CIRCULAR

AMENDMENTS TO SOME ARTICLES OF CIRCULAR NO. 39/2011/TT-NHNN DATED DECEMBER 15, 2011 OF THE GOVERNOR OF THE STATE BANK ON INDEPENDENT AUDIT OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES

Pursuant to Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010; the Law on amendments to some articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to Law on Independent Audit dated March 29, 2011;

Pursuant to the Government’s Decree No. 26/2014/ND-CP dated April 07, 2014 on organizational structure and operation of banking inspection and supervision authorities and the Government’s Decree No. 43/2019/ND-CP dated May 17, 2019 on amendments to the Government’s Decree No. 26/2014/ND-CP dated April 07, 2014 on organization and operation of banking inspection & supervision authorities;

Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017 on functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the request of Banking Chief Inspector, Supervisor;

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Article 1. Some Articles of Circular No.39/2011/TT-NHNN are amended as follows:

1. Article 1 is amended as follows:

“Article 1. Scope

1. This Circular provides independent audit of credit institutions and foreign bank branches.

2. The independent audit of credit institutions under special control according to the regulations of Articles 147 and 151a of the Law on Credit Institutions (amended) and the independent audit of credit institutions and foreign bank branches serving banking inspection and supervision according to the Government's regulations on organization and operation of banking inspection & supervision authorities shall comply with relevant laws and Articles 11, 12, 13 and 14 of this Circular.”

Clause 2 Article 8 is amended as follows:

“2. Independent audit of the operation of the internal control system of a credit institution or foreign bank branch shall cover:

a) Audit of the operation of the internal control system of the credit institution or foreign bank branch (including internal mechanisms, policies, processes and regulations) in accordance with applicable laws, regulations of the State Bank on the internal control system of credit institutions, foreign bank branches.

The contents of the internal control system that were audited without any change are not required to be re-audited;

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c) Contents of audit specified at Points a and b of this Clause and audit the operation of the internal control system of the contents of internal assessment of capital adequacy of commercial bank and foreign bank branch according to regulations of the State Bank on internal control system that is implemented by a commercial bank and foreign bank branch.”

3. Clause 3 is added to Article 8 as follows:

“3. Audit of the operation of the internal control system of a credit institution or foreign bank branch specified at Points b, c Clause 2 of this Article shall meet requirements for:

a) Efficiency, safety in operation; protection, management and safe and effective use of assets and resources;

b) An honest, reasonable, complete and prompt financial and management information system.”

4. Clause 4 Article 9 is amended as follows:

“4. Within 90 days from the day of receipt of the audit report that has qualified opinion, the credit institution or foreign bank branch shall return the audit results to the State Bank for reporting.”

Clause 2 Article 10 is amended as follows:

“2. The audit report regarding financial statements of a credit institution or foreign bank branch shall comply with the law on independent audit, accounting and audit standards of Vietnam and other relevant laws.

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6. Clause 11 Article 11 is amended as follows:

“11. Auditing organizations, auditors of banks, non-bank credit institutions, foreign bank branches are on the list of auditing organizations and auditors approved to perform audits for units that have public interests according to declaration of the Ministry of Finance for the period of implementation of audits.

If a bank or non-bank credit institution is an entity that has public interests in the security sector, the auditing organization or auditor of the bank or non-bank credit institution shall be on the list of auditing organizations and auditors approved to perform audits for units that have public interests in the securities sector according to declaration of State Securities Commission for the period of implementation of audits

7. Clause 2 Article 12 is amended as follows:

“2. Auditing organizations, auditors who perform audits of microfinance organizations and people's credit fund are on the list of auditing organizations and auditors approved to perform audits for units that have public interests according to declaration of the Ministry of Finance for the period of implementation of audits.

8. Clause 2a is added after Clause 2 Article 12 as follows:

 “2a. The independent audit organization has not audited the same microfinance organization or the people's credit fund for five consecutive years preceding the year of audit.”

9. Clauses 2, 4 and 5 Article 15 is amended as follows:

“2. Submit a written notice of the selected independent audit organization to the State Bank according to the following regulations within 30 days after the selection:

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b) A people's credit fund, a foreign bank branch that are subjects to microfinance safety supervision, inspection of State Bank branch of province (hereinafter referred to as “provincial-level State Bank branch”) shall send the notice to the provincial-level State Bank branch in which the people's credit fund or foreign bank branch is based.

4. Submit the independence audit result to the State Bank according to Point a or b Clause 2 of this Article within 90 days from the end of the fiscal year.

5. Carry out the re-audit in case the audit report has qualified opinion; submit the re-audit result to the State Bank according to Point a or b, Clause 2 of this Article.”

10. Clause 2 Article 16 is amended as follows:

“2. Analyze, evaluate and handle the independent audit or re-audit result according to Clause 4 and Clause 5 Article 15 of this Circular.

In case any auditor or auditing organization is found to be violating legal regulations during the independent audit process of credit institutions, foreign bank branches, provincial-level State Bank branches shall promptly report and propose appropriate actions to the Governor of the State Bank (the Bank Inspection and Supervision Agency).”

11. Clauses 1 and 3 Article 17 is amended as follows:

“1. Summarize, evaluate and submit reports of provincial-level State Bank branches specified in 3 Article 16 of this Circular to the Governor of the State Bank for handling.

3. Submit reports and proposals to the State Bank Governor in the following situations:

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b) The inspection and supervision agency discovers or receives reports of provincial-level State Bank branches specified Clause 2 Article 16 of this Circular on the auditors and auditing organizations violating legal regulations during the independent audit process of credit institutions, foreign bank branches and sends a written document to the Ministry of Finance.

Article 2. Clause 7 Article 3, Clause 2 Article 4, Clause 2 Article 6, Clause 9 Article 11, Clause 1 Article 16 and Clause 5 Article 17 of Circular No. 39/2011/TT-NHNN are annulled.

Article 3. Implementation

The Chief of Office, the bank inspection and supervision chief inspector, heads of units under the State Bank, credit institutions and foreign bank branches shall be responsible for the implementation of this Circular.

Article 4. Implementation provision

1. This Circular comes into force as of April 15, 2022 except for the case specified at Clause 2 of this Article

2. This Circular shall apply to independent audit of operation of internal control systems for internal assessment of capital adequacy of commercial banks or foreign bank branches from the fiscal year of 2022 onwards.

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PP. GOVERNOR OF THE STATE BANK
DEPUTY GOVERNOR




Doan Thai Son