Circular 63/2024/TT-NHNN procedures for revocation of licenses and liquidation of assets of credit institutions

CIRCULAR

Specifying dossiers and procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; and dossiers and procedures for revocation of licenses of Vietnam-based representative offices of foreign credit institutions and other foreign organizations engaged in banking activities^[1]

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

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

Pursuant to the June 17, 2020 Law on Enterprises;

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 specifying dossiers and procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; and dossiers and procedures for revocation of licenses of Vietnam-based representative offices of foreign credit institutions and other foreign organizations engaged in banking activities.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Circular specifies dossiers and procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; and those for revocation of licenses of Vietnam-based representative offices of foreign credit institutions and other foreign organizations engaged in banking activities in the following cases:

a/ The cases of revocation of licenses specified at Points a, c, d, dd and e, Clause 1, Article 36; and in Clause 2, Article 202, of the Law on Credit Institutions;

b/ The case of dissolution of credit institutions placed under special control specified at Point a, Clause 1, Article 187 of the Law on Credit Institutions;

c/ The cases of dissolution or termination of operation of credit institutions or foreign bank branches specified in Clause 1, Article 202 of the Law on Credit Institutions;

d/ The cases of dissolution or termination of operation of credit institutions or foreign bank branches specified in Clause 3, Article 202 of the Law on Credit Institutions;

dd/ The cases of dissolution of credit institutions placed under special control specified in Clause 4, Article 202 of the Law on Credit Institutions;

e/ The cases of dissolution of credit institutions eligible for early intervention specified in Clause 4, Article 202 of the Law on Credit Institutions;

g/ Vietnam-based representative offices of foreign credit institution or other foreign organizations engaged in banking activities (below referred to as foreign representative offices) applying for permission for operation termination; foreign representative offices not applying for extension, or applying for extension but having their applications disapproved by the State Bank of Vietnam (below referred to as the State Bank), upon the expiration of their operation duration.

2. Dossiers and procedures for revocation of  licenses of reorganized credit institutions must comply with the State Bank Governor’s regulations on reorganization of credit institutions.

3. The liquidation of assets of bankrupt credit institutions must comply with the law on bankruptcy; and the revocation of their licenses must comply with Clause 3, Article 203 of the Law on Credit Institutions.

4. For a credit institution having its license revoked before the effective date of the Law on Credit Institutions and subject to dissolution as in the case specified in Article 202 of the Law on Credit Institutions, the dissolution and asset liquidation procedures must comply with the Law on Credit Institutions, this Circular (except the provisions on license revocation), and relevant regulations.

5. For a credit institution that does not carry out banking activities for 12 consecutive months by the effective date of the Law on Credit Institutions and is subject to dissolution as in the case specified in Article 202 of the Law on Credit Institutions, the dissolution and asset liquidation procedures must comply with the Law on Credit Institutions, this Circular and relevant regulations.

Article 2. Subjects of application

1. Credit institutions, including:

a/ Commercial banks and cooperative banks;

b/ Non-bank credit institutions;

c/ Microfinance institutions.

2. Foreign bank branches.

3. Foreign representative offices.

4. Organizations and individuals related to the revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; and revocation of licenses of foreign representative offices.

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Decision-making authority means the competent authority of a credit institution, the parent bank, a foreign credit institution or another foreign organization engaged in banking activities that is competent to decide on the dissolution or termination of operation of the credit institution, foreign bank branch or foreign representative office as stated in the charter of the credit institution, parent bank, foreign credit institution or another foreign organization engaged in banking activities in accordance with current laws of Vietnam.

2. Parent bank means a foreign bank which has its branch(es) based in Vietnam.

3. The State Bank’s branch means the State Bank’s branch in a locality where a credit institution is headquartered or where a foreign bank branch or foreign representative office is located.

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

5. Management and Supervision Unit means a unit of the State Bank which has the functions of managing and supervising credit institutions and foreign bank branches.

6. Time of application for dissolution means the date stated in an application for permission for dissolution made by a credit institution or foreign bank branch.

Article 4. Competence to decide on revocation of licenses

1. The State Bank Governor (below referred to as the Governor) is competent to decide on the revocation of licenses of commercial banks, cooperative banks and microfinance institutions.

2. The Head of the Management and Supervision Unit is competent to decide on the revocation of licenses of:

a/ Non-bank credit institutions;

b/ Foreign bank branches, except those specified at Point a, Clause 3 of this Article.

3. Directors of the State Bank’s branches are competent to decide on the revocation of licenses of:

a/ Foreign bank branches subject to micro-safety inspection and supervision by the State Bank’s branches as assigned by the Governor;

b/ Foreign representative offices based in localities.

Article 5. Principles of revocation of licenses and liquidation of assets of credit institutions and foreign bank branches

1. Credit institutions and foreign bank branches shall determine their ability to settle debts and other property obligations before and during asset liquidation, dissolution and license revocation; and shall make final settlement for payment account balances at the State Bank before the latter recovers their licenses under this Circular.

2. A credit institution or foreign bank branch may only be dissolved when falling into one of the following cases:

a/ Having committed to full settlement of its debts and other property obligations and not currently undergoing settlement of disputes at the court or an arbitration;

b/ Having all debt obligations taken over by another credit institution, for credit institutions eligible for early intervention or placed under special control.

3. The dissolution of credit institutions or foreign bank branches must comply with this Circular and relevant regulations.

4. In the course of supervising the asset liquidation, if detecting that a credit institution is unable to fully pay its debts, the State Bank shall decide to terminate the liquidation and implement the plan on bankruptcy of the credit institution under Section 5, Chapter X, and Article 203, of the Law on Credit Institutions.

5. In the course of asset liquidation, if a foreign bank branch is unable to fully settle its debts and other property obligations, the parent bank shall be obliged to fulfill the commitments under Point c, Clause 3, Article 29 of the Law on Credit Institutions.

Article 6. Principles of dossier preparation

1. An application dossier shall be made in 1 set in Vietnamese. Foreign-language documents of a dossier shall be consularly legalized in accordance with Vietnam’s law, except cases exempted from consular legalization in accordance with the regulations on consular legalization, except financial statements made in English.

2. Foreign-language documents of a dossier shall be translated into Vietnamese. The Vietnamese translations shall be notarized or translators’ signatures shall be authenticated in accordance with law, except translations of financial statements that are subject to certification by organizations or individuals licensed to practice translation in accordance with law.

3. For copies other than certified copies or copies issued from the master register, their originals shall be produced for collation, and the collators shall be held responsible for the truthfulness of such copies to the originals.

4. An application dossier shall be signed by the legal representative of the credit institution, the legal representative of the parent bank for a foreign bank branch, the legal representative of a foreign credit institution or another foreign organization engaged in banking activities for a foreign representative office, or the authorized representative. In case of authorized signing of the dossier, the letter of authorization shall be made in accordance with law.

5. Every dossier shall be accompanied by a list of documents.

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

From the date the competent authority decides to approve the dissolution or from the date the State Bank issues a document on in-principal approval of the dissolution or from the date the State Bank issues a document requesting the credit institution or foreign bank branch to liquidate its assets, whichever comes first, the credit institution or foreign bank branch and its managers, executive officers and employees may not carry out the following activities and transactions related to its assets and debts:

1. Hiding or dispersing assets.

2. Waiving or reducing the right to claim debts.

3. Converting unsecured debts into debts secured by assets of the credit institution or foreign bank branch.

4. Pledging, mortgaging, donating or leasing assets.

5. Signing new agreements and contracts, except those serving the operation termination.

6. Transferring money and assets abroad.

Chapter II

REVOCATION OF LICENSES AND LIQUIDATION OF ASSETS OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES

Section 1

REVOCATION OF LICENSES

Article 8. Procedures for revocation of licenses of the credit institutions and foreign bank branches specified at Point d, Clause 1, Article 1 of this Circular

1. When wishing for voluntary dissolution, a credit institution or foreign bank branch shall:

a/ Hire an enterprise possessing a certificate of eligibility to provide valuation services in accordance with the regulations on valuation to valuate its assets and determine the value of its equity in accordance with law in the year preceding the year of application for dissolution and in the quarter preceding the time of application for dissolution;

b/ Formulate an asset liquidation plan under Point b, Clause 2 of this Article on the basis of results of the valuation of its assets and the determination of the value of its equity under Point a of this Clause;

c/ Prepare a dossier specified in Clause 2 of this Article and send it by post or hand-deliver it to the State Bank (the Single-Window Division) or the State Bank’s branch (the single-window division) according to the competence specified in Article 4 of this Circular.

2. Dissolution application dossier:

a/ An application for dissolution;

b/ The asset liquidation plan approved by the competent authority, which must have at least the following contents:

(i) Name, address and website of the credit institution or foreign bank branch;

(ii) Name, address and website of the parent bank (for foreign bank branches);

(iii) Names, addresses and phone numbers of members of the Board of Directors, members of the Members’ Council, members of the Supervisory Board, and Chief Executive Officer;

(iv) List of members of the liquidation council (with their names, addresses and phone numbers);

(v) Brief of the financial status and operation (real value of its charter capital or allocated capital; non-performing loans; debts, receivables and payables, including those stated on balance sheet and off balance sheet) by the time of application for dissolution, which must clearly state the ability to fully settle debts and other property obligations;

(vi) Reasons for the application for voluntary dissolution;

(vii) List of founding shareholders, major shareholders, owners, founding members, and capital-contributing members;

(viii) Plan and measures to handle rights and obligations, clearly stating the asset liquidation schedule and asset division options. For foreign bank branches, it is required to state the plan on remittance of capital, profits and assets abroad;

(ix) Responsibilities of organizations and individuals related to the asset liquidation, dissolution and license revocation;

(x) Recommendations and proposals (if any).

c/ The competent authority’s document approving the dissolution and the asset liquidation plan. In case the foreign bank branch applies for dissolution at the request of the parent bank, the dossier must contain the parent bank’s document on the dissolution or termination of operation of the foreign bank branch;

d/ Report on results of the valuation of assets and the determination of the value of equity of the credit institution or foreign bank branch as specified at Point a, Clause 1 of this Article;

dd/ The financial statements of the credit institution or foreign bank branch for the year preceding the year of application for dissolution, that have been audited by an independent audit organization in accordance with law, and the financial statements for the quarter preceding the time of application for dissolution. At the time of submission of the dissolution application dossier, if there are no audited annual financial statements, the credit institution or foreign bank branch may submit its unaudited financial statements and shall take responsibility for contents of such financial statements. The credit institution or foreign bank branch shall submit its audited financial statements immediately after the independent audit organization issues the audit report.

3. Within 15 days after receiving a complete and valid dossier specified in Clause 2 of this Article, the State Bank shall send a consultation request to:

a/ The People’s Committee for the latter’s viewpoint on the dissolution and license revocation; impacts of the dissolution and license revocation on political, economic and social stability in the locality;

b/ Related ministries and sectors for their opinions on the dissolution, asset liquidation and license revocation (if necessary).

4. The time limit for consultation specified in Clause 3 of this Article is 15 days after the State Bank sends a consultation request.

5. Within 15 days after the expiration of the time limit specified in Clause 4 of this Article:

a/ If deeming that the asset liquidation plan can prove the ability to fully settle debts and other property obligations, the State Bank shall issue a document on in-principle approval of the dissolution, including the content on approval of the asset liquidation plan, requesting the credit institution or foreign bank branch to establish a liquidation council and carry out the asset liquidation according to the approved asset liquidation plan. The State Bank shall establish a liquidation supervision group; or shall,

b/ Issue a document on disapproval of the dissolution, stating the reason, if deeming that the asset liquidation plan cannot prove the ability to fully settle debts and other property obligations; or shall,

c/ Request in writing the credit institution or foreign bank branch to report and explain relevant matters.

6. Within 30 days after the State Bank makes the request specified at Point c, Clause 5 of this Article, the credit institution or foreign bank branch shall send a report with explanations to the State Bank or the State Bank’s branch according to the competence specified in Article 4 of this Circular.

7. Within 10 days after receiving the report with explanations from the credit institution or foreign bank branch as specified in Clause 6 of this Article, the State Bank shall issue a document on in-principle approval of the dissolution as specified at Point a, Clause 5 of this Article or issue a written disapproval of the dissolution as specified at Point b, Clause 5 of this Article.

8. Asset liquidation:

a/ The credit institution or foreign bank branch shall establish a liquidation council within 30 days from the effective date of the document on in-principle approval of the dissolution and liquidate the assets under Section 2 of this Chapter and relevant regulations;

b/ Within 30 days after the credit institution or foreign bank branch is subject to liquidation termination in the case specified in Article 17 of this Circular, the liquidation council shall send a report on liquidation results and a request for liquidation termination (including also a request for liquidation termination to carry out law-specified bankruptcy procedures) to the liquidation supervision group, the People’s Committee, and the State Bank or the State Bank’s branch according to the competence specified in Article 4 of this Circular;

c/ Within 15 days after receiving the liquidation council’s documents specified at Point b of this Clause, the liquidation supervision group shall send a report on liquidation results and a request for liquidation termination (including also a request for liquidation termination to carry out law-specified bankruptcy procedures) to the State Bank or the State Bank’s branch according to the competence specified in Article 4 of this Circular;

d/ In the course of asset liquidation supervision, if detecting that the credit institution is unable to fully settle its debts and other property obligations, the liquidation supervision group shall send to the State Bank a report on liquidation results and request the liquidation termination in order to carry out law-specified bankruptcy procedures, for the cases of liquidation termination specified in Clause 3, Article 17 of this Circular.

9. License revocation:

a/ Within 60 days after receiving the liquidation supervision group’s documents specified at Points c and d, Clause 8 of this Article, the State Bank shall:

(i) Issue a liquidation termination decision and a license revocation decision, for the cases specified in Clauses 1 and 2, Article 17 of this Circular; or,

(ii) Issue a decision on termination of the liquidation of the credit institution in order to carry out law-specified bankruptcy procedures, for the case specified in Clause 3, Article 17 of this Circular; or,

(iii) Request in writing the credit institution or foreign bank branch to report and explain matters that need clarification and are related to the asset liquidation (if any).

b/ Within 30 days after the State Bank issues the request specified at Point a(iii) of this Clause, the credit institution or foreign bank branch shall send a report with explanations to the State Bank or the State Bank’s branch according to the competence specified in Article 4 of this Circular;

c/ Within 20 days after receiving the report with explanations from the credit institution or foreign bank branch as specified at Point b of this Clause, the State Bank shall make consideration and decision under Point a(i) or a(ii) of this Clause.

Article 9. Procedures for revocation of licenses of the credit institutions specified at Point dd, Clause 1, Article 1 of this Circular

1. The Special Supervisory Board shall request a credit institution placed under special control to coordinate with the credit institution taking over all debt obligations in formulating an asset liquidation plan and submitting it to the State Bank for approval.

2. The competent authority-approved asset liquidation plan of the credit institution placed under special control and the credit institution taking over all debt obligations must have at least the following contents:

a/ Names, addresses and websites of the credit institution placed under special control and the credit institution taking over all debt obligations;

b/ Names, addresses and phone numbers of members of the Board of Directors, members of the Members’ Council, members of the Supervisory Board, and Chief Executive Officers of the credit institution placed under special control and those of the credit institution taking over all debt obligations;

c/ List of members of the liquidation council (with their names, addresses and phone numbers);

d/ Brief of the financial status and operation (real value of the charter capital or allocated capital; non-performing loans; debts, receivables and payables, including those stated on balance sheet and off balance sheet) of the credit institution placed under special control by the time of requesting takeover of all debt obligations;

dd/ List of founding shareholders, major shareholders, owners, founding members and capital-contributing members of the credit institution placed under special control;

e/ Plan on purchase of part or all of assets, and takeover of all debt obligations of the credit institution placed under special control; schedule and method(s) of purchase of assets and transfer of debt obligations; rights and obligations of the credit institution placed under special control and the credit institution taking over all debt obligations; the third party’s rights and obligations related to the purchase of assets and transfer of debt obligations;  measures to support the credit institution taking over all debt obligations;

g/ Plan and measures to handle rights and obligations, clearly stating the asset liquidation schedule and asset division options;

h/ Responsibilities of organizations and individuals related to the dissolution, asset liquidation and license revocation;

i/ Recommendations and proposals (if any).

3. Within 30 days after receiving the liquidation plan specified in Clauses 1 and 2 of this Article, the State Bank shall issue a document on in-principle approval of the dissolution of the credit institution placed under special control, which must have the content on approval of the liquidation plan, request the credit institution placed under special control to liquidate assets; and establish the liquidation council and the liquidation supervision group.

4. Asset liquidation:

a/ The credit institution placed under special control shall liquidate its assets in accordance with Section 2 of this Chapter and relevant regulations;

b/ Within 30 days after the credit institution placed under special control is subject to liquidation termination as specified in Clauses 1 and 2, Article 17 of this Circular, the liquidation council shall make a report on liquidation results and send a liquidation termination request to the liquidation supervision group, the People’s Committee and the State Bank;

c/ Within 15 days after receiving the liquidation council’s documents specified at Point b of this Clause, the liquidation supervision group shall send a report on liquidation results and a liquidation termination request to the State Bank.

5. License revocation:

a/ Within 60 days after receiving the liquidation supervision group’s documents specified at Point c, Clause 4 of this Article, the State Bank shall:

(i) Issue a liquidation termination decision and a license revocation decision; or,

(ii) Issue a written request for the credit institution placed under special control to report and explain matters that need clarification and are related to the asset liquidation (if any);

b/ Within 30 days after the State Bank issues the request specified at Point a(ii) of this Clause, the credit institution placed under special control shall send a report with explanations to the State Bank;

c/ Within 20 days after receiving the report with explanations from the credit institution placed under special control as specified at Point b of this Clause, the State Bank shall make consideration and decision under Point a(i) of this Clause.

Article 10. Procedures for revocation of licenses of the credit institutions specified at Point e, Clause 1, Article 1 of this Circular

1. The credit institution eligible for early intervention shall coordinate with the credit institution taking over all debt obligations in formulating an asset liquidation plan for submission to the State Bank for approval.

2. The competent authority-approved asset liquidation plan of the credit institution eligible for early intervention and the credit institution taking over all debt obligations must have at least the following contents:

a/ Names, addresses and websites of the credit institution eligible for early intervention and the credit institution taking over all debt obligations;

b/ Names, addresses and phone numbers of members of the Board of Directors, members of the Members’ Council, members of the Supervisory Board, and Chief Executive Officers of the credit institution eligible for early intervention and those of the credit institution taking over all debt obligations;

c/ List of members of the liquidation council (with their names, addresses and phone numbers);

d/ Brief of the financial status and operation (real value of the charter capital or allocated capital; non-performing loans; debts, receivables and payables, including those stated on balance sheet and off balance sheet) of the credit institution eligible for early intervention by the time of requesting takeover of all debt obligations;

dd/ List of founding shareholders, major shareholders, owners, founding members and capital-contributing members of the credit institution eligible for early intervention;

e/ Plan, schedule and method of transfer of debt obligations between the credit institution eligible for early intervention and the credit institution taking over all debt obligations; rights and obligations of the credit institution eligible for early intervention and the credit institution taking over all debt obligations; the third party’s rights and obligations related to the transfer;

g/ Plan and measures to handle rights and obligations, clearly stating the asset liquidation schedule and asset division options;

h/ Responsibilities of organizations and individuals related to the dissolution, asset liquidation and license revocation;

i/ Recommendations and proposals (if any).

3. Within 30 days after receiving the liquidation plan specified in Clauses 1 and 2 of this Article, the State Bank shall issue a document on in-principle approval of the dissolution of the credit institution eligible for early intervention, including the content on approval for the liquidation plan, and request the credit institution eligible for early intervention to liquidate its assets; and establish the liquidation council and the liquidation supervision group.

4. The asset liquidation must comply with Clause 4, Article 9 of this Circular and relevant regulations.

5. The license revocation must comply with Clause 5, Article 9 of this Circular.

Article 11. Procedures for revocation of licenses of the credit institutions and foreign bank branches specified at Points a, b and c, Clause 1, and in Clauses 4 and 5, Article 1 of this Circular

1. Based on inspection/examination conclusions or banking supervision activities’ results with contents on the dissolution and revocation of the license of a credit institution or foreign bank branch or based on the State Bank’s decision on dissolution of a credit institution placed under special control or in case the credit institution or foreign bank branch, upon expiration of its operation duration, does not apply for extension or applies for extension but has such application disapproved by the State Bank, the State Bank shall request in writing the credit institution or foreign bank branch to liquidate its assets and establish the liquidation council and the liquidation supervision group.

2. The asset liquidation must comply with Points b, c and d, Clause 8, Article 8, Section 2, Chapter II of this Circular and relevant regulations.

3. The revocation of licenses of credit institutions and foreign bank branches must comply with Clause 9, Article 8 of this Circular.

Article 12. Information disclosure

1. Within 7 working days from the effective date of the document on in-principle approval of the dissolution specified at Point a, Clause 5, Article 8; in Clause 3, Article 9; or in Clause 3, Article 10, of this Circular, and the request for the credit institution or foreign bank branch to liquidate its assets as specified in Clause 1, Article 11 of this Circular, the credit institution or foreign bank branch shall publish such documents on 1 medium of the State Bank and of the credit institution or foreign bank branch (if any) and on 1 national daily printed newspaper in 3 consecutive issues or on 1 online newspaper of Vietnam for 7 working days and post up such documents at the head office, branches, transaction bureaus, representative offices, non-business units, subsidiaries and associated companies of the credit institution, and office of the foreign bank branch, with the following information:

a/ Number and date of issuance of the State Bank’s document on in-principle approval of the dissolution; number and date of issuance of the State Bank’s document requesting the credit institution or foreign bank branch to liquidate its assets;

b/ Name and head office address of the credit institution; name and office address of the foreign bank branch;

c/ Number and date of issuance of the establishment and operation license, establishment license, enterprise registration certificate or a legally equivalent document;

d/ Charter capital or allocated capital;

dd/ Legal representative.

2. Within 7 working days from the effective date of the license revocation decision:

a/ For the case of license revocation specified in Clause 1 or 2, Article 4 of this Circular, the State Bank shall post on its Portal the information on revocation of the license of the credit institution or foreign bank branch and send the license revocation decision to the People’s Committees, the credit institution or foreign bank branch, and the State Bank’s branch for the state management and for posting on the website of the State Bank’s branch (if any);

b/ For the case of license revocation specified at Point a, Clause 3, Article 4 of this Circular, the State Bank’s branch shall post on its website (if any) the information on revocation of the license of the foreign bank branch and send the license revocation decision to the People’s Committee, the foreign bank branch and the State Bank for the state management and for posting on the State Bank’s Portal.

3. Within 7 working days from the effective date of the license revocation decision, the credit institution or foreign bank branch shall publish such decision on 1 national printed daily newspaper in 3 consecutive issues or on 1 online newspaper of Vietnam for 7 working days, and post up such decision at the head office, branches, transaction bureaus, representative offices, non-business units, subsidiaries and associated companies of the credit institution; or at the office of the foreign bank branch.

4. Within 30 days from the effective date of the license revocation decision, the credit institution shall carry out legal procedures in accordance with the laws on tax and social insurance and other relevant laws to terminate its legal person status; the foreign bank branch shall carry out legal procedures in accordance with the laws on tax and social insurance and other relevant laws to terminate its operation.

Article 13. Notification to the business registration agency of the revocation of the license of a credit institution or foreign bank branch

Within 5 working days from the effective date of the license revocation decision, the State Bank shall send a notice of the license revocation, enclosed with the license revocation decision, to the provincial-level business registration agency of the locality where the credit institution is headquartered or where the foreign bank branch is located for updating to the National Information System on Business Registration.

Section 2

ASSET LIQUIDATION

Article 14. Composition, tasks and powers of liquidation councils

1. Composition of the liquidation council for a credit institution, except the case specified in Clause 2 of this Article:

a/ The liquidation council shall be composed of the Chairperson of the Board of Directors or Chairperson of the Members’ Council; at least 1 independent member of the Board of Directors (if any); Head of the Supervisory Board, Chief Executive Officer, Chief Accountant; a number of other members of the Board of Directors, members of the Members’ Council, members of the Supervisory Board (if any); major shareholders, owners, capital-contributing members and 5 customers with the largest deposit balance at the credit institution (if they so agree) at the time of application for dissolution. At the time of establishment and in the course of operation of the liquidation council, in case of vacancy of the Chairperson of the Board of Directors or Chairperson of the Members’ Council, the competent authority shall decide to select one among the members of the Board of Directors or the Members’ Council to join the liquidation council. In case of vacancy of the Head of the Supervisory Board, Chief Executive Officer or Chief Accountant, the competent authority shall decide to select another person to join the liquidation council until such title holder is added;

b/ The Chairperson of the Board of Directors or Chairperson of the Members’ Council shall act as the chairperson of the liquidation council. At the time of establishment and in the course of operation of the liquidation council, in case of vacancy of the Chairperson of the Board of Directors or Chairperson of the Members’ Council, the person selected by the competent authority to join the liquidation council in replacement of the Chairperson of the Board of Directors or Chairperson of the Members’ Council under Point a of this Clause shall act as the chairperson of the liquidation council;

c/ In case the credit institution has a new Chairperson of the Board of Directors or new Chairperson of the Members’ Council, such person shall act as the chairperson of the liquidation council in replacement of the person holding the title of chairperson of the liquidation council specified at Point b of this Clause.

2. Composition of the liquidation council of a credit institution eligible for early intervention or placed under special control that is dissolved and has all debt obligations taken over by another credit institution:

a/ The liquidation council shall be composed of the Chairperson of the Board of Directors or Chairperson of the Members’ Council of the credit institution eligible for early intervention or placed under special control and one of the credit institution taking over all debt obligations; at least 1 independent member of the Board of Directors (if any) of the credit institution eligible for early intervention or placed under special control and one of the credit institution taking over all debt obligations; the Head of the Supervisory Board, Chief Executive Officer and Chief Accountant of the credit institution eligible for early intervention or placed under special control and those of the credit institution taking over all debt obligations; a number of other members of the Board of Directors, members of the Members’ Council, members of the Supervisory Board (if any), members of the Supervisory Board of the credit institution taking over all debt obligations; major shareholders, owners, capital-contributing members and 5 customers with the largest deposit balance at the credit institution eligible for early intervention or placed under special control (if they so agree) at the time of application for dissolution. At the time of establishment and in the course of operation of the liquidation council, in case of vacancy of the Chairperson of the Board of Directors or Chairperson of the Members’ Council, the competent authority shall decide to select one among the members of the Board of Directors or the Members’ Council to join the liquidation council. In case of vacancy of the Head of the Supervisory Board, Chief Executive Officer or Chief Accountant, the competent authority shall decide to select another person to join the liquidation council until such title holder is added.

b/ The Chairperson of the Board of Directors or Chairperson of the Members’ Council of the credit institution eligible for early intervention or placed under special control shall act as the chairperson of the liquidation council. At the time of establishment and in the course of operation of the liquidation council, in case of vacancy of the Chairperson of the Board of Directors or Chairperson of the Members’ Council, the person selected by the competent authority to join the liquidation council in replacement of the Chairperson of the Board of Directors or Chairperson of the Members’ Council under Point a of this Clause shall act as the chairperson of the liquidation council.

c/ In case the credit institution eligible for early intervention or placed under special control has a new Chairperson of the Board of Directors or new Chairperson of the Members’ Council, such person shall act as the chairperson of the liquidation council in replacement of the person holding the title of chairperson of the liquidation council specified at Point b of this Clause.

3. Composition of the liquidation council of a foreign bank branch:

a/ The liquidation council shall be composed of the Chief Executive Officer, Chief Accountant, at least 1 member appointed by the parent bank and 5 customers with the largest deposit balance at the foreign bank branch (if they so agree) at the time of application for dissolution. At the time of establishment and in the course of operation of the liquidation council, in case of vacancy of the Chief Executive Officer or Chief Accountant, the decision-making authority of the parent bank shall select another person to join the liquidation council until such title holder is added;

b/ The Chief Executive Officer of the foreign bank branch shall act as the chairperson of the liquidation council. At the time of establishment and in the course of operation of the liquidation council, in case of vacancy of the Chief Executive Officer, the person selected by the decision-making authority of the parent bank to join the liquidation council in replacement of the Chief Executive Officer under Point a of this Clause shall act as the chairperson of the liquidation council;

c/ In case the foreign bank branch has a new Chief Executive Officer, such person shall act as the chairperson of the liquidation council in replacement of the person holding the title of chairperson of the liquidation council specified at Point b of this Clause.

4. Credit institutions and foreign bank branches shall decide on the composition of their liquidation councils as specified in Clause 1 or 3 of this Article in case of license revocation specified in Article 8 of this Circular.

5. The State Bank shall decide on the composition of the liquidation council of a credit institution or foreign bank branch in case of license revocation specified in Articles 9, 10 and 11 of this Circular, specifically as follows:

a/ The persons specified in Clauses 1, 2 and 3 of this Article at the proposal of the credit institution or foreign bank branch; or,

b/ Other persons as decided by the State Bank in case the credit institution or foreign bank branch does not request the composition specified in Clause 1, 2 or 3 of this Article.

6. Tasks and powers of the liquidation council:

a/ To use the seal of the credit institution or foreign bank branch in the course of liquidating assets of the credit institution or foreign bank branch in accordance with law;

b/ To review all items of assets and liabilities, off-balance-sheet items of reports on financial status of the credit institution or foreign bank branch; to make a list and amounts of creditors and debtors by the time of liquidation of assets of the credit institution or foreign bank branch and a list of assets of the credit institution or foreign bank branch for disposal;

c/ To carry out asset liquidation in accordance with this Circular, covering also the asset division under Article 15 of this Circular and relevant regulations; to seek all measures to recover debts and assets of the credit institution or foreign bank branch (except the case of liquidation of a credit institution eligible for early intervention or placed under special control that is dissolved and has all debt obligations taken over by another credit institution);

d/ Within the first 5 working days of every month or upon request, to report to the liquidation supervision group on the asset liquidation and division and other arising matters;

dd/ Expenses related to the operation of the liquidation council shall be paid by the credit institution or foreign bank branch. The accounting of expenses must comply with the current accounting regime;

e/ The liquidation council shall terminate its tasks when the credit institution terminates its legal person status or the foreign bank branch terminates its operation in accordance with law;

g/ Other tasks and powers as specified in this Circular.

Article 15. Order of asset division

1. The division of assets of a credit institution or foreign bank branch must comply with the following order:

a/ Special loans as specified in the Law on Credit Institutions;

b/ Fees and expenses for asset liquidation as specified by law;

c/ Unpaid amounts of salary, severance allowances, job-loss allowances, social insurance and health insurance premiums for employees as specified by law and other benefits under signed collective labor agreements and labor contracts;

d/ Payments to depositors;

dd/ Financial obligations toward the State;

e/ Other debts.

2. In case the value of assets of the credit institution is positive after making full payment for the amounts specified in Clause 1 of this Article, the remainder shall be divided among shareholders, owners and capital-contributing members in proportion to their contributed capital amounts at the time of asset division.

3. In case the value of assets of the foreign bank branch is positive after making full payment for the amounts specified in Clause 1 of this Article, the remainder shall be paid to the parent bank in accordance with relevant laws.

Article 16. Liquidation time limit

1. The liquidation time limit is 12 months from the effective date of the document on in-principle approval of the dissolution specified in Clause 5, Article 8; Clause 3, Article 9; or Clause 3, Article 10, of this Circular, and the written request for the credit institution or foreign bank branch to liquidate assets as specified in Clause 1, Article 11 of this Circular. The liquidation time limit may be extended with each extension not exceeding 12 months.

2. In case of requesting extension of the liquidation time limit, the liquidation council shall, at least 45 days before the expiration of the liquidation time limit, send a written request for extension of the liquidation time limit (clearly stating the reason) to the State Bank or the State Bank’s branch according to the competence specified in Article 4 of this Circular. If not falling into the case of liquidation termination specified in Article 17 of this Circular and the liquidation council does not make a written request for extension of the liquidation time limit, the liquidation supervision group shall consider sending a written request for extension of the liquidation time limit (clearly stating the reason) to the State Bank or the State Bank’s branch according to the competence specified in Article 4 of this Circular.

3. Within 40 days after receiving the request from the liquidation council or the liquidation supervision group as specified in Clause 2 of this Article, the State Bank shall issue a document on approval or disapproval of the request.

Article 17. Cases of liquidation termination

A credit institution or foreign bank branch shall terminate liquidation in the following cases:

1. Having fully settled debts and other property obligations under Clause 1, Article 15 of this Circular.

2. Upon the expiration of the liquidation time limit, if the credit institution or foreign bank branch has fully settled debts and other property obligations under Clause 1, Article 15 of this Circular, except deposits not yet received by depositors, and the credit institution or foreign bank branch has sufficient money to pay these deposits, the liquidation council of the credit institution or foreign bank branch shall transfer amounts reserved for unpaid deposits and the list of depositors having not yet received their deposits to the State Bank’s branch for management and payment to depositors and termination of liquidation.

3. Being incapable of paying all debts.

Section 3

SUPERVISION OF ASSET LIQUIDATION

Article 18. Organizational structure of the liquidation supervision group

1. The State Bank shall decide to establish the liquidation supervision group, appoint the head of the liquidation supervision group, decide on the use of the seal of the liquidation supervision group, and specify the tasks and powers of the head and members of the liquidation supervision group.

2. The liquidation supervision group must have at least 5 members who meet the criteria and conditions specified in Article 19 of this Circular, including:

a/ A representative of the State Bank;

b/ A representative of another credit institution who is appointed at the proposal of the Board of Directors or the Members’ Council of such credit institution (in case the State Bank appoints another credit institution to participate in supervising the liquidation of assets of the credit institution or foreign bank branch).

Article 19. Criteria and conditions for a member of the liquidation supervision group

1. Possessing a university degree or higher in economics, finance, banking, business administration, law, accounting or auditing, and having at least 3 years’ experience in the banking or deposit insurance sector.

2. Being other than a shareholder, owner, capital-contributing member, related person of a member of the Board of Directors, member of the Members’ Council or member of the Supervisory Board, Chief Executive Officer, or member of the liquidation council of the credit institution or foreign bank branch subject to asset liquidation.

Article 20. Operational mechanism of the liquidation supervision group

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

2. The head and members of the liquidation supervision group shall be held responsible before the person who has issued the decision on the establishment of the liquidation supervision group for the performance of their tasks.

3. A meeting of the liquidation supervision group shall only be held with the participation of at least two-thirds of the total members. The liquidation supervision group’s decisions shall only be approved with the consent of the majority of members present at the meeting. In case valid votes for and valid votes against are equal, the content in the vote for of the head of the liquidation supervision group shall prevail.

4. Expenses related to activities of the liquidation supervision group shall be borne by the credit institution or foreign bank branch. The accounting of expenses must comply with the current accounting regime.

5. The liquidation supervision group shall terminate its tasks when the State Bank issues a decision on termination of the liquidation of assets of the credit institution or foreign bank branch.

Article 21. Tasks and powers of the liquidation supervision group

1. To direct and supervise the credit institution or foreign bank branch in the inventory of all debts, receivables and payables; to request the credit institution or foreign bank branch to invite creditors and debtors for reconciliation to determine the solvency and sources for debt payment.

2. To request the liquidation council to report and provide documents and information on the practical organization and operation of the credit institution or foreign bank branch in the course of asset liquidation, and make payment for creditors according to the order of priority specified in this Circular.

3. To supervise the entire process of asset liquidation in accordance with this Circular and the decision on establishment of the liquidation supervision group as specified in Clause 1, Article 18 of this Circular.

4. Within the first 10 days of every month or upon request, the liquidation supervision group shall prepare a report and hand-deliver or send it by post to the State Bank or the State Bank’s branch according to the competence specified in Article 4 of this Circular, the Deposit Insurance of Vietnam, and the People’s Committee, which must have the contents on practical asset liquidation and division and arising matters, and recommendations for the liquidation termination (if any), using the form provided in the Appendix to this Circular. When necessary, the liquidation supervision group may send a written request to related agencies for them to assist the credit institution or foreign bank branch in recovering receivables or handling customers who intentionally cause asset loss.

5. To be entitled to propose the State Bank to decide to suspend the operation of any member of the liquidation council who intentionally violates law, fails to implement the liquidation plan, attempts to disperse assets, or shirks responsibilities or obligations; and report serious cases to the Governor for issuance of a written request to competent agencies to handle violators in accordance with law (if any).

6. To propose the State Bank or the People’s Committee to handle matters falling beyond the liquidation supervision group’s competence.

7. To submit to the State Bank’s direction.

8. Other tasks and powers as specified in this Circular.

Chapter III

REVOCATION OF LICENSES OF FOREIGN REPRESENTATIVE OFFICES

Article 22. Procedures for revocation of the license of a foreign representative office

1. In case the foreign representative office applies for operation termination:

a/ The foreign representative office shall prepare 1 set of dossier and hand-deliver it at the single-window division or send it by post to the State Bank’s branch. The dossier must comprise:

(i) A written request for operation termination, clearly stating the reason for requesting for termination of the operation and revocation of the license of the foreign representative office, retention of documents after the license is revoked, and responsibilities of organizations and individuals related to the process of operation termination and license revocation;

(ii) The competent authority’s document approving termination of the operation of the foreign representative office;

b/ Within 40 days after receiving a complete and valid dossier as specified at Point a of this Clause, the State Bank’s branch shall:

(i) Issue a decision to revoke the license and request the foreign representative office to liquidate the office lease contract and settle any other obligations and debts (if any) with related individuals or organizations, carry out the procedures for termination of the operation and closure of the foreign representative office, return the operation registration certificate and the seal in accordance with law; or,

(ii) Issue a written request for the foreign representative office to report and explain relevant matters (if any).

c/ Within 30 days after receiving the request from the State Bank’s branch, the foreign representative office shall send the report with explanations to the State Bank’s branch as specified at Point b(ii) of this Clause;

d/ Within 5 working days after receiving the report with explanations as specified at Point c of this Clause, the State Bank’s branch shall implement Point b(i) of this Clause.

2. For the case of license revocation specified at Point a, Clause 1, Article 1 of this Circular, the State Bank’s branch shall implement Point b(i), Clause 1 of this Article.

3. In case the foreign representative office does not apply for extension of its operation duration under the State Bank’s regulations, within 10 days from the deadline for submitting the application dossier, the State Bank’s branch shall issue a written request for the foreign representative office to liquidate the office lease contract and settle other obligations and debts (if any) with related individuals and organizations, carry out procedures for termination of operation and closure of the office, and return the operation registration certificate and the seal in accordance with law.

4. If the foreign representative office applies for extension of its operation duration but has such application disapproved by the State Bank’s branch, the latter shall, in its notice of disapproval, request the foreign representative office to liquidate the office lease contract and settle other obligations and debts (if any) with related individuals and organizations, carry out procedures to termination of operation and closure of the office, and return the operation registration certificate and the seal in accordance with law.

Article 23. Disclosure of information on revocation of the license of a foreign representative office

1. Within 7 working days from the effective date of the license revocation decision, the State Bank’s branch shall post information on the license revocation on its website (if any), and send the decision to the People’s Committee, the foreign representative office, and the State Bank for the state management and for posting on the State Bank’s Portal.

2. Within 7 working days from the effective date of the license revocation decision, the foreign representative office shall publish the decision in 1 national daily printed newspaper in 3 consecutive issues or on 1 electronic newspaper of Vietnam for 7 working days, and post up the decision at its office.

3. In case the foreign representative office does not apply for extension of its operation duration under the State Bank’s regulations or applies for the extension but has such application disapproved by the State Bank’s branch, within 7 working days from the date of expiration of the license, the State Bank’s branch shall post on its website (if any) the information on termination of operation duration of the foreign representative office, and send a notice of the termination to the People’s Committee and the State Bank for the state management and for posting on the State Bank’s Portal.

Article 24. Notification to the business registration agency of revocation of the license of a foreign representative office

Within 5 working days from the effective date of the decision to revoke the license of the foreign representative office, the State Bank’s branch shall send a notice of the license revocation, together with the license revocation decision, to the provincial-level business registration agency of the locality where the foreign representative office is located for the latter to update information to the National Information System on Enterprise Registration.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 25. Responsibilities of related units

1. Credit institutions, foreign bank branches and foreign representative offices shall fully and truthfully provide information on their organization and operation; and comply with the reporting regime and relevant provisions on dissolution, asset liquidation and license revocation of this Circular.

2. The Management and Supervision Unit shall:

a/ Act as the focal point for receiving and appraising dossiers according to the competence specified in Clauses 1 and 2, Article 4 of this Circular;

b/ For the cases specified in Article 8 of this Circular, send consultation requests or propose the Governor to send consultation requests according to the competence specified in Clauses 1 and 2, Article 4 of this Circular to:

(i) The People’s Committee and related ministries and agencies as specified in Clause 3, Article 8 of this Circular;

(ii) The State Bank’s branch regarding the organization and operation, ability to fully settle debts and other property obligations; opinions on the dissolution, asset liquidation and license revocation; and recommendations on measures to deal with relevant matters; and impacts of the dissolution and license revocation on the safety of the credit institution system in the locality;

(iii) Related units of the State Bank regarding dissolution, asset liquidation and license revocation (if necessary).

c/ Propose the Governor to consider and decide on the matters concerning dissolution, asset liquidation and license revocation for credit institutions according to the competence specified in Clause 1, Article 4 of this Circular; and decide on matters concerning dissolution, asset liquidation and license revocation for credit institutions and foreign bank branches according to the competence specified in Clause 2, Article 4 of this Circular;

d/ Propose the Governor to decide on the revocation of licenses or decide to revoke licenses of bankrupt credit institutions under Clause 3, Article 1 of this Circular according to the competence specified in Clauses 1 and 2, Article 4 of this Circular;

dd/ Handle requests related to the dissolution, asset liquidation and license revocation for credit institutions and foreign bank branches under Clauses 1 and 2, Article 4 of this Circular that fall beyond the competence of the liquidation supervision group; and propose the Governor to consider and handle arising matters concerning dissolution, asset liquidation and license revocation for credit institutions and foreign bank branches that fall beyond their competence;

e/ Send notices to business registration agencies under Article 13 of this Circular;

g/ Within 5 working days from the effective date of the license revocation decision, send a written request to the Information Technology Department for cancellation of bank codes.

3. The State Bank’s branches shall:

a/ Act as the focal points for receiving and appraising dossiers according to the competence specified in Clause 3, Article 4 of this Circular;

b/ For the cases specified in Article 8 of this Circular, send consultation requests or propose the Governor to send consultation requests according to the competence specified in Clause 3, Article 4 of this Circular to:

(i) The People’s Committee and related ministries and agencies as specified in Clause 3, Article 8 of this Circular;

(ii) Related units of the State Bank regarding dissolution, asset liquidation and license revocation (if necessary).

c/ Decide on matters concerning the dissolution, asset liquidation and license revocation for foreign bank branches; and operation termination and license revocation for foreign representative offices according to the competence specified in Clause 3, Article 4 of this Circular;

d/ Handle requests related to the dissolution, asset liquidation and license revocation for foreign bank branches and foreign representative offices under Clause 3, Article 4 of this Circular that fall beyond the competence of the liquidation supervision group; assign representatives to join the liquidation supervision group for the cases of license revocation specified in Clauses 1 and 2, Article 4 of this Circular upon request; and propose the Governor to consider and handle the arising matters concerning dissolution, asset liquidation and license revocation for foreign bank branches and concerning license revocation for foreign representative offices that fall beyond their competence;

dd/ Send feedback to the Management and Supervision Unit within 15 days after receiving the latter’s request under Point b(ii), Clause 2 of this Article;

e/ Coordinate with the Management and Supervision Unit in handling matters on dissolution, asset liquidation and license revocation of credit institutions and foreign bank branches;

g/ Send notices to business registration agencies under Articles 13 and 24 of this Circular;

h/ Within 5 working days from the effective date of the license revocation decision, send a written request to the Information Technology Department for cancelling bank codes.

4. Related departments and units of the State Bank shall give opinions upon requests of the Management and Supervision Unit or the State Bank’s branches under regulations.

Article 26. Implementation provisions

1. This Circular takes effect on February 17, 2025.

2. From the effective date of this Circular, the following documents cease to be effective:

a/ The State Bank Governor’s Circular No. 24/2017/TT-NHNN of December 29, 2017, on procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; and procedures for revocation of licenses of representative offices of foreign credit institutions and other foreign organizations engaged in banking activities;

b/ Clause 7, Article 1; and Clause 5, Article 2, of the State Bank Governor’s Circular No. 14/2019/TT-NHNN of August 30, 2019, amending and supplementing a number of articles of the Circulars concerning the State Bank’s periodical reporting regime;

c/ The State Bank Governor’s Circular No. 11/2020/TT-NHNN of November 2, 2020, amending and supplementing a number of articles of the State Bank Governor’s Circular No. 24/2017/TT-NHNN of December 29, 2017, on procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; and procedures for revocation of licenses of representative offices of foreign credit institutions and other foreign organizations engaged in banking activities.

Article 27. Organization of implementation

Heads of the units of the State Bank, credit institutions, foreign bank branches, Vietnam-based representative offices of foreign credit institutions and other foreign organizations engaged in banking activities, and related organizations and individuals shall implement this Circular.-

For the State Bank Governor
Deputy Governor
DOAN THAI SON

* The Appendix to this Circular is not translated.