Military Bank permitted to make risk provisioning

The State Bank of Vietnam issued Document No.8738/NHNN-CNH on September 25th, 2008 to allow the Joint-Stock Commercial Military Bank to make risk provisioning from the fourth quarter of the year 2008 in compliance with Article 7 of Decision No.493/2005/QD-NHNN of April 22nd, 2005.

Under this decision, the Military Bank is required to closely monitor and supervise the classification of loans and risk provisioning at its head-quarter, transaction offices, and branches in strict compliance with Article 7.

In extraordinary cases of bad loans, the Military Bank should accurately and timely evaluate and analyze the reasons and take effective measures to deal with these cases. Intentional concealments and incorrect reports on the real nature of the risks are strictly forbidden. The Bank is also required to continue improving its system of internal credit rating and risk provision policy in accordance with its real operations and the applicable laws.

In addition to periodical reports, after one year of application , the Military Bank should assess the system of internal credit rating and risk provisioning and make reports to the State Bank of Vietnam, especially with the comparison of the results in implementing Articles 6 and 7 of Decision No.493/2005/QD-NHNN.

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