14:12 | 14/12/2017 Economy
The International Finance Corporation (IFC) and the Netherlands Development Finance Company (FMO) on December 13 launched an online course on Related Party Transactions Governance for Vietnamese commercial banks.
|Experts discuss the importance of related party transactions governance in commercial banks. — VNS Photo|
Related party transactions (RPTs) are viewed as situations, which are open to a possible conflict of interest and can harm individual institutions and stakeholders, that should be subject to rigorous review.
The e-course is expected to help promote the application of international best practices in RPTs among commercial banks in Việt Nam to improve their access to capital.
The e-course, based on the Related Party Transactions Guidebook for Commercial Banks in Việt Nam in 2016, is divided into five modules, covering the key concepts, including governance, RPT policy, approval process and monitoring roles. It also highlights the importance of transparency and disclosure of the RPTs for commercial banks.
“We believe continued improvement in governance is the key for commercial banks in Việt Nam to grow sustainably and can benefit the entire economy,” said Nguyễn Nguyệt Ánh, IFC’s Corporate Governance Officer.
Banks are engines of growth and generate a multiplier impact on the economy. Failure of one bank has a systematically large impact on the banking system and the economy.
“Financial institutions should make sure that they adequately manage related party transactions. Abusive RPTs can harm individual institutions and trust in the financial sector as a whole,” said Jasper Veel, FMO’s Corporate Governance Officer, adding that strong practices contribute to a more favourable investment climate.
IFC is a sister organisation of the World Bank and a member of the World Bank Group.