Vietcombank will become the first major State-owned bank to apply Basel II standards, two years earlier than the deadline set by the central bank.

According to the bank, it is finalising the final steps to apply for the international standards thoroughly next month.

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, the State Bank of Viet Nam (SBV) selected 10 commercial banks to pilot Basel II standards and set the deadline of 2020 for the banks to meet the standards. It was part of the SBV’s plan to restructure the domestic credit institution system, as risk management gaps remain a major reason for increasing bad debts.

The selected banks were Vietcombank, Vietinbank and BIDV, along with MB and Sacombank, Techcombank, ACB, VPBank, VIB and Maritime Bank. Until now, none of them has completed the application for the standards.

However, another member of the Viet Nam’s credit institutions, private bank OCB, late last year, became the first Vietnamese bank to complete the implementation of a Basel II project, equipping it with the infrastructure of a modern and safe bank that meets capital, supervisory review and transparency requirements.

OCB said it implemented 10 tools to support credit work and risk management while drafting and amending nearly 30 processes or regulations relevant to credit and data work and risk management to meet Basel II standards. It also held communication and training programmes for its employees.—VNS