Circular No. 17/2017/TT-NHNN dated November 20, 2017 of the Vietnam State Bank amending, supplementing a number of articles of the Circular 40/2011/TT-NHNN regulating on licensing and organizations, operations of commercial banks, foreign bank branches, representative offices of foreign credit institutions and other foreign organizations with banking operations in Vietnam

CIRCULAR

Amending and supplementing a number of articles of Circular No. 40/2011/TT-NHNN of December 15, 2011, providing the licensing, organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions and other foreign institutions engaged in banking activities in Vietnam[1]

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

Pursuant to the June 16, 2010 Law on Credit Institutions;

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 bank inspector-supervisor;

The Governor of the State Bank of Vietnam promulgates the Circular amending and supplementing a number of articles of Circular No. 40/2011/TT-NHNN of December 15, 2011, providing the licensing, organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions and other foreign institutions engaged in banking activities in Vietnam.

Article 1. To amend and supplement a number of articles of Circular No. 40/2011/TT-NHNN of December 15, 2011, providing the licensing, organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions and other foreign institutions engaged in banking activities in Vietnam (below referred to as Circular No. 40/2011/TT-NHNN):

1. To amend and supplement Clause 4, Article 13 as follows:

“4. In case papers are copies other than certified copies and copies from originals, the originals of such papers are required for comparison and the comparing person shall sign the copies and take responsibility for the accuracy of such copies compared to the originals.”

2. To amend and supplement Point b, Clause 4, Article 14 as follows:

“b/ Copies of diplomas proving professional qualifications.”

3. To add Section 4 to Chapter II as follows:

“Section 4

PROVISIONS ON RENEWAL OF LICENSES AND ADDITION OF OPERATION CONTENTS TO LICENSES

Article 18a. Principles of renewal of licenses and addition of operation contents to licenses

The renewal of licenses and addition of operation contents to licenses shall be conducted under the following principles:

1. The State Bank may not grant its renewal with regard to operations which commercial banks and foreign bank branches are not allowed to carry out by the law effective at the time of renewal; shall concurrently change the names of permitted operations in accordance with the Law on Credit Institutions and Appendices 01a and 01b to this Circular. A renewed license shall replace all licenses and approvals (an integral part of a license) already granted by the State Bank to commercial banks and foreign bank branches before the renewal.

2. For foreign exchange trading and service provision; gold bar trading; and trading and provision of foreign exchange, monetary and other financial asset derivatives on domestic and international markets, the addition of such operations to a license must comply with the State Bank’s specific provisions and other relevant laws.

3. Commercial banks and foreign bank branches may carry out operations specified in Clause 24, Article 4 of the commercial bank establishment and operation license form (Appendix 01a) and Clause 23, Article 4 of the foreign bank branch establishment license form (Appendix 01b) after obtaining the State Bank’s approval. Procedures for adding operation contents to a license must comply with the State Bank’s specific provisions and relevant laws.

4. In case a commercial bank or foreign bank branch applies for adding operation contents to its license together with the renewal of such license, the State Bank shall consider the renewal of the license, including the addition of operation contents, if the commercial bank or foreign bank branch has a complete dossier specified in Article 18c of this Circular.

Article 18b. Procedures for application of renewal of licenses and addition of operation contents to licenses

1. A commercial bank or a foreign bank branch wishing to renew its license or add operation contents to its license shall make an application dossier under Article 18c of this Circular and send it by post or directly to the State Bank (via the Banking Inspection and Supervision Agency).

2. Within 40 days after receiving a complete and valid dossier from a commercial bank or foreign bank branch, the State Bank shall effect the renewal of the license or addition of operation contents to the license or renewal of the license together with addition of contents as requested by the commercial bank or foreign bank branch. In case of refusal, the State Bank shall reply in writing clearly stating the reason.

3. After the State Bank renews the license or adds operation contents to the license, the commercial bank or foreign bank branch shall:

a/ Carry out procedures in relation to the changes in its license with the business registration agency in accordance with law;

b/ Publicize the changes in the license on the State Bank’s media of communication and a daily for three consecutive issues or a Vietnam e-newspaper within seven working days after the State Bank renews the license or adds operation contents to the license;

c/ The commercial bank shall amend its Charter according to the content of its renewed license and register the amended Charter with the State Bank under Clause 3, Article 27 of this Circular.

Article 18c. Dossier of application for renewal of a license and addition of  operation contents to a license

1. For renewal of a license:

a/ An application for renewal of a license signed by the at-law representative of the commercial bank or foreign bank branch which clearly states operations to be carried out. For a wholly foreign-owned bank, the application must contain its commitment that its owner or foreign bank owning 50% of its charter capital are allowed to carry out these operations in the country where its owner or foreign bank is headquartered. For a foreign bank branch, the application must contain its commitment that its parent bank is currently permitted to carry out these operations in the country of origin.

b/ A list of operations under the current license and other written approvals of the State Bank accompanied by copies of such license and written approvals.

2. For addition of operation contents of the license:

a/ An application for addition of operation contents to a license signed by the at-law representative of the commercial bank or foreign bank branch which clearly states operations to be added. For a wholly foreign-owned bank, the application must contain its commitment that its owner or foreign bank owning 50% of its charter capital are allowed to carry out these operations in the country where its owner or foreign bank is headquartered. For a foreign bank branch, the application must contain its commitment that its parent bank is currently permitted to carry out these operations in the country of origin. For addition of the operation of investment in future contracts of government bonds, the application must clearly state that the bank has been licensed to trade in government bonds;

b/ The resolution of the Board of Directors (Members Council) of the commercial bank on the unanimous approval of the application for addition of operation contents to the license; a written approval of the parent bank signed by its at-law representative of the application for addition of operation contents to the license (for a foreign bank branch);

c/ Particularly for application for addition of the operation related to interest rate derivatives, provision of commodity derivatives or security deposit to the license, apart from the dossier referred at Points a and b of this Clause, commercial banks or foreign bank branches must have an internal process, including risk management measures suitable to each operation proposed to be added to the license.

3. For the application for both addition of operation contents to the license and renewal of the license:

a/ An application for addition of operation contents to the license together with renewal of the license signed by the at-law representative of the commercial bank or foreign bank branch, containing the contents specified at Point a, Clause 1 and Point a, Clause 2 of this Article;

b/ The dossier specified at Point b, Clause 1, and Points b and c, Clause 2, of this Article.”

4. To amend and supplement Article 36 as follows:

a/ To amend and supplement Point a, Clause 1, as follows:

“a/ The examination council shall be formed under the State Bank Governor’s decision and composed of the Governor or a Deputy Governor (authorized by the Governor) as its chairman and heads of the units specified in Clauses 2, 3, 4, 5, 6, 7, 8 and 10 of this Article as its members;”

b/ To supplement Points g and h to Clause 2 as follows:

“g/ To act as the focal point for receiving and examining dossiers of application for renewal of licenses and addition of operation contents to licenses of commercial banks or foreign bank branches, and submit these dossiers to the State Bank Governor;

h/ The dossier must comprise written opinions of related units of the State Bank on the application for addition of operation contents to the license for the operation related to interest rate derivatives, provision of commodity derivatives products or securities deposit.”

c/ To add Clauses 10 and 11 to Clause 36 as follows:

“10. The Foreign Exchange Management Department:

a/ Within 30 days after receiving a written request of the Banking Inspection and Supervision Agency, to examine the license application dossier and give its written opinion to the Banking Inspection and Supervision Agency;

b/ To give assessments of issues relating to foreign exchange activities of commercial banks or foreign bank branches.

11. Within 10 days after receiving a written request from the Banking Inspection and Supervision Agency for addition to the license the operation related to interest rate derivatives, provision of commodity derivatives products or securities deposit, related units of the State Bank shall give written opinions clearly stating whether they approve or disapprove application dossiers of commercial banks or foreign bank branches”.

Article 2. To replace Appendix 01 to Circular No. 40/2011/TT-NHNN with Appendix 01 to this Circular, including Appendix 01a (Commercial bank establishment and operation license form), Appendix 01b (Foreign bank branch establishment license form), and Appendix 01c (Representative office establishment license form).

Article 3. Implementation responsibility

The Chief of the Office, the Chief of the Banking Supervision Agency, and the heads of the units of the State Bank of Vietnam, directors of provincial-level State Bank branches, chairpersons of Boards of Directors or Members’ Councils, directors general (directors) of commercial banks, and directors general (directors) of foreign bank branches shall implement this Circular.

Article 4. Effect

1. This Circular takes effect on January 5, 2018.

2. To annul Circular No. 08/2015/TT-NHNN of June 30, 2015, amending and supplementing a number of articles of Circular No. 40/2011/TT-NHNN.-

For the Governor of the State Bank
Deputy Governor
NGUYEN DONG TIEN

* All Appendices to this Circular are not translated.