THE STATE BANK OFVIETNAM | | THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness |
No. 28/2016/TT-NHNN | | Hanoi, October 5, 2016 |
CIRCULAR
Amending and supplementing a number of articles of Circular No. 21/2014/TT-NHNN of August 14, 2014, of the Governor of the State Bank of Vietnam, guiding the scope of foreign exchange activities and the conditions, order and procedures for approval of foreign exchange activities of credit institutions and foreign bank branches
Pursuant to June 16, 2010 Law No. 46/2010/QH12 on the State Bank of Vietnam;
Pursuant to June 16, 2010 Law No. 47/2010/QH12 on Credit Institutions;
Pursuant to December 13, 2005 Ordinance No. 28/2005/PL-UBTVQH11 on Foreign Exchange and March 18, 2013 Ordinance No. 06/2013/PL-UBTVQH13 Amending and Supplementing a Number of Articles of the Ordinance on Foreign Exchange;
Pursuant to the Government’s 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 Foreign Exchange Management Department,
The Governor of the State Bank of Vietnam promulgates the Circular amending and supplementing a number of articles of Circular No. 21/2014/TT-NHNN of August 14, 2014, guiding the scope of foreign exchange activities and the conditions, order and procedures for approval of foreign exchange activities of credit institutions and foreign bank branches.
Article 1.To amend and supplement a number of articles of Circular No. 21/2014/TT-NHNN of August 14, 2014, guiding the scope of foreign exchange activities and the conditions, order and procedures for approval of foreign exchange activities of credit institutions and foreign bank branches (below referred to as Circular No. 21/2014/TT-NHNN), as follows:
1.To add the following Clause 5 to Article 1:
“5. Offshore indirect investment activities of credit institutions and foreign bank branches must comply with the law on offshore indirect investment.”
2.To amend and supplement Clause 2, Article 3 as follows:
“2. Foreign exchange activities of a licensed credit institution include foreign exchange trading and provision of foreign exchange services by a licensed credit institution for residents and non-residents in current transactions, capital transactions and other foreign exchange-related transactions, including basic foreign exchange activities in the domestic market, basic foreign exchange activities in the international market, and other foreign exchange activities in domestic and international markets.”
3. To annul Clause 5, Article 3.
4. To amend and supplement Article 4 as follows:
“Article 4. Principles of foreign exchange activities
1. For basic foreign exchange activities:
a/ Commercial banks, cooperative banks, general finance companies, factoring finance companies, consumer credit finance companies, financial leasing companies and foreign bank branches may carry out all basic foreign exchange activities in the domestic market and/or international market within the scope prescribed in this Circular after obtaining approval of the State Bank of Vietnam (below referred to as the State Bank) in the form of grant/renewal of their establishment and operation licenses or license modification and supplementation decisions covering the activities of foreign exchange trading and provision of foreign exchange services in the domestic market and/or international market within the scope prescribed by the State Bank;
b/ For foreign exchange-related derivative activities and other foreign exchange activities other than those referred to at Point a, Clause 1, and Clause 2, of this Article:
(i) Commercial banks and licensed foreign bank branches may carry out foreign exchange-related derivative activities without having to request approval of the addition of foreign exchange activities when the State Bank has issued a guiding document and permitted the commercial banks and foreign bank branches to carry out such derivative activities in Vietnam dong;
(ii) Commercial banks and licensed foreign bank branches may carry out other foreign exchange activities without having to request approval of the addition of foreign exchange activities when the State Bank has issued a document providing guidance on such foreign exchange activities;
c/ Policy banks may carry out basic foreign exchange activities in domestic and international markets in accordance with this Circular.
2. For other foreign exchange activities:
a/ Licensed credit institutions may carry out other foreign exchange activities in domestic and international markets after obtaining the State Bank’s written approval permitting the credit institutions to do so in a definite term for each specific product or group of products (below referred to as definite-term written approval);
b/ After the period for carrying out foreign exchange activities stated in the definite-term written approval expires, licensed credit institutions may carry out other foreign exchange activities in domestic and international markets after obtaining the State Bank’s written extension of the definite-term written approval. Each extension must not be exceed such period.
3. In the course of carrying out foreign exchange activities in the international market, licensed credit institutions shall regularly review, monitor and assess foreign partners in order to make appropriate adjustments to ensure their safe operation.
4. When carrying out foreign exchange activities, licensed credit institutions shall comply with this Circular and relevant law applicable to each foreign exchange activity. Particularly for policy banks, they shall comply with regulations of the Government and Prime Minister and relevant laws.”
5. To amend Clause 2 of, and add Clauses 15, 16, 17 and 18 to, Article 5 as follows:
“2. Conducting term foreign-currency purchase and sale transactions, foreign-currency swap transactions and foreign-exchange option transactions.”
“15. Opening payment accounts for foreign credit institutions.
16. Receiving foreign-currency deposits from foreign credit institutions.
17. Conducting interest-rate derivative transactions and other foreign exchange-related derivative transactions in the domestic market according to the principle stated at Point b(i), Clause 1, Article 4 of this Circular.
18. Carrying out other foreign exchange activities in the domestic market other than the activities mentioned in Clauses 1 thru 17 of this Article according to the principle stated at Point b(ii), Clause 1, Article 4 of this Circular.”
6. To amend and supplement Article 6 as follows:
“Article 6. Scope of basic foreign exchange activities of commercial banks in the international market
1. Making international payment and remittance.
2. Conducting foreign-currency purchase and sale spot transactions in the international market.
3. Conducting term foreign-currency purchase and sale transactions and foreign-currency swap transactions with foreign financial institutions to prevent and limit risks for term foreign-currency purchase and sale contracts signed and foreign-currency swap transactions conducted with domestic clients.
4. Providing international factoring and guarantees in foreign currencies.
5. Providing offshore loans to clients other than credit institutions.
6. Making overseas foreign-currency deposits (including time deposits and demand deposits).
7. Conducting interest-rate derivative transactions and other foreign exchange-related derivative transactions in the international market according to the principle stated at Point b(i), Clause 1, Article 4 of this Circular.
8. Carrying out other foreign exchange activities in the international market other than the activities mentioned in Clauses 1 thru 7 of this Article according to the principle stated at Point b(ii), Clause 1, Article 4 of this Circular.”
7. To amend and supplement Article 7 as follows:
“Article 7. Other foreign exchange activities in domestic and international markets
1. The State Bank shall consider and permit commercial banks to carry out in a definite term other foreign exchange activities in domestic and international markets for each specific product or group of products, including other foreign exchange activities in domestic and international markets other than those mentioned in Articles 5 and 6 of this Circular.
2. After the period for carrying out other foreign exchange activities in domestic and international markets stated in the definite-term written approval expires, commercial banks that wish to continue these foreign exchange activities and fully meet the conditions and submit a dossier prescribed in Clause 2, Article 10, and Clause 5, Article 11, of this Circular and comply with relevant regulations of the State Bank, may carry out these foreign exchange activities after obtaining the State Bank’s written extension of the definite-term written approval.”
8. To amend and supplement Article 8 as follows:
“Article 8. Conditions for approval of basic foreign exchange activities in the domestic market
To obtain approval for carrying out basic foreign exchange activities in the domestic market, a commercial bank must meet the following conditions:
1. Having an information technology system which meets governance and administration, risk management, safety and security requirements for foreign exchange activities, such as machinery and equipment serving foreign exchange activities, information and data storage devices; disaster prevention plan; and software supporting foreign exchange-related operations.
2. Having internal regulations on risk management relating to foreign exchange activities expected to be carried out.”
9. To amend and supplement Article 9 as follows:
“Article 9. Conditions for approval of basic foreign exchange activities in the international market
To obtain approval for carrying out basic foreign exchange activities in the international market, a commercial bank must meet the following conditions:
1. Meeting the conditions prescribed in Article 8 of this Circular.
2. Having internal regulations on criteria for selecting partners and determining transaction limits for foreign partners; particularly, foreign partners with which a licensed credit institution conducts transactions on deposits (other than payment deposits) must be overseas financial institutions with a credit rating of Baa3/P-3 or higher as provided by Moody’s Investors Service or of BBB-/A-3 or higher as provided by Standards & Poor’s or of BBB-/F3 or higher as provided by Fitch Ratings.
3. The conditions prescribed in Clause 2 of this Article do not apply in case the commercial bank makes deposits (other than payment deposits) at its overseas branches or subsidiaries.
The total balance of deposits of the commercial bank at all of its overseas branches and subsidiaries must not exceed 10% of its charter capital.”
10. To amend and supplement Article 10 as follows:
“Article 10. Conditions for approval of other foreign exchange activities in domestic and international markets
1. In each period, pursuant to the objectives of monetary policy and foreign exchange management policy, a commercial bank may carry out in a definite term other foreign exchange activities in domestic and international markets when meeting the following conditions:
a/ Having been permitted to carry out basic foreign exchange activities in the domestic or international market;
b/ Having internal regulations on operational processes with risk management measures for each foreign exchange activity expected to be carried out;
c/ Having internal regulations on criteria for selecting partners and determining appropriate transaction limits for each foreign partner;
d/ Complying with regulations on safety ratios in banking operations in the year preceding the year of submission of the approval request dossier and by the time of dossier submission;
dd/ Not having been administratively sanctioned for any violations in foreign exchange activities in the year preceding the year of submission of the approval request dossier and by the time of dossier submission;
e/ Having operated at a profit in the year preceding the year of submission of the approval request dossier as stated in its audited financial statements.
2. To obtain permission for extension of other foreign exchange activities in domestic and international markets, a commercial bank must meet the following conditions:
a/ Having been permitted by the State Bank to carry out other foreign exchange activities in a definite term;
b/ Not having been administratively sanctioned for any violations in the course of carrying out foreign exchange activities in a definite term;
c/ Complying with regulations on safety ratios in banking operations in the year preceding the year of submission of the extension request dossier and by the time of dossier submission;
d/ Having operated at a profit in the year preceding the year of request for the extension as stated in its audited financial statements.”
11. To amend and supplement Article 11 as follows:
“Article 11. Dossier of request for approval of foreign exchange activities
1. Principles of making and sending a dossier of request for approval of foreign exchange activities (below referred to as dossier):
a/ The dossier shall be made in Vietnamese. If the dossier comprises Vietnamese translations of foreign-language documents, a commercial bank may submit the documents having translator signatures certified under Vietnam’s law on certification or the documents bearing the certification of its lawful representative;
b/ In the dossier, the application for a license for carrying out foreign exchange activities, internal regulations and reports shall be signed by a lawful representative of the commercial bank;
c/ The dossier may be submitted directly or sent by post to the State Bank;
d/ Copies of documents in the dossier shall be certified in terms of their accuracy against the originals by a lawful representative of the commercial bank.
2. A dossier of request for approval of basic foreign exchange activities in the domestic market must comprise:
a/ A written request for approval of foreign exchange activities, made according to the form in Appendix 1 to this Circular;
b/ Internal regulations on risk management relating to foreign exchange activities, which must at least state the identification of different types of risks and a plan for management of these risks;
c/ A report describing the information technology system, applicable technical solutions, and processes for dealing with foreign exchange activities in this system, which must have the details provided in Appendix 3 to this Circular.
3. A dossier of request for approval of basic foreign exchange activities in the international market must comprise:
a/ The documents prescribed in Clause 2 of this Article;
b/ Internal regulations on criteria for selecting partners and determining transaction limits for partners, which must include regulations on review and re-assessment of partners on a periodic basis and upon occurrence of unexpected events that may affect their credit ratings.
4. A dossier of request for permission for carrying out other foreign exchange activities in a definite term in domestic and international markets must comprise:
a/ A written request made according to the form in Appendix 1 to this Circular, which must state products or groups of products expected to be provided and time of their provision;
b/ A report on the commercial bank’s compliance with regulations on safety ratios in banking operations in the year preceding the year of submission of the permission request dossier and by the time of dossier submission;
c/ Internal regulations on operational processes with risk management measures appropriate to each foreign exchange activity expected to be carried out; particularly, risk management measures must at least state the identification of different types of risks and a plan for management of these risks;
d/ Internal regulations on criteria for selecting partners and determining transaction limits for partners, which must include regulations on review and re-assessment of partners on a periodical basis and upon occurrence of unexpected events that may affect their credit ratings;
dd/ A report on domestic foreign exchange activities in the year preceding the year of dossier submission and by the time of dossier submission, with a commitment that the commercial bank has not been administratively sanctioned for any violations in foreign exchange activities;
e/ Copies of the audited financial statements in the year preceding the year of request for permission for carrying out foreign exchange activities for a definite term.
5. A dossier of request for permission for extension of other foreign exchange activities in domestic or international market must comprise:
a/ A written request made according to the form in Appendix 1 to this Circular, explaining the necessity to extend these activities, enclosed with a commitment that the commercial bank has not been administratively sanctioned for any violations in the course of carrying out foreign exchange activities in a definite term;
b/ A report assessing the results of foreign exchange activities carried out in a definite term;
c/ Copies of the audited financial statements in the year preceding the year of request for extension;
d/ A report on the commercial bank’s compliance with regulations on safety ratios in banking operations in the year preceding the year of submission of the extension request dossier and by the time of dossier submission.”
12. To amend and supplement Article 12 as follows:
“Article 12. Order and procedures for approval or approval of extension of foreign exchange activities
1. A commercial bank that wishes to carry out foreign exchange activities in the domestic or international market shall make 1 (one) dossier set prescribed in Article 11 of this Circular and send it to the State Bank. If the dossier is incomplete, within 10 (ten) working days after receiving it, the State Bank shall request in writing the commercial bank to supplement the dossier.
2. Within 40 (forty) days after receiving a complete and valid dossier as prescribed in this Circular, the State Bank shall:
a/ Approve basic foreign exchange activities in the domestic or international market for the commercial bank by granting/renewing an establishment and operation license or issuing a license modification and supplementation decision;
b/ Approve other foreign exchange activities in domestic and international markets for the commercial bank.
The State Bank’s written approval for the commercial bank to carry out other foreign exchange activities in domestic and international markets must have the following principal details: names and duration of operations, products or groups of products permitted to be performed/provided; limitations and safety assurance conditions (if any). This written approval shall be made according to the form in Appendix 4 to this Circular;
c/ In case of disapproval, the State Bank shall notify such in writing to the commercial bank, clearly stating the reason.
3. The order and procedures for approval for a commercial bank to extend other foreign exchange activities in domestic and international markets must comply with Clauses 1 and 2 of this Article.”
13. To amend and supplement Article 14 as follows:
“Article 14. Scope of basic foreign exchange activities in the international market
1. Making international payment and remittance for clients in Vietnam.
2. Conducting foreign-currency purchase and sale spot transactions in the international market.
3. Conducting term foreign-currency purchase and sale transactions and foreign-currency swap transactions with foreign financial institutions to prevent and limit risks for term foreign-currency purchase and sale contracts signed and foreign-currency swap transactions conducted with domestic clients.
4. Providing international factoring and guarantees in foreign currencies for clients in Vietnam.
5. Making overseas foreign-currency deposits (including time deposits and demand deposits).
6. Conducting interest-rate derivative transactions and other foreign exchange-related derivative transactions in the international market according to the principle stated at Point b(i), Clause 1, Article 4 of this Circular without having to request approval of the addition of foreign exchange activities.
7. Carrying out other foreign exchange activities in the international market other than those mentioned in Clauses 1 thru 6 of this Article according to the principle stated at Point b(ii), Clause 1, Article 4 of this Circular without having to request approval of the addition of foreign exchange activities.”
14. To amend and supplement Article 15 as follows:
“Article 15. Other foreign exchange activities in domestic and international markets
1. In addition to the foreign exchange activities referred to in Articles 13 and 14 of this Circular, the State Bank shall consider and permit foreign bank branches to carry out in a definite term other foreign exchange activities for each specific product or group of products, including:
a/ Other foreign exchange activities in the domestic market;
b/ Other foreign exchange activities in the international market for clients in Vietnam.
2. After the period for carrying out other foreign exchange activities in domestic and international markets stated in the definite-term written approval expires, foreign bank branches that wish to continue these foreign exchange activities and fully meet the conditions and submit a dossier prescribed in Articles 18 and 20 of this Circular and comply with relevant regulations of the State Bank, may carry out these activities after obtaining the State Bank’s written extension of the definite-term written approval.”
15. To amend the title of Article 16 as follows:
“Article 16. Conditions for approval of basic foreign exchange activities in the domestic market”
16. To amend the title of Article 17 as follows:
“Article 17. Conditions for approval of basic foreign exchange activities in the international market”
17. To amend the title of Article 18 as follows:
“Article 18. Conditions for approval of other foreign exchange activities in domestic and international markets”
18. To amend and supplement Article 19 as follows:
“Article 19. Dossier, order and procedures for requesting approval of basic foreign exchange activities in domestic and international markets
The dossier, order and procedures for requesting approval of basic foreign exchange activities in domestic and international markets are as the same as those for commercial banks as prescribed in Clauses 1, 2 and 3, Article 11, and Article 12, of this Circular.”
19. To amend and supplement Article 20 as follows:
“Article 20. Dossier, order and procedures for requesting approval of other foreign exchange activities in domestic and international markets
The dossier, order and procedures for requesting approval or approval of extension of other foreign exchange activities in domestic and international markets are as the same as those for commercial banks as prescribed in Clauses 1, 4 and 5, Article 11, and Article 12, of this Circular.”
20. To amend and supplement Article 21 as follows:
“Article 21. Scope of foreign exchange activities of general finance companies
1. Scope of basic foreign exchange activities in the domestic market:
a/ Conducting foreign-currency purchase and sale spot transactions;
b/ Conducting term foreign-currency purchase and sale transactions, foreign-currency swap transactions and foreign-currency option transactions;
c/ Receiving foreign-currency deposits from institutional clients other than credit institutions; providing foreign-currency loans for clients other than credit institutions;
d/ Providing factoring and bank guarantees in foreign currencies;
dd/ Issuing international credit cards;
e/ Discounting and rediscounting negotiable instruments and valuable papers in foreign currencies;
g/ Providing foreign-currency receipt and payment services; assigning economic organizations to act as exchange agents or foreign-currency payment agents;
h/ Providing foreign-exchange asset management and preservation services; providing foreign-currency loans as entrusted;
i/ Acting as agents issuing valuable papers in foreign currencies;
k/ Providing foreign-exchange counseling services to clients;
l/ Opening foreign-currency payment accounts at commercial banks and foreign bank branches licensed to carry out foreign exchange activities;
m/ Borrowing and providing foreign-currency loans from/for licensed credit institutions and domestic financial institutions;
n/ Making and receiving foreign-currency deposits at/from other licensed credit institutions;
o/ Receiving foreign-currency deposits from foreign credit institutions;
p/ Providing financial leasing in foreign currencies.
2. Scope of basic foreign exchange activities in the international market:
a/ Conducting foreign-currency purchase and sale spot transactions in the international market;
b/ Conducting term foreign-currency purchase and sale transactions and foreign-currency swap transactions with foreign financial institutions to prevent and limit risks for term foreign-currency purchase and sale contracts signed and foreign-currency swap transactions conducted with domestic clients;
c/ Providing offshore loans for clients other than credit institutions;
d/ Opening payment accounts at foreign banks to issue credit cards;
dd/ Providing international factoring and bank guarantees in foreign currencies.
3. For other foreign exchange activities in domestic and international markets:
a/ The State Bank shall consider and permit general finance companies to carry out in a definite term foreign exchange activities for each specific product or group of products, including other foreign exchange activities in domestic and international markets other than the foreign exchange activities prescribed in Clauses 1 and 2 of this Article, if they meet the conditions and submit a dossier prescribed in Clause 1, Article 26, and Clause 3, Article 27, of this Circular;
b/ After the period for carrying out other foreign exchange activities in domestic and international markets stated in the definite-term written approval expires, general finance companies that wish to continue these foreign exchange activities and fully meet the conditions and submit a dossier prescribed in Clause 2, Article 26, and Clause 4, Article 27, of this Circular and comply with relevant regulations of the State Bank, may carry out these activities after obtaining the State Bank’s written extension of the definite-term written approval.”
21. To amend and supplement Article 22 as follows:
“Article 22. Scope of foreign exchange activities of factoring finance companies
1. Scope of basic foreign exchange activities in the domestic market:
a/ Receiving foreign-currency deposits from institutional clients other than credit institutions;
b/ Making and receiving foreign-currency deposits at/from other licensed credit institutions;
c/ Borrowing foreign-currency loans from licensed credit institutions and domestic financial institutions;
d/ Discounting and rediscounting negotiable instruments and valuable papers in foreign currencies;
dd/ Providing factoring in foreign currencies;
e/ Providing foreign-exchange asset management and preservation services;
g/ Providing foreign-exchange counseling services to clients;
h/ Opening foreign-currency payment accounts at commercial banks and foreign bank branches licensed to carry out foreign exchange activities.
2. Scope of basic foreign exchange activities in the international market: providing international factoring.”
22. To add the following Article 22a to below Article 22:
“Article 22a. Scope of foreign exchange activities of consumer credit finance companies
1. Scope of basic foreign exchange activities in the domestic market:
a/ Receiving foreign-currency deposits from institutional clients other than credit institutions;
b/ Making and receiving foreign-currency deposits at/from other licensed credit institutions;
c/ Borrowing foreign-currency loans from licensed credit institutions and domestic financial institutions;
d/ Discounting and rediscounting negotiable instruments and valuable papers in foreign currencies;
dd/ Issuing international credit cards;
e/ Providing foreign-exchange asset management and preservation services;
g/ Providing foreign-exchange counseling services to clients;
h/ Opening foreign-currency payment accounts at commercial banks and foreign bank branches licensed to carry out foreign exchange activities.
2. Scope of basic foreign exchange activities in the international market: opening payment accounts at foreign banks to issue credit cards.”
23. To amend and supplement Article 23 as follows:
“Article 23. Scope of basic foreign exchange activities of financial leasing companies in the domestic market
1. Receiving foreign-currency deposits from institutional clients other than credit institutions.
2. Making and receiving foreign-currency deposits at/from other licensed credit institutions.
3. Borrowing foreign-currency loans from licensed credit institutions and domestic financial institutions.
4. Providing financial leasing in foreign currencies.
5. Providing financial lessees with foreign-currency loans for addition of working capital.
6. Providing financial leasing in foreign currencies as entrusted.
7. Providing foreign-exchange asset management and preservation services.
8. Providing foreign-exchange counseling services to clients.
9. Carrying out purchase and sublease activities by providing financial leasing in foreign currencies.
10. Opening foreign-currency payment accounts at commercial banks and foreign bank branches licensed to carry out foreign exchange activities.”
24. To amend and supplement Article 24 as follows:
“Article 24. Conditions for approval for general finance companies, factoring finance companies, consumer credit finance companies and financial leasing companies to carry out basic foreign exchange activities in the domestic market
1. The State Bank shall consider and grant approval for general finance companies that meet the conditions required for commercial banks in Article 8 of this Circular to carry out basic foreign exchange activities in the domestic market as prescribed in Clause 1, Article 21 of this Circular.
2. The State Bank shall consider and grant approval for factoring finance companies that meet the conditions required for commercial banks in Article 8 of this Circular to carry out basic foreign exchange activities in the domestic market as prescribed in Clause 1, Article 22 of this Circular.
3. The State Bank shall consider and grant approval for consumer credit finance companies that meet the conditions required for commercial banks in Article 8 of this Circular to carry out basic foreign exchange activities in the domestic market as prescribed in Clause 1, Article 22a of this Circular.
4. The State Bank shall consider and grant approval for financial leasing companies that meet the conditions required for commercial banks in Article 8 of this Circular to carry out basic foreign exchange activities in the domestic market as prescribed in Article 23 of this Circular.”
25. To amend and supplement Article 25 as follows:
“Article 25. Conditions for approval for general finance companies, factoring finance companies and consumer credit finance companies to carry out basic foreign exchange activities in the international market
1. The companies meet the conditions prescribed in Article 9 of this Circular.
2. The companies have operated at a profit for 1 (one) year preceding the year of submission of the approval request dossier as stated in their audited financial statements.”
26. To amend and supplement Article 26 as follows:
“Article 26. Conditions for approval for general finance companies to carry out other foreign exchange activities in domestic and international markets
1. In each period, pursuant to the objectives of monetary policy and foreign exchange management policy, a general finance company shall be permitted to carry out in a definite term other foreign exchange activities in domestic and international markets when meeting the following conditions:
a/ Meeting the conditions required for commercial banks under Points a, b, c, d and dd, Clause 1, Article 10 of this Circular;
b/ Having operated at a profit for 2 (two) consecutive years preceding the year of submission of the permission request dossier as stated in its audited financial statements.
2. To obtain permission for extension of other foreign exchange activities in domestic and international markets, a general finance company must meet the following conditions:
a/ Meeting the conditions required for commercial banks under Points a, b and c, Clause 2, Article 10 of this Circular;
b/ Having operated at a profit for 2 (two) consecutive years preceding the year of request for extension as stated in its audited financial statements.”
27. To amend and supplement Article 27 as follows:
“Article 27. Dossier of request for approval of foreign exchange activities
1. A dossier of request for approval for general finance companies, factoring finance companies, consumer credit finance companies and financial leasing companies to carry out basic foreign exchange activities in the domestic market must comply with Clauses 1 and 2, Article 11 of this Circular.
2. A dossier of request for approval for a general finance company, factoring finance company or consumer credit finance company to carry out basic foreign exchange activities in the international market must comprise:
a/ The documents prescribed in Clause 3, Article 11 of this Circular;
b/ Copies of the audited financial statements for 1 (one) year preceding the year of request for the approval.
3. A dossier of request for approval for a general finance company to carry out other foreign exchange activities in a definite term in domestic and international markets must comprise:
a/ The documents specified at Points a, b, c, d and dd, Clause 4, Article 11 of this Circular;
b/ Copies of the audited financial statements for 2 (two) consecutive years preceding the year of request for the approval.
4. A dossier of request for approval of the extension of other foreign exchange activities in domestic and international markets for a general finance company must comprise:
a/ The documents specified at Points a, b and d, Clause 5, Article 11 of this Circular;
b/ Copies of the audited financial statements for 2 (two) consecutive years preceding the year of request for the extension.”
28. To amend and supplement Article 29 as follows:
“Article 29. Foreign exchange activities of the Vietnam Bank for Social Policies
1. The Vietnam Bank for Social Policies may carry out the following basic foreign exchange activities in the domestic market without having to seek the State Bank’s approval:
a/ Conducting foreign-currency purchase and sale spot transactions;
b/ Conducting term foreign-currency purchase and sale transactions, foreign-currency swap transactions and foreign-currency option transactions;
c/ Receiving deposits from and providing loans in foreign currencies for clients other than credit institutions;
d/ Providing remittance and payment services in foreign currencies in the territory of Vietnam; providing foreign-currency receipt and payment services;
dd/ Purchasing, selling, discounting and rediscounting negotiable instruments and other valuable papers in foreign currencies;
e/ Providing foreign-exchange asset management and preservation services; providing foreign-currency loans as entrusted;
g/ Providing foreign-exchange counseling services to clients;
h/ Opening foreign-currency payment accounts at commercial banks and other foreign bank branches licensed to carry out foreign exchange activities;
i/ Borrowing and providing foreign-currency loans from/for other licensed credit institutions;
k/ Making and receiving foreign-currency deposits at/from other licensed credit institutions.
2. The Vietnam Bank for Social Policies may carry out the following basic foreign exchange activities in the international market without having to seek the State Bank’s approval:
a/ Making international payment and remittance;
b/ Making foreign-currency purchase and sale spot transactions in the international market;
c/ Conducting term foreign-currency purchase and sale transactions and foreign-currency swap transactions with foreign financial institutions to prevent and limit risks for foreign-currency purchase and sale contracts signed and foreign-currency swap transactions conducted with domestic clients.
3. For other foreign exchange activities in domestic and international markets:
a/ Based on the objectives of monetary policy and foreign exchange management policy in each period, the State Bank shall consider and permit the Vietnam Bank for Social Policies to carry out in a definite term foreign exchange activities for each specific product or group of products, including other foreign exchange activities in domestic and international markets other than the foreign exchange activities mentioned in Clauses 1 and 2 of this Article if the latter fully meets the conditions and submits a dossier required for a commercial bank under Points a, b, c, dd and e, Clause 1, Article 10, and Points a, c, d, dd and e, Clause 4, Article 11, of this Circular;
b/ After the period for carry out other foreign exchange activities in domestic and international markets stated in the definite-term written approval expires, the State Bank shall consider and permit extension of these foreign exchange activities in a written extension of the definite-term written approval if the Vietnam Bank for Social Policies wishes to continue these activities and fully meets the conditions and submits a dossier required for a commercial bank under Points a, b and d, Clause 2, Article 10, and Points a, b and c, Clause 5, Article 11, of this Circular, and complies with relevant regulations of the State Bank.
4. The order and procedures for consideration and approval or approval of extension of other foreign exchange activities must comply with Article 12 of this Circular.”
29. To add the following Article 29a to below Article 29:
“Article 29a. Foreign exchange activities of the Vietnam Development Bank
1. The Vietnam Development Bank may carry out the following basic foreign exchange activities in the domestic market:
a/ Conducting foreign-currency purchase and sale spot transactions;
b/ Conducting term foreign-currency purchase and sale transactions, foreign-currency swap transactions and foreign-currency option transactions;
c/ Receiving deposits from and providing loans in foreign currencies for clients other than credit institutions;
d/ Providing factoring and guarantees in foreign currencies;
dd/ Providing remittance and payment services in foreign currencies in the territory of Vietnam;
e/ Purchasing, selling, discounting and rediscounting negotiable instruments and other valuable papers in foreign currencies;
g/ Providing foreign-currency loans as entrusted;
h/ Providing foreign-exchange counseling services to clients;
i/ Opening foreign-currency payment accounts at commercial banks and other foreign bank branches licensed to carry out foreign exchange activities;
k/ Borrowing and providing foreign-currency loans from/for other licensed credit institutions;
l/ Making and receiving foreign-currency deposits at/from other licensed credit institutions;
m/ Opening payment accounts for foreign credit institutions;
n/ Receiving foreign-currency deposits from foreign credit institutions.
2. The Vietnam Development Bank may carry out the following basic foreign exchange activities in the international market:
a/ Making international payment and remittance;
b/ Conducting foreign-currency purchase and sale spot transactions in the international market;
c/ Conducting term foreign-currency purchase and sale transactions and foreign-currency swap transactions with foreign financial institutions to prevent and limit risks for foreign-currency purchase and sale contracts signed and foreign-currency swap transactions conducted with domestic clients;
d/ Providing factoring and guarantees in foreign currencies;
dd/ Providing offshore loans for clients other than credit institutions;
e/ Making overseas deposits (including time deposits and demand deposits).
3. For other foreign exchange activities in domestic and international markets:
a/ Based on the objectives of monetary policy and foreign exchange management policy in each period, the State Bank shall consider and permit the Vietnam Development Bank to carry out in a definite term foreign exchange activities for each specific product or group of products, including other foreign exchange activities in domestic and international markets other than the foreign exchange activities mentioned in Clauses 1 and 2 of this Article if the latter fully meets the conditions and submits a dossier required for a commercial bank under Points a, b, c, dd and e, Clause 1, Article 10, and Points a, c, d, dd and e, Clause 4, Article 11, of this Circular;
b/ After the period for carrying out other foreign exchange activities in domestic and international markets stated in the definite-term written approval expires, the State Bank shall consider and permit extension of these foreign exchange activities in a written extension of the definite-term written approval if the Vietnam Development Bank wishes to continue these activities and fully meets the conditions and submits a dossier required for a commercial bank under Points a, b and d, Clause 2, Article 10, and Points a, b and c, Clause 5, Article 11, of this Circular, and complies with relevant regulations of the State Bank.
4. The order and procedures for consideration and approval or approval of extension of other foreign exchange activities must comply with Article 12 of this Circular.”
30. To amend and supplement Article 30 as follows:
“Article 30. Foreign exchange activities of cooperative banks
1. Cooperative banks may carry out the following basic foreign exchange activities in the domestic market:
a/ Conducting foreign-currency purchase and sale spot transactions;
b/ Conducting term foreign-currency purchase and sale transactions, foreign-currency swap transactions and foreign-currency option transactions;
c/ Receiving deposits from and providing loans in foreign currencies for clients other than credit institutions;
d/ Providing remittance and payment services in foreign currencies in the territory of Vietnam; providing foreign-currency receipt and payment services;
dd/ Purchasing, selling, discounting and rediscounting negotiable instruments and other valuable papers in foreign currencies;
e/ Providing foreign-exchange asset management and preservation services; providing foreign-currency loans as entrusted;
g/ Providing foreign-exchange counseling services to clients;
h/ Opening foreign-currency payment accounts at commercial banks and other foreign bank branches licensed to carry out foreign exchange activities;
i/ Borrowing and providing foreign-currency loans from/for other licensed credit institutions and domestic financial institutions;
k/ Making and receiving foreign-currency deposits at/from other licensed credit institutions.
2. Cooperative banks may carry out the following basic foreign exchange activities in the international market:
a/ Making international payment and remittance;
b/ Conducting foreign-currency purchase and sale spot transactions in the international market;
c/ Conducting term foreign-currency purchase and sale transactions and foreign-currency swap transactions with foreign financial institutions to prevent and limit risks for foreign-currency purchase and sale contracts signed and foreign-currency swap transactions conducted with domestic clients.
3. The conditions, dossier, order and procedures for consideration and approval of basic foreign exchange activities in domestic and international markets are as the same as those for commercial banks as prescribed in Articles 8 and 9, Clauses 1, 2 and 3, Article 11, and Article 12, of this Circular.”
31. To amend and supplement Article 31 as follows:
“Article 31. Principles of conversion
1. The State Bank shall convert licenses for commercial banks, general finance companies, factoring finance companies, consumer credit finance companies, financial leasing companies and foreign bank branches that have permitted to carry out foreign exchange activities according to the following principles:
a/ Conversion into establishment and operation licenses or license modification and supplementation decisions stating the activities of foreign exchange trading and provision of foreign exchange services in the domestic market and/or international market within the scope prescribed by the State Bank for commercial banks, general finance companies, factoring finance companies, consumer credit finance companies, financial leasing companies and foreign bank branches that have been licensed to carry out one or several basic foreign exchange activity(ies) in the domestic market and/or international market;
b/ Conversion into definite-term written approvals for other foreign exchange activities;
c/ For credit institutions being under special control, the conversion of their licenses for foreign exchange activities must comply with this Circular. While being under special control, credit institutions shall operate under the State Bank’s decisions on special control, approved plans on organization and operation consolidation, and relevant regulations;
d/ The conversion shall be made through October 31, 2017. Past this date, commercial banks, general finance companies, factoring finance companies, consumer credit finance companies, financial leasing companies and licensed foreign bank branches must cease foreign exchange activities for which conversion has not been made or is not permitted to be made due to their failure to meet the conditions prescribed in Article 32 of this Circular.
2. The State Bank shall convert the license for foreign exchange activities for the Vietnam Development Bank in accordance with this Circular. After the conversion is completed, the Vietnam Development Bank may carry out all basic foreign exchange activities in domestic and international markets in accordance with this Circular. The written approval of foreign exchange activities for the Vietnam Development Bank after the conversion shall be made according to the form in Appendix 5 to this Circular.
3. During conversion, commercial banks, the Vietnam Development Bank, general finance companies, factoring finance companies, consumer credit finance companies, financial leasing companies and licensed foreign bank branches may continue foreign exchange activities under their licenses or certificates of eligibility for carrying out foreign exchange activities in the domestic market, certificates of registration of foreign exchange activities in the international market or written permissions of the State Bank.
4. For foreign exchange activities already permitted by the State Bank to be carried out on a pilot basis, credit institutions and foreign bank branches may continue these activities until the expiration of the pilot period stated in the written permission. After this pilot period expires, if wishing to continue these foreign exchange activities, credit institutions and foreign bank branches shall carry out procedures for requesting extension of these activities in accordance with this Circular.”
32. To amend and supplement Article 32 as follows:
“Article 32. Conditions for conversion
1. The State Bank shall consider and permit conversion of licenses for basic foreign exchange activities in the domestic market when commercial banks, general finance companies, factoring finance companies, consumer credit finance companies, financial leasing companies or licensed foreign bank branches meet the conditions prescribed in Article 8 of this Circular.
2. The State Bank shall consider and permit conversion of licenses for basic foreign exchange activities in the international market when commercial banks, general finance companies, factoring finance companies, consumer credit finance companies, financial leasing companies or licensed foreign bank branches meet the conditions prescribed in Article 9 of this Circular.
3. The State Bank shall consider and permit conversion of licenses for other foreign exchange activities in domestic and international markets when commercial banks and foreign bank branches meet the conditions prescribed in Clause 1, Article 10 of this Circular.
4. The State Bank shall consider and permit conversion of licenses for other foreign exchange activities in domestic and international markets when general finance companies meet the conditions prescribed in Clause 1, Article 26 of this Circular.”
33. To amend and supplement Article 33 as follows:
“Article 33. Dossier for conversion
1. A dossier for conversion of a license for basic foreign exchange activities in the domestic market must comprise:
a/ A written request for conversion, made according to the form in Appendix 2 to this Circular;
b/ Copies of the establishment and operation license, eligibility certificate, registration certificate and written permissions for foreign exchange activities (if any);
c/ Internal regulations on foreign exchange-related risk management, which must at least state the identification of different types of risks and a plan for management of these risks;
d/ A report describing the information technology system and applicable technical solutions and processes for dealing with foreign exchange activities in this system, which must have the details referred to in Appendix 3 to this Circular.
2. A dossier for conversion of a license for basic foreign exchange activities in the international market must comprise:
a/ The documents mentioned in Clause 1 of this Article;
b/ Internal regulations on criteria for selecting partners and transaction limits for partners, which must include regulations on review and re-assessment of partners on a periodic basis and upon occurrence of unexpected events that may affect their credit ratings.
3. A dossier for conversion of a license for other foreign exchange activities in domestic and international markets must comprise:
a/ A written request for conversion, made according to the form in Appendix 2 to this Circular;
b/ The documents mentioned at Points b, c, d and dd, Clause 4, Article 11 of this Circular;
c/ The documents mentioned at Point e, Clause 4, Article 11 of this Circular (for commercial banks and foreign bank branches);
d/ The documents mentioned at Point b, Clause 3, Article 27 of this Circular (for general finance companies);
dd/ A report on implementation of every of other foreign exchange activities after obtaining the State Bank’s permission.
4. A dossier for license conversion for the Vietnam Development Bank:
a/ A written request for conversion, made according to the form in Appendix 2 to this Circular;
b/ A copy of the eligibility certificate or registration certificate for providing foreign exchange services.”
34. To amend and supplement Clause 3 of, and add Clause 11 to, Article 35 as follows:
“3. To establish internal regulations on operational processes and risk management processes in foreign exchange activities, and take responsibility for the contents of such regulations; to carry out foreign exchange activities only after having established internal regulations on operational processes; to carry out foreign exchange activities strictly according to the established internal processes; to control transactions under current regulations on inspection and internal control and audit.”
“11. When making deposits at their overseas branches or subsidiaries as prescribed in Clause 3, Article 9 of this Circular, commercial banks shall take responsibility for their business performance. Not later than the 10thof the first month of a quarter, commercial banks shall send the previous quarter’s reports on the balance of deposits at their overseas branches and subsidiaries to the State Bank (the Banking Supervision Agency).”
35. To amend and supplement Article 36 as follows:
“Article 36. Responsibilities of units under the State Bank
1. The Banking Supervision Agency shall:
a/ Act as the focal point in receiving and appraising the completeness and validity of dossiers of request for approval of foreign exchange activities and dossiers of request for approval for conversion of licenses for foreign exchange activities;
b/ Collect written opinions from related units under the State Bank on requests of credit institutions and foreign bank branches for approval of foreign exchange activities or for conversion of licenses for foreign exchange activities;
c/ Summarize opinions of related units, appraise the dossiers for the last time and submit them to the State Bank Governor for approval of foreign exchange activities or for approval of conversion of licenses for foreign exchange activities of credit institutions and foreign bank branches;
d/ Act as the focal point in solving problems in the approval of foreign exchange activities or approval of conversion of licenses for foreign exchange activities in accordance with this Circular.
2. The Foreign Exchange Management Department shall, within 10 (ten) working days after receiving a written request from the Banking Supervision Agency, base itself on its assigned functions and tasks to:
a/ Give opinions on the requests of credit institutions or foreign bank branches for approval of foreign exchange activities relating to its functions and tasks;
b/ Give opinions on the requests of credit institutions or foreign bank branches licensed to carry out foreign exchange activities for approval of conversion of licenses for foreign exchange activities related to its functions and tasks;
c/ Act as the focal point in solving problems arising in the implementation of this Circular.
3. The Monetary Policy Department shall, within 10 (ten) working days after receiving a written request from the Banking Supervision Agency, base itself on its assigned functions and tasks to:
a/ Give opinions on the reports on the observance of the limit of total foreign-currency status by credit institutions and foreign bank branches licensed to carry out foreign exchange activities;
b/ Give opinions on the requests of credit institutions or foreign bank branches for approval of foreign exchange activities related to its functions and tasks;
c/ Give opinions on the requests of credit institutions or foreign bank branches licensed to carry out foreign exchange activities for approval of conversion of licenses for foreign exchange activities relating to its functions and tasks.
4. The Information Technology Department shall, within 10 (ten) working days after receiving a written request from the Banking Supervision Agency, base itself on its assigned functions and tasks to give opinions on the reports describing information technology systems and applicable technical solutions and processes for dealing with foreign exchange activities in these systems when credit institutions or foreign bank branches request approval of, or conversion of licenses for, foreign exchange activities.
5. Other related units under the State Bank shall base themselves on their assigned functions and tasks to give opinions on issues relating to the approval of, or approval of conversion of licenses for, foreign exchange activities for credit institutions and foreign bank branches at the request of the Banking Supervision Agency.”
Article 2.To replace and add some appendices
1. To replace Appendix 1 to Circular No. 21/2014/TT-NHNN with Appendix 1 to this Circular.
2. To replace Appendix 2 to Circular No. 21/2014/TT-NHNN with Appendix 2 to this Circular.
3. To add Appendices 3, 4 and 5 to this Circular.
Article 3.Effect
This Circular takes effect on November 18, 2016.
Article 4.Organization of implementation
The Chief of the Office, the Director of the Foreign Exchange Management Department and heads of related units under the State Bank, directors of the State Bank’s provincial-level branches, chairpersons of Boards of Directors, chairpersons of Members’ Councils, and directors general (directors) of commercial banks and foreign bank branches shall organize the implementation of this Circular.
For the State Bank Governor
Deputy Governor
NGUYEN DONG TIEN
* All appendices to this Circular are not translated.-
Vietnamese
Circular 28/2016/TT-NHNN DOC (Word)
Circular 28/2016/TT-NHNN PDF (Original)
Circular 28/2016/TT-NHNN ZIP (Word)
