Circular 28/2018/TT-NHNN amending and supplementing Circular 40/2011/TT-NHNN on granting licenses

CIRCULAR

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

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

Pursuant to the June 16, 2010 Law on Credit Institutions 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 amending and supplementing a number of articles of the Governor of the State Bank of Vietnam’s Circular No. 40/2011/TT-NHNN of December 15, 2011, providing the grant of licenses for and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign institutions engaged in banking activities in Vietnam.

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

1. To amend and supplement Article 3 as follows:

“Article 3. Competence to decide on grant of licenses

1. The State Bank Governor may decide to grant licenses in accordance with the Law on Credit Institutions, this Circular and relevant laws.”

2. To amend and supplement Clause 2, Article 6 as follows:

“2. The licensing fee rates must comply with the law on charges and fees.”

3. To amend and supplement the title of Section 2, Chapter II as follows:

“Section 2

CONDITIONS ON FOUNDING SHAREHOLDERS OF JOINT-STOCK COMMERCIAL BANKS, FOUNDING MEMBERS OF JOINT-VENTURE BANKS, OWNERS BEING FOREIGN CREDIT INSTITUTIONS OF WHOLLY FOREIGN-OWNED BANKS, AND PARENT BANKS OF FOREIGN BANK BRANCHES”

4. To amend and supplement the title of Article 9 as follows:

“Article 9. Conditions on founding shareholders of a joint-stock commercial bank”

5. To amend and supplement the title of Article 10 as follows:

“Article 10. Conditions on founding members of a joint-venture bank, and owners being foreign credit institutions of a wholly foreign-owned bank”

6. To amend and supplement the title of Article 11 as follows:

“Article 11. Conditions on the parent bank of a foreign bank branch”

7. To amend and supplement Point a, Clause 4, Article 14 as follows:

“a/ Resumes, made according to the form provided in Appendix 03 to this Circular; criminal record certificates:

For persons holding Vietnamese citizenship: Criminal record certificates must be issued by criminal record database-managing agencies, containing information on expurged criminal conviction status (including criminal convictions already expurged and not yet expurged) and information on the ban on holding certain positions or establishing or managing enterprises or cooperatives;

For persons without Vietnamese citizenship: Criminal record certificates or equivalent documents (containing information on criminal conviction status, including criminal convictions already expurged and not yet expurged and information on the ban on holding certain positions or establishing or managing enterprises or cooperatives) must be issued by competent Vietnamese or foreign agencies under regulations;

Criminal record certificates or equivalent documents must be issued by competent agencies within 6 (six) months before the time of submission of the license application dossier;”

8. To amend and supplement Point a (iii), Clause 3, Article 15 as follows:

“(iii) In addition to the above documents, a founding shareholder’s dossier must also have the following documents:

- His/her resume’, made according to the form provided in Appendix 03 to this Circular; and his/her criminal record certificate issued by a criminal record database-managing agency, containing information on criminal conviction status (including criminal convictions already expurged and not yet expurged) and information on the ban on holding certain positions or establishing or managing enterprises or cooperatives;

The criminal record certificate must be issued by a competent agency within 6 (six) months before the time of submission of the license application dossier;

- Financial statements of 3 years preceding the year of submission of the license application dossier of the enterprise(s) managed by the founding shareholder, or a copy of his/her university or postgraduate degree in economics or law;

- A list of assets each valued at VND 100 million or more and debts and relevant supporting documents of the individual, made according to the form provided in Appendix 07 to this Circular;”

9. To amend and supplement Point b (vi), Clause 3, Article 15 as follows:

“(vi) People’s identity cards or citizen’s identity cards or passports of its at-law representative and capital contribution representative at the bank;”

10.  To amend and supplement Point b (ix), Clause 3, Article 15 as follows:

(ix) In addition to the above documents, a founding shareholder’s dossier must also have the following documents:

- Resume’ of the capital contribution representative, made according to the form provided in Appendix 03 to this Circular, and his/her criminal record certificate prescribed at Point a, Clause 4, Article 14 of this Circular;

- Financial statements of 5 years preceding the year of submission of the license application dossier which have been independently audited by an audit firm on the Ministry of Finance-published list of audit institutions eligible for corporate audit and have no qualified opinion of the audit firm;”

11. To amend and supplement Clause 4, Article 17 as follows:

“4. The resume’ of the expected director general (director) of the foreign bank branch, made according to the form provided in Appendix 03 to this Circular and certified by the parent bank, and his/her criminal record certificate prescribed at Point a, Clause 4, Article 14 of this Circular; copies of diplomas and certificates proving his/her professional capacity and qualifications and documents proving his/her satisfaction of the conditions and criteria specified in the Law on Credit Institutions and relevant laws.”

12. To amend and supplement Clause 7, Article 18 as follows:

“7. The resume’ of the expected head of the representative office, made according to the form provided in Appendix 03 to this Circular and certified by the foreign credit institution or another foreign institution engaged in banking activities, and his/her criminal record certificate prescribed at Point a, Clause 4, Article 14 of this Circular; and copies of diplomas and certificates proving his/her professional capacity and qualifications.

13. To amend and supplement Point b, Clause 2, Article 23 as follows:

“b/ Being located in Vietnam’s territory and at a given address with the name of building (if any), house number, alley, street, road, village, hamlet, commune, ward, township, district, town, provincial city, province or centrally run city; telephone and fax numbers and email address (if any). In case a commercial bank registers to base its head office at more than one house number or building at different addresses, these house numbers or buildings must be adjacent;”

14. To amend and supplement point b, Claus 3, Article 23 as follow:

“b/ Being located in Vietnam’s territory and at a given address with the name of building (if any), house number, alley, street, road, village, hamlet, commune, ward, township, district, town, provincial city, province or centrally run city; telephone and fax numbers and email address (if any);”

15. To amend and supplement Claus 4, Article 23 as follows:

4. A representative office must be located in Vietnam’s territory and at a given address with the name of building (if any), house number, alley, street, road, village, hamlet, commune, ward, township, district, town, provincial city, province or centrally run city; telephone and fax numbers and email address (if any).”

16. To amend and supplement Point b, Clause 1, Article 35 as follow:

“b/ The Ministry of Public Security, on the list of persons expected to be elected or appointed as members of the Board of Directors or the Members’ Council, members of the Control Board and director general (director) of a commercial bank, or the director general (director) of a foreign bank branch, or the head of a representative office.”

17. To amend and supplement Clause 2, Article 35 as follows:

“2. Within 15 days after receiving the State Bank’s request for opinion, these agencies shall send their written opinions to the State Bank.”

18. To amend and supplement Clause 6, Article 36 as follows:

“6. The Information Technology Department:

a/ Within 30 days after receiving a written request from the Banking Supervision Agency, to appraise a license application dossier and send its written opinions to the Banking Supervision Agency;

b/ To assess issues related to information technology of commercial banks and foreign bank branches.”

19. To amend and supplement Point b, Section 4, Appendix 5a and Point b, Section 6, Appendix 5b as follows:

“b/ Not to use capital mobilized or borrowed from other institutions or individuals for capital contribution; to take responsibility before the law for the lawfulness of the sources of capital contributed for establishing the bank;”

Article 2.

1. To remove the phrase “and register with the State Bank under Clause 3, Article 27 of this Circular” at Point c, Clause 3, Article 18b of Circular No. 40/2011/TT-NHNN (as added under Clause 3, Article 1 of the Governor of State Bank of Vietnam’s Circular No. 17/2017/TT-NHNN of November 20, 2017, amending and supplementing a number of articles of Circular No. 40/2011/TT-NHNN).

2. To remove the phrase “and a written certification of registration of the charter of the commercial bank” at Point a (ii), Clause 2, Article 36 of Circular 40/2011/TT-NHNN.

3. To replace the phrase “people’s identity card” with the phrase “people’s identity card or citizen’s identity card or passport’ in Appendix 07 to Circular No. 40/2011/TT-NHNN.

4. To annul Articles 7 and 8, Clause 1 of Article 9, Clause 1 of Article 10, Clause 1 of Article 11, and Articles 12, 20, 21, 24, 27 and 28, of Circular No. 40/2011/TT-NHNN.

Article 3.Implementation responsibility

The Chief of the Office, the Chief of the Banking Supervision Agency, and 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 commercial banks and foreign bank branches, and heads of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities shall organize the implementation of this Circular.

Article 4.Implementation provision

This Circular takes effect on January 15, 2019.-

For the State Bank Governor
Deputy Governor
NGUYEN DONG TIEN