Circular 13/2023/TT-NHNN amend Circulars providing for the grant of licenses for organization and operation of commercial banks

CIRCULAR

Amending and supplementing a number of articles of the Circulars providing for the grant of licenses for, organization and operation of, and dossiers, order and procedures for approval of changes for, 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. 102/2022/ND-CP of December 12, 2022, 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 Circulars providing for the grant of licenses for, organization and operation of, and dossiers, order and procedures for approval of changes for, commercial banks and foreign bank branches.

Article 1. To amend and supplement a number of articles of Circular No. 40/2011/TT-NHNN of December 15, 2011, of the Governor of the State Bank of Vietnam, providing for the grant of licenses for, and organization and 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. To amend and supplement Clauses 5 and 13, Article 2 as follows:

“5. Joint-venture bank means a commercial bank which is established in Vietnam, with capital amounts contributed by the Vietnamese partners (including at least one Vietnamese bank and at most one Vietnamese non-bank enterprise) and the foreign partners (including at least one foreign bank and at most one foreign non-bank enterprise) on the basis of a joint-venture contract; and which is a Vietnamese legal entity headquartered in Vietnam. A joint-venture bank may be established and organized as a limited liability company with two or more members, provided that the number of its members does not exceed five, in which each of the members and his/her affiliated persons may own no more than 50% of its charter capital.”

“13. Capital-contributing member means a bank or non-bank enterprise that contributes capital to a joint-venture bank; or a foreign credit institution that contributes capital to a wholly foreign-owned bank.”

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

“(iii) The establishment license or business registration certificate or an equivalent document (except Vietnamese enterprises);

(vi) Copies of the passports of its legal representative and the representative of the contributed capital amount at the bank (for persons not holding Vietnamese citizenship);”     

3. To add Item (iii) to Point b, Clause 3, Article 31 as follows:

“(iii) A new partner which is a non-bank enterprise must satisfy the following conditions:

- Being established under Vietnam’s law or foreign law;

- Obtaining a competent authority’s written approval of contribution of capital to joint-venture banks in accordance with law, for a state enterprise;

- Complying with relevant regulations on capital contribution, for an enterprise possessing an establishment and operation license in the field of banking, securities or insurance;

- Having an equity of at least VND 1 trillion and total assets equivalent to at least VND 2 trillion for 3 consecutive years preceding the year of submitting a dossier of request for approval of the purchase and sale or transfer of the contributed capital amount, in case the contributed capital amount accounts for between over 1% and under 5% of the charter capital of the joint-venture bank, or having an equity of at least VND 200 billion and total assets equivalent to at least VND 400 billion for 3 consecutive years preceding the year of submitting a dossier of request for approval of the purchase and sale or transfer of the contributed capital amount, in case the contributed capital amount accounts for up to 1% of the charter capital of the joint-venture bank;

- Ensuring that the amount left after subtracting the legal capital from the equity at least equals the contributed capital amount as committed, based on data from the financial statement, which has undergone independent audit without qualified opinion of the auditing unit, of the year preceding the year of submitting a dossier of request for approval of the purchase and sale or transfer of the contributed capital amount, for an enterprise operating in the business line subject to legal capital requirement;

- Having earned profits in 3 consecutive years preceding the year of submitting a dossier of request for approval of the purchase and sale or transfer of the contributed capital amount;

- Refraining from using capital mobilized or borrowed from another organization or individual to contribute capital;

- Fully performing tax and social insurance obligations according to regulations by the time of submitting a dossier of request for approval of the purchase and sale or transfer of the contributed capital amount;

- Not being a founding shareholder, an owner, a founding member, or a strategic shareholder of another credit institution established and operating in Vietnam.”

4. To replace Appendix 02a, Appendix 03, Appendix 04, Appendix 05a, Appendix 05b, and Appendix 07 with Appendix 02a, Appendix 03, Appendix 04, Appendix 05a, Appendix 05b, and Appendix 07, respectively, promulgated together with this Circular.

Article 2. To make a number of additions to Circular No. 50/2018/TT-NHNN of December 31, 2018, of the Governor of the State Bank of Vietnam, on dossiers, order and procedures for approval of changes for commercial banks and foreign bank branches

1. To add Item (iii) to Point b, Clause 2, Article 16 as follows:

“(iii) For the buyer or transferee that is a non-bank enterprise, such a dossier must comprise:

- The enterprise’s establishment license or business registration certificate or an equivalent document (except Vietnamese enterprises);

- A document authorizing the enterprise’s representative of the contributed capital amount at the bank in accordance with law;

- Copies of the passports of the enterprise’s legal representative and the representative of its contributed capital amount at the bank (for persons not holding Vietnamese citizenship);

- A competent authority’s written approval of the enterprise’s contribution of capital to the bank;

- A report on the enterprise’s satisfaction of the conditions for a new partner being a non-bank enterprise for acquiring the contributed capital amount from the joint-venture bank according to the State Bank’s regulations on the grant of licenses for, and organization and operation of, commercial banks, foreign bank branches, and representative offices of foreign credit institutions and other foreign institutions engaged in banking activities in Vietnam;

- The enterprise’s financial statements of 3 consecutive years preceding the year of submitting a dossier of request for approval of the purchase and sale or transfer of the contributed capital amount, which have undergone independent audit without qualified opinion of the auditing unit;

- A report on the enterprise’s financial capacity for contributing capital to the joint-venture bank, made according to the form provided in Appendix 01 to this Circular;

- A declaration of information about the enterprise’s credit relationship history, made according to the form provided in Appendix 02 to this Circular;

- Written certifications given by the tax office and social insurance agency stating the enterprise’s fulfillment of tax and social insurance obligations;

- The enterprise’s written commitment stating that it is not a founding shareholder, an owner, a founding member, or a strategic shareholder of another credit institution established and operating in Vietnam.”

2. To add Appendix 01 and Appendix 02 promulgated together with this Circular to Circular No. 50/2018/TT-NHNN.

Article 3. Responsibility for organization of implementation

The Chief of the Office, the Chief of the Banking Supervision Agency, and heads of units under the State Bank of Vietnam, commercial banks, foreign bank branches, representative offices of foreign credit institutions and other foreign institutions engaged in banking activities, and related organizations and individuals shall organize the implementation of this Circular.

Article 4. Implementation provisions

1. This Circular takes effect on December 14, 2023.

2. To annul Clauses 9 and 19, Article 1, and Clause 3, Article 2, Circular No. 28/2018/TT-NHNN of November 30, 2018, of the Governor of the State Bank of Vietnam, amending and supplementing a number of articles of Circular No. 40/2011/TT-NHNN of December 15, 2011, of the Governor of the State Bank of Vietnam, providing for the grant of licenses for, and organization and operation of, commercial banks, foreign bank branches, and representative offices of foreign credit institutions and other foreign institutions engaged in banking activities in Vietnam.-

For the Governor of the State Bank of Vietnam
Deputy Governor
DOAN THAI SON

* The Appendices to this Circular are not translated.