On January 18, 2024, with 450/477 deputies participating in the voting in favor, the new Law on Credit Institutions was passed by the National Assembly, which includes provisions regarding safety assurance ratios in activities of credit institutions.
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Photo 1: Safety assurance ratios in activities of credit institutions under the Law on Credit Institutions 2024_Hotline: 097 211 8764
Specifically, the Law on Credit Institutions 2024 stipulates the safety assurance ratios in activities of credit institutions as follows:
(1) Credit institutions, foreign bank branches must maintain the following safety assurance ratios:
- Liquidity ratio;
- Minimum capital adequacy ratio of 08% or higher as prescribed by the Governor of the State Bank for each period;
- Maximum foreign currency, gold exposure relative to own capital;
- Ratio of purchasing, holding, investing in government bonds, government-guaranteed bonds;
- Other safety assurance ratios.
(2) Commercial banks, cooperative banks, foreign bank branches participating in the national interbank payment system must hold reserve funds at the State Bank, maintain a minimum quantity of valuable papers allowed to be pledged as regulated by the Governor of the State Bank for each period.
(3) The Governor of the State Bank shall prescribe the safety assurance ratios as mentioned above for each type of credit institution, foreign bank branch.
(4) The total capital of a credit institution invested in other credit institutions, subsidiary companies of credit institutions in the form of capital contribution, share purchase, and investment in the form of capital contribution, share purchase of enterprises operating in the banking, insurance, securities sector shall not be counted as own capital when calculating the safety assurance ratio.
Thus, the Law on Credit Institutions 2024 regulates the safety assurance ratios in activities of credit institutions from July 01, 2024.
The Law on Credit Institutions 2024 takes effect from May 15, 2024.
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