Circular No. 06/2015/TT-NHNN dated June 01, 2015 of the State Bank of Vietnam regulating on time limit, orders, procedures on forwarding for cases of owning shares exceeding the rate as regulated under Article 55 of the Law on credit institutions

THE STATE BANK OF VIETNAM

Circular No. 06/2015/TT-NHNN dated June 01, 2015 of the State Bank of Vietnam regulating on time limit, orders, procedures on forwarding for cases of owning shares exceeding the rate as regulated under Article 55 of the Law on credit institutions

Pursuant to the Law No. 46/2010/QH12 dated June 16, 2010 on the State Bank of Vietnam;

Pursuant to the Law No. 47/2010/QH12 dated June 16, 2010 on credit institutions;

Pursuant to the Decree No. 156/2013/ND-CP of November 11, 2013, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Banking and Inspection Department;

The Governor of the Vietnam State Bank (hereinafter referred to as the State Bank) regulates time limit, orders, and procedures of forwarding for cases of owning shares exceeding the rate as regulated under Article 55 of the Law on credit institutions

Article 1. Scope of application and subjects of application

1. This Circular regulates on time limit, orders, and procedures of forwarding for cases of shareholders and related persons of shareholders holding shares that exceed the limit as regulated under Article 55 of the Law on credit institutions arising before the effective day of the law on Credit institutions (hereinafter referred to as “ownership of shares that are excessive”.

2. This Circular is applied for:

a) Shareholders and related persons of those shareholders (hereinafter referred to as “related shareholders” that hold the excessive shares.

b) Credit institutions that have shareholders related ownership of excessive shares (hereinafter referred to as credit institutions).

Article 2. Time limit, orders, procedures of forwarding for cases of holding excessive shares

1. Credit institutions coordinates with shareholders, groups of shareholder related to share ownership to set up remedial plans for owning excessive shares (hereinafter referred to as remedial plan), to make sure that no later than December 31, 2015 the share ownership rate of shareholders, group of related shareholders in credit institutions shall comply with the law on credit institutions except cases of holding excessive shares permitted by the Prime Minister or approved by the State Bank. The remedial plan must contain the following contents:

a) List of shareholders, groups of related shareholders (clearly mention the relationship) who are holding excessive shares with the following information:

- Full name, ID number or passport number, permanent address (for shareholders being individuals); name, address of the head office, business line, registration business certification number, tax code (for shareholders being organizations);

- Shares and ownership share rate over the working capital (clearly mention the quantity, share rate over the working capital entrusted to other organizations, individuals; information about entrusted organizations, individuals and relationship between entrusted organizations, individuals and those shareholders (if any);

- Number of shares and rate of shares over working capital that are entrusted by organizations, individuals; information of entrusting organizations, individuals and the relationship among entrusting organizations, individuals and those shareholders (if any);

b) Measures and roadmap for solving the excessive share ownership;

c) Commitment of credit institutions on coordinating and requesting shareholders, group of shareholders to implement the remedial roadmap as mentioned above;

2. Within the time of implementing the remedial plan as mentioned under Clause 1 of this Article or in the time limit as mentioned in the plan approved by the State Bank, shareholders, group of shareholders holding excessive shares are not permitted to increase the number of shares in credit institutions under all forms, except the following cases:

a) Receiving shares as a form of bonus;

b) Purchasing newly issued shares when credit institutions raise the working capital by selling shares but still ensure that the share ownership rate after purchasing shares matches with regulations under Article 55 of the law on credit institutions.

3. Since the effective day of this Circular, credit institutions are not permitted providing credit or providing new credit (in the case of providing already) to shareholders, groups of shareholders who are holding excessive shares or related persons of those shareholders.

4. Shareholders being individuals, organizations whose representative is member of Management Board, member of Controlling Board, General Director (Director) of the credit institutions that are holding excessive shares are permitted transferring the excessive shares.

Article 3. Handling after time of forwarding

After the time limit as specified under Clause 1 Article 2 of this Circular or after the time as mentioned in the restructuring plan approved by the State Bank, shareholders, groups of shareholder fail to comply with the limit of share ownership as prescribed under the law on credit institutions, the State Bank shall apply the following measures:

1. Refusing to accept persons appointed as a member of the Board of Management, member of Controlling Board, General Director of credit institution if these persons are:

a) Shareholders or being in the group of shareholders who are holding excessive shares in the credit institutions;

b) Representative of contributed capital or related persons of the subjects as mentioned under Point a of this Clause;

2. Not considering persons in the Board of Management, Controlling Board of credit institutions of shareholders, group of shareholder who are holding excessive shares in the credit institutions.

3. Shareholders, group of shareholder who are holding excessive shares are not allowed to raise the number of shares at the credit institutions under all forms, except cases as specified under Clause 2 Article 2 of this Circular; having not received the cash dividend (if any) for excessive shares until they fully comply with the share limit as regulated.

4. Other measures as regulated including restructuring measures for credit institutions that have shareholders, group of shareholders who are holding excessive shares at the request of the State Bank.

Article 4. Responsibilities of credit institutions

1. To review the list of shareholders, group of shareholders who are holding excessive shares as stipulated under the law on credit institutions and coordinate with these shareholders to set up remedial plans as specified under Clause 1 Article 2 of this Circular and send to the State Bank (through the Banking and Inspection Department or the State Bank’s branches in provinces and cities under central management if the Banking and Inspection Department are not located in that place) within 30 days since the effective day of this Circular.

2. To supervise shareholders holding excessive shares to implement remedial plan as mentioned under Clause 1 Article 2 of this Circular; Monthly (before the tenth of the month after the reporting month), to report to the State Bank (through the Banking and Inspection Department or the State Bank’s branches in provinces and cities under central management if the Banking and Inspection Department are not located in that place) results of remedial measures implemented at the credit institutions.

- To understand the situation of shareholders, groups of shareholder holding excessive shares, of which clearly states information as specified under Point a Clause 1 Article 2 of this Circular;

- Results of remedy on the share ownership rate, group of shareholders holding excessive shares; if it fails to implement properly as mentioned in the remedial plan, reasons, difficulties and problems (if any) must be mentioned clearly.

3. To report as regulated on the situation of shareholders, group of shareholders at the request of the State Bank for each period (if any).

4. To supplement the remedial plans as mention under Clause 1 Article 2 of this Circular (including measures, roadmaps) into the plan on structuring the organization and operation of credit institutions to implement at the request of the State Bank (in the case the approved structuring plan is not included these contents).

Article 5. Responsibilities of shareholders, groups of shareholder who are holding excessive shares

1. To coordinate with credit institutions to set up plans and implement remedial measures to be in accordance with the law on limit of share ownership rate and other regulations.

2. To comply with regulations related to rights and obligations of shareholders, transfer shares of shareholders in the credit institutions.

3. To be responsible for the accuracy of information provided for credit institutions before the law;

Article 6. Responsibilities of the State Bank’s branches in provinces and cities under the central management where credit institutions are located (except places have Banking and Inspection Department)

1. To receive the report of credit institutions on remedial plans of holding excessive shares as regulated under this Circular; to direct credit institutions to complete the remedial plans (in necessary); to report the State Bank (through Banking and Inspection Department) on remedial plans of credit institutions.

2. To supervise the implementation of remedial measures; quarterly (before the 20^thof the month after the reporting month) to report the State Bank (through Banking and Inspection Department) the result of remedial plans of credit institutions in accordance with contents as specified under Clause 2, Clause 4 of this Circular, of which proposes to handle with arising problems, difficulties of credit institutions (if any).

Article 7. Responsibilities of the Banking and Inspection Department and Department, Sub-department under the management of the State Bank

1. Banking and Inspection Department:

a) To receive the report of credit institutions where the head office is located in Hanoi and Ho Chi Minh city on remedial measures of holding excessive shares as regulated under this Circular; to direct credit institutions to complete remedial measures (if necessary); to supervise the implementation of remedial measures of shareholders, credit institutions as reported to the State Bank;

b) To receive, summarize the report from credit institutions where head offices are located in Hanoi and Ho Chi Minh city as specified under Clause 2 Article 4 and from the State Bank’s branches in provinces and cities as specified under Clause 2 Article 6 of this Circular;

c) To be the focal point to consult for the State Bank Governor to handle with suggestions of the State Bank’s branches in provinces and cities under the central management and problems arising from share ownership rate in credit institutions.

2. Other Departments:

To coordinate with proposals of the State Bank’s branches in provinces and cities, credit institutions and arising problems at the request of the Banking and Inspection Department.

Article 8. Implementation effect

This Circular takes effect from July 07, 2015.

Article 9. Implementation organization

Head of the Office, head of banking and inspection department, heads of the units under the State Bank, directors of the State Bank branches in provinces, cities under the central Government s management, president and members of the Board of Management, General Directors (Directors) of credit institutions shall implement this Circular./.

For State Bank Governor

Deputy Governor

Nguyen Phuoc Thanh