Circular No. 04/2018/TT-NHNN dated March 12, 2018 of the State Bank of Vietnam on amending, supplementing a number of articles of the Circular No. 08/2017/TT-NHNN dated August 01, 2017 of the Governor of State Bank of Vietnam stipulating on orders, procedures of banking inspection

THE STATE BANK OF VIETNAM

Circular No. 04/2018/TT-NHNN dated March 12, 2018 of the State Bank of Vietnam on amending, supplementing a number of articles of the Circular No. 08/2017/TT-NHNN dated August 01, 2017 of the Governor of State Bank of Vietnam stipulating on orders, procedures of banking inspection

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law amending, supplementing a number of articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Decree No. 16/2017/ND-CP dated February 17, 2017 of the Government defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

Pursuant to the Decree No. 26/2014/ND-CP dated April 7, 2014 of the Government stipulatingorganization and operation of inspection and supervisory of the banking sector;

Pursuant to the Decree No. 33/2015/ND-CP dated March 27, 2015 of the Government on implementing conclusions of supervision;

Pursuant to the Decree No. 35/2014/QD-TTg dated June 12, 2014 of the Prime Minister defining functions, tasks, powers and organizational structure of the banking inspection and supervision authority affiliated to the State Bank of Vietnam;

At the request of the Chief Inspector of the Central Banking Inspection and Supervision Authority;

The Governor of the State Bank of Vietnam promulgates a Circular amending, supplementing a number of articles of the Circular No. 08/2017/TT—NHNN dated August 01, 2017of the Vietnam State Bank Government stipulating on orders, procedures on banking inspection;

Article 1. To amend, supplement a number of articles of the Circular No. 08/2017/TT-NHNN of the State Bank Governor stipulating on orders, procedures of banking inspection

1. To amend, supplement Article 17 as follows:

“Article 17. Remedial measures for banking supervision

Remedial measures for banking supervision include:

1. Recommendations and warnings;

2. Impose penalties for administrative violations in accordance with regulations of law.

3. Apply early intervention;

4. Request a competent authority to take other remedial measures for banking supervision in accordance with regulations of law.

2. To supplement Article 18a into Article 18 as follows:

“Article 18a. Applying early intervention for banking supervision

1. Based on legal documents on adjusting subjects of banking supervision, documents, information, data on operation of subjects of banking supervision:

a) Chief of Banking Supervision and Inspection, directors of the State Bank of provinces, cities under the central management where the Banking Supervision and Inspection Department is not located shall present to the State Bank Governor for consideration and promulgation of documents on applying early intervention for subjects of banking supervision that are under cases as stipulated under Clause 1 Article 130a of the Law on credit institutions (that are amended and supplemented), excluding cases as stipulated under Point b, c of this Clause;

b) Chief of Banking Inspection and Supervision Department shall consider and promulgate documents on early intervention for subjects of banking supervision and inspection being People’s Credit Funds, micro financial organizations in the area where the banking inspection and supervision department falls into one of the cases as stipulated under Clause 1 Article 130a of the Law on credit institutions (that is amended and supplemented);

c) Directors of the State Bank’s branches of provinces, cities under the central management where the Banking Inspection and Supervision Department is not located shall consider and promulgate documents on early intervention for subjects of banking supervision being one of the cases as stipulated under Clause 1 Article 130a of the Law on credit institutions (that is amended and supplemented);

2. Within 30 days since the receipt of documents on applying early intervention, subjects of banking inspection shall report in writing to the State Bank (through Banking Supervision Agency) to present on current situation, causes, remedial measures and implementation organization). Remedial measures of subjects of banking supervision must include one of measures as stipulated under Clause 4 Article 130a of the Law on credit institutions (that is amended and supplemented). In the course of implementation, if there is any amendment or supplementation of remedial measures, subjects of banking supervision shall report in writing to the State Bank (through banking supervision agency) to present causes, remedial measures (that is amended and supplemented) and organize the implementation.

3. If it is considered as necessity:

a) The chief of Banking Supervision and Inspection Department, directors of the State Bank of provinces, cities under the central management where the Banking Supervision and Inspection Department is not located shall present to the State Bank Governor for consideration and promulgation of documents on requesting subjects of banking supervision to adjust and supplement remedial measures, excluding cases as stipulated under Point b, c of this Clause;

b) Chief of Banking Inspection and Supervision Department shall consider and promulgate documents to request subjects of banking supervision being People’s Credit Fund, micro financial organizations in the area where the Banking Inspection and Supervision Department is not located to adjust and supplement remedial measures;

c) Directors of the State Bank of provinces, cities under the central management where the Banking Inspection and Supervision Department is not located shall consider and promulgate documents to request subjects of banking supervision being People’s Credit Fund, micro financial organizations to adjust and supplement remedial measures.

4. Within 15 days since the receipt of documents on requesting to adjust and supplement remedial measures, subjects of banking supervision shall send remedial measures to the State Bank (through banking supervision agency) and organize the implementation. The time for implementing remedial measures (including remedial measures that are adjusted and supplemented) is no more than one year since the document on applying early intervention issued by the State Bank is received.

5. If subjects of banking supervision can’t build up remedial measures as stipulated under Clause 3 Article 130a of the Law on credit institutions (that is amended and supplemented) or the deadline of implementing remedial measures expires but fail to correct situations as stipulated under Clause 1 Article 130a of the Law on credit institutions (that is amended and supplemented) depending on the nature and degree of risk:

a) Chief of Banking Inspection and Supervision, directors of the State Bank of provinces and cities under the central management where the banking inspection and supervision department is not located shall consider and promulgate documents on requesting subjects of banking supervision to implement one of measures as stipulated under Clause 4 Article 130a of the Law on credit institutions (that is amended and supplemented) excluding cases as stipulated under Point b, c of this Clause;

b) Chief of the Banking Inspection and Supervision Department shall consider and promulgate documents on requesting subjects of banking supervision being People’s Credit Fund, micro financial organizations in the area where the Banking Inspection and Supervision Department is located to implement one of measures as stipulated under Clause 4 Article 130a of the law on credit institutions (that is amended and supplemented).

c) Directors of the State Bank of provinces, cities under the central management where the Banking Inspection and Supervision Department is not located shall consider and promulgate documents on requesting subjects of banking supervision being People’s Credit Fund, micro financial organizations in the area to implement one of measures as stipulated under Clause 4 Article 130a of the Law on credit institutions (that is amended and supplemented).

6. After subjects of banking supervision correct situations as stipulated under Clause 1 Article 130a of the Law on credit institutions (that is amended and supplemented) or subjects of banking supervision are put into special supervision:

a) Chief of Banking Inspection and Supervision, directors of the State Bank branches of provinces and cities under the central management where the Banking Inspection and Supervision Department is not located shall present to the State Bank Governor for consideration and promulgate documents on terminating early intervention excluding cases as stipulated under Point b, c of this Clause;

b) Chief of Banking Inspection and Supervision Department shall consider and promulgate documents on terminating early intervention for subjects of banking supervision being People Credit’s Fund, micro financial organizations in the area where the Banking Inspection and Supervision is located;

c) Directors of the State Bank branches of provinces, cities under the central management where the Banking Inspection and Supervision Department is not located shall consider and promulgate documents on terminating early intervention for subjects of banking supervision being People Credit’s Fund, micro financial organizations in the area.”

3. To supplement Article 19a into Article 19 as follows:

“Article 19a.To supervise and judge on implementing remedy measures of subjects of banking inspection that applies early intervention

1. Monthly or in urgent cases at the request of the banking supervision agency, subjects of banking supervision shall report on progress, results of implementing remedial measures.

2. The banking supervision agency shall frequently examine, judge the progress, results, difficulties related to the implementation of remedial measures of subjects of banking supervision.

3. Through supervision of implementing remedial measures of subjects of banking supervision, if detecting lateness or inefficiency in the course of implementation:

a) Chief of Banking Inspection and Supervision Department, directors of the State Bank’s branches of provinces and cities under the central management shall present the State Bank Governor on promulgating documents to request subjects of banking supervision to present causes and remedial measures excluding cases as stipulated under Point b, c of this Clause;

b) Chief of Banking Inspection and Supervision Department shall promulgate documents to send to subjects of banking supervision being People’s Credit Fund, micro financial organizations in the area where the Banking Inspection and Supervision Department is located to request on presenting causes and remedial measures;

c) Directors of the State Bank’s branches of provinces and cities under the central management where the Banking Inspection and Supervision Department shall promulgate documents to send to subjects of banking supervision being People’s Credit Fund, micro financial organizations to request on presenting causes and remedial measures.

4. During the process of supervision, based on results of implementing remedy measures of subjects of banking supervision, depending on nature, degree of risk, the banking inspection agency shall recommend

Article 2.Implementation organization

Chief of Office, Chief Inspector, heads of the affiliates of the State Bank, Directors of the branches of the State Bank of provinces, Presidents of the Board of Directors, Board of Members, General Directors (Directors), credit institutions and foreign banks’ branches shall implement this Circular.

Article 3.Implementation provisions

This Circular takes effect on July 01, 2018.

For the Governor

Deputy Governor

Nguyen Dong Tien