Circular No. 50/2018/TT-NHNN dated December 31, 2018 of the State Bank of Vietnam on prescribing dossiers, order and procedures for approving changes of commercial banks and foreign bank branches

CIRCULAR

Prescribing dossiers, order and procedures for approving changes of commercial banks and foreign bank branches^[1]

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

Pursuant to the June 16, 2010 Law on Credit Institutions, and the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the Government’s Decree No. 16/2017/ND-CP of February 17, 2017, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Chief of the Banking Supervision Agency;

The Governor of the State Bank of Vietnam promulgates the Circular prescribing dossiers, order and procedures for approving changes of commercial banks and foreign bank branches.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

1. This Circular prescribes:

a/ Dossiers, order and procedures for approving changes in, and modification of, establishment and operation licenses of commercial banks or establishment licenses of foreign bank branches (below referred to as licenses) regarding the following information:

(i) Changes in names and locations of head offices of commercial banks; or changes in names and locations of offices of foreign bank branches;

(ii) Increase in charter capital of commercial banks or allocated capital of foreign bank branches;

(iii) Extension of the operation duration;

b/ Dossiers, order and procedures for approving changes of commercial banks and foreign bank branches:

(i) Purchase and sale or transfer of capital contributions of owners of single-member limited liability commercial banks; purchase and sale or transfer of capital contributions of capital-contributing members of limited liability commercial banks with two or more members;

(ii) Purchase and sale or transfer of shares of major shareholders; purchase and sale or transfer of shares by/to shareholders to become major shareholders of commercial banks;

(iii) Suspension of business operation for at least 5 working days, except the case where business operation is suspended for aforce majeureevent.

2. The purchase and sale or transfer of shares or capital contributions leading to the legal transformation of commercial banks must comply with the State Bank’s regulations and relevant regulations.

3. The transfer of all capital contributions and the whole charter capital of a commercial bank that has been compulsorily purchased must comply with Clause 3, Article 3 of the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions.

4. Foreign investors may purchase shares of Vietnamese commercial banks in accordance with the regulations on purchase by foreign investors of shares of Vietnamese credit institutions.

Article 2.Subjects of application

1. Commercial banks.

2. Foreign bank branches.

3. Organizations and individuals related to dossiers, order and procedures for approving changes of commercial banks and foreign bank branches prescribed in this Circular.

Article 3.Principles of making and sending dossiers of request for approval of changes

1. A dossier shall be made in one set in Vietnamese. Foreign-language documents in a dossier shall be legalized by a consular office in accordance with Vietnam’s law (except the case of exemption from consular legalization in accordance with the regulations on consular legalization) and translated into Vietnamese. Vietnamese translations of foreign-language documents shall be notarized or signatures of translators shall be authenticated in accordance with law.

2. For documents in a dossier which are copies, a commercial bank or foreign bank branch shall submit duplicates made from master registers or notarized copies or copies enclosed with original documents for comparison. In case a dossier submitter submits copies enclosed with original documents for comparison, the person checking the documents shall give his/her signature in such copies for certification and take responsibility for the truthfulness of copies to original documents.

3. A written request for approval of changes shall be signed by the lawful representative of a commercial bank or foreign bank branch. In case of authorized signing, the dossier must have a document of authorization made in accordance with law.

4. A dossier shall be submitted directly or sent by post to the State Bank of Vietnam (via the Banking Supervision Agency) or an authorized provincial-level branch of the State Bank of Vietnam (below collectively referred to as the State Bank).

Article 4.Competence to approve changes

1. The Governor of the State Bank may issue decisions to approve changes specified in Clause 1, Article 1 of this Circular of large-sized commercial banks and foreign bank branches.

2. Directors of the State Bank’s provincial-level branches may approve changes specified in Clause 1, Article 1 of this Circular of foreign bank branches based in their localities, except the cases specified in Clause 1 of this Article.

Chapter II

DOSSIERS, ORDER AND PROCEDURES FOR APPROVING CHANGES OF COMMERCIAL BANKS AND FOREIGN BANK BRANCHES

Article 5.Change of names

1. A dossier of request for approval of the change of a name must comprise:

a/ A written request, which must have at least the following contents:

(i) Present name;

(ii) New name, which must comply with the relevant regulations on naming;

(iii) Reason(s) for the change;

b/ A resolution or decision of the Shareholders’ General Meeting for a joint-stock commercial bank; a resolution or decision of the Members’ Council for a limited liability commercial bank with two or more members; or a decision of the owner for a single-member limited liability commercial bank, approving the change of the bank’s name; and a document issued by the parent bank approving the change of the name of its Vietnam-based branch.

2. Order and procedures for approval:

a/ A commercial bank or foreign bank branch shall make and send a dossier to the State Bank. In case such dossier in incomplete and invalid, within 7 working days after receiving it, the State Bank shall request in writing the commercial bank or foreign bank branch to supplement and complete it;

b/ Within 40 working days after receiving a complete and valid dossier, the State Bank shall consider and issue a decision to modify the license. In case of refusal to approve the change, the State Bank shall reply in writing, clearly stating the reason.

Article 6.Relocation of the head office of a commercial bank or office of a foreign bank branch within the same province or city

1. A dossier of request for approval of the relocation must comprise:

a/ A written request, which must have at least the following contents:

(i) Present location;

(ii) New location;

(iii) Reason(s) for the relocation;

(iv) Plan on installation of equipment and devices in the new office to meet law-prescribed requirements on offices;

(v) Plan on office relocation to ensure uninterrupted operation;

b/ A resolution or decision of the Shareholders’ General Meeting for a joint-stock commercial bank; a resolution or decision of the Members’ Council for a limited liability commercial bank with two or more members; or a decision of the owner for a single-member limited liability commercial bank, approving the relocation of the bank’s head office; and a document issued by the parent bank approving the relocation of the office of its Vietnam-based branch.

c/ Documents showing that the commercial bank or foreign bank branch has or will have the right to lawfully use its head office or office in the new location.

2. Order and procedures for approval:

a/ A commercial bank or foreign bank branch shall make and send a dossier to the State Bank. In case such dossier in incomplete and invalid, within 7 working days after receiving it, the State Bank shall request in writing the commercial bank or foreign bank branch to supplement and complete it;

b/ Within 25 working days after receiving a complete and valid dossier, the State Bank shall issue a written approval of the request for relocation of the head office of the commercial bank or office of the foreign bank branch. In case of refusal to approve the request, the State Bank shall reply in writing, clearly stating the reason.

The State Bank’s written approval is valid for 12 months from the date of its signing.

3. At least 30 working days before the expected date of operation commencement in the approved new location, a commercial bank or foreign bank branch shall send to the State Bank a written request for modification of information about its head office or office location in its license, reporting the date of operation commencement in the approved new location and satisfaction of law-prescribed conditions on head offices or offices.

4. Within 15 working days after receiving the request mentioned in Clause 3 of this Article, the State Bank shall issue a decision to modify information about the head office location of the commercial bank or office location of the foreign bank branch in its license.

Article 7.Relocation of the head office of a commercial bank or office of a foreign bank branch from one province or city to another

1. A dossier of request for approval of the relocation must comprise:

a/ For a commercial bank: the documents specified in Clause 1, Article 6 of this Circular.

b/ For a foreign bank branch:

(i) The documents specified in Clause 1, Article 6 of this Circular;

(ii) An operation plan for the first 3 years in the new location with at least the following contents: Analysis and assessment of the demand for banking services in the new location; a tentative business strategy, clearly stating changes (if any) in business strategy; expected business results in the first 3 years of operation in the new location and other notes.

2. Order and procedures for approval:

a/ A commercial bank or foreign bank branch shall make and send a dossier to the State Bank. In case such dossier in incomplete and invalid, within 7 working days after receiving it, the State Bank shall request in writing the commercial bank or foreign bank branch to supplement and complete it;

b/ Within 25 working days after receiving a complete and valid dossier, the State Bank shall issue a written approval of the request for relocation of the head office of the commercial bank or office of the foreign bank branch. In case of refusal to approve the request, the State Bank shall reply in writing, clearly stating the reason.

3. The State Bank’s written approval is valid for 12 months from the date of its signing.

4. At least 30 working days before the expected date of operation commencement in the approved new location, a commercial bank or foreign bank branch shall send to the State Bank a written request for modification of information about its head office or office location in its license, reporting the date of operation commencement in the approved new location and satisfaction of law-prescribed conditions on head offices or offices.

5. Within 15 working days after receiving the request mentioned in Clause 4 of this Article, the State Bank shall issue a decision to modify information about the head office location of the commercial bank or office location of the foreign bank branch in its license.

Article 8.Change of address of the head office of a commercial bank or address of the office of a foreign bank branch in case such head office or office is not relocated

1. In case the address of the head office of a commercial bank or address of the office of a foreign bank branch is changed but such head office or office is not relocated, the commercial bank or foreign bank branch shall send to the State Bank a written request for modification of its head office or office address, enclosed with documents proving the address change (except cases where the address change is due to change in administrative boundaries).

2. Within 30 working days after receiving a written request of a commercial bank or foreign bank branch, the State Bank shall issue a decision on modification of address of the head office of the commercial bank or address of the office of the foreign bank branch in its license.

Article 9.Extension of operation duration

1. A dossier of request for approval of the extension of operation duration must comprise:

a/ A written request, which must have at least the following contents:

(i) Present operation duration;

(ii) Operation duration expected to be extended;

(iii) Reason(s) for the extension;

b/ A resolution or decision of the Shareholders’ General Meeting for a joint-stock commercial bank; a resolution or decision of the Members’ Council for a limited liability commercial bank with two or more members; or a decision of the owner for a single-member limited liability commercial bank, approving the extension of the bank’s operation duration; and a document issued by the parent bank approving the extension of the operation duration of its Vietnam-based branch;

c/ A general report on organization and operation of the commercial bank or foreign bank branch, clearly stating:

(i) Assessment review of operation in the 3 years preceding the year of dossier submission, including major operation norms related to capital structure, capital use and business results; organization and operation of the governance and executive apparatus, internal audit and internal control system;

(ii) Tentative business plan for the subsequent 3 years.

2. Order and procedures for approval:

a/ At least 6 months before its license expires, a commercial bank or foreign bank branch shall make and send a dossier to the State Bank. In case such dossier is incomplete and invalid, within 7 working days after receiving it, the State Bank shall request in writing the commercial bank or foreign bank branch to supplement and complete
the dossier;

b/ Within 40 working days after receiving a complete and valid dossier, the State Bank shall issue a decision to modify the operation duration of the commercial bank or foreign bank branch in its license. In case of refusal to approve the extension of the operation duration, the State Bank shall reply in writing, clearly stating the reason.

Article 10.Suspension of business operation for at least 5 working days, except cases of operation suspension due toforce majeureevents

1. A dossier of request for approval of the suspension of business operation must comprise:

a/ A written request, which must have at least the following contents:

(i) Projected number of days and date of the suspension;

(ii) Reason(s) for, and necessity of, the suspension;

(iii) Projected measures to minimize impacts of the suspension on rights and interests of customers;

b/ A resolution or decision of the Board of Directors for a joint-stock commercial bank; or a resolution or decision of the Members’ Council for a limited liability commercial bank, on suspension of business operation; or a decision of the general director of the foreign bank branch on suspension of business operation;

c/ Documents proving the necessity of the suspension.

2. Order and procedures for approval:

a/ At least 45 working days before the expected date of suspension of its business operation, a commercial bank or foreign bank branch shall make and send a dossier to the State Bank. In case such dossier is incomplete and invalid, within 7 working days after receiving it, the State Bank shall request in writing the commercial bank or foreign bank branch to supplement and complete the dossier;

b/ Within 30 working days after receiving a complete and valid dossier, the State Bank shall approve in writing the request of the commercial bank or foreign bank branch in its license. In case of refusal to approve the request, the State Bank shall reply in writing, clearly stating the reason.

3. At least 7 working days before the date of suspension of its business operation approved by the State Bank, a commercial bank or foreign bank branch shall publish information on the suspension in its media, the State Bank’s media and a printed daily newspaper for 3 consecutive issues or an online newspaper of Vietnam, stating the time of and reason(s) for the suspension.

Article 11.Increase of charter capital of a joint-stock commercial bank from proceeds from conversion of convertible bonds, reserve fund for charter capital addition, share capital gains, retained profits and other funds in accordance with law

1. A dossier of request for approval of the increase of charter capital must comprise:

a/ A written request, which must have at least the following contents:

(i) Necessity of increase of charter capital;

(ii) Present charter capital, clearly stating the volume of common shares, volume of each kind of preferred shares and volume of treasury stocks; charter capital expected to increase;

(iii) Funding sources used for increase of charter capital;

(iv) Projected time of completion of increase of charter capital;

b/ A resolution or decision of the Shareholders’ General Meeting approving the plan on increase of charter capital of a joint-stock commercial bank from convertible bonds, reserve fund for charter capital addition, share capital gains, retained profits and other funds in accordance with law;

c/ A plan on increase of charter capital mentioned at Point b of this Clause must have at least the following contents:

(i) A plan on conversion of bonds into stocks, including information on convertible bonds issued: volume, par value and maturity of bonds; information on expected conversion of bonds into stocks: volume and par value of bonds, and conversion ratio (in case of increase of charter capital from proceeds from the conversion of convertible bonds into common stocks);

(ii) Information on the reserve fund for charter capital addition, share capital gains, retained profits and other funds obtained according to independent audit results; information on amounts from the reserve fund for charter capital addition, share capital gains, retained profits and other funds used for increasing charter capital (in case of increase of charter capital from the reserve fund for charter capital addition, share capital gains, retained profits and other funds);

(iii) A list of shareholders and holding rates of shareholders that hold at least 5% of the voting share capital each and of the charter capital at present and after the increase; and a list of shareholders and their affiliated persons that hold shares equal to at least 20% of the charter capital each at present and after the increase. These lists must have identification information (for an individual: full name, and serial number, date and place of issuance of citizen identity card or passport; for an organization: name, identification number and head office address of the organization, and full name, and serial number, date and place of issuance of citizen identity card or passport of the at-law representative) on shareholders and their affiliated persons in accordance with law;

(iv) Information on total holding rates of foreign investors at present and after the capital increase.

2. Order and procedures for approval:

a/ A commercial bank shall make and send a dossier to the State Bank. In case such dossier is incomplete and invalid, within 7 working days after receiving it, the State Bank shall request in writing the commercial bank to supplement and complete the dossier;

b/ Within 25 working days after receiving a complete and valid dossier, the State Bank shall issue a written approval of the request for increase of charter capital of the commercial bank. In case of refusal to approve the request, it shall reply in writing, clearly stating the reason.

3. A written approval of increase of charter capital is valid for 12 months from the date of its signing.

4. The modification of a license is prescribed as follows:

a/ Within 10 working days after completing the issuance of stocks in accordance with law, a commercial bank shall send to the State Bank a written request for modification of charter capital in its license, enclosed with:

(i) A document issued by the State Securities Commission on the issuance of stocks;

(ii) Information specified at Point c(iii) and c(iv), Clause 1 of this Article after the issuance of stocks is completed.

b/ Within 15 working days after receiving the request, the State Bank shall issue a decision to modify the charter capital in the license.

Article 12.Increase of charter capital of joint-stock commercial banks in cases other than those specified in Article 11 of this Circular

1. A dossier of request for approval of the increase of charter capital of a joint-stock commercial bank must comprise:

a/ A written request, which must have at least the following contents:

(i) Present charter capital and expectedly increased charter capital;

(ii) Commitments to notifying share purchasers of the rights and obligations of shareholders as defined in the Law on Credit Institutions, specifically as follows:

- To take responsibility before law for the lawfulness of the funding sources used to purchase shares; to refrain from using credit extended by credit institutions or foreign bank branches to purchase shares; to refrain from purchasing shares in the name of another individual or legal person in any form, except case of entrustment prescribed by law;

- To comply with the Law on Credit Institutions regarding the holding cap for shareholders and regarding shareholders and their affiliated persons;

- To comply with the regulations on major shareholders and their affiliated persons;

(iii) Names of shareholders and their holding rates before and after the increase of charter capital, in case such increase leads to the formation of a major shareholder or conversion of a major shareholder into an ordinary shareholder;

b/ Resolution or decision of the General Shareholders’ Meeting approving the plan on increase of charter capital of the commercial bank;

c/ The plan mentioned at Point b of this Clause, which must have at least the following contents:

(i) Necessity of the increase of charter capital;

(ii) Total charter capital amount expected to be increased; total par value and type of shares to be issued, and addressees of the issuance; expected issuances and plan for each issuance (if any);

(iii) Expected time of issuance and expected time of completion of additional issuance of stocks;

d/ A list of shareholders and rates of holding by shareholders that own at least 5% of voting shares and of the present charter capital and charter capital expected to be increased; and a list of shareholders and their affiliated persons that own shares representing at least 20% of the present charter capital and charter capital expected to be increased. These lists must have identification information about shareholders and their affiliated persons as prescribed by law.

2. The order and procedures for approval, and validity of a written approval of the modification of a license regarding increase of charter capital must comply with Clauses 2, 3 and 4, Article 11 of this Circular.

Article 13.Increase of charter capital of limited liability commercial banks

1. A dossier of request for approval of the increase of charter capital of a limited liability commercial bank must comprise:

a/ A written request, which must have at least the following contents:

(i) Present charter capital and expectedly increased charter capital;

(ii) Necessity of the increase of charter capital;

(iii) Information about the reserve fund for charter capital addition, retained profits, and other funds determined based on independent audit results; or information about the amount taken from the reserve fund for charter capital addition, retained profits, and other funds used to increase charter capital (in case of use of the reserve fund for charter capital addition, retained profits, and other funds to increase charter capital);

(iv) A commitment to using lawful funding sources for additional allocation or contribution of capital, made by the owner or capital contributor (in case the owner or capital contributor additionally allocates or contributes capital for increase of charter capital);

b/ A resolution or decision of the Members’ Council, for a limited liability commercial bank with two or more members, or decision of the owner, for a single-member limited liability commercial bank, approving the increase of charter capital, which must have at least the following contents:

(i) Total charter capital amount expected to be increased;

(ii) Expected increases of charter capital;

(iii) Funding sources used to increase charter capital;

(iv) Expected time of completion of the increase of charter capital;

c/ In case a limited liability commercial bank with two or more members increases its charter capital through using contributed capital of new capital contributors, it shall, in addition to the documents specified at Points a and b of this Clause, submit the following:

(i) For a new capital contributor being a foreign credit institution:

- The independently audited financial statements of 5 years preceding the year of dossier submission and the latest financial statement by the time of dossier submission;

- A copy of the establishment and operation license or an equivalent document;

- A document issued by the competent authority of the country of origin, providing information about the foreign credit institution, which must have at least the following contents: activities licensed to be carried out in the country of origin by the time of dossier submission; observance of the banking law and other laws for 5 years preceding the year of dossier submission and by the time of dossier submission; capital adequacy ratio and other prudential ratios under regulations of the country of origin in the year preceding the year of dossier submission and by the time of dossier submission; and observance by the foreign credit institution of the regulations on risk management and setting aside of provisions in the year preceding the year of dossier submission and by the time of dossier submission;

- A document issued by an international credit rating agency providing credit rating within 6 months before the time of dossier submission;

- The organization and operation charter;

- A report on the establishment, operation and development orientations of the foreign credit institution up to the time of dossier submission;

- A document appointing a person expected to represent contributed capital at the bank;

- A written commitment on readiness to provide supports in terms of finance, technology, management, administration and operation of the bank, ensuring that the real value of the bank’s charter capital is not lower than legal capital and ensuring full compliance with the State Bank’s regulations on operation safety;

- A written commitment issued by the competent authority of the country of origin to ensuring its capacity to supervise the entire operation of the foreign credit institution (including operation of the limited liability bank expected to contribute capital) in compliance with international practice;

- A written commitment that the foreign credit institution is not a founding shareholder, owner, founding member or strategic shareholder of another Vietnamese credit institution;

(ii) For a new capital contributor being a Vietnamese commercial bank:

- A document appointing a person expected to represent contributed capital at the bank, providing his/her personal identification information;

- The independently audited financial statement of the year preceding the year of dossier submission and the latest financial statement by the time of dossier submission;

- A report on observance of the State Bank’s regulations on risk management and setting aside of provisions at the time of dossier submission; and prudential ratios in banking operations under the State Bank’s regulations in the year preceding the year of dossier submission and by the time of dossier submission;

- A report on compliance with the holding cap prescribed for credit institutions in Clause 6, Article 103 of the Law on Credit Institutions;

- A report on capital adequacy ratio and expected rates of capital contribution and share purchase after capital contribution;

- A written commitment that the bank is not a founding shareholder, owner, founding member or strategic shareholder of another credit institution.

2. The order and procedures for approval for a limited liability commercial bank to increase its charter capital through using retained profits and other funds under law must comply with Clause 2, Article 5 of this Circular.

3. The order and procedures for approval, and validity of a written approval for a limited liability commercial bank to increase its charter capital through using capital additionally allocated by the owner or existing capital contributor or by a new capital contributor must comply with Clauses 2 and 3, Article 11 of this Circular.

4. The modification of a license after obtaining the State Bank’s approval under Clause 3 of this Article is prescribed as follows:

a/ Within 15 working days after completing the allocation or contribution of capital, a commercial bank shall send a written request for adjustment of charter capital in the license to the State Bank, which must state the rates of capital contribution by capital contributors after the capital contribution, enclosed with a document proving that the owner or capital contributor has contributed capital for increase of charter capital;

b/ Within 15 working days after receiving the request, the State Bank shall issue a decision adjusting the charter capital amount stated in the license.

Article 14.Increase of allocated capital of foreign bank branches

1. A dossier of request for approval of the increase of allocated capital of a foreign bank branch must comprise:

a/ A written request, which must have at least the following contents:

(i) Present allocated capital and expectedly increased allocated capital;

(ii) Necessity of the increase of the allocated capital;

(iii) Information about the reserve fund for allocated capital addition, retained profits, and other funds determined based on independent audit results; or information about the amount taken from the reserve fund for allocated capital addition, retained profits, and other funds used to increase allocated capital (in case of use of the reserve fund for allocated capital addition, retained profits, and other funds to increase the allocated capital);

(iv) Capital amount expected to be additionally allocated from the parent bank (in case the parent bank provides capital for increase of the allocated capital);

b/ The parent bank’s written approval of the increase of the allocated capital of the foreign bank branch in Vietnam, which must have at least the following contents:

(i) Total allocated capital expected to be increased;

(ii) Expected increases (if any) of the allocated capital;

(iii) Funding sources used to increase the allocated capital;

(iv) Expected time of completion of the increase.

2. The order and procedures for approval for a foreign bank branch to increase its allocated capital through using retained profits and other funds in accordance with law must comply with Clause 2, Article 5 of this Circular.

3. The order and procedures for approval for a foreign bank branch to increase its allocated capital through using capital additionally allocated by the parent bank must comply with Clause 2, Article 11 of this Circular.

The State Bank’s written approval is valid for 6 months from the date of its signing.

4. The modification of a license after obtaining the State Bank’s approval under Clause 3 of this Article shall be carried out as follows:

a/ Within 15 working days after completing the increase of its allocated capital, a foreign bank branch shall send to the State Bank a written request for adjustment of the allocated capital amount stated in the license;

b/ Within 15 working days after receiving the request, the State Bank shall issue a decision adjusting the allocated capital amount stated in the license.

Article 15.Purchase and sale or transfer of the whole contributed capital of owners at single-member limited liability commercial banks

1. A dossier of request for approval of the purchase and sale or transfer of the whole contributed capital of the owner at a single-member limited liability commercial bank must comprise:

a/ The commercial bank’s written request, which must have at least the following information:

(i) Names and head office addresses of the owner and of the purchaser or transferee;

(ii) Expected time of purchase and sale or transfer;

b/ A written agreement on purchase and sale or transfer between the owner and the purchaser or transferee;

c/ Documents proving the purchaser’s or transferee’s full satisfaction of the conditions on owners of single-member limited liability commercial banks as prescribed at Point c(i), Clause 1, Article 13 of this Circular.

2. Order and procedures for approval:

a/ The commercial bank shall make and send a dossier to the State Bank. If such dossier is incomplete and invalid, within 7 working days after receiving it, the State Bank shall request in writing the commercial bank to supplement and complete the dossier;

b/ Within 75 working days after receiving a complete and valid dossier, the State Bank shall issue a written approval of the request of the commercial bank; in case of refusal to approve the request, the State Bank shall reply in writing, clearly stating the reason.

3. The State Bank’s written approval is valid for 3 months from the date of its signing.

4. Within 7 working days after completing the purchase and sale or transfer, a commercial bank shall send to the State Bank a report on results of purchase and sale or transfer, enclosed with documents proving the completion of such purchase and sale or transfer.

Article 16.Purchase and sale or transfer of contributed capital at limited liability commercial banks with two or more members

1. A dossier of request for approval of the purchase and sale or transfer of contributed capital to a transferee being an existing capital contributor of a commercial bank must comprise:

a/ The commercial bank’s written request, which must state:

(i) Names and head office addresses of the seller or transferor and the purchaser or transferee;

(ii) Rate of purchase and sale or transfer of contributed capital; holding rates and value of contributed capital by capital contributors before and after the purchase and sale or transfer;

(iii) Expected time of purchase and sale or transfer;

(iv) Reason(s) for the purchase and sale or transfer;

b/ The resolution or decision of the Members’ Council of the commercial bank on the purchase and sale or transfer of contributed capital;

c/ A written agreement on the purchase and sale or transfer of contributed capital between the seller or transferor and the purchaser or transferee.

2. A dossier of request for approval of the purchase and sale or transfer of contributed capital of a capital contributor to a purchaser or transferee being a new capital contributor must comprise:

a/ The documents specified in Clause 1 of this Article;

b/ Documents proving that the purchaser or transferee fully satisfies the law-prescribed conditions to purchase or receive the transfer of contributed capital of a limited liability commercial bank with two or more members, specifically as follows:

(i) The documents specified at Point c(i), Clause 1, Article 13 of this Circular, for a purchaser or transferee being a foreign credit institution;

(ii) The documents specified at Point c(ii), Clause 1, Article 13 of this Circular, for a purchaser or transferee being a Vietnamese commercial bank.

3. The order and procedures for approval, validity of a written approval, and reporting on completion of the purchase and sale or transfer must comply with Clauses 2, 3 and 4, Article 15 of this Circular.

Article 17.Purchase and sale or transfer of shares of major shareholders; purchase and sale or transfer of shares leading to formation of major shareholders

1. A dossier of request for approval of the purchase and sale or transfer of shares of a major shareholder must comprise:

The commercial bank’s written request, which must have at least the following contents:

a/ Information about the volume, type and total par value of shares of the major shareholder to be purchased and sold or transferred;

b/ Information about the major shareholder that purchases and sells or transfers shares, including identification information and title of the major shareholder (in case the major shareholder is an individual), or title of a representative of the major shareholder (in case the major shareholder is an organization) at the commercial bank, volume and holding rate of voting shares to voting share capital, volume and holding rate of common shares and preferential shares (if any) to charter capital at present or after the purchase and sale or transfer;

c/ Information about commitments and agreements between the commercial bank and the major shareholder relating to the holding rate and restriction (if any) on transfer of shares of major shareholders;

d/ Expected rate of holding by the major shareholder and its/his/her affiliated persons to charter capital after the purchase and sale or transfer of shares;

dd/ Expected time of purchase and sale or transfer.

2. A dossier of request for approval of the purchase or receipt of transferred shares leading to the formation of a major shareholder must comprise:

The commercial bank’s written request, which must have at least the following contents:

a/ Information about the volume, type and total par value of shares purchased or received through transfer;

b/ Information about the purchaser or transferee of shares, including identification information, volume and holding rate of voting shares to voting share capital, volume and holding rate of common shares and preferential shares (if any) to charter capital at present and after the purchase or receipt of transferred shares;

c/ The rate of holding of shares to charter capital by the purchaser or transferee and its/his/her affiliated persons after the purchase or receipt of transfer;

d/ Expected time of purchase or receipt of transfer;

dd/ Commitments to notifying the purchaser or transferee of the rights and obligations of shareholders as prescribed by law, specifically as follows:

(i) To take responsibility before law for the lawfulness of funding sources used to purchase shares; to refrain from using credit extended by credit institutions or foreign bank branches to purchase shares; to refrain from purchasing shares in the name of another individual or legal person in any form, except case of entrustment prescribed by law;

(ii) To comply with the Law on Credit Institutions regarding holding cap for shareholders, and regarding shareholders and affiliated persons;

(iii) To comply with the regulations on major shareholders and affiliated persons.

3. The order and procedures for the purchase of shares making the purchasers become major shareholders in case a joint-stock commercial bank increases its charter capital must comply with Article 12 of this Circular.

4. The order and procedures for approval, and validity of a written approval of the purchase and sale of shares, or transfer and receipt of transferred shares must comply with Clauses 2 and 3, Article 15 of this Circular.

5. Within 7 working days from the date of completing the purchase and sale, transfer or receipt of transfer of shares, a commercial bank shall send to the State Bank a written report on results of purchase and sale, transfer or receipt of transfer of shares and the contents specified at Points b and d, Clause 1 of this Article.

Chapter III

IMPLEMENTATION PROVISIONS

Article 18.Responsibilities of the Banking Supervision Agency

1. To act as the focal point for receiving, appraising, and collecting opinions (when necessary) of related units of the State Bank, then summarize and submit them to the State Bank Governor for consideration and approval, with regard to the changes specified in Articles 5 thru 17 according to its competence defined in Clause 1, Article 4 of this Circular.

2. To propose the State Bank Governor to consult in writing provincial-level People’s Committees on approval of the changes specified in Article 7 of this Circular.

3. To act as the focal point for receiving reports from commercial banks and foreign bank branches in accordance with this Circular with regard to the changes falling within its competence defined in Clause 1, Article 4 of this Circular.

4. To assume the prime responsibility for proposing the State Bank Governor to decide which foreign bank branches are of large size in accordance with Clause 1, Article 4 of this Circular.

Article 19.Responsibilities of provincial-level branches of the State Bank

1. To receive dossiers and approve the changes specified in Articles 5, 6, 8, 9, 10 and 14 according to their decentralized competence to manage foreign bank branches as defined in Clause 2, Article 4 of this Circular.

2. To act as the focal point for receiving reports from foreign bank branches in accordance with this Circular with regard to the changes falling within their competence defined in Clause 2, Article 4 of this Circular.

Article 20.Responsibilities of commercial banks and foreign bank branches

1. To take responsibility before law for the accuracy, completeness and truthfulness of information provided in their dossiers.

2. To supplement and complete their dossiers at the request of the State Bank within 30 working days after receiving such request. Past this time limit, if a commercial bank or foreign bank branch fails to supplement and complete its dossier, the State Bank shall refuse to consider the former’s request for approval of changes.

3. To perform other responsibilities in accordance with this Circular.

Article 21.Effect

1. This Circular takes effect on February 15, 2019.

2. The following documents cease to be effective:

a/ The State Bank Governor’s Circular No. 06/2010/TT-NHNN of February 26, 2010, guiding the organization, management, administration, charter capital, transfer of shares, modification of licenses, and charters of commercial banks;

b/ The State Bank Governor’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 20, 2006, on the organization and operation of foreign bank branches, joint-venture banks, wholly foreign-owned banks, and representative offices of foreign commercial banks in Vietnam.

Article 22.Organization of implementation

The Chief of the Office, Chief of the Banking Supervision Agency, and heads of units of the State Bank, directors of provincial-level branches of the State Bank, chairpersons of Boards of Directors or Members’ Councils, heads of Supervisory Boards, directors general (directors) of commercial banks, and directors general of foreign bank branches shall implement this Circular.-

For the State Bank Governor
Deputy Governor
DOAN THAI SON