Circular No. 24/2017/TT-NHNN dated December 29, 2017 of the State Bank of Vietnam on guiding the order and procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; the order and procedures for revocation of licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities

CIRCULAR

Guiding the order and procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; the order and procedures for revocation of licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities[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 November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the November 26, 2014 Law on Enterprises;

Pursuant to the June 19, 2014 Law on Bankruptcy;

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 guiding the order and procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; and the order and procedures for revocation of licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

1.This Circular prescribes the order and procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; and the order and procedures for revocation of licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities.

2. In case a credit isntitution is reorganized,the order and procedures for revocation of its license must comply with the law on reorganization of credit institutions.

3. In case a credit institution falls bankrupt,the liquidation of its assets must comply with the bankruptcy law.

Article 2.Subjects of application

1.Credit institutions, including:

a/ Commercial banks and cooperative banks;

b/Non-bank credit institutions;

c/ Microfinance institutions.

2. Foreign bank branches.

3.Representative offices of foreign credit institutions and other foreign institutions engaged in banking activities (below referred to as representative offices).

4. Organizations and individuals involved in the revocation of licenses and the liquidation of assets of credit institutions and foreign bank branches and the revocation of licenses of representative offices.

Article 3.Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Credit institution or foreign bank branch having its license revoked means a credit institution or foreign bank branch which has its license revoked under Points a, c, d, dd and e, Clause 1 of Article 28, Article 150, and Clause 2, Article 154, of the Law on Credit Institutions (as amended and supplemented).

2. Body with deciding competence means the body of a credit institution, parent bank, foreign credit institution or another foreign institution engaged in banking activities competent to decide on the dissolution or operation termination of such credit institution, foreign bank branch or representative office under the charter of such institution or bank and in accordance with current laws of Vietnam.

3. Parent bank means a foreign bank having a branch operating in Vietnam.

4. State Bank branch means the branch of the State Bank in a province or centrally run city where a credit institution, foreign bank branch or representative office is located.

5. People’s Committee means the People’s Committee of a province or centrally run city where a credit institution, foreign bank branch or representative office is located.

Article 4.Principles of revocation of licenses and liquidation of assets of credits institutions and foreign bank branches

1. Credit institutiosn and foreign bank branches shall determinetheir capability to pay debts and other asset liabilities before and during the asset liquidation, dissolution and license revocation.

2. The State Bank of Vietnam (below referred to as the State Bank) may only approve the dissolution of a credit institution or foreign bank branch which has the capability to pay debts and other asset liabilities. The dissolution of credit institutions and foreign bank branches must comply with this Circular and relevant regulations.

3. In the process of supervising the liquidation of assets, if detecting that a credit instition is unable to pay all debts, the State Bank shall issue a decision to terminate the liquidation then proceed to implementing the plan on bankruptcy of the credit institution under Section 1e, Chapter VIII of the Law on Credit Institutions (as amended and supplemented).

4. In the process of liquidating assets, if a foreign bank branch is unable to pay all debts and other asset liabilites, its parent bank shall implement the commitments under Point b, Clause 3, Article 20 of the Law on Credit Institutions (as amended and supplemented).

Article 5.Principles ofmaking dossiers

1. Dossiers shall be made in Vietnamese. Foreign-language documents shall be consularly legalizedand translated into Vietnamese and notarized, except thoseexempted from consular legalizationin accordance with law.

2. In case copies of documents are other than certified copies or duplicates, their originals shall be produced for comparision. Comparers shall sign the copies and take responsibility for the accuracy of such copies.

Article 6.Prohibited acts in revocation of licenses and liquidation of assets of credit institutions and foreign bank branches

After the body with deciding competence of a credit institution or foreign bank branch approves its dissolution or the Governor of the State Bank (below referred to as the Governor) orders in writing a credit institution or foreign bank branch to liquidate its assets under Clause 1, Article 8 of this Circular, such credit institution or foreign bank branch, its managers, executive officers and employees are prohibited from carrying out the following activities and transactions related to its debts and assets:

1. Hiding or dispersing assets.

2. Waiving or reducing debt claims.

3. Converting unsecured debts into debts secured with its assets.

4. Pledging, mortgaging, donating, and leasing assets.

5. Signing new agreements or contracts, except agreements or contracts for its operation termination.

6. Transferring money and assets abroad.

Chapter II

REVOCATION OF LICENSES AND LIQUIDATION OF ASSETS OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES

Section 1

REVOCATION OF LICENSES

Article 7.Order and procedures for revocation of licenses of credit institutions and foreign bank branches voluntarily requesting dissolution

1. Approval of request for dissolution:

a/ A credit institution or foreign bank branch shall:

(i) Hire an independent audit firm or organization which is eligible under the laws on asset valuation and price appraisal and enterprise valuation to value and appraise its assets and determine its value in the year preceding the year of request for dissolution and in the quarter preceding the time of request for dissolution;

(ii) Work out an asset liquidation plan under Point b, Clause 4 of this Article and based on the results of asset valuation and price appraisal and enterprise valuation mentioned at Point a(i) of this Clause;

(iii) Make one (1) dossier set under Clause 4 of this Article, then send it directly or by post to the State Bank;

b/ Within fifteen (15) days after receiving a complete and valid dossier specified in Clause 4 of this Article, the Banking Supervision Agency shall examine it and send it to the following for opinion or submit it to the Governor for doing so:

(i) The State Bank branch, on the actual organization and operation of the credit institution or foreign bank branch and its capability to pay all debts and other assetliabilites; its view on the asset liquidation, dissolution, license revocation, and possible handling measures related to the asset liquidation, dissolution and license revocation; impacts of the dissolution and license revocation on the safety of the system of credit institutions in the locality. In case it agrees with the license revocation, the State Bank branch of the province or city where there is no Banking Supervision Department shall appoint a representative to join the liquidation supervision team under this Circular;

(ii) The People’s Committee, on the dissolution and license revocation and impacts of the dissolution and license revocation on the political, social and economic stability of the locality;

(iii) Related ministries, sectors and State Bank units, on the asset liquidation, dissolution and license revocation (when finding it necessary);

c/ Within fifteen (15) days after receiving the request for opinion, the agencies and units specified under Point b of this Clause shall send their written opinions to the Banking Supervision Agency. Past this time limit, agencies and units giving no opinions shall be considered having agreed with the dissolution and license revocation.

d/ Within fifteen (15) days after the time limit for consultancy, the Banking Supervision Agency shall summarize opinions and, if finding that the asset liquidation plan proves the capability to pay all debts and other assetliabilitesand guarantee the interests of debtors and creditors, consider and propose the Governor:

(i) To issue a written approval for the dissolution, covering the approval for an asset liquidation plan and requesting the credit institution or foreign bank branch to form a liquidation council and liquidate its assets according to the approved plan; and form a liquidation supervision team; or,

(ii) To send a written request to the credit institution or foreign bank branch to report and explain related contents;

dd/ Within ten (10) working days after receiving an explanatory report of the credit institution or foreign bank as branch specified at Point d(ii) of this Clause, the Banking Supervision Agency shall propose the Governor to follow Point d(i) of this Clause;

e/If finding that the asset liquidation plan fails to prove the capability to pay all debts and other assetliabilites, the Banking Supervision Agency shall consider and propose the Governor to issue a written disapproval of the dissolution, clearly stating the reason.

2. Liquidation of assets:

a/Within thirty (30) days after the written approval of dissolution takes effect, a credit institution or foreign bank branch shall form a liquidation council and liquidate its assets under Section 2 of this Chapter and other relevant regulations;

b/ Within thirty (30) days after the liquidation is completed, the liquidation council shall make a written report on liquidation results and a written request for liquidation completion (including the request for liquidation completion for carrying out bankruptcy procedures in accordance with law) for the cases of liquidation completion specified in Article 13 of this Circular, and send them to the liquidation supervision team, the People’s Committee and the State Bank branch of the province or city where there is no Banking Supervision Department or to the provincial-level Banking Supervision Department;

c/ Within fifteen (15) days after receiving the document of the liquidation council referred to at Point b of this Clause, the liquidation supervision team shall make a written report on liquidation results and a written request for liquidation completion (including the request for liquidation completion for carrying out bankruptcy procedures in accordance with law), and send them to the State Bank branch of the province or city where there is no Banking Supervision Department or to the provincial-level Banking Supervision Department;

d/ In the course of supervising the liquidation of assets of the credit institution, if detecting that the credit institution is incapable to pay all debts and other assetliabilites, the liquidation supervision team shall make a written report on liquidation results and a written request for liquidation completion for carrying out bankruptcy procedures in accordance with law for the case of liquidation completion specified in Clause 2, Article 13 of this Circular, and send them to the State Bank branch of the province or city where there is no Banking Supervision Department or to the provincial-level Banking Supervision Department;

dd/ Within fifteen (15) days after receiving the documents of the liquidation supervision team referred to at Points c and d of this Clause, the State Bank branch shall make a written proposal on liquidation results and a written request for liquidation completion for the cases of liquidation completion specified in Article 13 of this Circular (including the request for liquidation completion for carrying out bankruptcy procedures in accordance with law) and send them to the Banking Supervision Agency.

3. Revocation of licenses:

a/ Within thirty (30) days after receiving the documents of the liquidation supervision team referred to at Points c and d, Clause 2 of this Article or within fifteen (15) days after receiving the document of the State Bank branch of the province or city where there is no Banking Supervision Department as specified at Point dd, Clause 2 of this Article, the Banking Supervision Agency shall consider and propose the Governor:

(i) To issue a decision on liquidation completion and a decision on license revocation, for the case specified in Clause 1, Article 13 of this Circular; or,

(ii) To issue a decision on liquidation completion for carrying out bankruptcy procedures in accordance with law for the case specified in Clause 2, Article 13 of this Circular. The State Bank shall revoke the license after the judge appoints an asset management officer or enterprise to manage and liquidate the assets; or,

(iii) To send a written request to the credit institution or foreign bank branch to report and explain asset liquidation-related issues;

b/ Within ten (10) working days after receiving an explanatory report of the credit institution or foreign bank branch specified at Point a(iii) of this Clause, the Banking Supervision Agency shall consider and propose the Governor to follow Points a(i) or a(ii) of this Clause;

c/ Within forty (40) days after receiving the documents of the liquidation supervision team specified at Points c and d, Clause 2 of this Article or within twenty-five (25) days after receiving the document of the State Bank branch of the province or city where there is no Banking Supervision Department specified Point dd, Clause 2 of this Article, the State Bank shall issue a decision or a written request under Point a of this Clause.

4. A dossier of request for dissolution must comprise:

a/ A written request for dissolution signed by the lawful representative of the credit institution or parent bank;

b/ The asset liquidation plan already approved by the body with deciding competency, stating at least the following:

(i) Name, address and website of the credit institution or foreign bank branch;

(ii) Name, address and website of the parent bank (for foreign bank branches);

(iii) Names, addresses and telephone numbers of members of the Board of Directors, the Members’ Council and the Control Board and the director general (director);

(iv) List of members of  the liquidation council (names, addresses and telephone numbers) under Clauses 1, 2 and 3, Article 10 of this Circular;

(v) Brief information on the financial status and operation (actual value of charter capital and allocated capital, bad debts, liabilities, receivables and payables, including both on balance sheet and off balance sheet) by the time the credit institution or foreign bank branch requests dissolution, clearly stating the capability to pay all debts and other assetliabilites;

(vi) Reasons for voluntary request for dissolution;

(vii) List of founding shareholders, major shareholders, owners, founding members and capital contributors;

(viii) Plan on and measures for settlement of interests and obligations, specifying the liquidation schedule and asset division plan. For foreign bank branches, a plan on overseas remittance of capital, profits and assets shall be also stated;

(ix) Responsibilities of organizations and persons involved in the asset liquidation, dissolution and license revocation;

(x) Recommendations and proposals (if any);

c/ The report, resolution and decision of the body with deciding competency approving the dissolution and asset liquidation plan;

d/ In case a foreign bank branch requests dissolution at the request of its parent bank, the dossier must comprise the report, resolution or decision of the parent bank on the dissolution and operation termination of its branch;

dd/ A report on asset valuation and price appraisal and enterprise valuation under Point a(i), Clause 1 of this Article;

e/ Financial statements of the credit institution or foreign bank branch of the year preceding the year of request for dissolution and the quarter preceding the time of request for dissolution audited by an independent audit firm in accordance with law. If at the time of submission of the dossier of request for dissolution, the above financial statements have not yet been audited, the credit institution or foreign bank branch may submit these financial statements and take responsibility for their contents. Immediately after the independent audit firm issues the audit report, the credit institution or foreign bank branch shall submit the audited financial statements.

Article 8.Order and procedures for revocation of the license of a credit institution or foreign bank branch subject tolicense revocation

1. Based on the inspection conclusions or bank supervision results regarding the revocation of the license of a credit institution or foreign bank branch or a competent authority’s decision on the policy on dissolution of a credit institution under special control, the Banking Supervision Agency shall consider and propose the Governor to send a written request to the credit institution or foreign bank branch to liquidate its assets and form a liquidation council and a liquidation supervision team.

2. The liquidation of assets must comply with Points b, c, d and dd, Clause 2, Article 7, Section 2, Chapter II of this Circular and relevant regulations.

3.The order for revocation of the license of a credit institution or foreign bank branchsubject to license revocation must comply with Clause 3, Article 7 of this Circular.

Article 9.Disclosure of information and implementation of procedures for termination of legal persons or termination of operation in accordance with law

1. Within seven (7) working days after the effective date of the written approval of dissolution specified at Point d (i), Clause 1, Article 7 of this Circular or the written request for asset liquidation specified in Clause 1, Article 8 of this Circular, the credit institution or foreign bank branch shallpublishthe following informationon a national daily for three (3) consecutive issues or an Vietnamese online newspaper for seven (7) working days and at its head office, branches,transaction offices, subsidiaries and affiliated companies:

a/ Serial number and date of the State Bank’s approval for the dissolution and written request for asset liquidation;

b/ Name and address of the head office;

c/ Serial number and date of the establishment and operation license, establishment license, enterprise registration certificate or an equivalent document;

d/ Charter capital and allocated capital;

dd/ At-law representative.

2.Within seven (7) working days aftereffective date ofa decision on revocation of the license of a credit institution or foreign bank branch, the State Bank shall publish such revocation on its website and send the decision to the credit institution or foreign bank branch, the State Bank branch, People’s Committee, the National Financial Supervisory Commission and the Ministry of Finance.

3. Within seven (7) working days after a decision on revocation of its license takes effect, a credit institution or foreign bank branch shall announce such decision on a national daily for three (3) consecutive issues or an Vietnamese online newspaper for seven (7) working days and post such decision at its head office, branches,transaction offices, subsidiaries and affiliated companies.

4. Credit institutions shall carry out procedures for the termination of their legal persons and foreign bank branches shall carry out procedures for the termination of their operation in accordance with law.

Section 2

LIQUIDATION OF ASSETS

Article 10.Members, tasks and powers of liquidation councils

1. Members of a liquidation council for a credit institution:

a/ A liquidation council must consist of the chairperson of the Board of Directors or the Members’ Council; at least one independent member of the Board of Directors; the head of the Control Board, the director general (director), the chief accountant; some other members selected from the members of the Board of Directors, Members’ Council or Control Board (if any), major shareholders, owners, capital contributors and five (5) clients with the largest outstanding deposits at the credit institution at the time of requesting dissolution. In case the post of chairperson of the Board of Directors, the Members’ Council, head of the Control Board, director general (director) or chief accountant is vacant, the body with deciding competence shall select a replacement to join the liquidation council;

b/ The chairperson of the Board of Directors or the Members Council shall act as the liquidation council chairperson. In case the post of chairperson of the Board of Directors or the Members’ Council is vacant, this Board or Council shall meet to select one from its members on the list of members of the liquidation council approved by a competent agency specified at Point a of this Clause to act as the liquidation council chairperson.

2. Members of a liquidation council for a foreign bank branch:

a/ A liquidation council must consist of the director general (director), the chief accountant and at least one (1) member designated by the parent bank and five (5) clients with the largest outstanding deposits at the foreign bank branch (if agreed by clients) at the time of requesting dissolution. In case the post of director general (director) or chief accountant is vacant, the body with deciding competence of the parent bank shall select a replacement to join the liquidation council;

b/ The director general (director) of the foreign bank branch shall act as the liquidation council chairperson. In case the post of director general (director) is vacant, the parent bank shall designate one from the members of the liquidation council to act as the liquidation council chairperson.

3. Credit institutions and foreign bank branches which voluntarily request dissolution may decide on their liquidation councils with the members defined in Clauses 1 and 2 of this Article.

4. The Governor shall decide on the liquidation council for a credit institution or foreign bank branch subject to license revocation as follows:

a / Members defined in Clauses 1 and 2 of this Article at the proposal of the credit institution or foreign bank branch; or,

b/ Other members at the proposal of the Banking Supervision Agency in case the credit institution or foreign bank branch does not propose members defined in Clauses 1 and 2 of this Article.

5. Duties and powers of a liquidation council:

a/ To use the seal of the credit institution or foreign bank branch in the process of liquidation of assets of the credit institution or foreign bank branch in accordance with law;

b/ To review all assets and liabilities, and items off the balance sheet of the credit institution or foreign bank branch; to draw up a list of creditors and debtors and their debts at the time of asset liquidation and a list of assets of the credit institution or foreign bank branch for handling;

c/ To organize the liquidation of assets in accordance with this Circular and relevant regulations and apply every measure to recover debts and assets of the credit institution or foreign bank branch;

d/ Within the first five working days of every month or irregularly, to report the asset liquidation, asset division and other arising matters to the liquidation supervision team;

dd/ Expenses for operation of a liquidation council shall be paid by the credit institution or foreign bank branch. The accounting of these expenses must comply with the current accounting regime.

Article 11.Order of asset division

1. The assets of a credit institution or foreign bank branch shall be divided to make payment in the following order:

a/ Special loans under the Law on Credit Institutions (as amended and supplemented);

b/ Fees and expenses for its liquidation in accordance with law;

c/ Salaries, severance allowances, unemployment insurance, social insurance and health insurance premiums owed to employees under law and other benefits under signed collective labor agreements and labor contracts;

d/ Amounts payable to depositors;

dd/ Financial obligations to the State;

e/ Other debts.

2. The remaining asset value, if any, of a credit institution after the amounts specified in Clause 1 of this Article are fully paid, shall be divided to the credit institution’s shareholders, owners and capital contributors according to their capital contribution proportions at the time of asset division.

3. The remaining asset value, if any, of a foreign bank branch after the amounts specified in Clause 1 of this Article are fully paid, shall be paid to its parent bank in accordance with relevant laws.

Article 12.Liquidation time limit

1. The liquidation time limit is twelve (12) months after the written approval for dissolution or written request for asset liquidation takes effect. The liquidation time limit may be extended with each extension not exceeding twelve (12) months.

2. In case of request for extension, forty-five (45) days before the expiration of the liquidation time limit, the liquidation council shall send a written request for extension (clearly stating the reason) to the State Bank branch of the province or city where there is no Banking Supervision Department or to the provincial-level Banking Supervision Department. For cases other than the cases of liquidation completion specified in Article 13 of this Circular, if the liquidation council makes no written request for extension of the liquidation time limit, the liquidation supervision team shall consider and send a written request for extension of this time limit (clearly stating the reason) to the State Bank branch of the province or city where there is no Banking Supervision Department or to the provincial-level Banking Supervision Department.

3. Within fifteen (15) days after receiving the written request of the liquidation council or the liquidation supervision team referred to in Clause 2 of this Article, the State Bank branch of the province or city where there is no Banking Supervision Department shall send a written proposal on the extension of the liquidation time limit to the Banking Supervision Agency for consideration and submission to the Governor for approving or disapproving the extension request.

4. Within forty (40) days after receiving the written request of the liquidation council or the liquidation supervision team referred to in Clause 2 of this Article, or within twenty-five (25) days receiving the written request of the State Bank branch of the province or city where there is no Banking Supervision Department specified in Clause 3 of this Article, the State Bank shall issue a written approval or disapproval of such request.

Article 13.Cases ofliquidation completion

A credit institution or foreign bank branch shall complete the liquidation in the following cases:

1. It has paid all debts and other assetliabilitesunder Clause 1, Article 11 of this Circular.

2. It is unable to pay all debts.

Section 3

SUPERVISION OF ASSET LIQUIDATION

Article 14.Organizational structure of a liquidation supervision team

1. The Governor shall form a liquidation supervision team, appoint its head, specify the use of the seal of the team, and define tasks and powers of its head and members.

2. The liquidation supervision team must have at least five (5) members who satisfy the criteria and conditions specified in Article 15 of this Circular, including:

a/ The representative of the State Bank;

b/ The representative of another credit institution who is designated at the request of  the Board of Directors or the Members’ Council of such credit institution (in case the Governor designates another credit institution to participate in supervising the liquidation of assets of the credit institution).

Article 15.Criteria and conditions for a liquidation supervision team member

1. Possessing a university or higher degree in economics, finance, banking, business administration, law, accounting or audit and having worked for at least 3 years in the banking or deposit insurance sector.

2. Being other than a shareholder, the owner, a capital contributor or an affiliated person of a member of the Board of Directors, or a member of the Members’ Council or the Control Board, or the director general (director) or a member of the liquidation council of the credit institution or foreign bank branch having its assets liquidated.

Article 16.Operation mechanism of a liquidation supervision team

1. Members of a liquidation supervision team shall work on a part-time basis.

2. The head and members of a liquidation supervision team are answerable for their performance to the director of the State Bank branch of the province or city where there is no Banking Supervision Department or the chief inspector of the provincial-level Banking Supervision Department and the Governor.

3. A meeting of a liquidation supervision team may be held when it is attended by at least two-thirds of the total members. A decision of the liquidation supervision team may be adopted only when the majority of members present at the meeting agree. In case the numbers of members agreeing and disagreeing with the decision are equal, the vote of the head of the team is decisive.

4. Expenses for operation of a liquidation supervision team shall be paid by the credit institution or foreign bank branch. The accounting of these expenses must comply with the current accounting regime.

5. A liquidation supervision team shall finish its tasks when the Governor issues a decision on completion of the liquidation of assets of the credit institution or foreign bank branch. In case of completing the liquidation of assets for carrying out bankruptcy procedures in accordance with law, the liquidation supervision team shall finish its tasks when the Governor issues a decision on the establishment of a special control board to control the operation of the credit institution.

Article 17.Tasks and powers of a liquidation supervision team

1. To direct and supervise the credit institution or foreign bank branch in inventorying all its debts, receivables and payables; to request the credit institution or foreign bank branch to invite its creditors and debtors to come for debt comparison so that it can identify its debt payment capability and sources.

2. To request the liquidation council of the credit institution or foreign bank branch to report and provide documents and information on its actual organization and operation in the process of asset liquidation and pay debts to its creditors strictly according to the priority order specified in this Circular.

3. To supervise the whole process of asset liquidation under this Circular and the Governor’s decision specified in Clause 1, Article 14 of this Circular.

4. Within the first ten (10) working days of every month or irregularly, to send to the State Bank branch of the province or city where there is no Banking Supervision Department, provincial-level Banking Supervision Department, Governor and People’s Committee a report on the process of liquidation and division of assets and other arising matters. In case of necessity, to request in writing related agencies to support the credit institution or foreign bank branch in collecting its receivables and dealing with clients that intentionally cause loss of its assets.

5. To request the State Bank branch of the province or city where there is no Banking Supervision Department or provincial-level Banking Supervision Department to stop operation of members of the liquidation council who intentionally violate law or fail to implement the asset liquidation plan or show signs of dispersing assets, or shirking responsibilities and obligations. In a serious case, to propose the Governor to request in writing law enforcement agencies to handle violators (if any).

6. To propose the State Bank branch of the province or city where there is no Banking Supervision Department, provincial-level Banking Supervision Department, Governor and People’s Committee in settling arising matters beyond its competence.

7. To submit to personal direction by the director of the State Bank branch of the province or city where there is no Banking Supervision Department or the chief inspector of the provincial-level Banking Supervision Department.

8. In the course  of supervising the liquidation of assets, if detecting that the credit institution is unable to pay all its debts and other assetliabilites, to report such under Point d, Clause 2, Article 7 of this Circular.

Chapter III

REVOCATION OF LICENSES OF REPRESENTATIVE OFFICES

Article 18.Order and procedures for revocation of licenses of representative offices

1. In case a representative office requests operation termination

a/ To make a dossier set under Article 19 of this Circular, then send it directly or by post to the State Bank;

b/ Within five (5) working days after receiving a complete dossier made under Article 19 of this Circular, the Banking Supervision Agency shall examine it and consult in writing the related State Bank branch and units on the operation termination, license revocation and handling measures in relation to the operation termination and license revocation (when finding it necessary);

c/ Within seven (7) working days after receiving the request of the Banking Supervision Agency, the consulted units referred to at Point b of this Clause shall send their written opinions to the former. Past this time limit, units giving no opinions shall be considered having agreed with the operation termination and license revocation.

d/ Within seven (7) working days after the expiration of the time limit for consultation, the Banking Supervision Agency shall consider and propose the Governor:

(i) To issue a decision on license revocation and request the representative office to carry out procedures for its operation termination and closure, return the operation registration paper and seal, liquidate the office rent contract and pay  liabilities and other debts (if any) to related individuals and organizations in accordance with law; or

(ii) To request in writing the representative office to report and explain related issues;

dd/ Within five (5) working days after receiving an explanatory report of the representative office specified at Point d(ii) of this Clause, the Banking Supervision Agency shall consider and propose the Governor to follow Point d(i) of this Clause;

e/ Within twenty (20) days after the expiration of the time limit for consultation, the State Bank shall issue a decision or request specified at Point d of this Clause.

2. In case a representative office is subject to license revocation:

Based on bank inspection and supervision results, the Banking Supervision Agency shall consider and propose the Governor to issue a decision on license revocation, and request the representative office to carry out procedures for its operation termination and closure, return the operation registration paper and seal, liquidate the office rent contract and pay liabilities and other debts (if any) to related individuals and organizations in accordance with law.

Article 19.Dossier of revocation of the license of a representative office

1. A written request for operation termination signed by the lawful representative of the concerned foreign credit institution or foreign institution engaged in banking activities, clearly stating the reason for the operation termination and license revocation of its representative office, the archive of dossiers and records after the license revocation, and responsibilities of organizations and persons involved in the process of operation termination and license revocation.

2. The written approval of the body with deciding competence for the operation termination of the representative office.

3. For a representative office having its license revoked under Point e, Clause 1, Article 28 of the Law on Credit Institutions (as amended and supplemented), its dossier must contain the document of a competent agency of the country where the concerned foreign credit institution or foreign institution engaged in banking activities is headquartered on the dissolution, bankruptcy, license revocation or operation suspension.

Article 20.Notification of the decision on revocation of a license of a representative office

1. Within seven (7) working days after a decision on revocation of the license of a representative office takes effect, the State Bank shall publish such decision on its website and send it to the representative office, the State Bank branch and People’s Committee.

2. Within seven (7) working days after a decision on revocation of its license takes effect, a representative office shall announce such decision on a national daily newspaper for three (3) consecutive issues or a Vietnamese online newspaper for seven (7) working days and post it at its office.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 21.Responsibilities of related units

1. Credit institutions, foreign bank branches and representative offices shall provide adequate and truthful information on their actual organization and operation; and observe the reporting regime and other regulations concerning the asset liquidation, dissolution and license revocation in accordance with this Circular.

2. State Bank branches of provinces or cities where there is no Banking Supervision Department shall respond to recommendations related to the process of asset liquidation, dissolution and license revocation of credit institutions, foreign bank branches and representative offices which fall beyond the competence of liquidation supervision teams; and propose the Governor to consider and settle matters falling beyond their competence and related to the process of liquidation of assets, dissolution and revocation of licenses of credit institutions and foreign bank branches and the process of revocation of licenses of representative offices.

3. State Bank branches in provinces or cities where branches of credit institutions are located shall coordinate with State Bank branches in provinces or cities were credit institutions are headquartered and the Banking Supervision Agency in liquidating assets, dissolving and revoking licenses of credit institutions.

Article 22. Transitional provisions

Credit instituions and foreign bank branches which have started the liquidation of their assets before the effective date of this Circular in accordance with the regulations effective at the time of asset liquidation may continue with the liquidation under the State Bank Governor’sCircular No. 34/2011/TT-NHNN of October 28, 2011, guiding the order and procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; the order and procedures for revocation of licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities, and Circular No. 29/2015/TT-NHNN of December 22, 2015, amending and supplementing a number of legal documents of the State Bank on dossiers comprising certified copies.

Article 23.Effect

1.This Circular takes effect on February 26, 2018.

2. The following legal documentscease to be effective onthe effective date of this Circular:

a/ The State Bank Governor’sCircular No. 34/2011/TT-NHNN of October 28, 2011, guiding the order and procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; the order and procedures for revocation of licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities;

b/ Article 7 of the State Bank Governor’sCircular No. 29/2015/TT-NHNN of December 22, 2015, amending and supplementing a number of legal documents of the State Bank on dossiers comprising certified copies.

Article 24.Organization of implementation

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

For the State Bank Governor
Deputy Governor
NGUYEN DONG TIEN