Circular No. 06/2010/TT-NHNN dated February 26, 2010 of the State Bank of Vietnam guiding the organization, governance, administration, charter capital, transfer of shares and supplementation and modification of licenses or charters of commercial banks

THE STATE BANK OF VIETNAM

Circular No. 06/2010/TT-NHNN of February 26, 2010, guiding the organization, governance, administration, charter capital, transfer of shares and supplementation and modification of licenses or charters of commercial banks

Pursuant to the 1997 Law on the State Bank of Vietnam and the 2003 Law Amending and Supplementing a Number of Articles of the Law on the State Bank of Vietnam;

Pursuant to the 1997 Law on Credit Institutions and the 2004 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the 2005 Law on Enterprises;

Pursuant to the Government’s Decree No. 96/2008/ND-CP of August 26, 2008, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

Pursuant to the Government’s Decree No. 59/2009/ND-CP of July 16, 2009, on organization and operation of commercial banks;

The State Bank of Vietnam (below referred to as the State Bank) guides the organization, governance, administration, charter capital, transfer of shares and supplementation and modification of licenses or charters of commercial banks as follows:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Circular details the organization, governance, administration, charter capital, transfer of shares and supplementation and modification of licenses or charters of commercial banks under Decree No. 59/2009/ND-CP of July 16, 2009, on organization and operation of commercial banks (below referred to as Decree 59).

2. For joint-venture and wholly foreign-owned commercial banks, this Circular will apply to matters not regulated in the State Bank Governor’s Circular No. 03/2007/TT-NHNN of June 5, 2007, guiding the Government’s Decree No. 22/2006/ND-CP of February 28, 2006, on organization and operation of branches of foreign banks, joint-venture banks and wholly foreign-owned banks and representative offices of foreign credit institutions in Vietnam.

Article 2. Subjects of application

1. Commercial banks (below referred to as banks);

2. Organizations and individuals involved in the organization and operation of banks under Article 1 of this Circular.

Article 3. Principles on making and submitting dossiers

1. Dossiers shall be made in Vietnamese. Copies in Vietnamese and translations from English into Vietnamese shall be duly certified under law.

2. Written requests for the State Bank’s approval of relevant matters specified in this Circular shall be signed by chairmen of Boards of Directors or at-law representatives of banks. If they authorize others to sign such requests, dossiers must comprise letters of authorization made under law. Signers shall take responsibility for the accuracy and truthfulness of the dossiers.

3. Banks’ dossiers shall be sent to the State Bank or its branches directly, by post, fax or email (certified by phone calls) then their originals shall be submitted to the State Bank for examination and filing.

Chapter II

PROVISIONS ON ORGANIZATION, GOVERNANCE AND ADMINISTRATION

Section 1. BANKS’ HEAD OFFICES

Article 4. Head office

1. A bank’s head office must satisfy all the conditions specified in Clause 1, Article 5 of this Circular. Relocation of a bank’s head office is subject to written approval of the State Bank before it is carried out.

2. When a bank wishes to move one or several sections that do not conduct direct transactions with clients out of its head office, it must satisfy the conditions specified in Clause 2, Article 5 of this Circular, and notify such move to the State Bank’s provincial-level branch in the locality where it is headquartered (below referred to as the State Bank branch), the Banking Inspection and Supervision Agency (below referred to as the Inspection and Supervision Agency) at least 15 working days before the move.

When a bank moves several sections of its head office that do not conduct direct transactions with clients to a place outside the province or city where its head office is based, it shall concurrently notify within the above time limit such move to the State Bank branch in the locality to which the sections move.

3. In emergency cases or force majeure circumstances, a bank may move its head office to a new place to ensure its continuous and stable operation. Within five (5) working days from the date of moving, it shall notify in writing such move to the State Bank branch and the Inspection and Supervision Agency. The new place must satisfy the essential conditions specified at Point a, Clause 1, Article 5 of this Circular. Within 90 days from the date of move, the bank shall handle with incidents and stabilize operation in the former head office or carry out procedures requesting the move of its head office under regulations.

Article 5. Conditions on a head office

1. For a head office:

a/ Being located in the Vietnamese territory at a specified address with room number (if any), floor number, name of building (for office buildings for lease), house number, name of street (lane) or commune, ward, township, rural district, urban district, town, provincial city, province or centrally run city; telephone number, fax number and website, of the bank. When the bank registers to locate its head office in more than one house or building at different addresses, such houses or buildings must be adjacent;

b/ Satisfying security requirements; conditions and criteria of treasury safety (if the treasury is located at the head office), archives, fire and explosion prevention and fighting under law;

c/ Having a managerial information system connected online between the head office and branches and business sections of the bank.

2. When a bank wishes to move one or several sections having no direct transactions with clients out of its head office to another place, the new place must satisfy the following conditions:

a/ Being located in the Vietnamese territory at a specified address with room number (if any), floor number, name of building (for office buildings for lease), house number, name of street (lane) or commune, ward, township, rural district, urban district, town, provincial city, province or centrally run city; telephone number, and fax number;

b/ Satisfying security requirements; conditions and criteria of archives, fire and explosion prevention and fighting; and other relevant conditions under law, with regard to professional sections to be moved out of the head office;

c/ Having a managerial information system connected online to the head office;

d/ In this place, the bank may neither conduct transactions or any business activities nor put up signboards or advertisements that might mislead the public as to the fact that the bank has an additional place of transaction;

e/ The bank shall organize and manage the operation of sections outside its head office in accordance with law.

Article 6. Dossiers requesting the State Bank to approve relocation of head office

1. A bank’s written request for the State Bank Governor’s approval of relocation of the head office, which must contain at least the following details:

a/ Reason and necessity for the relocation;

b/ Satisfaction of the prescribed conditions for the place to which the head office will be relocated;

c/ A plan to maintain business operations during the time of relocation to ensure the bank’s uninterrupted operation.

2. Resolution of the General Meeting of Shareholders (for joint-stock commercial banks); decision of the owner (for banks organized as one-member limited liability companies); or resolution of the meeting of the Board of Directors (for banks organized as limited liability companies with two or more members), approving the relocation of the head office and modification of the bank’s license or charter related to this matter.

3. Documents evidencing the bank’s right to lawfully use or own its head office in the new place.

Article 7. Procedures for approving the relocation of a bank’s head office

1. If a bank relocates its head office within the same province or centrally run city:

a/ It shall make a dossier (2 original sets) under Article 6 of this Circular and send it to the State Bank (through a concerned State Bank branch).

b/ Within fifteen (15) working days after receiving the bank’s complete dossier specified at Point a of this Clause, the State Bank branch shall verify the place to which the bank’s head office will be relocated and evaluate the bank’s satisfaction of the conditions specified in Clause 1, Article 5 of this Circular; send a written proposal, enclosed with a complete dossier set, to the State Bank Governor (through the Inspection and Supervision Agency) for consideration and decision. If seeing that the dossier and conditions fail to comply with this Circular and relevant regulations, the State Bank branch shall issue a document guiding the bank to comply with law.

c/ Within ten (10) working days after receiving the State Bank branch’s proposal and enclosed complete dossier specified in Clause 2 of this Article, the State Bank Governor shall issue a written approval or disapproval of the bank’s request for relocation, and clearly state the reason in case of disapproval.

2. If a bank relocates its head office to another province or centrally run city:

a/ It shall make a dossier (2 original sets) under Article 6 of this Circular and send it to the State Bank (through the Inspection and Supervision Agency).

b/ Within five (5) working days after receiving the bank’s complete dossier specified at Point a of this Clause, the State Bank (the Inspection and Supervision Agency) shall make a request for written opinions of the following units:

- The State Bank branch, on the relocation of the bank’s head office;

- The State Bank branch in the province or city where the bank’s new head office will be based (enclosed with a complete dossier set), on the relocation of the bank’s head office. The State Bank branch shall verify the place where the head office will be based and evaluate the bank’s satisfaction of the conditions specified in Clause 1, Article 5 of this Circular;

- The People’s Committees of the province or city where the bank is headquartered and of the place where the bank’s new head office will be based, on the relocation of the bank’s head office.

c/ Within fifteen (15) working days after receiving the State Bank’s written request, the above units shall send their opinions to the State Bank (through the Inspection and Supervision Agency).

d/ Within ten (10) working days after the expiration of the time limit specified at Point c of this Clause, the State Bank Governor shall issue a written approval or disapproval of the bank’s request, and clearly state the reason in case of disapproval.

3. The State Bank Governor’s decision approving the relocation of a bank’s head office constitutes an integral part of the bank’s license and concurrently serves as the decision approving the modification of the bank charter’s details related to the relocation.

4. After obtaining the State Bank’s approval, a bank shall relocate its head office and settle obligations and interests of concerned clients, individuals and organizations; and carry out relocation-related business registration, newspaper notification and other relevant procedures under law.

5. Within 180 days after obtaining the State Bank’s written approval of the relocation of a bank’s head office, the bank shall send a report to the State Bank branches (in the locality of its former head office and the locality of its new head office) and the State Bank (through the Inspection and Supervision Agency), enclosed with a copy of the business registration certificate and a copy of the page of the newspaper publishing the relocation notice.

Section 2. COMMISSIONS OF THE BOARD OF DIRECTORS

Article 8. Organizational structure of Commissions of the Board of Directors

1. The Board of Directors shall set up at least two commissions under Clause 9, Article 16 of Decree 59, including a Risk Management Commission and a Personnel Commission.

2. Each Commission must consist of at least three members, including the head and members. A member of the Board of Directors may concurrently act as a member of one or more than one commission. For banks with independent members of the Board of Directors, the Risk Management Commission must consist of at least one independent member of the Board of Directors.

3. The head of a commission must be a member of the Board of Directors. The Board of Directors shall decide to appoint or relieve from duty the head and members of a commission under internal regulations of the bank.

4. Based on its assigned functions and tasks, a commission may be composed of one or a number of non-members of the Board of Directors (such as independent consultants, staff members of professional sections of the bank, or other cases decided by the Board of Directors).

5. The Board of Directors shall promulgate internal regulations on working mechanisms and functions and tasks of the Commissions mentioned in Articles 9 and 10 of this Circular. Within five (5) working days after promulgating internal regulations, the Board of Directors shall send them to the State Bank’s branch and the State Bank (through the Inspection and Supervision Agency) for reporting.

Article 9. Working mechanisms of Commissions of the Board of Directors

1. Commissions are assisting bodies of the Board of Directors and shall advise the Board of Directors on the performance of its tasks and powers and perform other tasks assigned by the Board of Directors (if any).

2. The Board of Directors shall specify working mechanisms of Commissions, which must include at least the following:

- Regular meetings of the Commission;

- Irregular meetings of the Commission;

- Decision making by the Commission;

- The Board of Directors’ mechanism for deciding on Commission’s proposals.

Article 10. Tasks and functions of Commissions

1. The Board of Directors shall promulgate internal regulations on the tasks and functions of Commissions. These regulations must contain at least the following contents: the formation, functions, tasks and number of members of each Commission, and responsibilities of each member. Regulations on the functions and tasks of the Risk Management Commission and the Personnel Commission must contain at least the contents specified in Clauses 2 and 3 of this Article.

2. Functions and tasks of the Risk Management Commission:

a/ To advise the Board of Directors on the promulgation of processes and policies falling within its competence which are related to risk management in banking operations under law and the bank’s charter;

b/ To analyze, and give warnings on, the safety of the bank against potential risks and measures to prevent these risks in short and long terms.

c/ To consider and evaluate the compliance and effectiveness of the bank’s current risk management processes and policies for making recommendations and proposals to the Board of Directors on requests for change of current processes or policies and operation strategies.

d/ To advise the Board of Directors on decision to approve relevant investments and transactions, risk management policies and response plans within its functions and tasks assigned by the Board of Directors.

3. Functions and tasks of the Personnel Commission:

a/ To advise the Board of Directors on the size and structure of the Board of Directors and on executive officers to suit the bank’s operation scope and development strategies.

b/ To advise the Board of Directors on personnel-related matters arising in carrying out procedures to elect, appoint, dismiss or relieve from duty the titles of member of the Board of Directors, member of the Control Board and executive officer of the bank under law and the bank’s charter.

c/ To study, and advise the Board of Directors on promulgating, the bank’s internal regulations falling within the competence of the Board of Directors, on salary, remuneration, bonus, personnel recruitment, training and other preferential treatment policies for the bank’s executive officers and staff members.

Section 3. APPROVAL AND APPOINTMENT OF PERSONNEL OF A JOINT-STOCK COMMERCIAL BANK

Article 11. Process and procedures for electing members of the Board of Directors and the Control Board

1. At least thirty (30) days before holding a meeting of the General Meeting of Shareholders, a bank’s Board of Directors shall notify shareholders with the participation right of the number of members to be elected or additionally elected to the Board of Directors and the Control Board, including the number of independent members of the Board of Directors (when such members have not yet been elected or are fewer than 2); and concurrently notify the conditions and criteria for the to-be-elected titles for shareholders to nominate holders of these titles under law.

2. Based on the shareholders’ list of nominees, the Board of Directors shall verify their conditions and criteria and make a list of candidates for to-be-elected titles. When shareholders fail to nominate sufficient candidates for members of the Board of Directors (including independent members of the Board of Directors) and members of the Control Board or when candidates fail to satisfy the required conditions and criteria, the Board of Directors shall nominate additional candidates for these titles.

For unqualified candidates, the Board of Directors shall notify the reason to the shareholder or group of shareholders that nominate them.

3. After making a list of candidates, the Board of Directors shall request in writing the State Bank’s branch to consider and approve this list.

4. The General Meeting of Shareholders shall decide on the numbers of to-be-elected members of the Board of Directors and the Control Board and elect those on the list of candidates approved by the State Bank’s branch under Clause 3 of this Article. A bank may make a list of candidates for and separately elect independent members of the Board of Directors like other members of the Board of Directors.

5. Members of the Board of Directors and the Control Board shall commence performing their tasks from the time they are elected by the General Meeting of Shareholders and take over the jobs. They shall take individual responsibility for their tasks during their term of office.

Article 12. Dossiers requesting the State Bank to approve the list of candidates for members of the Board of Directors and the Control Board

1. A bank’s written request for the State Bank’s approval of the list of candidates, which must contain the following principal details:

a/ Reason for electing or adding members of the Board of Directors and the Control Board;

b/ Certification of candidates’ satisfaction of criteria and conditions specified in Decree 59.

2. The Board of Directors’ resolution approving the list of candidates. In case of additionally electing members of the Board of Directors and the Control Board, this resolution must indicate the number of members to be additionally elected.

3. List of candidates for members of the Board of Directors (indicating those for independent members of the Board of Directors, if any), and the Control Board, which must contain the following principal details: full names, incumbent posts, to-be-elected titles and summary of each candidate’s satisfaction of conditions and criteria specified in Decree 59.

4. Curricula vitae (made according to the form provided in Appendix 1 to this Circular, not printed herein) and judicial record cards of candidates.

5. Copies of diplomas evidencing professional qualifications of candidates under regulations.

6. A report on related benefits of candidates under Article 27 of Decree 59.

7. Another credit institution’s Board of Directors’ written approval of its manager to act as a member of the bank’s Board of Directors (when the nominated person is a member of the Board of Directors of another credit institution).

8. Declaration on affiliated persons of candidates under Clause 9, Article 5 of Decree 59 (made according to the form provided in Appendix 2 to this Circular, not printed herein).

9. Other documents evidencing candidates’ satisfaction of conditions and criteria specified in Decree 59 (if any).

10. For a candidate who does not bear Vietnamese nationality, in addition to the above documents, the dossier must also include the judicial record card (or equivalent document) issued by a competent agency of the country where the foreigner resides before coming to Vietnam. This card must be consularly legalized. For a foreigner who has resided in Vietnam for full 6 months or more, his/her judicial record card issued by the provincial-level Justice Department of the locality where he/she resides is required.

Article 13. Process and procedures for approving the list of candidates for members of the Board of Directors and the Control Board

1. At least ten (10) working days before holding a meeting of the General Meeting of Shareholders to elect members of the Board of Directors and the Control Board, a bank shall make a dossier (1 original set) under Article 12 of this Circular and send it to the State Bank (through the State Bank’s branch), requesting approval of the list of candidates.

2. Within seven (7) working days after receiving a complete dossier specified in Clause 1 of this Article, the State Bank’s branch shall examine and verify procedures, dossiers and conditions under Decree 59 and this Circular. When the dossier satisfies the prescribed conditions, the State Bank’s branch shall approve in writing the list of candidates and concurrently send it to the State Bank (through the Inspection and Supervision Agency) for reporting. When deeming that the dossier and conditions fail to comply with this Circular and relevant regulations, the State Bank’s branch shall provide written guidance for the bank to comply with law.

Article 14. Process and procedures for approving the titles of Chairman and member of the Board of Directors, head and member of the Control Board

1. Within fifteen (15) working days from the date the General Meeting of Shareholders elects members of the Board of Directors and the Control Board, a bank shall complete procedures for electing, and assigning tasks to, the titles within the Board of Directors and the Control Board. The Board of Directors shall send a written request, enclosed with a dossier, to the State Bank Governor (through the Inspection and Supervision Agency) for approving the titles of Chairman and member of the Board of Directors and head and member of the Control Board. Such dossier comprises:

a/ Minutes of the meeting of the General Meeting of Shareholders to elect members of the Board of Directors and the Control Board;

b/ The Board of Directors’ and the Control Board’s resolutions on the election and assignment of tasks to the titles in the Board of Directors and the Control Board (if any).

c/ Documents listed in Clauses 4 thru 10, Article 12 of this Circular, for elected members.

2. Within fifteen (15) working days after receiving the bank’s complete dossier, the State Bank Governor shall issue a decision approving the election of members of the Board of Directors and the Control Board. If disapproving such election or requesting supplementation of the dossier, he/she shall clearly state the reason in writing.

3. Within 30 days from the date the State Bank Governor signs a document requesting supplementation of the dossier, the bank’s Board of Directors shall complete the dossier and send it to the State Bank. If the Board of Directors fails to supplement the dossier within the prescribed time limit, the State Bank Governor shall issue a written disapproval.

4. From the time of receiving the State Bank Governor’s written disapproval of the titles at the bank’s request, concerned members of the Board of Directors and the Control Board may not continue performing their tasks.

5. For the case specified in Clause 4 of this Article, the bank shall carry out procedures for additionally electing members of the Board of Directors and the Control Board if their number is insufficient as prescribed.

Article 15. Dossiers and procedures for requesting the State Bank to approve the appointment of the director general

1. Before appointing the director general, the Board of Directors shall send a written request, enclosed with a dossier, to the State Bank’s branch for approval of the person to be appointed as director general, which must contain at least the following details: reason for appointment and certification of such person’s satisfaction of the criteria and conditions specified in Decree 59. The enclosed dossier comprises:

a/ In-principle written agreement between the bank and the person to be appointed as director general on such person’s holding of the post of director general, indicating the term of this post.

b/ Documents listed in Clauses 4, 5, 6, 8 and 9, Article 12 of this Circular, for the person to be appointed as director general.

c/ For a to-be-appointed person not bearing Vietnamese nationality, in addition to the above documents, the dossier also includes:

- His/her judicial record card specified in Clause 10, Article 12 of this Circular;

- His/her passport still valid for at least 6 months from the date of dossier submission, and documents evidencing that he/she will be permitted to reside and work in Vietnam if so approved by the State Bank.

2. Within five (5) working days after receiving a complete dossier specified in Clause 1 of this Article, the State Bank’s branch shall examine and verify the dossier and conditions under Decree 59 and this Circular. If the prescribed conditions are satisfied, the State Bank’s branch shall approve in writing the person to be appointed as director general and concurrently report such to the State Bank (through the Inspection and Supervision Agency). If seeming that the dossier and conditions fail to comply with this Circular and relevant regulations, the State Bank’s branch shall issue a written disapproval (clearly stating the reason) or guide the bank in complying with law.

3. After obtaining the State Bank branch’s in-principle written approval, the bank’s Board of Directors shall issue a decision appointing the director general.

4. The director general shall commence performing his/her tasks after the Board of Directors issues an appointment decision and he/she takes over the jobs, and shall take individual responsibility for his/her tasks during his/her term of office.

5. Within five (5) working days after appointing the director general, the Board of Directors shall send a written request, enclosed with a dossier, to the State Bank Governor (through the Inspection and Supervision Agency) for approval of the title of director general. The enclosed dossier comprises:

a/ The Board of Directors’ resolution on the appointment of the new director general;

b/ Documents listed at Points a, b and c, Clause 1 of this Article.

6. Within ten (10) working days after receiving the bank’s complete dossier, the State Bank Governor shall issue a decision approving the title of director general. In case of disapproval, he/she shall clearly state the reason in writing.

7. If the State Bank Governor disapproves the title of director general at the bank’s request, the incumbent director general may not continue his/her tasks from the time of receiving the State Bank Governor’s written disapproval.

8. In case the director general is re-appointed, within fifteen (15) days before the expiration of the term of office of the director general, the Board of Directors shall send a report, enclosed with its resolution, on the re-appointment to the State Bank Governor and State Bank branch’s director. A decision approving the title of director general for the re-appointed person remains effective in the new term of office, unless the State Bank Governor disapproves in writing such re-appointment or the director general automatically loses his/her capacity, is dismissed or relieved from duty by the Board of Directors or is forced to quit his/her post under current law.

Section 4. APPROVAL AND APPOINTMENT OF PERSONNEL OF A JOINT-STOCK COMMERCIAL BANK WITH OVER 50% OF CHARTER CAPITAL OWNED BY THE STATE

Article 16. Process and procedures for electing and approving the titles of member of the Board of Directors, member of the Control Board and director general

1. At least thirty (30) days before holding a meeting of the General Meeting of Shareholders, a bank’s Board of Directors shall notify shareholders with the participation right of the number of members to be elected or added to the Board of Directors and the Control Board, projecting the number of independent members of the Board of Directors (when such members have not yet been elected or fewer than 2 under regulations); and concurrently notify conditions and criteria for the to-be-elected titles for shareholders to nominate candidates under law.

2. The director general of a joint-stock commercial bank with over 50% of charter capital owned by the State must be a member of the Board of Directors (as the Board of Directors’ member-cum-director general), who shall be nominated by the State Bank Governor.

3. The state capital’s owner (with the State Bank Governor acting as representative) shall nominate a candidate for member of the Board of Directors, the Board of Directors’ member-cum-director general or member of the Control Board under current regulations.

4. Based on the shareholders’ list of candidates for these titles, the Board of Directors shall appraise the conditions and criteria and finalize a list of candidates for the to-be-elected titles. If shareholders fail to nominate sufficient candidates for members of the Board of Directors (including independent members of the Board of Directors) or members of the Control Board, or when candidates fail to satisfy the prescribed conditions and criteria, the Board of Directors shall nominate additional candidates for these titles.

For unqualified candidates, the Board of Directors shall notify the reason to the shareholder or group of shareholders nominating them.

5. After making a list of candidates, the Board of Directors shall request in writing the State Bank (through the Organization and Personnel Department) to examine and approve this list. The dossier and procedures for requesting the State Bank to approve a list of candidates comply with current regulations on personnel work.

6. The General Meeting of Shareholders shall decide on the number of to-be-elected members of the Board of Directors and the Control Board and elect those on the State Bank-approved list of candidates under Clause 4 of this Article. The bank may make a list of candidates for and separately elect independent members of the Board of Directors like other members of the Board of Directors.

7. Member of the Board of Directors, the Board of Directors’ member-cum-director general and member of the Control Board shall commence performing their tasks from the time they are elected by the General Meeting of Shareholders and take over the jobs. They shall take individual responsibility for their tasks during their term of office.

8. Within fifteen (15) working days from the date the General Meeting of Shareholders elects the titles of member of the Board of Directors, the Board of Directors’ member-cum-director general and member of the Control Board, the bank shall complete procedures for electing, and assigning tasks to, the titles in the Board of Directors and the Control Board. The Board of Directors shall send a written request, enclosed with a dossier, to the State Bank Governor (through the Inspection and Supervision Agency) for approval of the titles of chairman and member of the Board of Directors, the Board of Directors’ member-cum-director general and head and member of the Control Board. The enclosed dossier comprises:

a/ The minutes of the General Meeting of Shareholders’ meeting to elect the titles of member of the Board of Directors, the Board of Directors’ member-cum-director general and member of the Control Board;

b/ The Board of Directors’ and the Control Board’s resolutions on the election of and assignment of tasks to the titles in the Board of Directors and the Control Board (if any).

c/ Documents listed in Clauses 4 thru 10, Article 12 of this Circular, for elected members.

9. Within fifteen (15) working days after receiving the bank’s complete dossier specified in Clause 7 of this Article, the State Bank shall issue a decision approving the titles of member of the Board of Directors, the Board of Directors’ member-cum-director general and member of the Control Board. If disapproving these titles or requesting supplementation of the dossier, the State Bank Governor shall clearly state the reason in writing.

10. Subsequent processes comply with Clauses 3, 4 and 5, Article 14 of this Circular.

Article 17. Dossiers and procedures for appointing, relieving from duty or dismissing deputy directors general and chief accountants

The bank’s Board of Directors shall appoint, relieve from duty or dismiss deputy directors general and chief accountants after obtaining the State Bank’s approval. Dossiers and procedures for requesting the State Bank’s approval comply with the State Bank’s current regulations on personnel work.

Section 5. APPROVAL AND APPOINTMENT OF PERSONNEL OF A COMMERCIAL BANK WITH 100% OF CHARTER CAPITAL OWNED BY THE STATE

Article 18. Process and procedures for appointing and approving the titles of member of the Board of Director, member of the Control Board, director general, deputy director general and chief accountant

1. The director general of a joint-stock commercial bank with 100% of charter capital owned by the State must be a member of the Board of Directors (referred to as the Board of Directors’ member-cum-director general).

2. The State Bank Governor shall appoint, relieve from duty or dismiss the titles of member of the Board of Director, the Board of Directors’ member-cum-director general, member of the Control Board, director general, deputy director general and chief accountant.

3. Based on management requirements, the State Bank Governor may issue a decision to appoint, relieve from duty or dismiss his/her representative as member of the Board of Director, the Board of Directors’ member-cum-director general or member of the Control Board without any proposal of the bank’s Board of Directors.

4. The order, procedures and dossiers for requesting the State Bank Governor (through the Organization and Personnel Department) to appoint, relieve from duty or dismiss the titles of member of the Board of Director, the Board of Directors’ member-cum-director general, member of the Control Board, deputy director general or chief accountant comply with current regulations on personnel work.

5. The State Bank Governor’s decision appointing the titles of member of the Board of Director, the Board of Directors’ member-cum-director general or member of the Control Board concurrently serves as the decision approving these titles.

Section 6. OTHER PROVISIONS

Article 19. Full-time members of the Control Board

1. The Control Board’s full-time members are those who work on a full-time basis in the recess between meetings of the Control Board and shall take responsibility for one or several tasks assigned by the Control Board.

2. The Control Board’s full-time members may not concurrently hold posts or work in other credit institutions.

3. The Control Board shall specify working mechanisms as well as tasks and responsibilities of each full-time member of the Control Board.

Article 20. Relief from duty, dismissal or automatic loss of capacity of members of the Board of Directors or the Control Board

1. Within fifteen (15) working days from the date the Chairman of the Board of Directors automatically loses his/her capacity under Clause 1, Article 23 of Decree 59, the Board of Directors’ members shall hold a meeting to elect one of its members as the Chairman.

2. Within fifteen (15) working days from the date the head of the Control Board automatically loses his/her capacity under Clause 1, Article 23 of Decree 59, the Control Board’s members shall hold a meeting to elect one of its members as the head.

3. Within sixty (60) days after receiving a resignation application from the Chairman of the Board of Directors, the Board of Directors shall hold a meeting to carry out procedures for relieving from duty the Chairman of the Board of Directors and electing the replacement.

4. Within sixty (60) days after receiving a resignation application from the head of the Control Board, the Control Board shall hold a meeting to carry out procedures for relieving from duty the head of the Control Board and electing the replacement.

5. After the bank has elected a new Chairman of the Board of Directors and a new head of the Control Board under this Article, the Board of Directors shall request in writing the State Bank Governor (through the Inspection and Supervision Agency) to approve these titles, enclosed with the Board of Directors’ resolution on the election of the Chairman of the Board of Directors or the Control Board’s resolution on the election of the head of the Control Board.

6. For cases of relief from duty or dismissal of members of the Board of Directors or members of the Control Board under Clause 1, Article 24 of Decree 59, the Board of Directors may hold an extraordinary meeting of the General Meeting of Shareholders or submit the cases to the upcoming General Meeting of Shareholders for decision.

7. The titles of Chairman of the Board of Directors, member of the Board of Directors, the Board of Directors’ member-cum-director general, head of the Control Board or member of the Control Board of a joint-stock commercial bank with over 50% of charter capital owned by the State shall be relieved from duty or dismissed under this Article after the State Bank’s approval is obtained. The dossier and procedures for requesting the State Bank’s approval comply with the State Bank’s current regulations on personnel work.

Article 21. Replacement of the director general in emergency cases

1. Within one (1) working day from the date the director general is identified as automatically losing his/her capacity under Clause 1, Article 23 of Decree 59 or Clause 8, Article 16 of this Circular, or he/she is relieved from duty or dismissed without any replacement yet, the Board of Directors shall immediately issue a decision appointing a deputy general director to run the bank’s operations, ensuring their stability and continuity, and report such in writing to the State Bank (through the Inspection and Supervision Agency and the State Bank’s branch). The appointed person shall take individual responsibility for his/her assigned tasks during the time of task performance.

2. Within sixty (60) days from the date the director general automatically loses his/her capacity or is relieved from duty or dismissed under Clause 1 of this Article, the Board of Directors shall carry out procedures for requesting the State Bank Governor to appoint, or approve the appointment of, the new director general under regulations.

Article 22. Meetings of the Control Board

1. The Control Board shall meet at least once every quarter and may convene an extraordinary meeting to timely address urgent matters.

2. The Control Board’s head shall convene an extraordinary meeting:

a/ At the request of at least 2 members of the Control Board;

b/ At the request of the director of the State Bank’s branch (for joint-stock commercial banks other than those with over 50% of charter capital owned by the State), or of the State Bank Governor (for banks of other types);

c/ In other cases specified by banks.

3. The Control Board shall promulgate internal regulations on other matters (other than those mentioned in Clauses 1 and 2 of this Article) related to the Control Board’s meeting (method of notifying, convening and organizing the meeting, voting, minutes, and collection of written opinions of members) in accordance with regulations applicable to the Board of Directors’ meetings under Articles 49, 50 and 51 of Decree 59.

Article 23. Other matters related to the tasks and powers of the Board of Directors and the Control Board

1. The Board of Directors and the Control Board shall take responsibility for the matters related to internal audit, examination and control systems under the State Bank Governor’s Decision No. 36/2006/QD-NHNN of August 1, 2006, promulgating the Regulation on internal examination and control applicable to credit institutions, and Decision No. 37/2006/QD-NHNN of August 1, 2006, promulgating the Regulation on internal audit applicable to credit institutions.

2. In case a bank has no independent member of the Board of Directors, and the Board of Directors collects written opinions of its members under Article 51 of Decree 59, the Board of Directors’ secretary shall count the votes and make a vote-count record under the supervision of at least one Control Board member.

3. Incumbent members of the Board of Directors who satisfy the conditions and criteria for independent members of the Board of Directors under Article 22 of Decree 59 may be re-elected as independent members of the bank’s Board of Directors. An individual may act as an independent member of the Board of Directors for not more than 2 terms of office of a bank’s Board of Directors.

4. The bank’s Board of Directors shall promulgate internal regulations of its own and those related to the bank’s organization, governance and operation within its competence in accordance with law and Decree 59.

5. The Board of Directors of a commercial bank with 100% of charter capital owned by the State shall propose to the State Bank Governor matters falling within the owner’s deciding competence under Article 56 of Decree 59. Based on the proposed matters, the owner (with the State Bank Governor acting as a representative) shall consider and make decision according to his/her competence.

Chapter III

CHARTER CAPITAL; PURCHASE, SALE AND TRANSFER OF SHARES; BUY-BACK OF CAPITAL CONTRIBUTED BY CONTRIBUTORS

Section 1. CHARTER CAPITAL

Article 24. Chapter capital of a bank

1. Charter capital is capital actually allocated by the owner or actually contributed by shareholders and contributors and indicated in a bank’s charter.

2. A bank’s charter capital may be increased from:

a/ The reserve fund for charter capital addition; the share capital surplus fund; retained profits and other funds as provided by law;

b/ Public offering or private placement of stocks;

c/ Conversion of convertible bonds into common stocks;

d/ Capital additionally allocated by the owner or contributors;

e/ Other sources as provided by law.

Article 25. Adjustment of charter capital

1. A document approving the adjustment of a bank’s charter capital is valid for 12 months from the date of its signing. In case the charter capital increase is not completed within the prescribed time limit, and if the General Meeting of Shareholders (for joint-stock commercial banks) or the owner (for wholly foreign-owned banks organized as one-member limited liability companies) or the Board of Directors (for banks organized as limited liability companies with two or more members) adopts changes in the charter capital increase plan already approved by the State Bank, such document ceases to be legally effective.

2. After completely adjusting the charter capital, the bank shall send a report to the State Bank (through the Inspection and Supervision Agency) on the adjustment, enclosed with a copy of the business registration certificate with the new charter capital. For joint-stock commercial banks, in addition to the above documents which shall all be sent to the State Bank’s branch, a list of shareholders is required.

Section 2. ADJUSTMENT OF THE CHARTER CAPITAL OF A JOINT-STOCK COMMERCIAL BANK

Article 26. Dossier requesting the State Bank to approve the increase of the charter capital of a joint-stock commercial bank

1. A bank’s written request for such increase, clearly stating the reason and necessity for the increase.

2. The General Meeting of Shareholders’ resolution approving the charter capital increase plan.

3. The charter capital increase plan approved by the General Meeting of Shareholders, which must contain at least the following:

a/ Demands for adjusting the charter capital (specifying the use of capital for each demand);

b/ The projected business plan after such adjustment, covering such indicators as amount and rate of growth in total assets, credit and mobilized deposits of clients; deposits and loans of other credit institutions; banking safety assurance ratios; return on equity (ROE), and return on asset (ROA);

c/ The charter capital increase plan must contain at least the following:

(i) Total charter capital projected to be increased; sources used for increasing the charter capital;

(ii) In case capital is increased from public offer of stocks or private placement of shares:

- Projected drives of issue in a year;

- Plan for each drive, covering types of stocks to be issued, eligible purchasers, offered price applicable to each purchaser (if this price is not yet identified, to indicate it as unidentifiable price, ensuring compliance of the offered price of stocks with the Enterprise Law), time of issue, and other conditions related to the benefits and obligations of each purchaser (if any);

(iii) In case capital is increased from the conversion of convertible bonds into common stocks:

- Information on the issue of convertible bonds, including total value of issued bonds; drives of issue; bond term and interest rate, rate of conversion of bonds into stocks; bond purchasers; and plan to convert bonds into stocks;

- Information on bond conversion request, including total value of bonds already converted into stocks in previous periods and time of conversion (if any); total value of bonds to be converted in this period, rate of conversion of bonds into stocks, and time of conversion.

(iv) Projected changes in the structure and ratio of equity of shareholders with major holding rate and shareholders being members of the Board of Directors, members of the Control Board and director general of a bank after each adjustment of the charter capital (if any).

4. A report on the list of existing shareholders with major holding rate and shareholders being members of the Board of Directors, members of the Control Board and director general of a bank, comprising names and addresses of these shareholders, number of shares of each type, total shares, and holding rate to the total charter capital of the bank.

5. In case charter capital is increased from public offering or private placement of stocks, in addition to the above documents, the dossier comprises:

a/ A written request for share purchase, made by shareholders with major holding rate that intend to purchase shares from a bank (made according to the form provided in Appendix 3, for institutional shareholders, or Appendix 4, for individual shareholders, not printed herein);

b/ A written request for share purchase, made by members of the Board of Directors, members of the Control Board and director general who intend to purchase shares from a bank (made according to the form provided in Appendix 4, not printed herein).

Article 27. Buy-back of shares resulting in the reduction of the charter capital of a joint-stock commercial bank

1. A bank’s buy-back of its own shares is subject to the State Bank’s approval if such buy-back results in charter capital reduction.

2. Conditions on a bank to buy-back shares:

a/ Satisfying the conditions specified in Article 40 of Decree 59;

b/ Conducting profitable business for 2 consecutive years preceding the year of request for buy-back and having no accumulative loss;

c/ Not having been administratively sanctioned by the State Bank in monetary and banking operations for the 2 years preceding the time of request for the State Bank’s approval.

Article 28. Dossier requesting the State Bank to approve buy-back of shares resulting in the reduction of the charter capital of a joint-stock commercial bank

1. A bank’s written request, which must contain at least the following:

a/ Reason for buy-back, buy-back method and price, eligible buyers-back, ratio of shares to be bought back to charter capital, procedures and time of payment to shareholders;

b/ Evaluation of the charter capital reduction’s impacts on the bank’s organization and operation.

2. Resolution of the meeting of the General Meeting of Shareholders, approving the reduction of the bank’s charter capital.

3. The charter capital reduction plan already approved by the General Meeting of Shareholders, which comprises:

a/ Detailed contents specified at Point a, Clause 1 of this Article;

b/ The contents specified at Point b, Clause 3, Article 26 of this Circular, in case of charter capital reduction.

4. The list of shareholders with major holding rate and the list of members of the Board of Directors, members of the Control Board and executive officers of a bank before and after charter capital reduction, indicating the following:

- For an individual: name, number of his/her identity card or passport or another valid paper, and date and place of its issue;

- For an institution: name, address of its head office, number of the business registration certificate and date and place of its issue; representatives of shareholders’ contributed capital, numbers of their identity cards or passports or other valid papers, and dates and places of their issue;

- Number and value of owned shares, share holding rate in charter capital before and after charter capital reduction.

5. The list of shareholders selling their shares to the bank, enclosed with the information specified in Clause 4 of this Article (in case of buy-back of shares of a number of shareholders).

Article 29. Process and procedures for approving the adjustment of the charter capital of a joint-stock commercial bank

1. A joint-stock commercial bank shall make a dossier (2 original sets) under regulations and send it to the State Bank (through the State Bank’s branch). A joint-stock commercial bank with over 50% of charter capital owned by the State shall make a dossier (1 original set) under regulations and send it to the State Bank (through the Inspection and Supervision Agency).

2. Within ten (10) working days after receiving a complete dossier from a joint-stock commercial bank under Clause 1 of this Article, the State Bank’s branch shall:

a/ Appraise the dossier under this Circular;

b/ Evaluate the charter capital adjustment plan: the adjustment’s effectiveness and impacts on the bank’s operation, and the necessity of adjustment;

c/ In case the bank buys-back its shares, resulting in charter capital reduction: evaluate the bank’s satisfaction of the conditions on a commercial bank under Clause 2, Article 27 of this Circular;

d/ Send a report to the State Bank Governor (through the Inspection and Supervision Agency) on dossier appraisal and condition evaluation results, specifying the necessity to adjust the charter capital, evaluating the effectiveness and impacts of such adjustment; indicating agreements or disagreements with the bank’s request.

3. Within ten (10) working days after receiving the State Bank branch’s report on charter capital adjustment under Point d, Clause 2 of this Article and enclosed dossier, the Inspection and Supervision Agency shall collect opinions of the concerned unit (the Monetary Policy Department), appraise, summarize and submit them to the State Bank Governor for decision.

4. Within fifteen (15) working days after receiving a complete dossier from the joint-stock commercial bank with over 50% of charter capital owned by the State under Clause 1 of this Article, the Inspection and Supervision Agency shall collect opinions of the concerned unit (the Monetary Policy Department), appraise, summarize and submit them to the State Bank Governor for decision.

5. Within five (5) working days after receiving a report from the Inspection and Supervision Agency, the State Bank Governor shall approve or disapprove in writing the bank’s request for charter capital adjustment. In case of disapproval, he/she shall clearly state the reason in writing.

Section 3. ADJUSTMENT OF THE CHARTER CAPITAL OF A JOINT-VENTURE BANK OR WHOLLY FOREIGN-OWNED BANK

Article 30. Dossier requesting the adjustment of the charter capital of a joint-venture bank or wholly foreign-owned bank

1. The bank’s written request for charter capital adjustment, indicating the reason and necessity for the adjustment;

2. Decision of the owner (for wholly foreign-owned banks organized as one-member limited liability companies) or resolution of the Board of Directors (for banks organized as limited liability companies with two or more members), approving the bank’s charter capital adjustment plan;

3. Members’ written commitment to contributing capital (for joint-venture banks or wholly foreign-owned banks organized as limited liability companies with two or more members);

4. The charter capital adjustment plan already approved by the owner (for wholly foreign-owned banks organized as one-member limited liability companies) or the Board of Directors (for banks organized as limited liability companies with two or more members), which must contain at least the following:

a/ Demands for charter capital adjustment (specifying the use of capital for each demand); and sources used to increase charter capital;

b/ The contents specified at Point b, Clause 3, Article 26 of this Circular.

Article 31. Process and procedures for approving the adjustment of the charter capital of a joint-venture bank or wholly foreign-owned bank

1. The bank shall make a dossier (1 original set) under Article 30 of this Circular and send it to the State Bank (through the Inspection and Supervision Agency).

2. Within twenty (20) working days after receiving a bank’s complete dossier mentioned in Clause 1 of this Article, the State Bank Governor shall approve or disapprove in writing the bank’s request for charter capital adjustment. In case of disapproval, he/she shall clearly state the reason in writing.

Section 4. BUY-BACK OF CAPITAL CONTRIBUTED BY CONTRIBUTORS TO A JOINT-VENTURE BANK OR WHOLLY FOREIGN-OWNED BANK ORGANIZED AS A LIMITED LIABILITY COMPANY WITH TWO OR MORE MEMBERS

Article 32. Conditions on a bank to buy back capital contributed by contributors

1. The bank’s buy-back of capital contributed by its contributors is subject to the State Bank’s written approval.

2. Conditions:

a/ Those specified in Clause 7, Article 68 of Decree 59;

b/ Conducting profitable business for two consecutive years preceding the year of request for buy-back and having no accumulative loss;

c/ Not having been administratively sanctioned by the State Bank in monetary and banking operations for the two years preceding the time of request for the State Bank’s approval.

Article 33. Dossiers and procedures requesting the State Bank to approve a bank’s buy-back of capital contributed by contributors

1. A dossier requesting the State Bank to approve a bank’s buy-back of capital contributed by contributors comprises:

a/ The bank’s written request, which must indicate at least the following:

- Reason for, method and price of buy-back, eligible buyers, ratio of capital to be bought back to charter capital, procedures and time of payment to capital contributors.

- Assessment of the charter capital reduction’s impacts on the bank’s organization and operation.

b/ Resolution of capital contributors’ meeting, approving the plan to buy back capital contributed by contributors which results in the reduction of the bank’s charter capital.

c/ The contributed capital buy-back plan already approved by contributors, which must contain at least the following:

- Detailed contents specified at Point a of this Clause;

- The contents specified at Point b, Clause 3, Article 26 of this Circular;

- List of capital contributors before and after charter capital reduction, indicating name of the organization, its representative at law, number of the business registration certificate and date and place of its issue; value of contributed charter capital, ratio of contributed capital to charter capital before and after charter capital reduction.

2. Process and procedures requesting the State Bank to approve a bank’s buy-back of capital contributed by contributors:

a/ The bank shall send a dossier (1 original set) to the State Bank (through the Inspection and Supervision Agency).

b/ Within twenty (20) working days after receiving the bank’s complete dossier mentioned at Point a of this Clause, the State Bank Governor shall approve or disapprove in writing the bank’s buy-back of capital contributed by contributors. In case of disapproval, he/she shall clearly state the reason in writing.

Section 5. TRANSFER OF SHARES

Article 34. Transfer of shares in cases subject to the State Bank’s approval

1. For share transfer transactions specified in Clause 3, Article 26 of Decree 59: The State Bank’s branch shall approve share transfer transactions of joint-stock commercial banks while the State Bank approve share transfer transactions of joint-stock commercial banks with over 50% of charter capital owned by the State.

2. Transactions on trading of shares with major holding rate are share trading transactions of shareholders holding 5% or more of share capital with voting right.

3. For banks having their securities listed: The transfer of their shares complies with the law on securities and securities market; at the same time members of the Board of Directors, members of the Control Board and the director general shall ensure the holding rate specified in Clause 4, Article 36 of Decree 59.

4. Within five (5) working days after conducting share transfer transactions under Clauses 3 and 4, Article 36 of Decree 59, a bank (including bank having its securities listed) shall send a share transfer report to the State Bank’s branch (for joint-stock commercial banks) or the State Bank (for joint-stock commercial banks with over 50% of charter capital owned by the State).

Article 35. Share transfer dossiers in cases subject to the State Bank’s approval

1. The Board of Directors’ written request, which must contain at least the following: transferor and transferee of shares; number and total par value of transferred shares, ratio of total par value of transferred shares to charter capital.

2. List of shareholders with major holding rate before and after transfer, showing shareholders with major holding rate after transfer. Such list contains the following information:

- Names of individual shareholders, numbers of identity cards and dates and places of their issue;

- Name of the institutional shareholder, address of its head office, number of the business registration certificate and date and place of its issue, representative of the institutional shareholder, number of his/her identity card, passport or another valid paper;

- Number and total par value of owned shares, ratio of owned shares to charter capital.

3. A written request for share transfer, which must contain at least the following information on transferor and transferee below:

- For an individual: name, number of his/her identity card or passport or another valid paper, date and place of its issue;

- For an institution: name, address of its head office, number of the business registration certificate and date and place of its issue; representative of contributed capital of shareholders, number of his/her identity card or passport or another valid paper, date and place of its issue;

- Number and total par value of transferred shares;

- Number and value of owned shares, ratio of owned shares to charter capital before and after transfer;

- Projected date of transaction;

- Signatures of transferor and transferee (with full names).

4. Declaration on affiliated persons of the transferee (made according to the form provided in Appendix 2 to this Circular, not printed herein).

5. Foreign transferees shall comply with the Government’s Decree No. 69/2007/ND-CP of April 20, 2007, on foreign investors’ purchase of shares of Vietnamese commercial banks (Decree 69), and the State Bank’s Circular No. 07/2007/TT-NHNN of November 29, 2007, guiding a number of provisions of Decree 69.

Article 36. Process and procedures for requesting the State Bank to approve the transfer of shares

1. A joint-stock commercial bank shall make a dossier (1 original set) under regulations and send it to the State Bank’s branch. Within seven (7) working days after receiving a complete dossier specified in Article 35 of this Circular, the State Bank’s branch shall examine and verify the dossier and decide on approval of the transfer of shares by shareholders or request in writing the bank to supplement the dossier or explain its unclear contents, or disapprove the transfer. In case of disapproval (if seeing that the transfer of shares may cause banking operation instability), it shall clearly state the reason in writing.

2. A joint-stock commercial bank with over 50% of charter capital owned by the State shall make a dossier (1 original set) under regulations and send it to the State Bank (through the Inspection and Supervision Agency). Within seven (7) working days after receiving a complete dossier specified in Article 35 of this Circular, the State Bank shall approve in writing the transfer of shares by shareholders or request in writing the bank to supplement the dossier or explain its unclear contents, or issue a written disapproval. In case of disapproval (if seeing that the transfer of shares may cause banking operation instability), it shall clearly state the reason in writing.

Article 37. Conducting share transfer transactions for members of the Board of Directors, members of the Control Board and directors general of joint-stock commercial banks

1. At least fifteen (15) working days before conducting the transactions specified in Clause 4, Article 36 of Decree 59, the bank’s Board of Directors shall send a report to the State Bank (for joint-stock commercial banks with over 50% of charter capital owned by the State) or the State Bank’s branch (for joint-stock commercial banks), indicating the following:

- For an individual: name, number of his/her identity card or passport or another valid paper, date and place of its issue;

- For an institution: name, address of its head office, number of the business registration certificate and date and place of its issue; representative of contributed capital of shareholders, number of his/her identity card or passport or another valid paper, date and place of its issue;

- Number and total par value of owned shares, rate of owned shares, ratio of total par value of transferred shares to charter capital at the current point of time;

- Number and total value of owned shares, ratio of owned shares to charter capital at the time the General Meeting of Shareholders elects or the Board of Directors appoints these titles;

- Number and total value of transferred shares, ratio of transferred shares to total owned shares at the time the General Meeting of Shareholders elects or the Board of Directors appoints these titles;

- Projected date of transaction;

- A report enclosed with the transferor’s written commitment to observing the provisions of Clause 4, Article 36 of Decree 59.

2. Members of the Control Board, members of the Control Board and directors general who conduct share transfer transactions under Clause 3, Article 36 of Decree 59 shall comply with Clause 4, Article 36 of Decree 59 and Articles 35 and 36 of this Circular.

3. If seeing that the transfer of shares threatens to cause banking operation instability, within ten (10) working days after receiving the report referred to in Clause 1 of this Article, the State Bank (for joint-stock commercial banks with over 50% of charter capital owned by the State) or the State Bank’s branch (for joint-stock commercial banks) shall request in writing the bank not to conduct such transfer transactions, clearly stating the reason. Past this time limit, if no written request is made, the State Bank or State Bank’s branch will be regarded as not objecting share transfer transactions at the bank’s request.

Chapter IV

MODIFICATION AND SUPPLEMENTATION OF CHARTERS OR DETAILS OF ESTABLISHMENT AND OPERATION LICENSES

Article 38. Deciding competence

1. The modification and supplementation of the details of a bank’s organization and operation charter (below referred to as charter), operation license or establishment and operation license granted by the State Bank Governor (below referred to as license) is subject to the State Bank Governor’s written approval.

2. A decision approving the modification and supplementation of a bank’s charter constitutes an integral part of the charter approval decision.

3. A decision modifying and supplementing the details of a bank’s license constitutes an integral part of such license.

Article 39. Operation duration and its extension

1. A bank’s operation duration is indicated in the bank’s charter and license but must not exceed 99 years from the date of grant of the license.

2. At least 180 days before the expiration of the operation duration, if wishing to continue its operation, a bank may apply for the extension of this duration. The State Bank shall make case-by-case consideration of such extension with each extension not exceeding the operation duration indicated in the license.

Article 40. Dossier requesting the State Bank to approve the modification and supplementation of a bank’s charter or details of a bank’s license

1. The bank’s written request, clearly stating the reason for and necessity of such modification (enclosed with an appendix of the details of the current charter, details to be modified and supplemented, and legal grounds for modification and supplementation).

2. Resolution of the meeting of the General Meeting of Shareholders (for joint-stock commercial banks), decision of the owner (for wholly foreign-owned banks organized as one-member limited liability companies), or resolution of the Board of Directors (for commercial banks with 100% of charter capital owned by the State or banks organized as limited liability companies with two or more members), approving the modification and supplementation.

3. A document explaining in detail the nature of operations to be conducted, purposes, benefits, risks and operation effectiveness of the bank after conducting operations to be supplemented, physical foundations, information technology systems and personnel necessary for conducting operations, and other relevant matters (in case the bank requests the supplementation of operations in its license).

4. Other documents as required by the State Bank to clarify matters to be supplemented (if any).

Article 41. Process and procedures for requesting the State Bank to approve the modification and supplementation of a bank’s charter or details of a bank’s license

1. For joint-stock commercial banks (excluding those with over 50% of charter capital owned by the State):

a/ A bank shall make a dossier (2 original sets) under regulations and send it to the State Bank (through the State Bank’s branch).

b/ Within fifteen (15) working days after receiving a complete dossier specified at Point a of this Clause, the State Bank’s branch shall examine the dossiers and submit a report to the State Bank Governor (through the Inspection and Supervision Agency) for consideration and approval, or for providing written guidance for the bank to comply with law.

c/ Within ten (10) working days after receiving the State Bank branch’s written guidance specified at Point b of this Clause and enclosed dossier, the Inspection and Supervision Agency shall examine it and collect opinions of relevant units (when necessary), summarize and submit them to the State Bank Governor for decision.

2. For banks of other types (state-run commercial banks, joint-venture banks or wholly foreign-owned banks):

a/ A bank shall make a dossier (1 original set) under regulations and send it to the State Bank (through the Inspection and Supervision Agency).

b/ Within twenty five (25) working days after receiving the bank’s written request and enclosed dossier specified at Point a of this Clause, the Inspection and Supervision Agency shall examine the dossier and collect opinions of relevant units (when necessary), summarize and submit them to the State Bank Governor for decision.

3. Within five (5) working days after receiving the Inspection and Supervision Agency’s report under Clause 1 or 2 of this Article, the State Bank Governor shall approve in writing the modification and supplementation of the charter or details of the license or issue a written disapproval. In case of disapproval, he/she shall clearly state the reason in writing.

4. After obtaining the State Bank’s approval of modification and supplementation of the details of its license, the bank shall carry out business registration and information notification procedures under law. The bank shall send to the State Bank (through the Inspection and Supervision Agency) a report enclosed with the business registration certificate containing the modified and supplemented details. A joint-stock commercial bank defined in Clause 1 of this Article shall concurrently send such report to the State Bank’s branch.

Chapter V

RESPONSIBILITIES OF RELEVANT UNITS

Section 1. RESPONSIBILITIES OF BANKS

Article 42. Making of dossiers and compliance with processes and procedures for requesting the State Bank’s approval

1. To make complete and valid dossiers under this Circular.

2. After obtaining the State Bank’s written approval of the matters requested by a bank under this Circular, the bank shall carry out business registration and information notification procedures and observe other current relevant regulations.

Article 43. Reporting regime

1. By March 31 at the latest, to send to the State Bank (through the Inspection and Supervision Agency) a report on the list of the bank’s senior staff, including the director general, deputy directors general, directors of transaction bureaus, directors of branches, directors of dependent companies and chief accountant, and other executive titles as prescribed in the bank’s charter, enclosed with documents and dossiers evidencing the satisfaction of criteria and conditions specified in Clause 4, Article 21 of Decree 59, for those who have just been appointed compared to the previous reporting period. A joint-stock commercial bank shall concurrently send such report to the State Bank branch.

2. To report to the State Bank (through the Inspection and Supervision Agency) changes in the structure of, and assignment of tasks within, its Board of Directors and the Control Board within five (5) working days after such changes occur. A joint-stock commercial bank shall concurrently send such report to the State Bank branch.

3. To report on cases of share transfer among members of the Board of Directors, members of the Control Board and the director general under Clause 5, Article 36 of Decree 59, enclosed with relevant documents of a state agency competent to decide on compulsory transfer of shares.

4. To report on other matters under this Circular.

5. A joint-stock commercial bank shall report to the State Bank (the Inspection and Supervision Agency and the State Bank’s branch) on the structure of shareholders, holding rate (made according to the form provided in Appendix 5 to this Circular, not printed herein) as of June 30 and December 31 every year, within 30 days after making a report.

Section 2. STATE BANK BRANCHES

Article 44. Attendance at meetings of the General Meeting of Shareholders of a joint-stock commercial bank

1. The State Bank branch shall appoint its competent staff members to attend meetings of the General Meeting of Shareholders of a bank (excluding joint-stock commercial banks with over 50% of charter capital owned by the State); monitor the approval of resolutions of the General Meeting of Shareholders as well as the relief from duty, dismissal and election of members of the Board of Directors and the Control Board.

2. Within fifteen (15) working days after a meeting of the General Meeting of Shareholders, the bank’s Board of Directors shall send to the State Bank branch the resolution of the General Meeting of Shareholders.

Article 45. Receipt, consideration of and decision on the transfer of shares at joint-stock commercial banks

The State Bank’s branch shall receive, consider and decide on the approval of transfer of shares of shareholders of a joint-stock commercial bank under Articles 34 and 37 of this Circular.

Article 46. Receipt, examination and processing of dossiers requesting the State Bank to approve changes of joint-stock commercial banks according to assigned competence

After receiving a joint-stock commercial bank’s written request for approval of relevant matters under regulations, within the time limit specified in this Circular, the State Bank branch’s director shall:

1. Examine and appraise procedures, dossiers and conditions under this Circular.

2. Request in writing the bank to give explanations and supplement and modify dossiers if seeming that the dossiers and conditions fail to comply with this Circular; report to the State Bank Governor, requesting guidance (when necessary).

3. Send a report to the State Bank Governor (through the Inspection and Supervision Agency), evaluating the bank’s satisfaction of conditions and completion of dossiers and clearly stating its opinions, and report the opinions to the State Bank Governor for consideration and approval.

Article 47. Examination, inspection and supervision

After obtaining the State Bank Governor’s written approval of relevant matters at the request of a joint-stock commercial bank headquartered in the locality, the State Bank’s branch shall monitor, examine, inspect and supervise according to its assigned competence the bank’s compliance with the approved matters. If that bank faces difficulties or fails to comply with law, the State Bank branch shall report such in writing to the State Bank Governor, proposing solutions to the problems.

Article 48. Review of reports

The State Bank branch shall examine a joint-stock commercial bank’s reports specified in Article 43 of this Circular. After examination, if detecting that information in the reports is inaccurate or incompliant with this Circular, it shall request the bank to make other reports or give explanations. If such information is accurate and compliant with this Circular, it shall report to the State Bank Governor (through the Inspection and Supervision Agency) on examination results enclosed with relevant reports.

Section 3. THE INSPECTION AND SUPERVISION AGENCY

Article 49. Consideration and submission to the State Bank Governor for approval of a bank’s proposed changes

After receiving the State Bank branch’s written request or a bank’s written request and enclosed dossiers made according to the order and procedures specified in this Circular, the Inspection and Supervision Agency shall appraise the dossiers and collect opinions of relevant units under this Circular, summarize and submit them to the State Bank Governor for decision:

- To approve in writing the bank’s proposed changes; or,

- To request in writing the State Bank branch or the bank to supplement the dossiers and explain unclear contents; or,

- To issue a written refusal, clearly stating the reason.

Article 50. Examination, inspection and supervision

After obtaining the State Bank Governor’s written approval of matters at the bank’s request, the Inspection and Supervision Agency shall monitor, examine, inspect and supervise the bank’s compliance with the approved matters. If the bank faces difficulties or fails to comply with law, the Inspection and Supervision Agency shall report such to the State Bank Governor, proposing solutions to the problems falling within its competence.

Article 51. Review of reports

The Inspection and Supervision Agency shall review reports submitted by the State Bank branch and the bank under Articles 43 and 48 of this Circular. After review, if detecting that information in these reports is inaccurate or incompliant with this Circular, the Inspection and Supervision Agency shall submit such to the State Bank Governor for requesting the State Bank branch and the bank to make other reports or give explanations.

Section 4. OTHER RELEVANT UNITS

Article 52. The Monetary Policy Department

Within five (5) working days after receiving the Inspection and Supervision Agency’s written request (enclosed with a dossier requesting for adjustment of a bank’s charter capital), the Monetary Policy Department shall give its written opinions evaluating the charter capital adjustment plan’s impacts on the bank’s operation and banking system (if any); agree or disagree with such adjustment and send opinions to the Inspection and Supervision Agency.

Article 53. The Organization and Personnel Department

To guide and coordinate with state-run commercial banks in implementing processes and procedures related to holders of the titles of member of the Board of Directors, the Board of Directors’ member-cum-director general, member of the Control Board, deputy director general and chief accountant under the State Bank’s regulations on personnel work.

Article 54. Other relevant units

Within five (5) working days after receiving the Inspection and Supervision Agency’s written request, relevant units shall give their written opinions, agreeing or disagreeing with the bank’s request, and send opinions to the Inspection and Supervision Agency.

Chapter VI

ORGANIZATION OF IMPLEMENTATION

Article 55. Effect

1. This Circular takes effect on April 25, 2010.

2. The State Bank Governor’s Decision No. 1122/2001/QD-NHNN of September 4, 2001, promulgating the Regulation on shareholders, shares, stocks and charter capital of state-run and people’s joint-stock commercial banks; Decision No. 797/2002/QD-NHNN of July 29, 2002, and Decision No. 20/2008/QD-NHNN of July 4, 2008, amending and supplementing a number of articles of Decision No. 1122/2001/QD-NHNN of September 4, 2001;  Decision No. 1087/2001/QD-NHNN of August 27, 2001, promulgating the Regulation on organization and operation of Boards of Directors, Control Boards and directors general of state-run and people’s joint-stock commercial banks; and Decision No. 383/2002/QD-NHNN of April 24, 2002, promulgating the model charter of state-run and people’s joint-stock commercial banks, cease to be effective.

Article 56. Organization of implementation

The Chief of the Office, the Chief of the Inspection and Supervision Agency and heads of relevant units under the State Bank, directors of the State Bank’s branches, chairmen and members of Boards of Directors, heads and members of Control Boards, and directors general of commercial banks shall implement this Circular.-

For the State Bank Governor
Deputy Governor
TRAN MINH TUAN