Circular 27/2018/TT-NHNN on freezing, unfreezing capital and assets of foreign bank branches

CIRCULAR

Prescribing cases of freezing or unfreezing capital and assets of 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 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 prescribing cases of freezing or unfreezing capital and assets of foreign bank branches.

Article 1. Scope of regulation

This Circular prescribes cases of freezing or unfreezing capital and assets of foreign bank branches.

Article 2. Subjects of application

1. Foreign bank branches established and operating in the territory of Vietnam.

2. Organizations and individuals involved in the freezing or unfreezing of capital and assets of foreign bank branches.

Article 3. Interpretation of terms

1. Freezing of capital and assets means the performance by the State Bank of Vietnam (below referred to as the State Bank) of one or several of the following measures:

a/ Requesting a foreign bank branch not to transfer its capital and assets abroad;

b/ Freezing a foreign bank branch’s capital and assets deposited at the State Bank;

c/ Requesting a foreign bank branch to deposit its capital and assets at the State Bank and freezing such capital or assets;

d/ Requesting the credit institution at which a foreign bank branch’s capital and assets are deposited to freeze such capital or assets;

dd/ Requesting a foreign bank branch to deposit its capital and assets at a credit institution and requesting such credit institution to freeze the foreign bank branch’s capital and assets.

2. Parent bank means a foreign bank that opens a branch in Vietnam.

Article 4. Principles of freezing and unfreezing of capital and assets

1. The freezing or unfreezing of capital and assets of foreign bank branches aims to protect the depositors’ interests.

2. The State Bank Governor shall consider and decide on the freezing of capital and assets of a foreign bank branch when such foreign bank branch falls into a case specified in Article 5 of this Circular. A decision to freeze a foreign bank branch’s capital and assets must state the reason for freezing, starting time for freezing, freezing method and responsibility of the foreign bank branch.

3. The State Bank Governor shall consider and decide on the unfreezing of capital and assets of a foreign bank branch when such foreign bank branch falls in a case specified in Article 6 of this Circular. A decision to unfreeze a foreign bank branch’s capital and assets must the state the time of unfreezing and responsibility of the foreign bank branch.

Article 5. Cases of freezing capital and assets

The State Bank shall consider and decide on the freezing of a foreign bank branch’s capital and asset in the following cases:

1. The real value of allocated capital of the foreign bank branch is smaller than its legal capital for more than 6 consecutive months.

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