Vietnam International Bank (Upcom: VIB) has received approval from the State Bank of Vietnam (SBV) to apply capital adequacy ratio following Basel II standards.
This approval followed SBV’s Circular No 41/2016/TT-NHNN on regulating capital adequacy ratio for banks, branches of foreign banks, effective from January 1, 2019.
“Meeting strict Basel II standards, VIB is capable of operating safely in accordance with advanced general rules of developed countries around the world to prevent credit, market and operation risks,” said Mr. Han Ngoc Vu, CEO of the bank.
Basel II is the second edition of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on banking supervision.
Basel II comprises minimum capital requirements, supervisory review and market discipline. It aims to enhance competition and transparency in the banking system and make banks more resistant to market changes.
Three years ago, SBV selected the first 10 commercial banks to pilot Basel II standards. To date, the only private bank is VIB and Vietcombank – a state-owned one are the two banks among 10 to join the pilot scheme successfully.
“The successful implementation of Basel II helped VIB develop business strategies and better form customer, products, risk management and price policy to optimize capital and risk assets,” Vu added.
Previously, in July 2018, VIB became the fifth bank in Vietnam’s banking system to completely purchase all bad debts sold to Vietnam Asset Management Company (VAMC) to bring its real balance sheet back to “one number” – an important step to implement Basel II.