What minimum requirements must risk provisioning policies of credit institutions in Vietnam meet?

Risk provision policies of credit institutions in Vietnam must meet the minimum requirements specified in Clause 3, Article 6 of Circular 11/2021/TT-NHNN, specifically as follows:

3. A risk provisioning policy must include, but not limited to, the following requirements:

a) It must be in line with regulations of laws on accounting, financial, reporting and statistical regimes;

b) It must comprise procedures for collection of information and data about borrowers, ensure accurate classification of debts, off-balance sheet commitments, management of NPLs, management of bad credit balances and risk provisions that are duly set up in full;

c) It must include specific regulations on classification of debts, off-balance sheet commitments, amounts and methods of setting up risk provisions and use of provisions against risks arising from their operations towards specific borrowers in a regular or irregular manner.

d) It must include regulations on powers and responsibilities of their affiliates and individuals involved in classification of debts, off-balance sheet commitments, setting up and use of provisions for risks arising from their operations.

dd) It must cover the mechanism for inspection, supervision and reporting of implementation of activities prescribed in point a through point d of this clause.

Best Regards!