Circular No. 34/2011/TT-NHNN dated October 28, 2011 of the State Bank of Vietnam guiding the order and procedures for revoking licenses and liquidating assets of credit institutions and foreign bank branches; the order and procedures for revoking licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities

THE STATE BANK OF VIETNAM

Circular No. 34/2011/TT-NHNN of October 28, 2011, guiding the order and procedures for revoking licenses and liquidating assets of credit institutions and foreign bank branches; the order and procedures for revoking licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities

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 November 29, 2005 Law No. 60/2005/QH11 on Enterprises;

Pursuant to June 15, 2004 Law No. 21/2004/QH11 on Bankruptcy;

Pursuant to the Government’s Decree No. 05/2010/ND-CP of January 18, 2010, stipulating the application of the Law on Bankruptcy to credit institutions;

Pursuant to the Government’s Decree No. 96/2008/ND-CP of August 26, 2008, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

The State Bank of Vietnam guides the order and procedures for revoking licenses and liquidating assets of credit institutions and foreign bank branches; the order and procedures for revoking licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities, as follows:

Chapter 1

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular stipulates the order and procedures for revoking licenses and liquidating assets of credit institutions and foreign bank branches; the order and procedures for revoking licenses of representative offices of foreign credit institutions and other foreign institutions engaged in banking activities.

Article 2. Subjects of application

1. Credit institutions established and operating under the Law on Credit Institutions (excluding cooperative banks and people’s credit funds).

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. Institutions and individuals involved in the revocation of licenses of credit institutions, foreign bank branches and representative offices.

5. Institutions and individuals involved in the liquidation of assets of credit institutions and foreign bank branches.

Article 3. Interpretation of terms

In this Circular, terms and expressions below are construed as follows:

1. Bodies with deciding competence include:

a/ Bodies of credit institutions competent to decide on the termination of credit operation under the charters of these credit institutions and current laws;

b/ Bodies of parent banks competent to decide on the termination of operation of foreign bank branches under the charters of parent banks and in compliance with current laws of Vietnam;

c/ Bodies of foreign credit institutions and other foreign institutions engaged in banking activities which are competent to decide on the termination of operation of representative offices under the charters of these institutions and in compliance with current laws of Vietnam.

2. Owners include:

a/ Shareholders (for credit institutions established as joint-stock companies);

b/ Capital contributors (for credit institutions established as limited liability companies);

c/ Parent banks (for foreign bank branches);

d/ Foreign credit institutions or other foreign institutions engaged in banking activities (for representative offices).

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

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

5. Licenses include establishment and operation licenses of credit institutions, establishment licenses of foreign bank branches or representative offices which are granted by the State Bank. The State Bank’s written approval of modification or supplementation of a license constitutes an integral part of such license.

6. Parent bank means a foreign bank owning over 50% of the charter capital of a wholly foreign-owned bank operating in Vietnam or having a branch operating in Vietnam.

Article 4. Competence to revoke licenses or supervise the liquidation of assets of credit institutions or foreign bank branches

1. The Governor of the State Bank may revoke licenses of credit institutions, foreign bank branches and representative offices under the Law on Credit Institutions and this Circular.

2. The State Bank shall supervise the liquidation of assets of credit institutions and foreign bank branches under the Law on Credit Institutions and this Circular.

Article 5. Principles of making and sending dossiers

1. Dossiers must be made in Vietnamese. Copies in Vietnamese and Vietnamese translations of foreign-language documents must be authenticated by competent agencies under law.

2. For credit institutions, written requests for revocation of licenses shall be signed by their at-law representatives. In case at-law representatives authorize other persons to sign written requests, dossiers must contain documents of authorization made under law. For a credit institution having no at-law representative, the Board of Directors or the Members’ Council shall appoint a member to sign the written request.

3. For foreign bank branches and representative offices, written requests for license revocation shall be signed by their owners’ competent representatives.

4. Dossiers may be sent to the State Bank of Vietnam directly or by post.

Article 6. Principles of application of regulations on revocation of licenses and liquidation of assets of credit institutions and foreign bank branches

1. In case a credit institution is divided, split up, merged or consolidated, the order and procedures for license revocation comply with the law on division, splitting up, merger and consolidation of credit institutions.

2. In case a credit institution falls bankrupt, the State Bank shall revoke its license right after notifying in writing the termination of special control or the termination of application or non-application of measures to restore such credit institution’s solvency which cannot prevent it from bankrupcy. The liquidation of assets of credit institutions complies with the law on bankruptcy.

3. For other cases, the order and procedures for revoking licenses and liquidating assets of credit institutions and foreign bank branches comply with this Circular.

Article 7. Prohibited acts in revocation of licenses and liquidation of assets of credit institutions or foreign bank branches

After bodies with deciding competence of credit institutions or foreign bank branches approve the revocation of licenses (for cases in which credit institutions or foreign bank branches request the revocation of licenses) or the Governor of the State Bank requests in writing credit institutions or foreign bank branches to terminate their operation (for cases in which credit institutions or foreign bank branches have their licenses revoked), these credit institutions and foreign bank branches are prohibited from:

1. Hiding or dispersing assets;

2. Paying unsecured debts;

3. Waiving or reducing debt claims;

4. Converting unsecured debts into debts secured with their assets;

5. Donating, giving as gifts, pledging, mortgaging and leasing assets;

6. Signing new contracts other than contracts for terminating their operation;

7. Transferring money and assets abroad.

Chapter 2

SPECIFIC PROVISIONS

Section 1

REVOCATION OF LICENSES OF CREDIT INSTITUTIONS, FOREIGN BANK BRANCHES AND REPRESENTATIVE OFFICES

Article 8. Process of revocation of licenses of credit institutions and foreign bank branches

1. In case a credit institution or foreign bank branch requests the revocation of its license

a/ It shall:

- Work out a liquidation plan, which must be approved by the body with deciding competence.

- Make a dossier set under Article 9 of this Circular, then send it to the State Bank (the banking inspection and supervision agency).

b/ Within fifteen (15) working days after receiving a complete dossier specified in Article 9 of this Circular, the banking inspection and supervision agency shall examine it and consult in writing:

- The State Bank’s branch on:

(i) The actual organization and operation of the credit institution or foreign bank branch and its capability to fully pay debts;

(ii) Its viewpoint on the license revocation, proposals on handling measures following the license revocation;

(iii) The list of members of the liquidation council;

(iv) In case it agrees with the license revocation, it shall appoint an officer to join the liquidation supervision team under this Circular.

- The People’s Committee on:

(i) Impacts of the license revocation on the socio-economic stability of the locality; and

(ii) Its viewpoint on the license revocation.

- The Vietnam Deposit Insurance on:

(i) The actual organization and operation of the credit institution or foreign bank branch and its capability to fully pay debts;

(ii) The payment of deposit insurance premiums and the insured deposit balance according to the latest premium calculation table; the capability of capital sources for payment insurance sums and additional sources for payment when necessary;

(iii) Its viewpoint on the license revocation, proposals on modes of payment of insured deposits after the license revocation;

(iv) Impacts of the license revocation on benefits of depositors and the safety of the banking system.

- Related units of the State Bank on their viewpoints on the license revocation and proposals on handling measures following the license revocation (when finding it necessary).

c/ Within fifteen (15) working days after receiving the request of the banking inspection and supervision agency, the above units shall send their written opinions as requested to the banking inspection and supervision agency. Past this time limit, units giving no opinions shall be considered having agreed with the license revocation.

d/ Within ten (10) working days after receiving all opinions of the units specified at Point b, Clause 1 of this Article, the banking inspection and supervision agency shall summarize these opinions, state its viewpoint, and propose the Governor:

- To issue a decision on license revocation, request the credit institution or foreign bank branch to liquidate assets; and at the same time, to set up a liquidation council and a liquidation supervision team when finding the asset liquidation plan of the credit institution or foreign bank branch evidences the capability to fully pay debts and guarantee interests of creditors and debtors; or

- To request in writing the credit institution or foreign bank branch to explain related contents (if any).

e/ Within ten (10) working days after receiving an explanatory report of the credit institution or foreign bank branch, the banking inspection and supervision agency shall consider it, give its opinions and propose the Governor of the State Bank to handle the case under Point d, Clause 1 of this Article.

f/ Within five (5) working days after receiving the report from the banking inspection and supervision agency, the Governor shall consider and decide on proposals of the banking inspection and supervision agency specified at Points d and e, Clause 1 of this Article.

2. In case a credit institution or foreign bank branch is requested to have its license revoked:

a/ Based on inspection and supervision results or the request of a State Bank branch or a competent state agency, the banking inspection and supervision agency shall make a written report proposing the Governor of the State Bank to request in writing the credit institution or foreign bank branch to terminate its operation and elaborate an asset liquidation plan under Clause 2, Article 9 of this Circular.

b/ Within sixty (60) days after the Governor of the State Bank requests in writing the termination of its operation, the credit institution or foreign bank branch shall elaborate an asset liquidation plan and submit it together with a dossier of license revocation specified in Article 9 of this Circular to the State Bank for consideration and decision.

c/ After receiving a dossier of license revocation of the credit institution or foreign bank branch, the banking inspection and supervision agency shall carry out the license revocation procedures as stipulated in Clause 1 of this Article (except Point a).

Article 9. A dossier of license revocation of a credit institution or foreign bank branch

1. A written request for license revocation, stating the reason for license revocation, the capability to fully pay debts and handling measures to be taken after the license revocation, a list of expected members of the liquidation council (except the case in which the credit institution or foreign bank branch is requested to have its license revoked).

2. An asset liquidation plan containing at least the following details:

a/ Name, address and website of the credit institution or foreign bank branch.

b/ Name, address and website of the owner (for foreign bank branches).

c/ Names, addresses and telephone numbers of members of the Board of Directors, the Members’ Council and the Control Board and the director general (for credit institutions); or name, address and telephone number of the director general (for foreign bank branches).

d/ Names, addresses and telephone numbers of members of the Liquidation Council.

e/ Brief information on the financial status and operation (liabilities, receivables and payables, including both on-balance-sheet and off-balance-sheet ones) at the time the credit institution or foreign bank branch requests or is requested to have its license revoked, clearly identifying the capability to pay debts.

f/ Reason for the license revocation.

g/ List of major shareholders (for joint-stock credit institutions) or owners (for other credit institutions or foreign bank branches).

h/ Plan on settlement of interests and obligations, clearly indicating the liquidation schedule. For foreign bank branches, a plan on overseas remittance of capital, profits and assets must be stated.

i/ Plan on archive of dossiers and documents after the license revocation.

j/ Responsibilities of organizations and persons involved in the process of license revocation.

k/ Responsibilities of organizations and persons involved in the process of asset liquidation.

3. Decision of a competent agency on approving the license revocation and the asset liquidation plan of the credit institution or foreign bank branch.

4. In case a foreign bank branch has its license revoked under Point f, Clause 1, Article 28 of the Law on Credit Institutions, the dossier must contain a document of a competent authority of the country in which it is headquartered on its dissolution, bankruptcy, license revocation or operation termination.

5. In case a foreign bank branch requests the license revocation at the request of its parent bank, the dossier must contain a decision of the parent bank on its dissolution or operation termination.

6. Audited financial statement of the credit institution or foreign bank branch up to the time of requesting or being requested to have its license revoked.

Article 10. Process of revocation of licenses of representative offices

1. In case a representative office requests the license revocation

a/ It shall:

- Consult the agency competent to decide on license revocation.

- Make a dossier set under Article 11 of this Circular, then send it to the State Bank (the banking inspection and supervision agency).

b/ Within five (5) working days after receiving a complete dossier made under Article 11 of this Circular, the banking inspection and supervision agency shall examine it and consult in writing:

- The State Bank branch on the license revocation and its proposals on handling measures following the license revocation.

- Related units of the State Bank on the license revocation and their proposals on handling measures following the license revocation (when finding it necessary).

c/ Within seven (7) working days after receiving the request of the banking inspection and supervision agency, the above units shall send their written opinions as requested to the banking inspection and supervision agency. Past this time limit, units giving no opinions shall be considered having agreed with the license revocation.

d/ Within seven (7) working days after receiving all opinions of the units specified at Point b, Clause 1 of this Article, the banking inspection and supervision agency shall summarize these opinions, state its viewpoint, and propose the Governor:

- To issue a decision on license revocation, request the representative office to carry out procedures for its operation termination and closure, such as return of the operation registration and seal, liquidation of the office rent contract and payment of liabilities and other debts (if any) to related individuals and organizations under law; or

- To request in writing the representative office to explain related contents (if any).

e/ Within five (5) working days after receiving an explanatory report of the representative office, the banking inspection and supervision agency shall consider it, give its opinions and propose the Governor of the State Bank to handle the case under Point d, Clause 1 of this Article.

f/ Within five (5) working days after receiving the report from the banking inspection and supervision agency, the Governor shall consider and decide on proposals of the banking inspection and supervision agency specified at Points d and e, Clause 1 of this Article.

g/ Within five (5) working days after receiving the Governor of the State Bank’s decision on license revocation, the representative office shall carry out operation termination procedures.

2. In case a representative office is requested to have its license revoked:

a/ Based on inspection and supervision results or the request of a State Bank branch or a competent state agency, the banking inspection and supervision agency shall report in writing to and propose the Governor of the State Bank to issue a decision on revocation of the representative office’s license.

b/ Within five (5) working days after receiving the State Bank Governor’s  decision on license revocation, the representative office shall carry out license revocation  procedures.

Article 11. A dossier of license revocation of a representative office

1. A written request for license revocation, clearly stating the reason for license revocation, the archive of dossier and documents after the license revocation, and responsibilities of organizations and persons involved in the process of license revocation.

2. A document of the agency competent to decide on the revocation of the representative office’s license.

3. For a representative office having its license revoked under Point f, Clause 1, Article 28 of the Law on Credit Institutions, its dossier must contain the documents specified in Clause 4, Article 9 of this Circular.

4. For a representative office requesting the license revocation at the request of its owner, its dossier must contain its owner’s decision on its dissolution or operation termination.

Article 12. Notification of decisions on license revocation

1. Decisions on license revocation shall be sent to credit institutions, foreign bank branches, representative offices, State Bank branches, People’s Committees, the Vietnam Deposit Insurance, the National Financial Supervisory Commission, the Vietnam Banks Association and the Ministry of Finance.

2. Within seven (7) working days after a decision on revocation of the license of a credit institution, foreign bank branch or representative office takes effect, the State Bank shall publish such decision on its website and on a national daily for three (3) consecutive issues.

3. Within seven (7) working days after a decision on revocation of its license takes effect, a credit institution, foreign bank branch or representative office shall post up such decision at its head office and branches (for credit institutions) or its head office (for foreign bank branches and representative offices).

Section 2

LIQUIDATION OF ASSETS OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES UNDER THE STATE BANK’S SUPERVISION

Article 13. Process of liquidation of assets of credit institutions and foreign bank branches

1. Within thirty (30) working days after the decision on revocation of its license takes effect, a credit institution or foreign bank branch shall liquidate its assets under this Circular and other relevant regulations.

2. Within thirty (30) working days after the liquidation is completed, the credit institution or foreign bank branch shall carry out liquidation completion procedures specified in Article 15 of this Circular.

3. Within ten (10) working days after receiving the State Bank branch’s written request for liquidation completion, the banking inspection and supervision agency shall make a written report proposing the Governor of the State Bank to issue a decision on liquidation completion and request in writing the credit institution or foreign bank branch to explain unclear issues related to the liquidation process. The decision on liquidation completion is concurrently the decision on termination of operation of the liquidation supervision team.

4. Within ten (10) working days after receiving a decision on liquidation completion of the Governor of the State Bank, the credit institution shall carry out procedures for termination of its legal person status and publish an announcement thereon under current laws.

Article 14. Liquidation time limit

1. The liquidation time limit is twelve (12) months after a decision on license revocation takes effect. A credit institution or foreign bank branch which is unable to complete the liquidation within this time limit shall report such in writing to the Governor of the State Bank, requesting extension of this time limit (clearly stating the reason). The liquidation time limit may be extended three times with each extension not exceeding twelve (12) months.

2. Thirty (30) days before the expiration of the liquidation time limit, the credit institution or foreign bank branch shall send a written request for extension of this time limit to the State Bank (the banking inspection and supervision agency), clearly stating the reason. Within ten (10) working days after receiving such request, the Governor of the State Bank shall approve or disapprove it in writing.

Article 15. Liquidation completion

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

a/ It has fully paid debts to its creditors under Article 16 and Clause 1, Article 17 of this Circular.

b/ It is purchased by another credit institution which agrees to pay all debts to its creditors.

c/ It is unable to fully pay debts to its creditors.

d/ The specified liquidation time limit, including extensions (if any), has expired.

2. Upon liquidation completion under Points a and b, Clause 1 of this Article, the liquidation council shall report in writing to the People’s Committee and the State Bank branch, asking for permission for liquidation completion.

3. Upon liquidation completion under Points c and d, Clause 1 of this Article, the liquidation council shall report in writing to the People’s Committee and the State Bank branch on liquidation results and ask for permission for liquidation completion for carrying out bankruptcy procedures under regulations.

Article 16. Refund of assets

Credit institutions and foreign bank branches in danger of insolvency or subject to special control which have received special loans from the State Bank or other credit institutions or foreign bank branches or financial supports by the Vietnam Deposit Insurance shall refund the value of these loans (supports) before implementing Article 17 of this Circular.

Article 17. Priority order of asset division

1. The asset value of a credit institution or foreign bank branch shall be divided to make payments in the following priority order:

a/ Fees and expenses prescribed by law for its liquidation.

b/ Salaries, severance allowances and social insurance owed to employees under law and other benefits under signed collective labor agreements and labor contracts.

c/ Tax arrears.

d/ Amounts payable to depositors of the Vietnam Deposit Insurance and deposits of depositors.

e/ For debts secured with pledged or mortgaged assets: These debts will be paid first with these very pledged or mortgaged assets. If the value of pledged or mortgaged assets is not enough for payment of debts, the remaining debts shall be paid in the process of liquidation of assets of the credit institution or foreign bank branch. If the value of pledged or mortgaged assets is larger than the value of debts, the difference shall be accounted into the value of remaining assets of the credit institution or foreign bank branch. These creditors may reach agreement on debt payment proportions but such agreement must not affect the rights and obligations of the credit institution or foreign bank branch.

f/ For unsecured debts: These debts shall be paid to creditors on the list of creditors on the principle that if the asset value is enough for debt payment, each creditor will have all its/his/her debts fully paid; if the asset value is not enough for debt payment, each creditor will have its/his/her debts partially paid in corresponding proportions. These creditors may also reach agreement on debt payment proportions but such agreement must not affect the rights and obligations of the credit institution or foreign bank branch.

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 equally divided to the credit institution’s owners 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 belong to its owner(s).

Article 18. Liquidation councils

1. For a credit institution:

a/ A liquidation council shall be set up at the request of the Board of Directors or the Members’ Council of the credit institution and under a decision of the Governor of the State Bank, consisting of the chairman of the Board of Directors or the Members’ Council, at least one independent member of the Board of Directors (for joint-stock credit institutions), the head of the Control Board, the director general, the chief accountant, some other members selected from the members of the Board of Directors, Members’ Council or Control Board (if any), major shareholders (for joint-stock credit institutions) and five customers with the largest outstanding deposits at the credit institution at the time of requesting the license revocation or the time the State Bank requests in writing the operation termination.

b/ The chairman of the Board of Directors or the Members Council shall act as the liquidation council chairman. In case the post of chairman of the Board of Directors or the Members’ Council is vacant, this Board or Council shall meet to elect one from its members to act as the liquidation council chairman.

2. For a foreign bank branch:

a/ A liquidation council shall be set up at the request of the parent bank and under a decision of the Governor of the State Bank, consisting of the director general, the chief accountant and at least one (1) member designated by the owner and five (5) customers with the largest outstanding deposits at the foreign bank branch at the time of requesting the license revocation or the time the State Bank requests in writing the operation termination.

b/ The director general of the foreign bank branch shall act as the liquidation council chairman. In case the post of director general is in vacant, the parent bank shall appoint one from the members of the liquidation council to act as the liquidation council chairman.

Article 19. Responsibilities of a liquidation council

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

2. To organize the liquidation of assets of the credit institution or foreign bank branch and apply every measure to recover its debts and assets under the liquidation plan already approved by the Governor of the State Bank. All revenues of the credit institution or foreign bank branch must be used to pay debts to creditors under Articles 16 and 17 of this Circular.

3. On the fifth of every month, to report to the liquidation supervision team on the liquidation of assets of the credit institution or foreign bank branch under the liquidation plan already approved by the Governor of the State Bank.

4. Upon completion of the liquidation, to report in writing to the People’s Committee and the State Bank branch, requesting the liquidation completion under this Circular.

Section 3

SUPERVISION OF LIQUIDATION OF ASSETS OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES

Article 20. Organizational structure of a liquidation supervision team

1. The Governor of the State Bank shall set up a liquidation supervision team to supervise the liquidation of assets of a credit institution or foreign bank branch, appoint the head of this team and specify tasks and powers of the head and members of the team.

2. The liquidation supervision team is composed of at least five (5) members, including representatives of the State Bank of Vietnam, the State Bank branch and the Vietnam Deposit Insurance.

3. In case of necessity, the Governor of the State Bank may designate another credit institution to participate in supervising the liquidation of assets of the credit institution. A representative participating in the liquidation supervision team nominated by the Board of Directors or the Members’ Council of such credit institution must satisfy the criteria and conditions specified in this Circular.

Article 21. Operation mechanism of a liquidation supervision team

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

2. A liquidation supervision team may use the seal of the State Bank branch in documents and reports signed by its head.

3. The head and members of a liquidation supervision team are answerable to the director of the State Bank branch and the Governor of the State Bank for the performance of their tasks.

4. A meeting of a liquidation supervision team may be held when it is attended by at least two thirds of the total number of its 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 head of the team will make the final decision.

5. A liquidation supervision team shall complete the performance of its tasks when the Governor issues a decision on completion of the liquidation of assets of the credit institution or foreign bank branch.

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

Article 22. Criteria and conditions for a liquidation supervision team member

1. Being an officer of a related unit of the State Bank of Vietnam or the State Bank branch; or of the Vietnam Deposit Insurance or another credit institution, and designated by the Governor of the State Bank to join the liquidation supervision team.

2. Holding a university or postgraduate degree in finance and banking and having worked for at least 3 years in the banking or deposit insurance sector.

3. Being other than the owner 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 or a member of the liquidation council of the credit institution or foreign bank branch having its assets liquidated.

4. The head of the liquidation supervision team must be the director of the State Bank branch or a person authorized by the director of the State Bank branch.

Article 23. Tasks and powers of a liquidation supervision team

1. To direct and supervise the credit institution or foreign bank branch in inventorying all of 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 according to the priority order specified in this Circular.

3. To supervise the whole process of asset liquidation of the credit institution or foreign bank branch.

4. On the tenth of every month or extraordinarily, to send to the Governor of the State Bank, the chairperson of the People’s Committee and the Vietnam Deposit Insurance a report on the process of liquidation of assets of the credit institution or foreign bank branch. In case of necessity, to request in writing related agencies to support the credit institution or foreign bank branch in collecting its receivables and handling customers that intentionally cause loss of assets of the institution or credit bank branch.

5. To request the director of the State Bank branch to terminate operation of members of the liquidation council of the credit institution or foreign bank branch having its assets liquidated who intentionally violate law or fail to implement the 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 individual violators (if any).

6. To propose the director of the State Bank branch, the provincial-level People’s Committee and the Governor of the State Bank in settling arising problems beyond its competence.

7. To submit to personal direction by the director of the State Bank branch in the locality in which the credit institution or foreign bank branch is headquartered.

8. To report to the Governor of the State Bank on the implementation of the asset division plan by the credit institution or foreign bank branch.

9. In the process of supervision of the liquidation of assets of the credit institution, if detecting that the credit institution is incapable to fully pay its debts, to report such to the State Bank so that the latter can issue a decision on termination of the liquidation and request the credit institution to file an application for opening of bankruptcy procedures.

Chapter 3

RESPONSIBILITIES OF RELATED UNITS

Article 24. Responsibilities of credit institutions, foreign bank branches and representative offices

1. To provide adequate and truthful information on their actual organization and operation.

2. To observe the reporting regime and other regulations concerning the revocation of their licenses and the liquidation of their assets under this Circular.

Article 25. Responsibilities of State Bank branches in localities in which credit institutions are headquartered

1. Based on inspection and supervision results, to request the Governor of the State Bank to consider and decide on the revocation of licenses of credit institutions under Article 28 of the Law on Credit Institutions.

2. To respond to recommendations on problems related to the revocation of licenses and liquidation of assets of credit institutions and foreign bank branches which fall beyond the competence of liquidation supervision teams.

3. To give their written opinions on requests of the banking inspection and supervision agency under this Circular.

4. To propose the Governor of the State Bank to consider and settle problems falling beyond their competence and related to the revocation of licenses and liquidation of assets of credit institutions and foreign bank branches.

5. To appoint their officers to join liquidation supervision teams under this Circular.

Article 26. Responsibility of State Bank branches in provinces or centrally run cities in which branches of credit institutions are located

To coordinate with State Bank branches in provinces or centrally run cities in which credit institutions are headquartered and the banking inspection and supervision agency in revoking licenses and liquidating assets of credit institutions and foreign bank branches.

Article 27. Responsibilities of the banking inspection and supervision agency

1. Based on inspection and supervision results or requests of credit institutions, foreign bank branches or representative offices or requests of State Bank branches or requests of competent agencies, to examine dossiers and propose the Governor of the State Bank to consider and decide on revocation of licenses of credit institutions, foreign bank branches or representative offices which have committed serious violations affecting the banking system safety.

2. To advise the Governor of the State Bank on the setting up of liquidation supervision teams and addressing difficulties and problems arising in the process of license revocation and asset liquidation.

3. To propose the Governor of the State Bank to consult related ministries and sectors on the liquidation of assets of credit institutions or foreign bank branches in case of necessity.

4. To propose the Governor of the State Bank to issue decisions to set up liquidation councils.

5. To propose the Governor of the State Bank to issue decisions on liquidation termination.

6. To propose the Governor of the State Bank to issue decisions on liquidation termination and request credit institutions to file applications for opening of bankruptcy procedures under Clause 3, Article 156 of the Law on Credit Institutions.

Article 28. Responsibility of the Legal Department

To give its opinions on legal matters related to the process of revocation of licenses and liquidation of assets of credit institutions and foreign bank branches.

Article 29. Responsibility of the Office of the State Bank

To publicize license revocation decisions under this Circular.

Article 30. Responsibility of other departments

Other units of the State Bank shall give their written opinions at the request of the Banking Inspection and Supervision Agency under this Circular.

Chapter 4

IMPLEMENTATION PROVISIONS

Article 31. Effect

1. This Circular takes effect on December 11, 2011.

2. The State Bank Governor’s Decision No. 45/1999/QD-NHNN of February 5, 1999, promulgating the Regulation on revocation of establishment and operation licenses of Vietnamese joint-stock credit institutions and liquidation of joint-stock credit institutions under the supervision of the State Bank, ceases to be effective.

3. Clauses 40, 41, 71, 72 and 73 of the State Bank’s Circular No. 03/2007/TT-NHNN of June 5, 2007, guiding the implementation of a number of articles of the Government’s Decree No. 22/2006/ND-CP of February 28, 2006, on organization and operation of Vietnam-based foreign bank branches, joint-stock banks, wholly foreign-owned banks and representative offices of foreign credit institutions, cease to be effective.

Article 32. Organization of implementation

The director of the Office, the Chief Bank Inspector-Supervisor, and heads of the related units of the State Bank, directors of the State Bank branches in provinces and centrally run cities, chairpersons and members of Boards of Directors and Members’ Councils, heads and members of Control Boards, and directors general of credit institutions; directors general of foreign bank branches, chiefs of representative offices and related organizations and individuals shall implement this Circular.-

For the Governor of the State Bank
Deputy Governor
TRAN MINH TUAN