ACB becomes seventh bank to meet Basel II standards

The Asia Commercial Bank (ACB) late last week was officially given approval from the State Bank of Vietnam (SBV) to apply Basel II standards, raising the number of Vietnamese banks meeting the global norms ahead of the SBV’s schedule to seven.
ACB becomes seventh bank to meet Basel II standards ảnh 1The central bank has allowed ACB to apply Basel II from this month (Photo: ACB)
Hanoi (VNS/VNA) - The Asia CommercialBank (ACB) late last week was officially given approval from the State Bank of Vietnam(SBV) to apply Basel II standards, raising the number of Vietnamese banksmeeting the global norms ahead of the SBV’s schedule to seven.

According to the SBV’s decision, all of ACB’sactivities have started to follow Circular 41/2016-TT/NNNN regulating theapplication of Basel II standards since this month.

Basel II is the second edition of the BaselAccords, which are recommendations on banking laws and regulations issued bythe Basel Committee on banking supervision. Basel II, which comprises minimumcapital requirements, supervisory review and market discipline, aims to enhancecompetition and transparency in the banking system and make banks moreresistant to market changes.

The SBV has so far approved only seven localbanks to apply Basel II standards earlier than its deadline of 2020. They areVietcombank, VIB, OCB, MBBank, TPBank, VPBank and ACB.

With the application of Basel II ahead of theSBV’s deadline, the banks will be prioritised by the SBV in getting highercredit growth limits this year. According to current regulations, the SBV setsa credit growth limit for the entire year for each bank to ensure the creditgrowth target of the entire banking system during the year and all local banksexpect to have high credit growth limit as their income still mainly depends onlending.

At last month’s 2019 annual general meeting ofshareholders, Chairman of VIB Dang Khac Vy said VIB expected the SBV to approveits credit growth limit proposal of 35 percent in 2019 as it was one of thebanks to meet the central bank’s Basel II standards.

MB and TPBank also set high credit growthtargets of 20 percent for this year and are waiting for approval from thecentral bank. As for MBBank, industry insiders forecast the bank could then askfor another extension to increase its credit growth limit to 30 percent thisyear.

Meanwhile, credit growth targets set at otherbanks, which have not met Basel II standards, are lower. Techcombank, forexample, wants credit growth of 13 percent while the figure for Kien Long Bankis 15 percent.-VNS/VNA
VNA

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