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Vietnam central bank tightens supervision of weak credit institutions

State Bank of Vietnam issued tighter banking supervision guidelines that enable it to take early intervention measures against weak credit institutions, Viet Nam News reported March 21, citing a central bank circular.

Under the revised rules, State Bank of Vietnam's chief inspector or branch directors can submit proposals to the central bank governor to take early intervention actions against ailing credit institutions.

Credit institutions that are subject to the State Bank of Vietnam's early intervention will have 30 days to report the status and cause of their weakness, as well as solutions to resolve it, to the central bank in written documents.

In addition, the central bank's inspection bodies will be allowed to conduct extraordinary inspections on these credit institutions during the supervision process.

The new guidelines come into effect July 1.