Transactions are carried out at Vietcombank. The bank is among 10 lenders selected by the central bank to pilot Basel II standards, according to VnEconomy. -- File Photo

HA NOI (Biz Hub) ─ The State Bank of Viet Nam (SBV) has selected 10 commercial banks to pilot Basel II standards, the VnEconomy online reported.

Basel II is a set of banking regulations put forth by the Basel Committee on Banking Supervision (BCBS), which regulates finance and banking internationally.

It is the second of the Basel Accords, aiming at creating standards and regulations on how much capital financial institutions must put aside to reduce the risks associated with investing and lending practices.

According to VnEconomy, the selected banks are Vietcombank, Vietinbank and BIDV, along with MB and Sacombank, Techcombank and ACB. VPBank, VIB and Maritime Bank make up the ten.

Viet Nam is not a member of the BCBS and is hence not bound by the implementation timeline for Basel II.

The SBV has set a 2015 deadline for Basel II implementation in Viet Nam as part of its plan to restructure the domestic credit institution system, since risk management gaps remain a major reason for increasing bad debts.

Michael Krakowski, the director of the GIZ Macroeconomic Reform Programme, told Viet Nam News earlier this year that the country should quickly adopt and implement Basel II standards as an important step to achieve the goals of banking reforms.

However, industry insiders said the implementation process needed a reasonable roadmap as the Vietnamese banking system was still young as compared with other systems around the world.

The central bank required lenders to perform its Circular No 09/2014/TT-NHNN on debt classification and risk provisional fund establishment from this June in an effort to make them healthier. ─ VNS