Circular 16/2024/TT-NHNN building roadmap for compliance with limits on capital contribution and share purchase by credit institutions

CIRCULAR

On the building and implementation of the roadmap for compliance with limits on capital contribution and share purchase by credit institutions and their subsidiaries under Clause 5, Articles 137 of the Law on Credit Institutions

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

Pursuant to the Law on Credit Institutions dated January 18, 2024;

Pursuant to the Government’s Decree No.102/2022/ND-CP dated December 12, 2022, defining the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

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

The Governor of the State Bank of Vietnam promulgates a Circular on the building and implementation of the roadmap for compliance with limits on capital contribution and share purchase by credit institutions and their subsidiaries under Clause 5, Articles 137 of the Law on Credit Institutions.

Article 1. Scope of regulation and subjects of application

1. This Circular stipulates the credit institutions’ (except for credit institutions under special control) building and implementation of the roadmap for compliance with limits on capital contribution and share purchase under Clause 5, Articles 137 of the Law on Credit Institutions (hereinafter referred to as the compliance roadmap), including the following cases:

a) Credit institutions holding capital contributions and purchased shares of enterprises or other credit institutions being

b) Subsidiaries of credit institutions holding capital contributions and purchased shares of enterprises

c) Subsidiaries of credit institutions holding capital contributions and purchased shares of enterprises

2. Commercial banks subject to compulsory transfer must follow the compliance roadmap specified in Clause 5, Article 137 of the Law on Credit Institutions according to the compulsory transfer plan.

Article 2. Time for closing data to determine lists to build the compliance roadmap

Time for closing data to determine the subsidiaries of credit institutions, shareholders, major shareholders, capital contributors, and the lists for building the roadmap for compliance with the of Articles 4, 5, and 6 of this Circular is until the end of June 30, 2024.

Article 3.  Compliance roadmap timeline

Credit institutions, and their subsidiaries shall build and implement the roadmap, provided that by December 31, 2025, they shall strictly comply with the limits on capital contribution and share purchase under Clause 5, Article 137 of the Law on Credit Institutions.

Article 4. Building a roadmap for credit institutions’ compliance with the limits on capital contribution and share purchase under Point b, Clause 5, Articles 137 of the Law on Credit Institutions

1. Credit Institutions shall request their major shareholders and capital contributors to make a list of enterprises, other credit institutions that are affiliated persons and send it to credit institutions.

2. Credit institutions shall review, and identify enterprises, credit institutions on the list specified in Clause 1 of this Article, of which the capital contributions or purchased shares are held by such credit institutions.

3. Credit Institutions shall coordinate with major shareholders, capital contributors related to the enterprises, and credit institutions identified in Clause 2 of this Article to build a roadmap for compliance with the limits on capital contribution and share purchase under Point b, Clause 5, Article 137 of the Law on Credit Institutions. The compliance roadmap must have at least the following contents:

a) List of major shareholders, capital contributors related to enterprises, credit institutions identified in Clause 2 of this Article, including the following information:

For individuals: Full name; personal identification number (or valid citizen identity card number), date of issue, place of issue, registered permanent residence, current address (if different from registered permanent residence), date, month, year of birth of the individual who is Vietnamese; nationality, passport number, date of issue, place of issue, temporary residence in Vietnam, current address (if different from registered temporary residence) of the foreign individual; information about quantity of shares and shareholding ratios, capital contributions in the charter capital that an individual owns in credit institutions (including capital contributions and shares authorized or entrusted to other organization or  individuals to own in their names); name of organizations or individuals receiving authorization, entrustment and relationship with such individuals.

For organizations: Name of organizations, serial number of enterprise registration certificate or any equivalent legal document, date of issue, place of issue, enterprise identification number, head office address; Information about quantity of shares and shareholding ratios, capital contributions in the charter capital that the organizations own at the credit institutions (including capital contributions and shares authorized or entrusted to other organizations and individuals to own in their names); name of organizations or individuals receiving authorization or entrustment and relationship with such organizations.

b) List of enterprises, and credit institutions identified under Clause 2 of this Article, including the following information: Name of organizations, serial number of enterprise registration certificate or any equivalent legal document, date of issue, place of issue, enterprise identification number, head office address, and  relationship with major shareholders, capital contributors of credit institutions; Information about quantity of shares, shareholding ratios, capital contributions in the charter capital that credit institutions own at each enterprise or credit institution (including capital contributions and shares authorized or entrusted to other organizations and individuals to own in their names); name of organization or individual receiving authorization or entrustment and relationship with those organizations;

c) Measures applied (credit institutions reducing shareholding and capital contribution ratios in enterprises or other credit institutions that are their major shareholders or capital contributors; or major shareholders or capital contributors reducing their shareholding or capital contribution ratios in those credit institutions; or other measures) and implementation timelines for compliance with the  limits on capital contribution and share purchase specified at Point b, Clause 5, Article 137 of the Law on Credit Institutions.

4. Credit Institutions shall send the compliance roadmap specified in Clause 3 of this Article directly or through postal services to the State Bank (via the Banking Supervision Agency), major shareholders, capital contributors related to enterprises, credit institutions identified in Clause 2 of this Article within 120 days from the effective date of this Circular.

5. To ensure the credit institution's safe operation, the Banking Supervision Agency shall request the credit institution to modify or complete the compliance roadmap. Within 30 days from the date of receiving the request from the Banking Supervision Agency, the credit institution must modify, complete, and send the compliance roadmap to the State Bank (via the Banking Supervision Agency), major shareholders, and related capital contributors.

Article 5. Building a credit institution’s roadmap for its Subsidiaries to comply with the limits on capital contribution and share purchase under Point a, Clause 5, Article 137 of Law on Credit Institutions

1. Credit institutions shall make a list of enterprises, other credit institutions that are their shareholders, capital contributors and send it to their subsidiaries.

2. The subsidiaries of the credit institutions shall review, and identify enterprises, and credit institutions on the list specified in Clause 1 of this Article that they are making capital contributions or purchasing shares, and send such list to the credit institutions.

3. Credit institutions shall coordinate with their subsidiaries to build a roadmap to compliance with the limits on capital contribution and share purchase specified at Point a, Clause 5, Article 137 of the Law on Credit Institutions. The compliance roadmap must have at least the following contents:

a) List of credit institutions’ subsidiaries that hold capital contributions and purchased shares identified under Clause 2 of this Article, including the following information: Name of organizations, serial number of enterprise registration certificate or any equivalent legal document, date of issue, place of issue, enterprise identification number, head office address; Information about quantity of shares and shareholding ratios, capital contributions in the charter capital that credit institutions own at each subsidiary (including capital contributions and shares authorized or entrusted to other organizations and individuals to own in their names); name of organizations or individuals receiving authorization or entrustment and relationship with the credit institutions.

b)  List of enterprises, and credit institutions identified under Clause 2 of this Article, including the following information: Name of organizations, serial number of enterprise registration certificate or any equivalent legal document, date of issue, place of issue, enterprise identification number, head office address; Information about quantity of shares and shareholding ratios, capital contributions in the charter capital that Subsidiaries of the credit institutions own at each enterprise or credit institution (including capital contributions and shares authorized or entrusted to other organizations and individuals to own in their names); name of organizations or individuals receiving authorization or entrustment and relationship with the credit institutions.

c) Measures applied (credit institutions and their subsidiaries reducing shareholding and capital contribution ratios in enterprises or other credit institutions that are shareholders or capital contributors of the credit institutions; or shareholders, capital contributors reducing their shareholding, capital contribution ratios in that credit institution; credit institution reducing shareholding, capital contribution ratios in subsidiaries of the credit institution or other measures) and implementation timelines for compliance with the limits on capital contribution and share purchase specified at Point a, Clause 5, Articles 137 of the Law on Credit Institutions.

4. Credit institutions shall send the compliance roadmap specified in Clause 3 of this Article directly or through postal services to the State Bank (via the Banking Supervision Agency), Subsidiaries of the credit institutions, shareholders, capital contributors related to enterprises, credit institutions identified under Clause 2 of this Article within 120 days from the effective date of this Circular.

5. To ensure the credit institution's safe operation, the Banking Supervision Agency shall request the credit institution to modify or complete the compliance roadmap. Within 30 days from the date of receiving the request from the Banking Supervision Agency, the credit institution must modify, complete, and send the compliance roadmap to the State Bank (via the Banking Supervision Agency), subsidiaries of the credit institution, and related shareholders, capital contributors.  

Article 6. Building the credit institution’s roadmap for its subsidiaries to comply with the limits on capital contribution and share purchase under Point b, Clause 5, Article 137 of the Law on Credit Institutions

1. Credit institutions shall request major shareholders, capital contributors of a credit institutions to make a list of enterprises, other credit institutions that are affiliated persons and send it to credit institutions.

2. Credit institutions shall request subsidiaries to review, and identify enterprises, and credit institutions on the list specified in Clause 1 of this Article that Subsidiaries are making capital contributions, or purchasing shares.

3. Credit institutions shall coordinate with their subsidiaries, major shareholders, capital contributors related to enterprises, and credit institutions identified in Clause 2 of this Article to build a roadmap for compliance with the limits on capital contribution and share purchase under Point b, Clause 5, Article 137 of the Law on Credit Institutions. The compliance roadmap of credit institutions must have at least the following contents:

a) List of subsidiaries of credit institutions that hold capital contributions and purchased shares identified under Clause 2 of this Article, including the following information: Name of organizations, serial number of enterprise registration certificate or any equivalent legal document, date of issue, place of issue, enterprise identification number, head office address; Information about quantity of shares and shareholding ratios, capital contribution in the charter capital that credit institutions own at each subsidiary (including capital contributions and shares authorized or entrusted to other organizations and individuals to own in their names); name of organization or individual receiving authorization or entrustment and relationship with the credit institutions.

b) List of major shareholders, capital contributors related to enterprises, and credit institutions identified under Clause 2 of this Article, including the following information:

For individuals: Full name; personal identification number (or valid citizen identity card number), date of issue, place of issue, registered permanent residence, current address (if different from registered permanent residence), date, month, year of birth of the individual who is Vietnamese; nationality, passport number, date of issue, place of issue, temporary residence in Vietnam, current address (if different from registered temporary residence) of the foreign individual; information about quantity of shares and shareholding ratios, capital contributions in the charter capital that individuals own in credit institutions (including capital contributions and shares authorized or entrusted to other organizations and individuals to own in their names); name of organizations or individuals receiving authorization, entrustment and relationship with the individuals.

For organizations: Name of organizations, serial number of enterprise registration certificate or any equivalent legal document, date of issue, place of issue, enterprise identification number, head office address; Information about quantity of shares and shareholding ratios, capital contribution in the charter capital that the organizations own at the credit institutions (including capital contributions and shares authorized or entrusted to other organizations and individuals to own in their names); name of organizations or individuals receiving authorization or entrustment and relationship with such organizations.

c) List of enterprises, and credit institutions identified under Clause 2 of this Article, including the following information: Name of organizations, serial number of enterprise registration certificate or any equivalent legal document, date of issue, place of issue, enterprise identification number, head office address; Information about quantity of shares, shareholding ratios, capital contributions in the charter capital that the Subsidiaries of the credit institutions own at each enterprise or credit institution (including capital contributions and shares authorized or entrusted to other organizations and individuals to own in their names); name of organizations or individuals receiving authorization or entrustment and relationship with Subsidiaries of that credit institutions.

d) Measures applied (credit institutions, subsidiaries of the credit institutions reducing shareholding and capital contribution ratios in enterprises or other credit institutions that are their shareholders or capital contributors; or shareholders, capital contributors reducing their shareholding, capital contribution ratios in the credit institutions; credit institution reducing shareholding, capital contribution ratios in its subsidiaries or other measures) and implementation timelines for compliance with the limits on capital contribution and share purchase specified at Point a, Clause 5, Articles 137 of the Law on Credit Institutions.

4. Credit institutions shall send the compliance roadmap prescribed in Clause 3 of this Article directly or through postal services to the State Bank (via the Banking Supervision Agency), their subsidiaries, major shareholders, capital contributors related to enterprises, credit institutions identified under Clause 2 of this Article within 120 days from the effective date of this Circular.

5. To ensure the credit institution's safe operation, the Banking Supervision Agency shall request the credit institution to modify or complete the compliance roadmap. Within 30 days from the date of receiving the request from the Banking Supervision Agency, the credit institution must modify, complete, and send the compliance roadmap to the State Bank (via the Banking Supervision Agency), subsidiaries of the credit institutions, and related major shareholders, capital contributors.

Article 7. Roadmap implementation

1. Credit institution, related organizations and in the compliance roadmap follow the roadmap sent to the State Bank in accordance with this Circular and relevant laws.

2. the compliance roadmap, if necessary, credit institutions shall coordinate with relevant organizations and individuals to modify the applied measures and compliance roadmap, ensuring adherence to the roadmap timeline specified in Article 3 of this Circular. Credit institutions shall send the modified compliance roadmap directly or through postal services to the State Bank (via the Banking Supervision Agency) and to subsidiaries of the credit institution, shareholders, major shareholders, and capital contributors of the related credit institutions.

3. The Banking Supervision Agency shall monitor and supervise the implementation of the compliance roadmap by credit institutions.

4. If subsidiaries of the credit institution fail to follow the compliance roadmap, the credit institution must reduce its shareholding, and capital contribution ratios in its subsidiaries or take other measures to ensure compliance with the provisions of Clause 5, Article 137 of the Law on Credit Institutions.

5. If credit institutions, subsidiaries of the credit institution fail to follow the compliance roadmap, depending on the nature and severity, the State Bank shall consider and take measures as prescribed by law.

6. At the end of the compliance roadmap implementation period, if the credit institution or its subsidiary fails to comply with the provisions of Clause 5, Article 137 of the Law on Credit Institutions, the credit institution, or its subsidiary must temporarily suspend its

Article 8. Responsibilities of credit institutions

1. Build and implement the credit institution's compliance roadmap; adopt shareholder’s rights, and capital contributors’ rights to request, urge, and coordinate with subsidiaries of credit institutions to build and implement the roadmap; urge and coordinate with shareholders, major shareholders, and affiliated persons to build and implement the compliance roadmap.

2. Make periodic reports in paper form, send directly or via postal service to the State Bank (Banking Supervision Agency) on the roadmap implementation of the previous quarter according to the Report Form in the Appendix to this Circular. The data closing time is from the 15^th day of the month preceding the reporting period to the 14^th day of the last month of the quarter belonging to the reporting period. The deadline for submitting the report is no later than the 25^th day of the last month of the quarter in the reporting period (the first reporting period is the first quarter report of 2025).

3. Take responsibility before the law for the accuracy and completeness of the information provided to the State Bank, related organizations and individuals.

Article 9. Responsibilities of credit institutions’ subsidiaries, shareholders, major shareholders, and capital contributors of credit institutions

1. Coordinate with credit institutions to build and implement the roadmap; implement the roadmap in accordance with this Circular and other relevant laws.

2. Report on the implementation of the compliance roadmap (clearly stating difficulties, problems, and proposed solutions) at the request of the credit institutions for synthesis and reporting to the State Bank.

3. Take responsibility before the law for the accuracy and completeness of information provided to credit institutions.

Article 10. Responsibility for implementation

Chief of Office, Chief Inspector of the Banking Supervision Agency, heads of units affiliated to the State Bank, credit institutions, related organizations and individuals shall implement this Circular.

Article 11: Effect

This Circular takes effect on August 15, 2024./.