Amounts of general provisions of credit institutions are now specified

This is the highlight of Circular No. 11/2021/TT-NHNN, prescribing classification of assets, amounts, and methods of setting up risk provisions and use of provisions for the handling of risks arising from operations of credit institutions and foreign bank branches.

The Circular prescribes the amounts that a credit institution must set aside for a general provision is 0.75% of the total balance of debts from class 1 to class 4, except the followings:

– Deposits are made at credit institutions, foreign bank branches in accordance with the law, and overseas credit institutions.

– Loans, forwards of securities between credit institutions and foreign bank branches in Vietnam.

Amounts of general provisions of credit institutions are now specified

– Purchases of promissory notes, treasury bills, certificates of deposit, or bonds issued by credit institutions and foreign bank branches onshore.   (This is a supplement to the existing regulation)

– Repos of government bonds, subject to point I of clause 1 of Article 1 in Circular No. 11. (This is a supplement to the existing regulation).

Circular No. 11/2021/TT-NHNN is entering into force as of October 1, 2021, replacing the Circular No. 02/2013/TT-NHNN dated January 21, 2013, and the Circular No. 09/2014/TT-NHNN dated March 18, 2014.

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