The Vietnam Chamber of Commerce and Industry (VCCI) has provided feedback on the Ministry of Finance’s draft decree on financial regulations for credit institutions, branches of foreign banks, and financial supervision and evaluation of state capital investment efficiency in credit institutions where the state holds more than 50% of the charter capital.
According to the feedback, Articles 24.3.b and 25.3.b of the draft decree propose changes to the profit distribution of credit institutions compared to the current regulations. Specifically, the draft suggests increasing the allocation to the Supplementary Charter Capital Reserve Fund from 5% to 10%, decreasing the Financial Reserve Fund allocation from 10% to 5%, and reducing the Investment Development Fund allocation from 25% to 20%.
The draft proposes increasing the allocation to the Supplementary Charter Capital Reserve Fund from 5% to 10% and decreasing the Financial Reserve Fund allocation from 10% to 5% (Photo: ST)
VCCI emphasizes the importance of these reserve funds for ensuring the safety and stability of banks. Given the potential financial fluctuations in Vietnam and globally, VCCI suggests prioritizing financial resources to enable banks to improve their safety ratios and resilience. Therefore, VCCI recommends reconsidering the proposed reduction in allocations to the Financial Reserve Fund and the Investment Development Fund.
Regarding the handling of asset losses, VCCI points out that Article 11.1 of the draft decree states that credit institutions must identify the cause, responsibility, and handling of asset losses. If the loss is due to subjective reasons, the person responsible must compensate. However, VCCI notes that determining whether a loss is caused by subjective or objective reasons can be challenging. The Civil Code does not use the concepts of subjective and objective reasons but instead refers to “the party at fault for causing the damage.”
Additionally, Article 11.1 stipulates that the authority to decide on the level of compensation shall be specified in the credit institution’s charter. VCCI highlights that this is inconsistent with Article 585 of the Civil Code, which states that the level of compensation for damage can be agreed upon by the parties involved or decided by the court.
To ensure consistency in application, VCCI recommends that the drafting agency adopt the principles and terminology used in the Civil Code.
