMC, especially high bad debts; assess ability to recall and reasons for difficulties in disposing bad debts to develop effective rectification measures; promote disposing bad debts according to market mechanisms.

2.6. Implement appropriate measures to increase revenues from non-credit services; post holdings on stock market; continue to develop finance healthily and increase charter capital. Promote application of Basel II capital standards and risk management principles according to international practices. Expeditiously develop database and calculating instruments and upgrade information technology to prepare for performing internal assessment on capital adequacy.

2.7. Actively cooperate with local governments and local competent authorities, especially police, court authorities and judgment enforcement authorities of all levels in recalling bad debts and disposing assets to sufficiently recall bad debts.

2.8. Actively and successfully publicize implementation results of operating monetary policies and operations of the sector, operation results of entities, results of restructuring together with bad debt disposal according to Decision No. 1058/QD-TTg and Resolution 42/2017/QH14, while focus on communicating to enable customers to fully understand legal benefits of credit institutions in disposing debts and responsibilities for paying debts of customers. Promptly acknowledge and submit reports to SBV on issues arising in operations to develop appropriate solutions, avoid impact on reliability and stabilize the system.

2.9. Emphasize roles and responsibilities of Cooperative banks for connecting people’s credit fund systems, circulating capital, examining, supervising and ensuring safety of people’s credit fund systems as per the law. People’s credit fund systems shall intensively and effectively implement approved measures for restructuring together with disposing bad debts, including developing and implementing measures for increasing charter capital and ensuring adequate charter capital as per the law; adjust organization and operation according to principles and purposes and comply with cooperative principles.

3. Prevent violations in banking sector

3.1. Stringently and extensively implement Directive No. 07/CT-NHNN dated October 11, 2017 on enhancing prevention of violations in monetary and banking sectors; fully implement regulations and law on anti-money laundering; enhance and utilize enterprise culture and professional ethics of officials; enforce principles, disciplines and compliance with regulations and law to ensure that officials and employees implement regulations, internal procedures, regulations and law and reduce ethic-related risks; take serious actions against violations. Regularly assess, review and rotate officials as per the law to minimize violations in credit institutions.

3.2. Stringently implement requests, propositions, warnings and decisions on inspection and auditing of inspecting agencies, State Audit Office of Vietnam and independent audit agencies. Actively implement measures for preventing, detecting and stringently dealing with violations, negativity and corruptions of individuals and affiliated entities in a synchronized manner.

3.3. Enhance transparency and openness in operation of credit institutions, especially credit operations. Thoroughly deal with cross ownership and violations against ownership limits. Intervene and deal with cases in which group interest or interest of major shareholders/groups of shareholder interferes with operation of credit institutions.

3.4. Focus on improving ability to administer, operate and supervise of Board of Directors/Board of Members, Board of Operation and Board of Supervisors with respect to operations of credit institutions. Review and amend systems of documents providing internal guidelines for professional operations to ensure compliance with regulations and law and guidelines of SBV.  Enhance effectiveness of internal inspection, control and fully comply with regulations under Circular No. 13/2018/TT-NHNN dated May 18, 2018 on internal control systems.

3.5. Thoroughly and stringently implement directions of Governor of SBV under Directive No. 02/CT-NHNN dated November 15, 2019 on enhancing management of money laundering and terrorism financing risks in banking sectors, which includes enhancing examining and reviewing documents and transactions during provision of products with risks of money laundering in banking sector.

3.6. Consumer finance companies shall rectifying granting loans and develop appropriate interest and debt collection policies to ensure transparency and compliance with regulations and law. People’s credit funds shall stringently comply with regulations and law in mobilizing and granting loans; enhance management and ethic education of officials, prevention of violations to ensure operational security and safety.

4. Develop non-cash payments; ensure security and safety in information technology operations, electronic payments and card payments

4.1. Review and revise internal procedures and regulations to ensure compliance with applicable regulations and law in providing payment services and intermediate payment services. Promote and develop technology infrastructure serving sharing and provision of digital products and enhance integration and connection with various sectors to provide non-cash payment services; actively cooperate with ministries and public service providers to promote use of non-cash payments in public services. Increase application of achievements of the 4^th industrial revolution in payment activities; conduct research and apply new and modern technology and payment methods to develop convenient and safe payment services. Actively implement basic standards of domestic chip cards according to roadmap for conversion according to SBV.

4.2. Enhance implementation of measures for ensuring safety and security of information systems, prioritizing synchronized measures regarding cybersecurity monitoring to actively detect and deal with information safety incidents. Closely control access of internal personnel and third party personnel to information systems. Organize implementation of internal control regarding management of login accounts in information technology.

4.3. Organize review and stringent implementation of regulations on privacy and provision of customer information of credit institutions and branches of foreign banks according to Decree No. 117/2018/ND-CP dated September 11, 2018 of Government. Implement measures for protecting and preventing information disclosure throughout local information systems in a synchronized manner.

4.4. Promote publicizing policies related to operating monetary policies and banking operations, issue warnings and instruct entities receiving payments and customers to be aware of schemes and intrigues of criminals, precautions and measures to ensure payment safety; provide customers with guidelines on solutions in case of incidents.  Actively monitor and promptly respond to feedback of the general public regarding issues related to payment services of entities; promptly take actions as per the law to ensure benefits of parties in case of incidents and/or frauds and submit reports to SBV and local branches of SBV.

5. Other tasks

5.1. Stringently comply with regulations of SBV on vault safety. Review organizational models of cash transaction center, vault departments and systems of internal documents and regulations on vault safety to ensure legitimacy, adequacy, safety and coordination. Be strict regarding cash collection and expenditure, contents of cash expenditure, classification of money eligible and ineligible for circulation. Promote internal supervision and self-examination, vault security and safety and prevent corruption and violations in monetary and vault management.

5.2. Cooperate with branches of SBV in provinces and cities in contacting voters with National Assembly Delegation in each city and province to promptly deal with difficulties related to monetary and banking affairs to promote socio-economic development in each city and province throughout the country.

5.3. Actively and successfully publicize implementation results of solutions for operating monetary policies, banking operations and operations of entities. Closely cooperate with SBV in effectively implementing information and communication affairs of banking sector to ensure operation effectiveness of banking system in Vietnam.

5.4. Stringently implement official-related affairs, particularly implementing assessment, selection, planning, allocation, use and assignment based on title standards, official assessment criteria, procedures, regulations and democracy principles to ensure openness and transparency.  Emphasize roles and responsibilities of representatives of state capital in credit institutions and enterprises under management of SBV. Stringently comply with regulations on position rotation.

V. IMPLEMENTATION

1. This Directive comes into effect from the day on which it is signed.

2. Entities in head offices of State bank of Vietnam and branches of the State bank in provinces and central-affiliated cities within their functions and tasks shall implement tasks specified under this Directive; submit reports on directive implementation to Office of State bank of Vietnam on a monthly/quarterly/yearly basis.

3. Office of State bank of Vietnam shall take charge and cooperate with entities affiliated to SBV in monitoring implementation of directives, submitting reports to Governor of State bank of Vietnam and Ministry of Planning and Investment as prescribed by the Government.

4. Heads of entities affiliated to State Bank of Vietnam, Directors of branches State banks of Vietnam of provinces and central-affiliated cities, Chairpersons of Boards of Directors, Boards of Members and General Directors of credit institutions and branches of foreign banks are responsible for implementation of this Directive./.

 

GOVERNOR Le Minh Hung