MHB permitted to make qualitative risk provisioning

The State Bank of Vietnam issued Document No.1818/NHNN-CNH on March 18 to allow the MeKong Housing Joint-Stock Commercial Bank to make risk provisioning in compliance with Article 7 of Decision No.493/2005/QD-NHNN on loan classification and risk provisioning on the qualitative basis.

Under this decision, the MHB is required to continue improving its system of internal credit rating and risk provisioning policy in accordance with its real operations and the applicable laws. The MHB should do research, and set up a historical credit database in order to evaluate risk potential and default probability of clients. The Bank is also required to closely monitor and supervise the loan classification and risk provisioning of its head-quarter, operation centers, and branches in strict compliance with Article 7 of Decision No.493/2005/QD-NHNN. In cases of abnormal bad loans, the MHB should accurately and promptly evaluate and analyze the reasons and take effective measures to deal with them. Intentional concealments of and dishonest reports on real risks are strictly forbidden.

My Huong

sbv

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