State Bank Inspectorate points out a series of violations at PGBank

PGBank, formerly known as Dong Thap Muoi Rural Commercial Joint Stock Bank, was established under operating license No. 0045-NH/GP dated November 13, 1993 with initial charter capital of VND 700 million. In 2007, Dong Thap Muoi Rural Commercial Joint Stock Bank changed its name to Petrolimex Petroleum Commercial Joint Stock Bank according to Decision No. 368/QD-NHNN dated February 8, 2007 of the Governor of the State Bank.

According to the inspection conclusion, PGBank has basically issued internal policies and procedures on credit granting, off-balance sheet commitments; debt classification, provisioning and use of reserves to handle credit risks; checking and monitoring loan capital; loan guarantees; handling bad debts, debt collection and risk handling...

However, regarding governance and risk management, the Board of Directors and the General Director issued a number of internal regulations that were either lacking or untimely. The effectiveness of controlling checkpoints in processes and operations was not high. The direction of reviewing and evaluating the causes of bad debt was not complete, and the responsibilities of departments and individuals in causing bad debt were not clarified...

The Chief Inspector of the State Bank has issued a Decision to sanction administrative violations in the field of banking and currency against PGBank for 3 acts, with a total fine of 370 million VND.

Internal control and audit activities related to handling, recovering bad debts, and handling risk debts still have shortcomings. Violations and shortcomings in credit granting have not been promptly detected to determine the causes and make recommendations to competent authorities. The causes leading to bad debts and the responsibilities of relevant groups and individuals have not been assessed.

The number of Internal Audit staff is not enough to meet the workload and requirements. Auditing, inspection and supervision activities for information technology related contents are still limited.

Methods and tools for identifying, measuring, monitoring and controlling risks are still simple and are in the process of research and development...

Regarding credit activities, through inspection of selected customers, there are still some cases of incomplete implementation of legal regulations, regulations of the State Bank and internal regulations of PGBank on loan conditions; appraisal and approval of loans; inspection and supervision of loans; collateral; debt classification, risk provisioning; granting guarantees, entrusting the issuance of letters of credit...

In addition, there are some contents that need to be noted, which have potential risks in PGBank's credit granting activities such as: granting credit to customers with collateral such as unsecured loans, debt collection rights, receivables... some customers warn of risks regarding financial situation, project progress, and debt repayment sources.

Regarding compliance with legal regulations on share ownership ratio, purchase and transfer of shares and stocks of shareholders at PGBank:

Based on data provided by PGBank, the inspection results show that PGBank does not have individual shareholders owning shares exceeding the ratio prescribed in Clause 1, Article 55 of the Law on Credit Institutions 2010 (amended and supplemented by the Law on Credit Institutions 2017) and Clause 1, Article 63 of the Law on Credit Institutions 2024 regulating the share ownership ratio for individual shareholders; there have been no cases of shareholders and related persons as prescribed by law exceeding the ratio prescribed in Clause 3, Article 55 of the Law on Credit Institutions 2010 (amended and supplemented by the Law on Credit Institutions 2017), Clause 3, Article 63 of the Law on Credit Institutions 2024.

At the same time, the State Bank Inspectorate has coordinated with relevant ministries, departments and branches to clarify information on the purchase and transfer of shares of 15 shareholders with ownership ratios of more than 0.1% of PGBank's charter capital during the inspection period.

Regarding bad debt settlement and off-balance sheet debt recovery after risk settlement: in 2023, PGBank has not achieved 100% of the plan to recover bad debt and debt with risk settlement.

The activities of handling and recovering bad debts at PGBank for some customers still have some shortcomings such as: the loan term structure is not fully in accordance with legal regulations; the financial situation and collateral of customers have not been checked and re-evaluated in a timely manner to have a direction for handling and recovering debts...

Inspection Conclusion No. 1446 pointed out the causes of the existing problems and violations. The management, operation, inspection and control of the Board of Directors, Executive Board, and the internal inspection and control system still have some problems mentioned in the Inspection Conclusion. Some individuals and professional departments at PGBank units/branches have not seriously complied with the provisions of the law, the State Bank and PGBank's internal regulations.

In addition, some loan customers do not comply with and implement the provisions of the law and the State Bank in their loan relationship with the bank.

The Inspector also pointed out the responsibility for the existing problems and violations including: The Board of Directors, the Supervisory Board, and the Executive Board of PGBank (through each period) are jointly responsible for management, operation, inspection, and control, and still allow the violations and problems mentioned in the Inspection Conclusion to occur.

Leaders of units, departments, and PGBank branches (through each period) are jointly responsible for management and operations to prevent violations and problems within the scope of management.

Individuals directly related to the shortcomings and errors mentioned in the Inspection Conclusion are responsible for consulting, deciding, monitoring, managing and inspecting each case of violation and error.

The Chief Inspector of the State Bank has issued a Decision to sanction administrative violations in the field of banking and currency against PGBank for 3 acts, with a total fine of 370 million VND, specifically: not issuing one or several internal regulations according to the provisions of law; establishing a trust contract with incomplete content according to the provisions of law; not establishing a Debt Purchase and Sale Council according to the provisions of law.

Nguyen Duc

Source: https://doanhnghiepvn.vn/kinh-te/tai-chinh-ngan-hang/thanh-tra-ngan-hang-nha-nuoc-chi-ra-loat-sai-pham-tai-ngan-hang-pgbank/20250709032859313