Circular No. 13/2019/TT-NHNN dated August 21, 2019 of the State Bank of Vietnam on amending and supplementing a number of Articles of the Circulars regarding the licensing, organization and operation of credit institutions and foreign bank branches

CIRCULAR

Amending and supplementing a number of articles of the Circulars regarding thelicensing, organization and operation of credit institutions and foreign bank branches[1]

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

Pursuant to the June 16, 2010 Law on Credit Institutions; and the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the November 20, 2012 Law on Cooperatives;

Pursuant to the Government’s Decree No. 26/2014/ND-CP of April 7, 2014, on organization and operation of the banking supervision agencies;

Pursuant to the Government’s Decree No. 43/2019/ND-CP of May 17, 2019, amending and supplementing a number of articles of the Government’s Decree No. 26/2014/ND-CP of April 7, 2014, on organization and operation of the banking supervision agencies;

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

At the proposal of the Chief of the Banking Supervision Agency;

The Governor of the State Bank of Vietnam promulgates the Circular amending and supplementing a number of articles of the Circulars regarding the licensing, organization and operation of credit institutions and foreign bank branches.

Article 1.To amend and supplement a number of articles of the State Bank Governor’s Circular No. 03/2018/TT-NHNN of February 23, 2018, providing the licensing, organization and operation of microfinance institutions

1. To amend and supplement Clause 2, Article 36 as follows:

“2. To inspect, supervise, and handle violations committed by microfinance institutions in the implementation of this Circular and other relevant regulations.”

2. To amend and supplement Clause 1, Article 37 as follows:

“1. To inspect, supervise, and handle violations committed by attached units of microfinance institutions in localities in accordance with law.”

Article 2.To amend and supplement a number of articles of the State Bank Governor’s Circular No. 22/2018/TT-NHNN of September 5, 2018, guiding procedures and dossiers of request for approval of lists of candidates of commercial banks, non-bank credit institutions and foreign bank branches (below referred to as Circular No. 22/2018/TT-NHNN)

1. To amend and supplement Clause 3, Article 3 as follows:

“3. The credit institution’s or foreign bank branch’s dossier enclosed with a list of documents shall be sent by post or submitted directly to the State Bank or the State Bank’s branch in the province or centrally run city (below referred to as the State Bank’s provincial-level branch according to the competence specified in Article 4 of this Circular.”

2. To amend and supplement Article 4 as follows:

“Article 4. Competent to approve lists of candidates of credit institutions and foreign bank branches

1. The Governor of the State Bank shall consider and approve lists of candidates of credit institutions or foreign bank branches, except the case prescribed in Clause 2 of this Article.

2. Directors of the State Bank’s provincial-level branches shall consider and approve lists of candidates of foreign bank branches which are located in localities and subject to their branches’ micro-prudential inspection and supervision.”

3. To amend and supplement Point b, Clause 1, Article 6 as follows:

“b/ The list of candidates, stating their full names, current titles and working units; and their expected titles at the credit institution; name of the nominating individual or organization; holding rates of shares or capital contributions of which the candidates are expected to act as representatives under authorization by the nominating organization (if any);”

4. To add the following Point dd to Clause 1, Article 6:

“dd/ A written commitment to taking responsibility before law for the fact that the candidates do not fall into the cases banned from holding certain positions under the Law on Credit Institutions.”

5. To amend and supplement Clause 4, Article 6 as follows:

“4. Criminal record certificates of candidates:

a/ For a candidate who holds Vietnamese citizenship: his/her criminal record certificate issued by a criminal record database-managing agency, which must contain sufficient information on his/her convictions (including convictions already expunged and convictions not yet expunged) and information on ban from holding certain positions or from establishing or managing enterprises or cooperatives;

b/ For a candidate who does not hold Vietnamese citizenship: his/her criminal record certificate or a document of equivalent validity (including sufficient information on convictions and information on ban from holding certain positions or from establishing or managing enterprises or cooperatives) issued by a competent Vietnamese or foreign agency under regulations. In case a criminal record certificate or document of equivalent validity issued by a foreign competent agency does not contain information on ban from holding certain positions or from establishing or managing enterprises or cooperatives, the owner (for a credit institution being a single-member limited liability company), capital contributor (for a credit institution being a limited liability company with two or more members), or shareholder, group of shareholders, Board of Directors, or Control Board (for a credit institution being a joint stock company) that nominates the candidate shall issue a document explaining that no competent foreign agency of the country issuing the criminal record certificate or document of equivalent validity provides such information, and commits to take responsibility before law for the fact that the candidate does not fall into the case banned from holding certain positions under the Law on Credit Institutions;

c/ The criminal record certificate or document of equivalent validity prescribed at Point a or b of this Clause shall be issued by a competent agency no more than 6 months before the credit institution submits a dossier of request for approval of the list of candidates.”

6. To add the following Clause 2a to below Clause 2, Article 7:

“2a. Criminal record certificates of candidates:

a/ For a candidate who holds Vietnamese citizenship: his/her criminal record certificate issued by a criminal record database-managing agency, which must contain sufficient information on his/her convictions (including convictions already expunged and convictions not yet expunged) and information on ban from holding certain positions or from establishing or managing enterprises or cooperatives;

b/ For a candidate who does not hold Vietnamese citizenship: his/her criminal record certificate or a document of equivalent validity (including sufficient information on convictions and information on ban from holding certain positions or from establishing or managing enterprises or cooperatives) issued by a competent or foreign agency under regulations. In case a criminal record certificate or document of equivalent validity issued by a competent foreign agency does not contain information on ban from holding certain positions or from establishing or managing enterprises or cooperatives, the foreign bank shall issue a document explaining that no competent agency of the country issuing the criminal record certificate or document of equivalent validity provides such information, and commits to take responsibility before law for the fact that the candidate does not fall into the case banned from holding certain positions under the Law on Credit Institutions;

c/ The criminal record certificate or document of equivalent validity prescribed at Point a or b of this Clause shall be issued by a competent agency no more than 6 months before the foreign bank branch submits a dossier of request for approval of the list of candidates.”

7. To amend and supplement Clause 3, Article 7 as follows:

“3. Dossiers and documents specified in Clauses 3, 5, 6 and 8, Article 6 of this Circular.”

8. To amend and supplement Article 8 as follows:

“Article 8. Procedures for approval of lists of candidates of credit institutions and foreign bank branches

1. A credit institution or foreign bank branch shall make 1 set of dossier prescribed in Articles 6 and 7 of this Circular and submit it to the State Bank, for the subjects prescribed in Clause 1, Article 4 of this Circular, or a State Bank’s provincial-level branch, for the subjects prescribed in Clause 2, Article 4 of this Circular. In case the dossier is incomplete or invalid, within 7 working days after receiving it, the State Bank (the Banking Supervision Agency) or a State Bank’s provincial-level branch shall request in writing the credit institution or foreign bank branch to complete the dossier.

2. Within 45 working days after receiving a request for dossier completion from the State Bank (the Banking Supervision Agency) or a State Bank’s provincial-level branch, the credit institution or foreign bank branch shall complete the dossier. Past this time limit, the credit institution or foreign bank branch shall re-submit a dossier prescribed in this Circular to the State Bank or a State Bank’s provincial-level branch for consideration and approval.

3. Within 30 working days after receiving a complete dossier prescribed in Articles 6 and 7 of this Circular, the State Bank or a State Bank’s provincial-level branch shall issue a document approving or disapproving the list of candidates of the credit institution or foreign bank branch. In case of disapproval, it shall send a written reply clearly stating the reason to the credit institution or foreign bank branch.”

9. To amend and supplement Article 11 as follows:

“Article 11. Notification and reporting regime

1. Credit institutions and foreign bank branches shall promptly notify in writing the State Bank of changes related to satisfaction of criteria and conditions on candidates arising during the period the State Bank considers dossiers of request for approval of lists of candidates, or arising from the date the State Bank issues a written approval of the lists of candidates to the date of election or appointment of personnel, specifically as follows:

a/ To send notifications to the Banking Supervision Agency, for the credit institutions and foreign bank branches prescribed in Clause 1, Article 4 of this Circular;

b/ To send notifications to State Bank’s provincial-level branches of the localities where foreign bank branches are located, for the foreign bank branches prescribed in Clause 2, Article 4 of this Circular.

2. Within 10 working days after electing or appointing the chairperson and members of the Board of Directors, the chairperson and members of the Members’ Council, the head and members of the Control Board and director general (director), the credit institution or foreign bank branch shall notify in writing of the list of personnel to the State Bank under Point a or b, Clause 1 of this Article, which is made according to the form provided in Appendix No. 03 to this Circular”.

10. To amend and supplement Clause 1, Article 12 as follows:

1. The Banking Supervision Agency shall act as the focal point in assessing the satisfaction of dossier requirements, criteria and conditions on candidates of credit institutions and foreign bank branches as prescribed in Clause 1, Article 4 of this Circular in accordance with the Law on Credit Institutions and this Circular; consult related units; and summarize and submit lists of candidates to the State Bank Governor for consideration and issuance of written approvals or disapprovals of lists of candidates of credit institutions and foreign bank branches.”

11. To amend and supplement Clause 3, Article 12 as follows:

“3. To receive and review notifications of credit institutions and foreign bank branches specified in Clause 2, Article 11 of this Circular. In case of finding errors, the Banking Supervision Agency shall request credit institutions or foreign bank branches to correct them or propose remedies to the State Bank Governor.”

12. To amend and supplement Article 13 as follows:

“Article 13. Responsibilities of State Bank’s provincial-level branches

1. Within 30 working days after receiving a complete dossier from a foreign bank branch prescribed in Clause 2, Article 4 of this Circular, a State Bank’s provincial-level branch shall assess the satisfaction of dossier requirements, criteria and conditions on candidates of such foreign bank branch in accordance with the Law on Credit Institutions and this Circular; consult related units; and issue a written approval or disapproval of the list of candidates of the foreign bank branch.

2. Within 5 working days after receiving a request for opinion from the Banking Supervision Agency, a State Bank’s provincial-level branch shall give its opinions in writing.

3. To receive notifications from the foreign bank branches prescribed in Clause 1, Article 11 of this Circular; to assess the satisfaction of criteria and conditions on candidates or remedies.

4. To receive and review notifications from the foreign bank branches prescribed in Clause 2, Article 11 of this Circular. In case of finding errors, a State Bank’s provincial-level branch shall request foreign bank branches to correct them or send proposals to the State Bank Governor if the case falls beyond its competence.”

13. To add the following 4a to below Point 4, Appendix No. 01:

“4a. Information on ban from holding certain positions or from establishing or managing enterprises or cooperatives (in case such information is not stated in a criminal record certificate or document of equivalent validity issued by a competent foreign agency).”

Article 3.To amend and supplement a number of articles of the State Bank Governor’s Circular No. 23/2018/TT-NHNN of September 14, 2018, on reorganization, revocation of licenses, and liquidation of assets of people’s credit funds 

1.To annul Point c(iii), Clause 1, Article 13.

2. To amend and supplement Point d, Clause 1, Article 13 as follows:

“d/ Within 15 days after receiving a request for opinion, a commune-level People Committee shall give written opinions about the consulted contents;”

3. To amend and supplement Points c and d, Clause 1, Article 17 as follows:

“c/ Within 15 days after receiving a complete dossier, a State Bank’s provincial-level branch shall consult in writing:

(i) The commune-level People’s Committee of the locality where the people’s credit fund’s head office is located about dissolution, revocation of the license; impacts of such dissolution and revocation on political, economic and social stability in the locality;

(ii) The Cooperative Bank of Vietnam about impacts of the dissolution and revocation of the license;

d/ Within 15 days after receiving a State Bank’s provincial-level branch’s request for opinion, the consulted units prescribed at Point c of this Clause shall give their written opinions;”

4. To amend and supplement Clause 2, Article 27 as follows:

“2. A liquidation-supervising team must consist of at least 3 members, including representatives of the State Bank’s provincial-level branch, Cooperative Bank of Vietnam, and Deposit Insurance of Vietnam (in case the Deposit Insurance of Vietnam provides special loans to the people’s credit fund).”

5. To amend and supplement Point d, Clause 1, Article 31 as follows:

“d/ To inspect the reorganization of people’s credit funds in localities in accordance with this Circular and relevant laws.”

6. To amend and supplement Article 32 as follow:

“Article 32. Responsibilities of the Banking Supervision Agency

1. To act as the focal point in receiving reports of State Bank’s provincial-level branches on approval of the reorganization, revocation of licenses and liquidation of assets of people’s credit funds prescribed in Clause 3, Article 31 of this Circular.

2. To act as the focal point in advising and proposing the amendment and supplementation of regulations on reorganization, revocation of licenses, and liquidation of assets of people’s credit funds to the State Bank Governor for decision. 

3. To act as the focal point in advising and submitting to the State Bank Governor the policy on dissolution of people’s credit funds placed under special control prescribed in Clause 1, Article 18 of this Circular to the Government for decision.

Article 4.To annul a number of articles of the State Bank Governor’s Circular No. 36/2014/TT-NHNN of November 20, 2014, prescribing limits and prudential ratios in operations of credit institutions and foreign bank branches

To annul Point c, Clause 1, and Clause 5, Article 29.

Article 5.Transitional provision

For dossiers of request for approval of lists of candidates of foreign bank branches received before August 26, 2019, the Banking Supervision Agency shall continue to process and submit them to the State Bank Governor for consideration and approval under Circular No. 22/2018/TT-NHNN, which is amended and supplemented under Article 2 of this Circular.

Article 6.Responsibility for organization of implementation

The Chief of the Office, the Chief of the Banking Supervision Agency, and heads of units of the State Bank, directors of State Bank’s provincial-level branches, chairpersons and members of the Boards of Directors or Members’ Councils, heads and members of Control Boards, and directors general (directors) of credit institutions and foreign bank branches shall organize the implementation of this Circular.

Article 7.Implementation provisions

1. This Circular takes effect on October 5, 2019, except Clause 2 of this Article.

2. Article 2 of this Circular takes effect on August 26, 2019.-

For the State Bank Governor
Deputy Governor
DOAN THAI SON