ON THE FINANCIAL REGIME APPLICABLE TO CREDIT INSTITUTIONS, BRANCHES OF FOREIGN BANKS, AND THE FINANCIAL SUPERVISION AND EVALUATION OF THE EFFICIENCY OF STATE CAPITAL INVESTMENT IN WHOLLY STATE-OWNED CREDIT INSTITUTIONS AND STATE-INVESTED CREDIT INSTITUTIONS

1. This Decree provides for:

a) The financial regime, revenues, expenditures, and profit distribution of credit institutions and branches of foreign banks as prescribed in Clause 3 Article 151, Clause 4 Article 145, and Clause 1 Article 148 of the Law on Credit Institutions;

b) Financial supervision and evaluation of the efficiency of state capital investment in credit institutions wholly owned by the State and credit institutions with state capital (including credit institutions in which the State holds more than 50% to less than 100% of charter capital, and cooperative banks).

2. The financial mechanism and performance evaluation of policy banks shall be implemented in accordance with other regulations of the Government.

1. Credit institutions and branches of foreign banks established, organized and operating in accordance with the Law on Credit Institutions.

2. Other relevant organizations and individuals.

1. Credit institutions and branches of foreign banks shall have financial autonomy, be responsible for their own business performance, and fulfill obligations and commitments in accordance with the law.

2. Credit institutions and branches of foreign banks must disclose financial statements in accordance with the Law on Credit Institutions and other relevant laws.

1. Owners’ equity:

a) Charter capital or allocated capital;

b) Differences arising from asset revaluation and exchange rate differences;

c) Share premium;

d) Funds: the charter capital supplementary reserve fund of the credit institution or the allocated capital supplementary reserve fund of the branch of a foreign bank, financial reserve fund, development investment fund;

dd) Undistributed retained earnings, unhandled accumulated losses;

e) Other capital owned by the credit institution or the branch of a foreign bank.

2. Mobilized capital as prescribed in the Law on Credit Institutions:

a) Capital mobilized from deposits and from the issuance of certificates of deposit and bonds;

b) Entrusted investment capital;

c) Loans from credit institutions, financial institutions, and other domestic and foreign organizations and individuals;

d) Loans from the State Bank of Viet Nam in accordance with the law.

3. Other capital as prescribed by law.

1. Credit institutions and branches of foreign banks may use capital for business activities in accordance with the Law on Credit Institutions and other relevant laws. Credit institutions wholly owned by the State and state-invested credit institutions shall also comply with the regulations on management and use of state capital invested in manufacturing and business activities of enterprises.

2. Credit institutions and branches of foreign banks may restructure their capital and assets to support business development in compliance with legal regulations.

3. Credit institutions and branches of foreign banks may purchase and invest in fixed assets directly serving their operations in accordance with Clause 3 Article 144 of the Law on Credit Institutions. For credit institutions wholly owned by the State and state-invested credit institutions, the purchase and investment in fixed assets must also comply with regulations on management and use of state capital invested in manufacturing and business activities of enterprises.

The transfer of capital and assets between branches of a credit institution shall be carried out in accordance with its internal regulations.

4. With respect to real estate held due to debt settlement as prescribed in Clause 3 Article 139 of the Law on Credit Institutions:

a) For real estate held by a credit institution for the purpose of sale or transfer to recover capital within the time limit prescribed in Clause 3 Article 139 of the Law on Credit Institutions, the credit institution shall not recognize an increase in assets nor make depreciation;

b) For real estate repurchased by a credit institution for use as its head office, workplace, or warehouse facilities directly serving its operations, the credit institution shall recognize an increase in assets and make depreciation in accordance with the law, and must comply with the fixed asset investment limits specified in Clause 3 Article 144 of the Law on Credit Institutions.

1. The capital contribution, purchase, sale, and transfer of shares and capital contributions by credit institutions shall comply with the Law on Credit Institutions and other relevant laws.

2. The authority to decide on plans for capital contribution, purchase, sale, and transfer of shares and capital contributions by credit institutions shall comply with the Law on Credit Institutions, other relevant laws, and the charter of the credit institution. For credit institutions wholly owned by the State and state-invested credit institutions, the regulations on management and use of state capital invested in manufacturing and business activities of enterprises must also be followed.

Credit institutions and branches of foreign banks shall comply with regulations on capital safety assurance as follows:

1. Manage and use capital and assets, distribute profits, and implement financial management and accounting regimes in accordance with the Law on Credit Institutions, this Decree, and other relevant laws;

2. Comply with regulations on operational safety in accordance with the Law on Credit Institutions and other relevant laws;

3. Purchase asset insurance for assets required to be insured;

4. Participate in deposit insurance and the safety assurance fund for the system of people's credit funds as prescribed by the Law on Credit Institutions;

5. Handle asset losses in accordance with Article 9 of this Decree;

6. Recognize risk provisions as business expenses in accordance with the Law on Credit Institutions and other relevant laws;

7. Other capital preservation measures as prescribed by law.

1. Credit institutions and branches of foreign banks shall carry out inventory and revaluation of assets in accordance with the Law on Accounting and other relevant laws;

2. Credit institutions and branches of foreign banks shall depreciate fixed assets in accordance with legal provisions applicable to enterprises.

In the event of asset losses, credit institutions and branches of foreign banks must determine the causes and responsibilities, and handle them in the following order:

1. In cases caused by subjective reasons, the person responsible for the loss must compensate for the damage. The handling of responsibility and compensation for damages shall comply with the law.  The credit institution or branch of the foreign bank shall, based on legal regulations, specify the authority to determine compensation levels in its charter.

2. In cases where the asset is insured, losses shall be handled in accordance with the insurance contract.

3. Use the provision for risks already recorded as expenses to cover the loss in accordance with the law.

4. The remaining loss value, after being offset by compensation from individuals, collectives, insurance organizations, and provisions recorded as expenses, shall be covered by the financial reserve fund of the credit institution or branch of a foreign bank. If the financial reserve fund is insufficient, the shortfall shall be recorded as other expenses in the period.

Credit institutions and branches of foreign banks may lease assets under their management and use in accordance with the law and the financial regulations and internal rules of the credit institution or branch of the foreign bank. For credit institutions wholly owned by the State, the lease of assets must also comply with regulations on the management and use of state capital invested in manufacturing and business activities of enterprises.

1. Credit institutions and branches of foreign banks may purchase, sell, and transfer assets to recover capital for more efficient business purposes.

2. The purchase, sale, and transfer of assets by credit institutions and branches of foreign banks shall comply with the Law on Credit Institutions, other relevant laws, and the charter, financial regulations, and internal rules of the credit institutions or branches of foreign banks. For credit institutions wholly owned by the State and state-invested credit institutions, the regulations on management and use of state capital invested in manufacturing and business activities of enterprises must also be followed.

1. Credit institutions and branches of foreign banks may liquidate damaged, obsolete, or unused assets to recover capital in a public and transparent manner in accordance with the law.

2. The liquidation of assets and the authority to decide on asset liquidation by credit institutions and branches of foreign banks shall comply with the Law on Credit Institutions, other relevant laws, and the charter, financial regulations, and internal rules of the credit institutions or branches of foreign banks. For assets required by law to be auctioned upon liquidation, credit institutions and branches of foreign banks must conduct auctions in accordance with the law. For credit institutions wholly owned by the State and state-invested credit institutions, the regulations on management and use of state capital invested in manufacturing and business activities of enterprises must also be followed.

1. Revenues from business activities of commercial banks, non-bank credit institutions, and branches of foreign banks include:

a) Interest income and similar income: interest from deposits, interest from loans, interest from trading and investing in debt securities, income from guarantees, interest from financial leasing, interest from debt trading, and other income from credit activities;

b) Income from service activities: income from payment services; treasury services; entrusted and agency services; services for asset custody, safety deposit box and vault rental, banking business consulting and other business consulting, monetary brokerage; and income from other services;

c) Income from foreign exchange and gold trading: income from foreign currency trading; foreign exchange gains; income from gold trading; income from currency-related derivatives;

d) Income from securities trading activities as permitted by the Law on Credit Institutions;

dd) Income from capital contribution, transfer of capital contributions and shares;

e) Income from other activities: recovery from debts previously settled with risk provisions (including debts written off but subsequently recovered); income from other derivative financial instruments; income from debt trading activities; income from asset transfer and liquidation; reversal of provisions; reversal of long-term investment devaluation provisions; asset lease income; other income in accordance with the law;

g) Other income: collections from liabilities that are now ownerless or have no identifiable creditor in accordance with the law shall be recognized as income; penalties paid by customers, compensation by customers due to contract breaches shall be accounted for as income; insurance compensation shall be accounted for as income after deducting insured losses; and other income as prescribed by law.

2. Principles of revenue recognition

Revenue recognition for income items of commercial banks, non-bank credit institutions, and branches of foreign banks shall comply with Clauses 2, 3, and 4 Article 145 of the Law on Credit Institutions. Specific principles for revenue recognition by commercial banks, non-bank credit institutions, and branches of foreign banks are implemented as follows:

a) For interest income and similar income:

a.1) Revenue from credit extension activities: Commercial banks, non-bank credit institutions, and branches of foreign banks are responsible for assessing debt recoverability and classifying debts in accordance with banking laws as a basis for recognizing accrued interest and accounting such accrued interest from credit extension activities as revenue as follows:

Commercial banks, non-bank credit institutions, and branches of foreign banks shall record accrued interest arising during the period as revenue for debts classified as standard debts that are not subject to specific risk provisioning as prescribed by law.

Accrued interest on debts maintained in the standard debt group due to the implementation of State policies, and accrued interest during the period on other debts, shall not be recorded as revenue. Commercial banks, non-bank credit institutions, and branches of foreign banks shall monitor such amounts off-balance sheet for collection and handling in accordance with the law; once collected, they shall be recorded as revenue.

a.2) Interest income from deposits: means the amount of interest accrued on deposits during the period.

b) For income from exchange rate differences due to foreign currency and gold revaluation:  commercial banks, non-bank credit institutions, and branches of foreign banks shall recognize revenue in accordance with accounting standards and other relevant laws.

c) Income from trading securities as permitted under the Law on Credit Institutions:

c.1) For trading securities: Commercial banks, non-bank credit institutions, and branches of foreign banks shall recognize income in accordance with enterprise accounting regulations applicable to trading securities.

c.2) For investment securities, excluding those treated as loans requiring debt classification and provisioning: commercial banks, non-bank credit institutions, and branches of foreign banks shall recognize interest income based on the estimated collectible interest.

d) For income from capital contribution:  dividends and distributed profits from capital contribution activities shall be recognized as income when a resolution, decision, or notification on dividend or profit distribution is issued.

dd) For revenue from other activities: revenue includes the total value of goods and services provided during the period, regardless of whether payment has been received.

1. Expenses of commercial banks, non-bank credit institutions, and branches of foreign banks include:

a) Interest expenses and similar expenses: interest paid on deposits; interest paid on borrowings; interest paid on certificates of deposit and bonds; and other costs related to credit activities;

b) Service operation expenses: expenses for payment services; treasury services; telecommunication services; entrusted and agency services; monetary brokerage services; consulting services for banking and other business activities; commission expenses for agents, brokers, and trustees in legally permitted activities. Brokerage commissions must comply with the following regulations:

b.1) Brokerage commissions shall be paid to third parties acting as intermediaries and shall not apply to agents of commercial banks, non-bank credit institutions, and branches of foreign banks; managers, controllers, members of the Supervisory Board, employees of commercial banks, non-bank credit institutions, and branches of foreign banks; or related persons of such entities as defined in the Law on Credit Institutions and its amending, supplementing, or replacing documents (if any);

b.2) The payment of brokerage commissions must be based on a contract or written confirmation between the commercial bank, non-bank credit institution, or branch of foreign bank and the brokerage commission recipient, which must include the following essential details: : name of the brokerage recipient, nature of the payment, payment amount, payment method, implementation and completion time, and responsibilities of each party;

b.3) For brokerage payments related to asset leasing (including collateral used in substitution for the performance of secured obligations): The brokerage fee for leasing each asset of a commercial bank, non-bank credit institution, or branch of foreign bank shall not exceed 5% of the total rental income generated from the asset through brokerage.

b.4) For brokerage payments related to the sale of pledged or mortgaged assets (including collateral used in substitution for the performance of secured obligations): The brokerage commission for selling each asset of a commercial bank, non-bank credit institution, or branch of foreign bank shall not exceed 1% of the proceeds from the sale of that asset through brokerage.

b.5) The Board of Directors, Members' Council, or General Director (Director) of the commercial bank, non-bank credit institution, or branch of foreign bank shall promulgate internal regulations on brokerage commissions for consistent and transparent application.

c) Expenses from foreign exchange and gold trading: expenses for foreign currency trading; exchange rate losses; gold trading; and currency-related derivative instruments;

d) Expenses for trading securities permitted under the Law on Credit Institutions;

dd) Income from capital contribution, transfer of capital contributions and shares;

e) Expenses from other business activities: expenses for interest rate swap operations; debt trading; financial leasing; other derivative financial instruments; and other business operations;

g) Tax expenses and other fees and charges;

h) Expenses for managers, executives, and employees (including controllers and members of the Supervisory Board): salaries, remuneration, bonuses, allowances; contributions based on salary including social insurance, health insurance, labor insurance (if any), unemployment insurance, trade union funds; personal accident insurance; expenses for uniforms and protective gear for employees who require personal protective equipment while working; subsidies; meal allowances (for commercial banks wholly owned by the State, the meal allowance shall comply with the regulations applicable to state-owned enterprises); healthcare expenses including periodic health check-ups, preventive medicine, and other medical expenses within the enterprise’s responsibility under the law; annual leave payments, expenses for female employees in accordance with labor laws, and other expenses as prescribed by law;

i) Expenses for administrative management and operations, including: materials, printing; travel expenses; professional training; expenses for research and application of science and technology, including appropriation to the science and technology development fund as prescribed by law and additional expenses in case the fund balance is insufficient for scientific and technological activities in the year; bonuses for innovations and improvements based on actual effectiveness, with public regulations on reward and an evaluation council; postal and telephone expenses; publishing, communication, advertising, marketing, and promotional expenses; purchases of publications, newspapers, and reference materials; expenses for party and union activities; electricity, water, occupational safety, and hygiene at the workplace; expenses for conferences, receptions, ceremonies, business meetings, and external affairs; consultancy and audit expenses; fees for hiring domestic and foreign experts; fire prevention and firefighting expenses; environmental protection expenses; and other expenses in accordance with the law;

k) Asset-related expenses, including: depreciation of fixed assets (depreciation of fixed assets used for business operations shall comply with the regulations on management, use, and depreciation applicable to enterprises. In case of installment purchases, the difference between the total payable amount and the spot purchase price shall be expensed over the payment period, unless capitalized as part of the historical cost of the asset under accounting standards); maintenance and repair of assets; procurement and repair of tools and instruments; asset insurance; asset lease expenses (if rent is paid in a lump sum for multiple years, it shall be amortized into business expenses over the useful life of the asset); expenses for asset management and operation services under lease contracts; and other asset-related expenses as prescribed by law;

l) Provisioning expenses:

l.1) Expenses for provisioning in operations in accordance with Article 147 of the Law on Credit Institutions and guiding documents;

l.2) Risk provision for special bonds issued by the Viet Nam Asset Management Company (VAMC) in accordance with Point a Clause 2 Article 21 of Decree No. 53/2013/ND-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of the VAMC, guidance of the State Bank of Viet Nam, and relevant amended or replaced documents (if any);

l.3) Risk provisioning expenses deductible for corporate income tax purposes shall be determined in accordance with tax laws on corporate income tax.

m) Deposit insurance fee as required by the Law on Deposit Insurance and other capital preservation expenses as prescribed by law;

n) Other expenses: contributions to industry associations to which the commercial bank, non-bank credit institution, or branch of foreign bank is a member, based on the association’s fee schedule; expenses for party and union activities (the portion not covered by union budgets shall be paid from the prescribed sources); asset disposal and liquidation costs, and residual value of liquidated or sold fixed assets (if any); expenses for recovery of written-off debts and non-performing loans; expenses to handle remaining losses after offsetting with compensation, insurance, as prescribed in Clause 4 Article 9 of this Decree; expenses for amounts previously recognized as revenue in prior periods but later assessed by the commercial bank, non-bank credit institution, or branch of foreign bank as uncollectible or actually not collected; expenses for social activities including donations, charity, and sponsorships in accordance with the Law on Corporate Income Tax; welfare-related expenses paid directly to employees, and other employee welfare expenses as prescribed by tax law; expenses for liabilities with unidentified creditors that were previously recorded as income but later determined to have identifiable creditors; expenses for penalties and compensation due to breaches of economic contracts attributable to the commercial bank, non-bank credit institution, or branch of foreign bank; expenses for administrative fines, except for fines that individuals are personally liable for under the law; court fees and judgment enforcement fees; and other expenses as prescribed by law.

2. Principles of expense recognition for commercial banks, non-bank credit institutions, and branches of foreign banks shall be governed by Article 146 of the Law on Credit Institutions.

1. Revenues of cooperative banks include:

a) Interest income and similar income: interest from deposits; interest from loans, including interest on loans to member people’s credit funds and to non-member customers; interest from trading and investing in debt securities; income from guarantees; interest from debt trading; and other credit-related income;

b) Income from service activities: income from payment services (including income from card services, electronic banking services; income from opening payment accounts, providing payment instruments for member people’s credit funds and non-member customers); income from treasury services; income from entrusted and agency operations; income from providing consulting services on banking and other business activities; income from supporting and developing products and services for people’s credit funds; income from agency activities in banking and insurance business sectors; income from other services as prescribed by law;

c) Income from securities trading as permitted by the Law on Credit Institutions;

d) Income from other activities, including: recovery from debts previously settled with risk provisions (including debts written off but subsequently recovered); income from debt trading; income from asset transfer and liquidation; reversal of provisions; income from asset leasing; income from other banking operations as permitted by the State Bank of Viet Nam;

dd) Other income as prescribed in Point g Clause 1 Article 13 of this Decree.

2. Principles of revenue recognition for income items of cooperative banks shall comply with Clause 2 Article 13 of this Decree.

1. Expenses of cooperative banks include:

a) Interest expenses and similar expenses: interest paid on deposits, including interest paid to member people’s credit funds and non-member customers, and other expenses as prescribed in Point a Clause 1 Article 14 of this Decree;

b) Expenses for service operations and securities trading activities as prescribed in Points b and d Clause 1 Article 14 of this Decree;

c) Other business expenses: expenses for debt trading activities and other business operations in accordance with the law;

d) Deposit insurance fee in accordance with the Law on Deposit Insurance; contributions to the safety fund of the people’s credit fund system in accordance with regulations of the Governor of the State Bank of Viet Nam; and other capital preservation expenses as prescribed by law;

dd) Administrative and operational expenses: professional training (including training for bank staff and banking/IT training for member people’s credit funds), and other expenses as prescribed in Point i Clause 1 Article 14 of this Decree;

e) Taxes and other charges; expenses for managers, executives, and employees; asset-related expenses; provisioning expenses; other expenses: as prescribed in Points g, h, k, l, and n Clause 1 Article 14 of this Decree.

2. Principles of expense recognition of cooperative banks shall comply with Article 146 of the Law on Credit Institutions.

1. Revenues of people’s credit funds include:

a) Interest income and similar income: interest from deposits; interest from loans; interest from debt trading; and other credit-related income;

b) Income from service activities: income from payment services (including income from money transfer services, collection and payment services on behalf of members and customers); treasury services; entrusted and agency services in banking-related fields, asset custody as permitted by the State Bank of Viet Nam; acting as insurance agents under laws on insurance business and credit institutions; consulting services on banking and other business activities for members; and other service income in accordance with the law;

c) Income from capital contributions to the Viet Nam Cooperative Bank: interest from capital contribution to the Viet Nam Cooperative Bank;

d) Income from other activities, including: recovery from debts previously settled with risk provisions (including debts written off but subsequently recovered); income from debt trading; income from asset transfer and liquidation; reversal of provisions; income from asset leasing; income from other activities;

dd) Other income as prescribed in Point g Clause 1 Article 13 of this Decree.

2. Principles of revenue recognition for income items of people’s credit funds shall comply with Clause 2 Article 13 of this Decree.

1. Expenses of people’s credit funds include:

a) Interest expenses and similar expenses: interest paid on deposits, including interest paid to members and to other organizations and individuals; interest paid on loans, including refinancing loans, loans from other credit institutions and financial institutions, and loans from the Viet Nam Cooperative Bank; and other credit-related expenses;

b) Service operation expenses: expenses for payment services, including money transfer services, collection and payment services for members and customers; cash transportation; treasury operations; and other expenses as prescribed in Point b Clause 1 Article 14 of this Decree;

c) Capital contribution expenses: expenses incurred from capital contribution to the Viet Nam Cooperative Bank;

d) Other business expenses: expenses for debt trading activities and other business operations in accordance with the law;

dd) Deposit insurance fee in accordance with the Law on Deposit Insurance; contributions to the safety fund of the people’s credit fund system in accordance with regulations of the Governor of the State Bank of Viet Nam; and other capital preservation expenses as prescribed by law;

e) Taxes and other charges; expenses for managers, executives, and employees; administrative and operational expenses; asset-related expenses; provisioning expenses; other expenses: as prescribed in Points g, h, k, l, and n Clause 1 Article 14 of this Decree.

2. Principles of expense recognition of cooperative banks shall comply with Article 146 of the Law on Credit Institutions.

1. Revenues of microfinance institutions include:

a) Interest income and similar income: a) Interest income and similar income: interest from deposits; interest from loans; interest from debt trading activities; and other credit-related income in accordance with the law;

b) Income from service activities: income from payment services; treasury services; collection, disbursement, and money transfer services for microfinance clients; entrusted lending services from organizations and individuals; consulting services on banking and other business activities; acting as insurance agents in accordance with the law on insurance business and the law on credit institutions; services related to asset custody, safe box and locker rentals; income from community benefit products; and other service activities as prescribed by law;

c) Income from foreign exchange differences as prescribed by accounting standards and relevant laws;

d) Income from other activities, including: recovery from debts previously settled using risk provisions (including debts written off but subsequently recovered); income from debt trading; income from transfer and liquidation of assets; reversal of provisions; income from asset leasing; and income from other activities as prescribed by law;

dd) Other income: non-refundable grants received by microfinance institutions to implement development programs and activities; tax refunds or reductions (if any); and other income as prescribed in Point g Clause 1 Article 13 of this Decree.

2. Principles of revenue recognition for income items of microfinance institutions shall comply with Clause 2 Article 13 of this Decree.

1. Expenses of microfinance institutions include:

a) Interest expenses and similar expenses: interest paid on deposits; mandatory savings deposits; other deposits; interest paid on borrowings; and other credit-related expenses;

b) Service operation expenses: collection, disbursement, and money transfer services for microfinance clients; telecommunication services; entrusted lending service fees; consulting services on banking and business activities; agency fees for providing insurance services; commission expenses for agents, brokers, and trustees in accordance with Point b Clause 1 Article 14 of this Decree;

c) Foreign exchange loss expenses as prescribed by accounting standards and relevant laws;

d) Other business expenses: debt trading operations and other business-related expenses as prescribed by law;

dd) Administrative and operational expenses: training and capacity building for staff, including training for collaborators and clients within the scope of microfinance activities, and other expenses as prescribed in Point i Clause 1 Article 14 of this Decree;

e) Taxes, fees, and charges; expenses for managers, executives, and employees; asset-related expenses; provisioning expenses; deposit insurance and other capital preservation expenses: as prescribed in Points g, h, k, l, and m Clause 1 Article 14 of this Decree;

g) Other expenses: community development expenses in accordance with the law and other expenses as prescribed in Point n Clause 1 Article 14 of this Decree.

2. Principles of expense recognition for microfinance institutions shall comply with Article 146 of the Law on Credit Institutions.

Revenue, expenses, assessable income, and other relevant contents for the purpose of corporate income tax calculation by credit institutions and branches of foreign banks shall comply with the law on corporate income tax.

The remaining profit of a credit institution, after offsetting prior-year losses (if any) in accordance with the Law on Corporate Income Tax and after paying corporate income tax, shall be distributed in the following order:

1. Profit sharing with parties contributing capital in joint arrangements according to signed transactions or contracts (if any);

2. Offsetting previous years’ losses that are no longer eligible to be deducted from pre-tax profits in accordance with regulations;

3. Appropriation of 10% of after-tax profit to the charter capital supplementary reserve fund, with the maximum fund balance not exceeding the charter capital of the credit institution;

4. The remaining profit, after deducting the amounts specified in Clauses 1, 2, and 3 of this Article, shall be distributed in the following order:

a) Appropriation of 10% to the financial reserve fund; the fund balance shall not exceed 25% of the charter capital of the credit institution;

b) Appropriation of up to 20% to the development investment fund; the fund balance shall not exceed the charter capital of the credit institution;

c) Appropriation to the reward and welfare funds for employees of the credit institution:

Credit institutions rated A in accordance with this Decree may appropriate up to three (03) months of actual salary to the reward and welfare funds;

Credit institutions rated B may appropriate up to one and a half (01.5) months of actual salary;

Credit institutions rated C may appropriate up to one (01) month of actual salary;

Credit institutions not subject to classification shall not make appropriations to the reward and welfare funds.

d) Appropriation to the bonus fund for credit institution managers and controllers:

Credit institutions rated A may appropriate up to one and a half (01.5) months of actual salary of the managers and controllers;

Credit institutions rated B may appropriate up to one (01) month of actual salary of the managers and controllers;

Credit institutions rated C or those not subject to classification shall not make appropriations to this bonus fund.

5. If the remaining profit after the appropriation to the development investment fund under Clause 4 of this Article is insufficient to appropriate to the reward and welfare funds for employees and the bonus fund for managers and controllers at the prescribed levels, the credit institution may reduce the appropriation to the development investment fund to allocate sufficient amounts to those funds, provided that the reduction shall not exceed the amount appropriated to the development investment fund in the fiscal year.

6. The remaining profit after appropriations under Clauses 3 and 4 of this Article shall be paid into the state budget.

The remaining profit of a credit institution, after offsetting prior-year losses (if any) in accordance with the Law on Corporate Income Tax and after paying corporate income tax, shall be distributed in the following order:

1. Profit sharing with parties contributing capital in joint arrangements according to signed transactions or contracts (if any);

2. Offsetting previous years’ losses that are no longer eligible to be deducted from pre-tax profits in accordance with regulations;

3. Appropriation of 10% of after-tax profit to the charter capital supplementary reserve fund, with the maximum fund balance not exceeding the charter capital of the credit institution;

4. The remaining profit, after deducting the amounts specified in Clauses 1, 2, and 3 of this Article, shall be distributed in the following order:

a) Appropriation of 10% to the financial reserve fund; the fund balance shall not exceed 25% of the charter capital of the credit institution;

b) Appropriation of up to 25% to the development investment fund; the fund balance shall not exceed the charter capital of the credit institution;

c) Appropriation to the reward and welfare funds for employees and the bonus fund for managers of the credit institution in accordance with the Government’s regulations on labor, salaries, remuneration, and bonuses applicable to enterprises with state ownership of more than 50% to less than 100% of charter capital;

d) The remaining profit after appropriations to the above-mentioned funds shall be distributed as dividends in cash or stock.

5. At least 30 days prior to the General Meeting of Shareholders, the representative of state capital in the credit institution shall seek guidance from the State Bank of Viet Nam regarding the profit distribution plan under Points b, c, and d Clause 4 of this Article before voting at the General Meeting. Within 20 days from the date of receiving a complete dossier from the credit institution, the State Bank of Viet Nam shall consult with the Ministry of Finance.  Within 20 days from the receipt of complete documents, the Ministry of Finance shall issue a written opinion to the State Bank of Viet Nam.

6. For cash dividends distributed under Point d Clause 4 of this Article, the credit institution shall remit to the state budget the cash amount corresponding to the state capital share in accordance with the law.

7. In case of stock dividend distribution under Point d Clause 4 of this Article, the State Bank of Viet Nam shall consult with the Ministry of Finance before submitting the proposal to the Prime Minister for consideration and approval of the policy on stock dividends. Stock dividends shall apply only to credit institutions that meet the following criteria:

a) Efficiently operating, as assessed based on the criteria for evaluating the efficiency of state capital investment in state-invested credit institutions as prescribed in this Decree, with a classification result of B or higher for the three consecutive years preceding the year in which stock dividends are to be distributed, as announced by the State Bank of Viet Nam;

b) A non-performing loan (NPL) ratio below 3%.

The remaining profit of a cooperative credit institution, after offsetting prior-year losses (if any) in accordance with the Law on Corporate Income Tax and after paying corporate income tax, shall be distributed in the following order:

1. Appropriation of 10% of after-tax profit to the charter capital supplementary reserve fund, with the maximum fund balance not exceeding the charter capital of the credit institution;

2. Appropriation of 10% to the financial reserve fund, with the maximum balance not exceeding 25% of the charter capital;

3. Appropriation of up to 25% to the development investment fund, with the maximum balance not exceeding the charter capital;

4. The remaining profit, after deductions under Clauses 1, 2, and 3 of this Article, shall be distributed as follows:

a) For the cooperative bank:

At least 30 days prior to the Members’ Congress, the representative of state capital in the bank shall seek guidance from the State Bank of Viet Nam regarding the distribution of the remaining profit before voting at the Members’ Congress.

Within 20 days from the date of receiving a complete dossier, the State Bank of Viet Nam shall consult with the Ministry of Finance for consensus on the distribution of the remaining profit, in order to instruct the state capital representative at the bank to vote at the Members’ Congress.

Within 20 days from receipt of the full dossier, the Ministry of Finance shall issue an official written opinion to the State Bank of Viet Nam.

The portion of profits distributed to the State as a member shall be used to supplement charter capital (state support capital). The authority, procedures, and steps for supplementing state capital shall comply with Article 28 of this Decree applicable to credit institutions wholly owned by the State.

b) For people’s credit funds: Profit distribution shall comply with the Law on Cooperatives and the charter of the respective people’s credit fund.

The remaining profit of a microfinance institution, after offsetting prior-year losses (if any) in accordance with the Law on Corporate Income Tax and after paying corporate income tax, shall be distributed in the following order:

1. Offsetting previous years’ losses that are no longer eligible to be deducted from pre-tax profits in accordance with regulations;

2. Appropriation of 10% of after-tax profit to the charter capital supplementary reserve fund, with the maximum balance not exceeding the charter capital of the microfinance institution;

3. The remaining profit, after deductions under Clauses 1 and 2 of this Article, shall be appropriated 10% to the financial reserve fund, with the maximum balance not exceeding 25% of the charter capital of the microfinance institution;

4. For microfinance institutions wholly owned by the State, the remaining profit after the appropriations in Clauses 1, 2, and 3 of this Article shall be distributed as follows:

a) Appropriation of up to 25% to the development investment fund, with the maximum balance not exceeding the charter capital of the microfinance institution;

b) The representative agency of the owner shall, based on regulations on classification and evaluation of credit institutions wholly owned by the State, review financial plans, assign targets, and conduct the classification process.  Based on the classification result, the microfinance institution shall distribute the remaining profit in accordance with the regulations applicable to credit institutions wholly owned by the State.

5. For other microfinance institutions, the distribution of remaining profit (after deductions under Clauses 1, 2, and 3 of this Article) shall be decided at their own discretion in accordance with their charter and relevant laws.

The remaining profit of a credit institution or a branch of a foreign bank, after offsetting prior-year losses (if any) in accordance with the Law on Corporate Income Tax and after paying corporate income tax, shall be distributed in the following order:

1. Profit sharing with parties contributing capital in joint arrangements according to signed transactions or contracts (if any);

2. Offsetting previous years’ losses that are no longer eligible to be deducted from pre-tax profits;

3. Appropriation of 10% of after-tax profit to the charter capital supplementary reserve fund of the credit institution or to the allocated capital supplementary reserve fund of the foreign bank branch. The maximum fund balance shall not exceed the charter capital or allocated capital, respectively;

4. The remaining profit, after deducting the amounts specified in Clauses 1, 2, and 3 of this Article, shall be distributed in the following order:

a) Appropriation of 10% to the financial reserve fund;

b) The remaining profit shall be distributed at the discretion of the credit institution or branch of a foreign bank in accordance with its charter, financial regulations, and internal rules.

1. The charter capital supplementary reserve fund and the allocated capital supplementary reserve fund shall be used to increase charter capital or allocated capital.

2. The financial reserve fund shall be used to cover residual asset losses and damages incurred during business operations after being offset by compensation from responsible organizations/individuals, insurance proceeds, and provisions previously recorded in expenses; and for other purposes as prescribed by law.

3. The development investment fund shall be used to implement development projects and supplement charter capital.

4. The bonus fund for managers and controllers shall be used to:

a) Provide bonuses to the Chairperson and members of the Board of Directors/Members’ Council, General Director, Director, Deputy General Director, Deputy Director, controllers, members of the Supervisory Board, and Chief Accountant;

b) The authority to determine bonus amounts under Point a shall follow the Law on Credit Institutions, the charter, and internal rules of the credit institution.

5. The reward fund shall be used to:

a) Year-end or periodic bonuses for staff of the credit institution based on individual work performance and productivity;

b) Ad-hoc bonuses for individuals or teams within the credit institution who have introduced technical innovations or process improvements that contribute to business efficiency;

c) Bonuses for individuals and entities outside the credit institution who have contributed to its business operations;

d) The authority to determine bonus amounts under Points a, b, and c of this Clause shall comply with the Law on Credit Institutions, the charter, and internal regulations of the credit institution.

6. The welfare fund shall be used to:

a) Investment in the construction, repair, or capital supplementation of welfare facilities of the credit institution; contribution of capital to the construction of industry-wide welfare projects or joint welfare facilities with other entities under contractual agreements;

b) Expenses for sports, cultural, and public welfare activities for the collective staff of the credit institution;

c) Regular or ad-hoc hardship allowances for staff, including retired or incapacitated employees of the credit institution;

d) Expenses for other welfare-related activities.

The Board of Directors (or Members’ Council) and the General Director (or Director), in coordination with the Executive Committee of the Trade Union, shall manage and use this fund.

7. Credit institutions and branches of foreign banks shall promulgate internal regulations on the management and use of funds formed from after-tax profits. For credit institutions wholly owned by the State:

a) They must establish and promulgate regulations on the management and use of reward and welfare funds in compliance with regulations on state capital management and use in production and business activities, ensuring transparency and participation by the Trade Union, and public disclosure within the institution before implementation;

b) During the fiscal year, credit institutions may make temporary appropriations based on profit-making results and fulfillment of corporate income tax obligations to ensure available resources for fund usage as prescribed.

The scope, authority, procedures, and process for state capital investment and additional capital contribution in credit institutions wholly owned by the State and in credit institutions with state ownership of more than 50% to less than 100% shall comply with the Law on management and use of state capital invested in manufacturing and business activities and other relevant legal regulations.

1. The annual financial plan of a credit institution or a branch of a foreign bank shall include:

a) Capital sources and capital use plan;

b) Income, expenses, business result, and state budget contribution plan;

c) Labor and salary plan.

2. Financial planning:

a) For credit institutions wholly owned by the State:

a.1) Before July 31 each year, the credit institution shall prepare the financial plan for the following year and submit it to the Ministry of Finance and the State Bank of Viet Nam for the purpose of preparing the state budget estimate;

a.2) Before March 1 of the planning year, based on the previous year's business performance, the credit institution shall review and finalize its financial plan and submit it to the State Bank of Viet Nam and the Ministry of Finance for the purposes of financial supervision and evaluation of business performance.  The financial plan shall be prepared using the templates for capital sources and uses; income, expenses, business results and state budget contribution; and labor and salary plans as set out in Appendix I, Appendix II, and Appendix III of this Decree.

a.3) The State Bank of Viet Nam shall take the lead and coordinate with the Ministry of Finance to review the financial plan and issue official written opinions and assign performance evaluation indicators to the credit institution before April 30 of the plan year.

b) For credit institutions with state ownership of more than 50% to less than 100% of charter capital:

b.1) Before July 31 each year, the credit institution shall prepare the financial plan for the following year and submit it to the Ministry of Finance and the State Bank of Viet Nam to serve the formulation of the state budget estimate;

b.2) Before March 1 of the planning year, based on the previous year's business performance, the credit institution shall review and finalize its financial plan and submit it to the State Bank of Viet Nam and the Ministry of Finance for the purposes of financial supervision and evaluation of state capital investment efficiency in the credit institution. The financial plan shall be prepared using the templates for capital sources and uses; income, expenses, business results and state budget contribution; and labor and salary plans as set out in Appendix I, Appendix II, and Appendix III of this Decree.

b.3) The State Bank of Viet Nam shall take the lead and coordinate with the Ministry of Finance in reviewing the financial plan prepared by the credit institution and determining specific evaluation indicators for assignment to the state capital representative at the credit institution before April 30 of the planning year.

c) For other credit institutions and branches of foreign banks: the preparation of financial plans shall comply with the provisions of the charter, financial regulations, and internal rules of the credit institution or foreign bank branch.

1. The financial supervision of enterprises being credit institutions in which the State holds 100% of charter capital, the financial supervision of subsidiaries and associated companies, the supervision of overseas investments made by credit institutions, and the special financial supervision of enterprises being credit institutions in which the State holds 100% of charter capital shall be carried out in accordance with the regulations applicable to state-owned enterprises and the provisions of this Decree.

2. Financial supervision of credit institutions with state capital shall comply with regulations for state-invested enterprises and the provisions of this Decree.

1. The evaluation criteria for the efficiency of state capital investment in credit institutions wholly owned by the State and credit institutions with state capital include:

a) Criterion 1. Revenue;

b) Criterion 2. After-tax profit and return on equity (ROE);

c) Criterion 3. Non-performing loan (NPL) ratio and loan loss ratio;

d) Criterion 4. Legal compliance by credit institutions regarding investment, management and use of state capital, tax obligations, remittances to the state budget, and financial and supervisory reporting requirements;

dd) Criterion 5. Implementation of public service and utility products (if any).

2. The criteria under Clause 1 of this Article shall be determined and calculated based on data from audited annual separate financial statements and periodical statistical reports as prescribed by law.

Criteria 1, 2, 4, and 5 shall be considered with adjustments for the following external factors:

a) Natural disasters, fires, epidemics, wars, and other force majeure events;

b) Business expansion plans approved by competent authorities, including accelerated depreciation for faster capital recovery or social welfare programs implemented under government policies;

c) Government-regulated pricing of goods and services, or mandates to fulfill socio-economic objectives as directed by the Government or Prime Minister.

3. Methods for determining evaluation indicators of state capital investment efficiency:

a) Revenue: determined based on audited annual financial statements of the credit institution;

b) After-tax profit and return on equity (ROE):

After-tax profit: net profit from business activities after deducting credit risk provisioning, current corporate income tax, and refundable income tax;

ROE: calculated as the ratio of after-tax profit to the average equity for the year. In which, the average annual owners’ equity shall be calculated as follows:

Equity is taken from the “equity” section of the balance sheet and includes: capital, funds, foreign exchange differences, revaluation differences, and undistributed retained earnings

a) NPL ratio and loan loss ratio:

The non-performing loan (NPL) ratio shall comply with regulations on asset classification in the operations of credit institutions and foreign bank branches.

The loss loan ratio is the ratio of loss loan balance (Group 5 loans as prescribed in regulations on asset classification in the operations of credit institutions and foreign bank branches) to total outstanding loans.

b) Compliance with laws and regulations:

Compliance includes the adherence to legal regimes and policies in the fields of investment, management, and use of state capital at credit institutions; tax compliance (excluding personal income tax); fulfillment of other obligations payable to the state budget; compliance with regulations on financial reporting and reporting for financial supervision purposes.

The amount of administrative penalties used as the basis for assessment and classification shall be the amount of fines stated in the administrative penalty decision for violations detected during the financial year under assessment, excluding any amounts payable for implementing remedial measures.

dd) Performance of public-utility products and services (if any):

Performance of public-utility products and services refers to the direct execution of tasks relating to national defense, security, or the provision of public services under state policy, through forms such as bidding, placement of orders, or assignment by the State.  The assessment of this indicator is based on the degree of completion in terms of quantity and quality of services. Depending on the sector, specialty, and specific characteristics, the representative agency of the owner shall establish appropriate assessment criteria.

1. The assessment of the performance of managers of credit institutions shall be carried out in accordance with Government regulations and the following criteria:

a) The degree of completion of the targets assigned by the State Bank of Viet Nam regarding post-tax profit and return on equity (ROE);

b) The classification result of the credit institution;

c) The degree of completion of the plan for providing public-utility products and services (for credit institutions providing public-utility services).

1. The assessment of performance and classification of credit institutions wholly owned by the State shall be conducted in accordance with regulations applicable to state-owned enterprises and the provisions of this Decree.

2. The State Bank of Viet Nam shall assume the prime responsibility and coordinate with the Ministry of Finance to review the financial plan and assign assessment and classification indicators to credit institutions wholly owned by the State, in accordance with the specific nature of their business operations. These indicators must be assigned to the credit institution in writing by April 30 of the planning year and shall not be adjusted during the implementation period, except in cases of force majeure.

3. Method of evaluation and classification of credit institutions:

The performance evaluation of credit institutions shall be conducted based on the assessment of the completion level of performance and classification indicators (A, B, C) assigned by the State Bank of Viet Nam in accordance with Appendix IV of this Decree.

1. The evaluation of the efficiency of state capital investment in credit institutions with over 50% to less than 100% of charter capital held by the State shall be carried out in accordance with regulations on performance evaluation applicable to credit institutions wholly owned by the State and the provisions of this Decree.

2. Before the credit institution holds its General Meeting of Shareholders, the State Bank of Viet Nam shall assume the prime responsibility and coordinate with the Ministry of Finance to review the financial plan and determine the evaluation indicators for credit institutions with over 50% to less than 100% of charter capital held by the State, in order to assign tasks to the state capital representative at the credit institution in writing by April 30 of the planning year. The assigned indicators shall not be adjusted during the implementation period, except in force majeure cases.

3. The State Bank of Viet Nam, based on the evaluation results of the efficiency of state capital investment and the performance results of the credit institution with over 50% to less than 100% state ownership, shall use such results as a basis for evaluating and rewarding the state capital representative and for developing and assigning tasks for the following year; and concurrently report to the Prime Minister for consideration and decision on continuing, expanding, or divesting state capital in these credit institutions.

1. The evaluation of the performance of the cooperative bank shall follow the regulations applicable to credit institutions wholly owned by the State under this Decree.

2. Before the cooperative bank holds its General Meeting of Members, the State Bank of Viet Nam shall assume the prime responsibility and coordinate with the Ministry of Finance to review the financial plan and determine the evaluation indicators for the cooperative bank, in order to assign tasks to the representative of the State’s supporting capital at the cooperative bank in writing by April 30 of the planning year. The assigned indicators shall not be adjusted during the implementation period, except in force majeure cases.

3. The State Bank of Viet Nam shall, based on the performance evaluation results of the cooperative bank, use such results as a basis for evaluating and rewarding the representative of the State’s supporting capital at the cooperative bank, and as a foundation for developing and assigning tasks to the representative of the State’s supporting capital at the cooperative bank for the following year.

1. Credit institutions and foreign bank branches shall implement accounting in accordance with Article 150 of the Law on Credit Institutions.

2. Economic and financial transactions shall be recorded in accounting books, financial statements, and final settlement reports in Vietnamese dong, with the national symbol "đ" and international symbol "VND".

3. Where an accounting unit mainly collects and spends in a single foreign currency, it may choose that foreign currency as the accounting currency and shall be responsible before the law. Financial statements used in Viet Nam must be converted into Vietnamese dong.

1. Credit institutions shall conduct internal audits in accordance with Article 58 of the Law on Credit Institutions and other relevant legal regulations.

2. Credit institutions and foreign bank branches must have their annual financial statements audited in accordance with Article 59 of the Law on Credit Institutions and regulations on audit.

1. Based on the provisions of this Decree and relevant legal regulations, credit institutions and foreign bank branches shall develop their own financial regulations and submit them to competent authorities for approval in accordance with their charters and internal regulations for implementation purposes.

2. For credit institutions wholly owned by the State, the development and issuance of financial regulations shall be in accordance with regulations applicable to state-owned enterprises.

1. Credit institutions and foreign bank branches shall comply with the reporting regime under Article 152 of the Law on Credit Institutions.

2. Credit institutions and foreign bank branches must disclose financial statements in accordance with Article 154 of the Law on Credit Institutions.

3. Credit institutions wholly owned by the State and credit institutions with state capital shall submit their annual financial plans as prescribed in Article 29 of this Decree.

1. Coordinate with the State Bank of Viet Nam in formulating and implementing plans for supervising credit institutions wholly owned by the State and credit institutions with state capital; conduct supervision on a thematic basis or as requested by the Government or the Prime Minister in accordance with regulations on management and use of state capital invested in production and business.

2. Coordinate with the State Bank of Viet Nam in handling financial issues of credit institutions wholly owned by the State and credit institutions with state capital in accordance with the law.

3. Assume the lead and coordinate with ministries and sectors in reporting to the Government on the review and evaluation of the implementation of this Decree for submission of a revised, supplemented, or replacement decree when necessary.

1. Conduct supervision, inspection, and examination of credit institutions and foreign bank branches in accordance with the Law on Credit Institutions; periodically send financial status reports of such institutions to the Ministry of Finance as prescribed in Appendix V of this Decree.

2. Perform the function of representing state ownership of capital in credit institutions with state capital as assigned by the Government.

a) Decide and take responsibility for their decisions within the scope of authority of the representative of state capital;

b) Assume the prime responsibility and coordinate with the Ministry of Finance in formulating and implementing financial supervision plans; assessing the performance and classifying state-owned enterprises being credit institutions wholly owned by the State; evaluating the efficiency of state capital investment in credit institutions with over 50% to less than 100% of charter capital held by the State as prescribed in this Decree and other relevant laws; submit reports on financial supervision results and classification results of credit institutions wholly owned by the State, and reports on financial supervision results of credit institutions with over 50% to less than 100% state ownership to the Ministry of Finance in accordance with regulations on financial supervision and evaluation of state capital investment efficiency in enterprises with over 50% state ownership;

c) The State Bank of Viet Nam, based on this Decree and regulations on financial supervision and evaluation of the efficiency of state capital investment in enterprises with state capital, shall carry out financial supervision and assess the performance of the cooperative bank. The State Bank shall prepare and submit a performance evaluation report of the cooperative bank to the Ministry of Finance in accordance with laws on financial supervision and state capital investment efficiency evaluation.

1. Credit institutions and foreign bank branches shall comply with financial regulations and manage and use capital and assets in accordance with the Law on Credit Institutions, this Decree, and other relevant legal provisions.

2. The Board of Directors or the Members’ Council shall be responsible for:

a) Organizing the implementation, inspection, and supervision of financial activities of the credit institution within their delegated authority under the Law on Credit Institutions and other relevant laws;

b) Deciding or approving, within their authority, in accordance with the Law on Credit Institutions, other relevant laws, and the charter of the credit institution: methods of capital mobilization; investment plans and plans for the purchase and sale of assets of the credit institution; plans for capital contribution, purchase, and sale of shares or contributed capital of the credit institution in enterprises or other credit institutions; and repurchase of the credit institution’s shares in accordance with the approved plan;

c) Inspecting, supervising, and directing the General Director (Director) of the credit institution and the capital representative in enterprises or other credit institutions in the use, preservation, and development of capital, organizing business operations as per approved plans, and fulfilling obligations to the state budget;

d) Performing other responsibilities in accordance with the law and the charter of the credit institution.

3. The General Director (Director) of the credit institution shall:

a) Manage the operations of the credit institution and be responsible before the Board of Directors, Members’ Council, and the law for such management;

b) Prepare and submit financial statements for approval to the Board of Directors or Members’ Council, or report to competent authorities; and be responsible for the accuracy and truthfulness of financial statements, statistical reports, final accounts, and other financial information;

c) Perform other responsibilities in accordance with laws and the charter of the credit institution.

4. The General Director (Director) of a foreign bank branch shall represent the foreign bank branch, be legally responsible for all activities of the branch, and manage its daily operations in accordance with the rights and obligations prescribed by the Law on Credit Institutions and other relevant legal regulations.

5. The representative of state capital at a credit institution shall:

Fully exercise the rights and fulfill the responsibilities relating to financial management, financial supervision, and evaluation of state capital investment efficiency in accordance with this Decree, laws on the management and use of state capital invested in production and business at enterprises, and other relevant regulations.

For credit institutions wholly owned by the State and credit institutions with state capital, if at the effective date of this Decree, the balance of the financial reserve fund exceeds the limit prescribed herein, the excess amount may be transferred to the charter capital supplementary reserve fund or the development investment fund, provided that the total amount of these funds complies with the limits set by this Decree; in case the total amount still exceeds the limits after such transfer, the excess shall be reversed into other income.

1. This Decree comes into force as of August 1, 2025.

2. This Decree replaces Decree No. 93/2017/ND-CP dated August 7, 2017 of the Government on financial regulations applicable to credit institutions, foreign bank branches, and on financial supervision and evaluation of the efficiency of state capital investment in credit institutions wholly owned by the State and credit institutions with state capital.

Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, Chairpersons of People’s Committees of provinces and centrally-affiliated cities, credit institutions, foreign bank branches, and relevant organizations and individuals shall be responsible for the implementation of this Decree.