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Legal Update

New Law On Setting Stricter Requirements For Financial Statements Of Credit Institutions

16 October 2007
Mayer Brown Legal Update


On 18 April 2007, the State Bank of Vietnam ("SBV") issued Decision No 16/2007/QD-NHNN ("Decision 16") promulgating the Regulation on Financial Reporting Regime applicable to credit institutions. With the decision, state administrative agencies and investors will be fully informed about the financial and business situation of credit institutions. It's important, especially for those who invest in bank shares.

Full Update

Under Decision 16, the financial reporting format is set following Vietnam's Accounting and Existing Accounting Mode to reflect economic and financial information. The financial reporting system includes Accounting Balance Sheet, report on business outcome, cash flow report, notes to financial report. Financial report must be submitted a maximum 90 days from the closing day of the fiscal year of a credit institution. The credit institution has to submit its audited financial report enclosed with conclusion by independent auditors to SBV immediately upon completion of the audit.

Decision 16 also requires quarterly reports be submitted to relevant agencies no later than the 30th of the first month of the next quarter, except for the fourth quarter. Banks are also required to draw up financial reports in cases of mergers and acquisitions, separation, dissolution and bankruptcy.

Audited annual financial reports of all credit institutions enclosed with conclusion of auditors have to be publicised at headquarters and branches, on Central and local newspapers of 3 continuous volumes, on websites or under the form of publication by credit institutions, and official documents sent to state managerial agencies as required, or press conference, etc.

The Decision was posted on Official Gazette on 24 June 2007 and became valid on 9 July 2007 (applied for Financial Report from Quarter II/2007). Decision No.1145/2002/QD-NHNN dated 18 October 2002, Decision No.1407/2002/QD-NHNN dated 1 November 2004 and Decision No.09/2006/QD-NHNN dated 20 February 2006 are replaced by this Decision 16.

Author: Tram Than

For further information, please contact:

Name: Dao Nguyen
Phone: +84 8 3822 8860
Fax: +84 8 3822 8864

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