LAW

ON CREDIT INSTITUTIONS

Pursuant to the Constitution of the Socialist Republic of Vietnam;

The National Assembly promulgates the Law on Credit Institutions.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Law stipulates the establishment, organization, operation, early intervention, special control, reorganization, dissolution, and bankruptcy of credit institutions; and the establishment, organization, operation, early intervention, dissolution, and cessation of operations of foreign bank branches; the establishment and operation of Vietnam-based representative offices of foreign credit institutions and other foreign institutions engaged in banking operations; the settlement of non-performing loans and disposal of collaterals of non-performing loans of credit institutions, foreign bank branches, and institutions with the function of purchasing, selling, and settling debts, of which 100% charter capital is held by the State.

Article 2. Subjects of application

1. Credit institutions.

2. Foreign bank branches.

3. Vietnam-based representative offices of foreign credit institutions and other foreign institutions engaged in banking operations (hereinafter referred to as foreign representative offices).

4. Institutions with the function of purchasing, selling, and settling debts, of which 100% charter capital is held by the State (hereinafter referred to as debt trading and settlement institutions).

5. Authorities, organizations and individuals related to the establishment, organization, operation, early intervention, special control, reorganization, dissolution, and bankruptcy of credit institutions; and the establishment, organization, operation, early intervention, dissolution, and cessation of operations of foreign bank branches; the establishment and operation of foreign representative offices; the resolution of non-performing loans and disposal of collaterals of non-performing loans of credit institutions, foreign bank branches, and debt trading and settlement institutions.

Article 3. Application of commercial practices

Organizations and individuals engaged in banking operations are entitled to reach agreement on the application of the following commercial practices:

1. International Commercial Terms published by the International Chamber of Commerce;

2. Other commercial practices which are not contrary to the fundamental principles of Vietnamese law.

Article 4. Interpretation of terms

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

1. Factoring means a form of credit extension through redeeming receivable amounts of a seller or providing pre-payments on behalf of a purchaser under a contract on goods purchase or sale or service provision between such seller and purchaser.

2. Bank guarantee means a form of credit extension to a client under which a credit institution or foreign bank branch commits to the obligee to fulfilling financial obligations on behalf of the obligor if such obligor fails to fulfill or insufficiently fulfills its obligations as committed. The client shall acknowledge and repay the debt to the credit institution or foreign bank branch as agreed upon.

3. Early intervention means the State Bank of Vietnam (hereinafter referred to as the State Bank) imposing restrictive requirements and measures to credit institutions and foreign bank branches and requesting them to take remedies under the supervision of the State Bank, as specified in Clause 1, Article 156 of this Law.

4. Credit extension means an agreement allowing an organization or individual to use a sum of money or a commitment allowing the use of a sum of money on the repayment principle by such professional operations as lending, discount, financial leasing, factoring, bank guarantee, letter of credit and other credit extension operations.

5. Foreign bank branch means an economic institution without a legal entity status and a subsidiary of a foreign bank which is liable for all of the branch’s obligations and commitments in Vietnam.

6. Discount means a form of credit extension through purchasing on a definite term, or purchasing while reserving the right to claim, negotiable instruments and other valuable papers of beneficiaries prior to their due date.

7. Lending means a form of credit extension under which the lender gives or commits to give the borrower a sum of money for use for a specific purpose in a certain period as agreed upon on the principle of payment of principal and interest in full to the lender.

8. Major shareholder means a shareholder of a credit institution, which is a joint-stock company, holding 05% or more of the voting shares, including those indirectly held, of such credit institution.

9. Subsidiary of a credit institution means a company falling in any of the following cases:

a) The credit institution itself or together with its affiliated persons owns more than 50% of the charter capital or voting shares of such company;

b) The credit institution has the right to appoint a majority or all of members of the Board of Directors or Members’ Council, the Chief Executive Officer (Director) of such company;

c) The credit institution may modify the Charter of such company;

d) The credit institution itself or together with its affiliated persons directly or indirectly controls the adoption of resolutions and decisions of the Shareholders’ General Meeting, Board of Directors or Members’ Council of such company.

10. Controlling company means a company that possesses, either directly or indirectly, more than 20% of the charter capital of a commercial bank, or a company that controls a commercial bank, or a commercial bank that holds a subsidiary or an affiliated company.

11. Affiliated company of a credit institution means a company of which more than 11% of the charter capital or voting shares are held by the credit institution itself or together with its affiliated persons, other than a subsidiary of such credit institution.

12. Specialized finance company means a type of non-bank financial institutions whose main operation is factoring, consumer credit, and financial leasing in accordance with this Law.

13. General finance company mean a type of non-bank financial institution that conduct operations as specified in Section 3, Chapter V of this Law.

14. Provision of services of via-account payment means the provision of payment instruments; provision of services of payment by check, payment order, payment authorization, collection, collection authorization, bank card, and other payment services for clients via their payment accounts.

15. License may be a license for establishment and operation of a credit institution, or license for establishment of a foreign bank branch or a foreign representative office, which is granted by the State Bank. The State Bank’s document modifying a license is an integral part of a license.

16. Credit institution’s capital contribution or share purchase means a credit institution by itself or another institution under its entrustment contributing capital to form the charter capital; purchasing shares in an enterprise or another credit institution, including also transferring and purchasing shares or capital contributions of an enterprise or another credit institution; allocating or contributing capital to a subsidiary or an affiliated company of such credit institution; or contributing capital to an investment fund.

17. Banking operations means the trading in and regular provision of one or some of the following services:

a) Deposit taking;

b) Credit extension;

c) Via-account payment.

18. Investment by capital contribution or share purchase to hold the right to control an enterprise includes investment accounting for over 50% of the charter capital or voting shares in an enterprise or another investment sufficient to control decisions of the Shareholders’ General Meeting or the Members’ Council.

19. Special control means the State Bank deciding to place a credit institution under its direct control.

20. Monetary brokerage means acting as an intermediary party for brokerage charges to arrange banking operations and other business activities in accordance with this Law between credit institutions and foreign bank branches.

21. Bank means a credit institution which may conduct all banking operations in accordance with this Law. Types of banks include commercial bank, policy bank and cooperative bank.

22. Cooperative bank means a bank of all people’s credit funds established by people’s credit funds and some other legal entities by contributing capital for the main purposes of systematic link, financial support and capital balancing within the system of people’s credit funds.

23. Commercial bank means a type of banks which may conduct all banking operations and other business activities in accordance with this Law for profit.

24. Affiliated person means an organization or individual having direct or indirect relations with another organization or individual in any of the following cases:

a) Parent company with its subsidiary and vice versa; parent company with its subsidiary’s subsidiary and vice versa; credit institution with its subsidiary and vice versa; credit institution with its subsidiary’s subsidiary and vice versa; among subsidiaries of the same parent company or credit institution; among subsidiaries of the same subsidiary of a parent company or credit institution; managers, supervisors, or Supervisory Board member of the parent company or credit institution, and individual or organization competent to appoint these persons with a subsidiary and vice versa;

b) Company or credit institution with its manager, supervisor or Supervisory Board member, or with company or organization competent to appoint these persons and vice versa;

c) Company or credit institution with organization or individual holding 05% or more of the charter capital or voting shares in such company or credit institution and vice versa;

d) Individual with his/her spouse; biological parent, adoptive parent, stepfather, stepmother, parent-in-law; biological child, adopted child, stepchild of the spouse, daughter-in-law, son-in-law; sibling; half-sibling; brother-in-law, sister-in-law of the sibling or half-sibling (hereinafter referred to as spouse, parent, child, sibling); paternal/maternal grandparent; paternal/maternal grandchild; biological paternal/maternal uncle, aunt, nephew, niece;

dd) Company or credit institution with individual in the relations specified at Point d of this Clause with manager, supervisor, Supervisory Board member, capital contributor or shareholder holding 05% or more of the charter capital or voting shares in that company or credit institution and vice versa;

e) Individual authorized to represent the capital contribution of an organization or individual specified at Points a, b, c, d and dd of this Clause with authorizing organization or individual; among individuals authorized to represent the capital contributions of an institution.

g) Other legal entities and individuals with potentially risky relations for the operations of the credit institution or foreign bank branch, who shall be specified in accordance with the internal regulations of the credit institution and foreign bank branch or the written request of the State Bank after inspection and supervision;

h) For people's credit funds, affiliated persons of a client of a people's credit fund mean those specified at Points b, c, dd and g of this Clause; a client and his/her spouse, parent, child, sibling.

25. Executives of a credit institution include the Chief Executive Officer (Director), Deputy Chief Executive Officer (Deputy Director), Chief Accountant, branch director and holders of other equivalent positions specified in the credit institution’s charter.

26. Managers of a credit institution include chairperson and other members of the Board of Directors; chairperson and other members of the Members’ Council; Chief Executive Officer (Director) and holders of other managerial titles specified in the credit institution’s charter.

27. Deposit taking means receiving money from an organization or individual as demand or term deposit, savings deposit, issuing deposit certificates and other forms of receiving deposits on the principles of full payment of principals and interests as agreed upon to the organization or individual making the deposit (hereinafter referred to as the depositor).

28. Mandatory transfer means a measure whereby the owners, capital contributor or shareholder of a commercial bank under special control must transfer all their shares and capital contributions to the transferee.

29. Restructuring of a credit institution under special control (hereinafter referred to as restructuring) means one of the following:

a) Recovery;

b) Merger, consolidation and transfer of all shares and capital contributions;

c) Mandatory transfer;

d) Dissolution;

dd) Bankruptcy.

30. People’s credit fund means a credit institution established voluntarily by legal entities, individuals and households as a cooperative to conduct one or more banking operations in accordance with this Law for the main purpose of mutual assistance in production and business development and life.

31. Bank run means a situation in which a large number of depositors withdraw their money from a credit institution, leading to the credit institution becoming insolvent, as specified by the Governor of the State Bank.

32. Derivative product means a financial instrument valued by predicted changes in the value of a principal asset such as interest rate, foreign exchange, currency or other principal assets.

33. Indirect ownership means an organization’s or an individual’s ownership of the charter capital of a credit institution through entrusted investment or through an enterprise whose more than 50% of the charter capital is owned by such organization or individual.

34. Re-discount means the discount of negotiable instruments and other valuable papers which have been discounted prior to their due date.

35. Payment account means a client’s demand deposit account opened by a client at a bank or foreign bank branch to use payment services provided by such bank or foreign bank branch.

36. Letter of credit means a form of credit extension by issuing, confirming, negotiating payment of, and returning a letter of credit.

37. Microfinance institution means a credit institution which mainly conducts one or more banking operations to meet the needs of low-income individuals and households and micro-enterprises.

38. Credit institution means an economic institution with a legal entity status that may conduct one, several or all banking operations in accordance with this Law. Credit institutions include banks, non-bank financial institutions, microfinance institutions and people’s credit funds.

39. Supporting credit institution means a credit institution engaged in administering, managing, controlling, offering organizational, operational, and financial support for credit institutions under special control.

40. Foreign credit institution means a credit institution established overseas under a foreign law.

Foreign credit institutions may be commercially present in Vietnam in the forms of joint-venture bank, wholly foreign-owned bank, foreign bank branch, joint-venture finance company, wholly foreign-owned finance company, joint-venture financial leasing company and wholly foreign-owned financial leasing company, or foreign representative office.

Joint-venture and wholly foreign-owned banks are commercial banks. Joint-venture and wholly foreign-owned finance companies, and joint-venture and wholly foreign-owned financial leasing companies are general financial companies or specialized financial companies in accordance with this Law.

41. Non-bank financial institution means a credit institution which may conduct one or some banking operations in accordance with this Law, except taking deposits of individuals and providing services of payment via client accounts. Types of non-bank financial institutions include general financial companies and specialized financial companies.

42. Charter capital means the total amount of money contributed by owners and capital contributors to a credit institution that is a limited liability company; or the total par value of shares sold to shareholders by a credit institution that is a joint stock company; or the total amount of money contributed by members of a credit institution that is a cooperative, or the capital supported by the State for a cooperative bank.

43. Allocated capital of a foreign bank branch means the amount of money allocated by a foreign bank to such foreign bank branch.

44. Legal capital means the minimum level of capital specified in law regulations to establish a credit institution or foreign bank branch.

45. Equity includes the actual value of the charter capital of a credit institution or the allocated capital of a foreign bank branch, plus some reserves and other liabilities, then minus deductible amounts. Equity shall be calculated in accordance with the regulations of the Governor of the State Bank.

Article 5. Use of phrases/words indicating banking operations

An institution other than a credit institution or foreign bank branch may not use the phrase/word “credit institution,” “bank,” “finance company,” “financial leasing company,” “microfinance institution,” “people's credit fund” or other phrases/words in its name or title or in secondary parts of its name or title or in its transaction documents or advertisements if the use of such phrases/words can make clients misunderstand that it is a credit institution or foreign bank branch.

Article 6. Legal forms of credit institutions

1. Domestic commercial banks established and organized as joint-stock companies, unless otherwise specified in Clause 2 of this Article or unless the imposition of mandatory transfer is approved.

2. State-owned commercial banks established and organized as one-member limited liability companies whose 100% of the charter capital is held by the State.

3. Domestic non-bank financial institutions established and organized as joint-stock or limited liability companies.

4. Joint-venture or wholly foreign-owned credit institutions established and organized as limited liability companies.

5. Cooperative banks and people’s credit funds established and organized as cooperatives.

6. Microfinance institutions established and organized as limited liability companies.

Article 7. Autonomy in business activities

1. Credit institutions and foreign bank branches have autonomy in their business activities and take accountability for the results of their business activities.

2. Credit institutions and foreign bank branches may refuse to extend credit or provide other services when finding that they do not fully meet the conditions to do so or such credit extension or service provision is inefficient or non-compliant with law regulations.

Article 8. Right to conduct banking operations

Organizations that fully meet the conditions in accordance with this Law and other relevant laws and are licensed by the State Bank may conduct one or some banking operations in accordance with this Law.

Article 9. Cooperation and competition in banking operations

Credit institutions and foreign bank branches may cooperate and compete in banking operations and other business activities in accordance with this Law and relevant laws.

Article 10. Responsibilities of credit institutions and foreign bank branches for protection of client interests

1. To purchase deposit insurance and contribute to the fund for ensuring the safety of the people's credit fund system in accordance with the law regulations and publicly announce their deposit insurance at headquarters and branches.

2. To facilitate clients to deposit and withdraw money, ensure full and on-time payment of principals and interests of deposits as agreed in accordance with the law regulations.

3. To refuse the investigation, blocking, seizure or transfer of deposits of clients, unless it is so requested by competent State authorities in accordance with the law regulations or so consented by clients.

4. To publicize deposit interest rates, service charges and rights and obligations of clients for each product and service provided.

5. To publicly announce the official trading hours. In case of cessation of transactions at one or several transaction location(s) during official trading hours or cessation of electronic transactions, at least 24 hours before such cessation, the credit institution or foreign bank branch must publicize information thereabout at the transaction location(s) or on its website.

In case of cessation of transactions due to force majeure events, no later than 24 hours after such cessation, the credit institution or foreign bank branch must publicize information thereabout at the transaction location(s) or on its website.

Article 11. Representatives at law of credit institutions

1. The representative at law of a credit institution shall be specified in the charter of such credit institution and must be one of the following persons:

a) Chairperson of the Board of Directors or Members’ Council of the credit institution;

b) Chief Executive Officer (Director) of the credit institution.

2. The representative at law of a credit institution must reside in Vietnam. When absent from Vietnam, he/she shall authorize in writing another person who must be a manager or an executive of the credit institution currently residing in Vietnam to perform his/her rights and obligations.

3. The credit institution must notify the State Bank of its representative at law within 10 days from the date he/she is elected or appointed as specified in the charter of the credit institution or when the representative at law is changed. The State Bank shall notify the representative at law of the credit institution to the business registration authority for the latter to update his/her information onto the national information system on business and cooperative registration.

Article 12. Disclosure of information

1. Credit institutions and foreign bank branches shall provide account holders with information on transactions and credit balances of their accounts as agreed upon with these holders.

2. Credit institutions and foreign bank branches shall report to the State Bank on information related to their business activities and may receive from the State Bank information on clients having credit relations with them in accordance with regulations of the Governor of the State Bank.

3. Credit institutions and foreign bank branches may exchange with one another information on their activities.

4. When conducting transactions with credit institutions or foreign bank branches, clients shall provide truthful, accurate information, documents and data in full and on time and take responsibility for such information, documents and data.

Article 13. Confidentiality of information

1. Managers, executives, and employees of credit institutions and foreign bank branches may not disclose clients’ information, business secrets of these institutions and branches.

2. Credit institutions and foreign bank branches shall hold in confidence the information of their clients in accordance with the Government’s regulations.

3. Credit institutions and foreign bank branches may not provide information of their clients for other organizations and individuals unless it is so requested by competent State authorities in accordance with the law regulations or consented by clients.

Article 14. Data security and business continuity

Credit institutions and foreign bank branches must ensure safety of their information systems, data security and business continuity in accordance with the regulations of the Governor of the State Bank and other relevant law regulations.

Article 15. Prohibited acts

1. Credit institutions and foreign bank branches conduct any banking operations and other business activities other than those specified in their licenses granted to them by the State Bank.

2. Individuals and organizations, other than credit institutions and foreign bank branches, conduct banking operations, except escrow, purchase and sale of securities by securities companies.

3. Organizations or individuals illegally intervene in banking operations and other business activities of credit institutions and foreign bank branches.

4. Credit institutions and foreign bank branches conduct competition restriction or unfair competition threatening to harm or harming the implementation of the national monetary policy, safety of the credit institution system, the interests of the State and the lawful rights and interests of organizations and individuals are prohibited.

5. Credit institutions, foreign bank branches, and their managers, executives, employees associate the sale of optional insurance products with the supply of banking products and services in all forms.

Chapter II

POLICY BANKS

Article 16. Establishment, operation and state-level governance of a policy bank

1. A policy bank shall be established by the Prime Minister and operate not for profit to implement the State’s socio-economic policies.

2. The Government shall specify operations of policy banks.

3. The Prime Minister, ministries and ministerial-level agencies shall perform state-level governance within their ambit over the activities of the policy bank.

Article 17. Owner and representatives of State ownership of a policy bank

1. The State is the owner of the policy bank. The Government uniformly manages the implementation of tasks and powers of the State as the owner of the policy bank.

2. The Board of Directors is the direct representative of the State ownership of a policy bank and performs the tasks and powers of the State as the owner in accordance with the Government's regulations.

Article 18. Charter capital of a policy bank

The charter capital of a policy bank is funded by the State budget and replenished from the State budget and other lawful financial sources.

Article 19. Management organizational structure of a policy bank

1. The policy bank's management organizational structure is composed of the Board of Directors, Supervisory Board, Chief Executive Officer and other managerial structures in accordance with the Government’s regulations.

2. The policy bank may establish its branches, exchanges, transaction offices and other affiliated units in accordance with the law regulations.

Article 20. Board of Directors of a policy bank

1. The Board of Directors is composed of the chairperson and other members.

2. The term of office of a member of the Board of Directors is 5 years at most.

3. The chairperson of the Board of Directors shall be appointed and relived from duty by the Prime Minister.

4. Quantity, appointment and relief from duty of members of the Board of Directors; structure, tasks and powers of the Board of Directors shall be specified by the Government.

5. The Board of Directors may establish its own secretariat. The responsibilities and tasks of the secretariat shall be specified by the Board of Directors.

Article 21. Supervisory Board of a policy bank

1. The Supervisory Board is composed of the head and other members.

2. The term of office of a member of the Supervisory Board is 5 years at most.

3. Quantity, appointment and relief from duty of members of the Supervisory Board; structure, tasks and powers of the Supervisory Board shall be specified by the Government.

4. The Supervisory Board may establish its own internal audit unit and use resources of the policy bank to perform its tasks.

Article 22. Chief Executive Officer of a policy bank

1. The Chief Executive Officer is the representative at law administering day-to-day business activities of the policy bank.

2. The term of office of a Chief Executive Officer is 5 years at most.

3. The Chief Executive Officer shall be appointed and relived from duty by the Prime Minister.

4. The appointment, relive from duty, rights and obligations of the Chief Executive Officer shall be specified by the Government.

Article 23. Prudential regulation of a policy bank

1. Policy banks have their solvency guaranteed by the State; are compensated for interest rate differences and management fees; and exempt from paying taxes and other payables to the State budget in accordance with the law regulations.

2. Policy banks may not maintain mandatory reserves and purchase deposit insurance.

Article 24. Internal control, internal audit, statements of a policy bank

1. Policy banks must carry out internal control and internal audit; formulate and issue internal processes on professional operations.

2. Policy banks shall implement statistical and operational reporting regimes in accordance with the law regulations.

Article 25. Settlement of non-performing loans and disposition of collateral of non-performing loans by a policy bank

Policy banks may apply this Law to settle non-performing loans and dispose of collateral for their non-performing loans.

Article 26. Financial mechanisms, salaries, restructuring, dissolution, examination, inspection and supervision of a policy bank

Financial mechanisms, salaries, restructuring, dissolution, examination, inspection and supervision of a policy bank and other issues related to a policy bank shall comply this Chapter and the Government’s regulations.

Chapter III

LICENSES

Article 27. Competence to grant, modify and revoke Licenses

1. The State Bank may grant, modify and revoke licenses in accordance with this Law.

2. The establishment and operation license of a credit institution is also the Certificate of Business Registration or Certificate of Cooperative Registration.

3. The establishment license of a foreign bank branch is also the Certificate of operation registration of such foreign bank branch and the license to establish a foreign representative office is also the Certificate of operation registration of such foreign representative office.

4. The Governor of the State Bank shall specify the notification of information on grant, modification and revocation of licenses; information on the appointment of Chief Executive Officers (Directors) of foreign bank branches, chief representatives of foreign representative offices and related information for the business registration authorities for the latter to update such information onto the national information system on business and cooperative registration.

Article 28. Legal capital

1. The Government shall specify legal capital of each type of credit institutions and foreign bank branches.

2. Credit institutions and foreign bank branches shall preserve the actual value of their charter or allocated capital at least equal to their legal capital.

3. The actual value of the charter capital or allocated capital shall be equal to the charter capital or allocated capital and capital surplus, plus accumulated undistributed profits, minus accumulated unsettled losses recorded in the accounting books.

4. The Governor of the State Bank shall specify the handling of cases in which the actual value of credit institutions’ charter capital or foreign bank branches’ allocated capital is lower than their legal capital.

Article 29. Licensing conditions

1. A credit institution may obtain a license if it fully meets the following conditions:

a) Its charter capital is at least equal to the legal capital;

b) Its owners are a one-member limited liability company, its founding shareholders or members are legal entities which are lawfully operating and financially capable for capital contribution. Its founding shareholders or members are individuals with full civil act capacity who commit to being financially capable for capital contribution.

c) Its managers, executives and Supervisory Board members fully meet the standards and conditions specified in Article 41 of this Law;

d) Its charter complies with this Law and other relevant laws;

dd) It has an establishment plan and a feasible business plan which surely neither affects the safety and stability of the credit institution system nor creates monopoly, restrict competition, or create unfair competition within the credit institution system.

2. A joint-venture or wholly foreign-owned credit institution may obtain a license if it fully meets the following conditions:

a) The conditions specified in Clause 1 of this Article;

b) The foreign credit institution may conduct banking operations in accordance with the law regulations of the country in which it is headquartered;

c) The operations to be conducted in Vietnam are those the foreign credit institution is licensed to conduct in the country in which it is headquartered;

d) Foreign credit institutions shall meet the conditions in terms of total assets and financial situation in accordance with the regulations of the Governor of the State Bank, and comply with the prudential regulations in the countries where they are headquartered;

dd) The foreign institution makes a written commitment to provide supports in finance, technology, governance, administration and operation for the joint-venture or wholly foreign-owned credit institution. It guarantees that the joint-venture or wholly foreign-owned credit institution preserves the actual value of its charter capital not lower than the legal capital and observes regulations on limits to ensure safety of their operations in accordance with this Law;

e) A competent foreign authority in the country where the foreign credit institution is headquartered has signed an agreement with the State Bank on inspection and oversight of banking operations and exchange of information on banking safety oversight and made a written commitment on consolidated oversight of the foreign credit institution’s operations according to international practices.

3. A foreign bank branch may obtain a license when it fully meets the following conditions:

a) Its allocated capital is at least equal to the legal capital;

b) The conditions specified at Points b, c and dd, Clause 1, and Points b, c, d and e, Clause 2 of this Article;

c) The foreign bank makes a written commitment to be liable for all obligations and commitments of its branch in Vietnam; and to guarantee the actual value of the branch’s allocated capital not lower than the legal capital and its observance of regulations on limits to ensure safety of its operations in accordance with this Law.

d) In case of requesting to establish a second or more foreign bank branch in Vietnam, the foreign bank must ensure that the foreign bank branch has been operating in Vietnam for 03 years immediately preceding the year of requesting to establish a new branch, does not violate law regulations, ensures its prudential ratio and conducts profitable business.

4. A foreign representative office may obtain a license when it fully meets the following conditions:

a) The foreign credit institution or the foreign institution otherwise engaged in banking operations is a legal entity licensed for banking operations in its country;

b) Under the law of the country in which the foreign credit institution or the foreign institution otherwise engaged in banking operations is headquartered, it may set up a Vietnam-based representative office.

5. Conditions for owners of credit institutions being one-member limited liability companies, founding shareholders, founding members specified at Point b, Clause 1 of this Article and conditions for granting licenses to people's credit funds and microfinance institutions shall be specified by the Government.

Article 30. Dossiers and procedures for licensing

The Governor of the State Bank shall specify dossiers and procedures for first-time licensing and renewal of licenses.

Article 31. Licensing time limit

1. Within 180 days after receiving a complete and valid dossier, the State Bank shall grant or refuse to grant an establishment and operation license of a credit institution, or a license to establish a foreign bank branch.

2. Within 60 days after receiving a complete and valid dossier, the State Bank shall grant or refuse to grant a license to establish a foreign representative office.

3. In case of refusal, the State Bank shall send a written notice clearly stating the reason for such refusal.

Article 32. Licensing fees

Licensed credit institutions, foreign bank branches, foreign representative offices that have granted licenses for the first time shall pay licensing fees in accordance with the law regulations on charges and fees upon renewal thereof.

Article 33. Publicity of grand opening

A credit institution, foreign bank branch or foreign representative office shall publicize in 01 media channel of the State Bank and 01 printed newspaper for 03 consecutive issues or 01 Vietnamese e-newspaper for at least 30 days before its expected grand opening the following information:

1. Name or head office address of the credit institution; name and head office address of the foreign bank branch or foreign representative office;

2. Serial number and date of grant of the license;

3. Charter capital of a credit institution or allocated capital of a foreign bank branch;

4. Representative at law of the credit institution, Chief Executive Officer (Director) of the foreign bank branch or chief representative of the foreign representative office;

5. The list of its founding shareholders or capital contributors with their respective shareholding and capital contribution ratios or of its owners;

6. The expected grand opening date.

Article 34. Conditions for grand opening

1. A licensed credit institution, foreign bank branch or foreign representative office may operate only from its grand opening date.

2. To organize a grand opening, a licensed credit institution or foreign bank branch must fully meet the following conditions:

a) The charter of the credit institution has been sent to the State Bank and approved by the competent authority;

b) It has sufficient charter capital or allocated capital; has a vault and headquarters that meet the conditions specified by the Governor of the State Bank;

c) It has a management organizational structure, internal control and audit system relevant to its type in accordance with this Law and other relevant law regulations;

d) Its information technology system meets managerial and operational requirements;

dd) It has internal regulations on the organization and operation of the Board of Directors, Members’ Council, Supervisory Board and Chief Executive Officer (Director) and professional divisions at its head office; internal regulations on risk management; and regulations on operational network management;

e) Its charter or allocated capital in Vietnam dong has been fully deposited at a non-interest bearing blocked account opened at the State Bank at least 30 days before inaugurating its operation. Its charter or allocated capital shall be released after it inaugurates its operation;

g) It has publicized information about its grand opening in accordance with Article 33 of this Law.

3. Credit institutions, foreign bank branches, and foreign representative offices must organize their grand openings within 12 months from the date licenses are granted to them, unless force majeure events occur. If after this time limit, the grand openings are not organized, the license shall expire. The State Bank shall announce on its web portal the expired licenses.

4. A licensed credit institution or foreign bank branch shall notify the State Bank of its operation inauguration conditions specified in Clause 2 of this Article at least 15 days before the expected grand opening. The State Bank shall suspend the opening of credit institutions and foreign bank branches that fail to meet the conditions specified in Clause 2 of this Article.

Article 35. Use of licenses

1. A licensed credit institution, foreign bank branch or foreign representative office may use the correct name and conduct appropriate operations as stated in the license granted to it.

2. A licensed credit institution, foreign bank branch or foreign representative office may neither tamper with, make unauthorized modification to, purchase, sell, transfer, rent nor lend its license

Article 36. Revocation of licenses

1. The State Bank shall revoke a license when:

a) The license application dossier contains false information in order to be eligible for obtaining a license;

b) The credit institution is split, merged, consolidated, dissolved or bankrupt, or has its legal form changed;

c) The credit institution, foreign bank branch or foreign representative office operates at variance with its license;

d) The credit institution or foreign bank branch seriously violates the law regulations on reserve requirement and prudential ratio;

dd) The credit institution or foreign bank branch fails to implement or fully implement the State Bank’s decisions to assure banking operation safety;

e) The foreign credit institution or another foreign institution engaged in banking operations that is commercially present in Vietnam but then it is dissolved, go bankrupt or has its license revoked or its operations suspended by the competent authority in the country where it is headquartered.

2. The State Bank shall publicize license revocation decisions in the web portal of the State Bank.

3. A credit institution or foreign bank branch shall terminate its business activities on the effective date of the State Bank’s decision to revoke its license.

4. The Governor of the State Bank shall specify dossiers and procedures of the revocation of licenses.

Article 37. Changes subject to the State Bank’s approval

1. A credit institution or foreign bank branch must obtain the State Bank’s written approval before carrying out procedures to change any of the following details:

a) Its name or place of its head office;

b) Its charter or allocated capital, except the case specified in Clause 3 of this Article;

c) Place of branch office of the credit institution;

d) Operations and operational duration;

dd) Purchase or sale or transfer of capital contributions of owners; purchase or sale or transfer of capital contributions of capital contributors; purchase and transfer of shares whereby such shareholders become major shareholders. Owners, capital contributors, shareholders, purchasers and transferees of shares and capital contributions of a credit institution shall coordinate with such credit institution to carry out procedures for approval of the details specified at this Point.

In case of buying, selling, receiving transfer of or transferring a capital contribution of a credit institution being a limited liability company, the buyer or transferee must meet the conditions for owners and capital contributors specified at Point b, Clause 1, Clause 2, Article 29 and Clause 2, Article 78 of this Law or the capital contributor must comply with Clause 1, Article 77 of this Law;

e) Suspension of transactions for 05 working days or more, except for suspension of transactions due to force majeure events;

g) Listing of stocks on a foreign stock exchange.

2. Dossiers and procedures for approval of the changes specified in Clause 1 of this Article and modification of licenses shall comply with the regulations of the Governor of the State Bank.

3. Change of the area of operation of the people's credit fund; change of the charter capital and transfer of capital contributions of capital contributors of the cooperative bank or people's credit fund shall comply with the regulations of the Governor of the State Bank.

4. When being approved to change details specified in Clause 1 of this Article, a credit institution or foreign bank branch shall:

a) Amend and supplement the charter of the credit institution in accordance with the approved changes specified at Points a, b, d and dd, Clause 1 of this Article;

b) Announce the changes specified at Points a, b, c and d, Clause 1 of this Article within 07 working days from the date of approval by the State Bank on 01 media channel of the State Bank and 01 printed newspaper for 03 consecutive issues or on 01 Vietnamese e-newspaper.

Chapter IV

ORGANIZATION, GOVERNANCE AND ADMINISTRATION OF CREDIT INSTITUTIONS FOREIGN BANK BRANCHES

Section 1

GENERAL PROVISIONS

Article 38. Branches, representative offices, non-business units, commercial presence of credit institutions

1. After receiving written approval from the State Bank, credit institutions may establish domestic branches, representative offices, or non-business units; or establish and change legal forms of commercial presence overseas, including overseas branches, representative offices and other forms of commercial presence.

2. The Governor of the State Bank shall specify conditions, dossiers, and procedures for establishment, change of legal forms, dissolution, and cessation of operations of those specified in Clause 1 of this Article for each type of credit institution.

3. The written approval of establishment of a domestic branch or representative office of the credit institution is also the Certificate of operation registration of such branch or representative office.

4. The Governor of the State Bank shall specify the notification of information on the establishment, dissolution, and cessation of operations of domestic branches and representative offices and related information to the business registration authorities for the latter to update such information onto the national information system on business and cooperative registration.

Article 39. Charters of credit institutions

1. The charter of a credit institution being a joint stock company or limited liability company must contain the following main information:

a) Name and place of the head office;

b) Operations;

c) Operational duration;

d) Charter capital, modes of capital contribution and increase and decrease of charter capital;

dd) Tasks and powers of the Shareholders’ General Meeting, Board of Directors, Members’ Council, and Supervisory Board, rights and obligations of the Chief Executive Officer (Director);

e) Methodology for election, appointment, or relief from duty of a member of the Board of Directors or Members’ Council or Supervisory Board, or a Chief Executive Officer (Director);

g) Name, head office address, nationality of owners and capital contributors of the credit institution being a limited liability company;

h) Rights and obligations of owners and capital contributors, for a credit institution being a limited liability company; and of shareholders, for a credit institution being a joint-stock company;

i) Representative at law;

k) Principles of finance, accounting, control and internal audit;

l) Methodology to adopt decisions of the credit institution; principles of settlement of internal disputes;

m) Bases and methods to determine remuneration, salaries and bonuses for managers, executives and Supervisory Board members;

n) Cases and procedures of dissolution;

o) Procedures for modification of the charter.

2. The charter of a cooperative bank or a people's credit fund must contain the following main information:

a) Those specified at Points a, b, c, d, e, i, k, l, m, n and o, Clause 1 of this Article;

b) Tasks and powers of the Shareholders’ General Meeting, Board of Directors, and Supervisory Board, rights and obligations of the Chief Executive Officer (Director);

c) Cases of termination and procedures for terminating membership;

d) Rights and obligations of members;

dd) Procedures for conducting the Members' General Meeting and adopting decisions of the Members' General Meeting, methodology to elect proxies to attend and vote at the Members' General Meeting in the case where the Members' General Meeting is a meeting of proxies;

e) Principles for distribution of profits based on the service levels and capital contribution ratios;

g) Financial management, use and handling of assets, capital, funds and losses.

3. A credit institution’s charter and its modifications shall be sent to the State Bank within 15 days after they are adopted.

Article 40. Management organizational structure of credit institutions

1. The management organizational structure of a credit institution established as a joint-stock company comprises the Shareholders’ General Meeting, Board of Directors, Supervisory Board and Chief Executive Officer (Director).

2. The management organizational structure of a credit institution established as a one-member limited liability company or a limited liability company with two or more members comprises the Members’ Council, Supervisory Board and Chief Executive Officer (Director).

3. The management organizational structure of a cooperative bank or people’s credit fund complies with Article 82 of this Law.

Article 41. Criteria and conditions for mangers, executives and holders of some other positions of a credit institution

1. To be a member of the Board of Directors or Members’ Council, one must:

a) Not be banned from holding the position as specified in Clause 1, Article 42 of this Law.

b) Have professional ethics in accordance with regulations of the Governor of the State Bank;

c) Hold a bachelor’s degree or higher;

d) Have any of the following: At least 03 years of experience as a manager or executive of a credit institution; At least 05 years of experience as a manager of an enterprise operating in the financial, accounting, or auditing sector or of another enterprise with equity equal to or higher than the legal capital required for the corresponding type of credit institution; At least 05 years of hands-on work experience in the operational department of a credit institution or foreign bank branch; At least 05 years of hands-on work experience in the financial, banking, accounting, or auditing department.

2. In addition to the standards and conditions specified in Clause 1 of this Article, to be an independent member of the Board of Directors, one must:

a) Neither currently nor previously in the past 03 years work for the credit institution or any subsidiary of such credit institution;

b) Not enjoy salaries or regular pays of such credit institution other than remunerations for members of the Board of Directors;

c) Have no spouse, parent, child, sibling and spouses of such persons being major shareholders of such credit institution, managers or Supervisory Board members of such credit institution or its subsidiary;

d) Not represent the ownership of shares of such credit institution; not hold, directly or indirectly, together with any affiliated person 01% or more of the charter capital or voting shares of such credit institution;

dd) Not be a manager or Supervisory Board member of such credit institution at any time in the 05 preceding years.

3. To be a member of the Supervisory Board, one must:

a) Meet the standards and conditions specified at Points a and b, Article 1 of this Article;

b) Hold a bachelor’s degree or higher in one of the following fields: finance, banking, economics, business administration, law, accounting, and auditing;

c) Have at least 3 years of hands-on work experience in finance, banking, accounting, or auditing;

d) Not be an affiliated person of a manager of such credit institution;

dd) Reside in Vietnam during his/her term of office if he/she is the head of the Supervisory Board.

4. To be a Chief Executive Officer (Director), one must:

a) Meet the standards and conditions specified at Points a and b, Article 1 of this Article;

b) Hold a bachelor’s degree or higher in one of the following fields: finance, banking, economics, business administration, law, accounting, and auditing;

c) Have any of the following: At least 05 years of experience as a executive of a credit institution; At least 05 years of experience as the Chief Executive Officer (Director) or Deputy Chief Executive Officer (Deputy Director) of an enterprise with equity equal to or higher than the legal capital required for the corresponding type of credit institution and at least 05 years of hands-on work experience in finance, banking, accounting, or auditing; At least 10 years of hands-on work experience in finance, banking, accounting, or auditing;

d) Reside in Vietnam during his/her term of office.

5. To be the Deputy Chief Executive Officer (Deputy Director), the chief account, a director of a branch or subsidiary or the holder of an equivalent position, one must:

a) Not be banned from holding the position as specified in Clause 2, Article 42 of this Law; or, if he/she is the Deputy Chief Executive Officer (Deputy Director), not be banned from holding the position as specified in Clause 1, Article 42 of this Law;

b) Hold a bachelor's degree or higher in one of the following fields: finance, banking, economics, business administration, law, accounting, auditing, or another field related to the position he/she will take charge of; or hold a bachelor's degree or higher in any field and have at least 03 years of hands-on work experience in finance, banking, or another field related to the position he/she will take charge of.

c) Reside in Vietnam during his/her term of office.

d) Meet the standards and conditions specified in law regulations on accounting if he/she is the chief accountant.

6. The Governor of the State Bank shall specify standards and conditions for managers, executives, and members of the Supervisory Board of cooperative banks, people's credit funds, and microfinance institutions.

Article 42. Cases banned from holding positions

1. The following persons may not be members of the Board of Directors, Members’ Council and Supervisory Board, Chief Executive Officer (Director), Deputy Chief Executive Officer (Deputy Director) and holders of equivalent titles specified in the charter of a credit institution:

a) Those specified in Clause 2 of this Article;

b) Those banned from acting as managers and executives of enterprises or cooperatives in accordance with the law regulations on cadres, civil servants, public employees, and on anti-corruption;

c) Those who used to be owners of private enterprises, partners of partnerships, Chief Executive Officers (Directors), members of Boards of Directors, member of the Members’ Councils, supervisors and members of Supervisory Boards of enterprises, or members of Boards of Directors and Chief Executive Officer (Director) of cooperatives at the time such enterprises or cooperatives are declared bankrupt, unless they are assigned, designated, or appointed to participate in the management, administration, and control of enterprises or cooperatives that are credit institutions declared bankrupt depending on their task requirements;

d) Those who were once suspended from holding the title of chairperson or other member of the Board of Directors; chairperson or another member of the Members’ Council; head or another member of the Supervisory Board; or Chief Executive Officer (Director) of a credit institution under Article 47 of this Law or determined by a competent authority as having committed violations leading to the revocation of the credit institution’s license;

dd) Affiliated persons of members of the Board of Directors, members of the Members' Council, Chief Executive Officer (Director) of such credit institution, unless otherwise specified in Clause 3, Article 69, Point b, Clause 1 Article 73 and Point a, Clause 2, Article 77 of this Law;

e) Affiliated persons of members of the Supervisory Board, Deputy Director of such people's credit fund;

g) Persons held liable, according to inspection conclusions, for causing the credit institution or foreign bank branch to be imposed the highest fines for administrative violations against monetary and banking law regulations regarding licensing, administration, management, shareholding, stocks, capital contribution, share purchase, credit extension, corporate bond purchase, and prudential ratios.

2. The following persons may not act as chief accountant or director of a branch or Chief Executive Officer (Director) of a subsidiary of a credit institution:

a) Those who are juvenile or have difficulties in cognition and behavior control, or lose their civil act capacity.

b) Those who are being prosecuted for criminal liability or serving prison sentences; undergoing compulsory detoxification or compulsory corrections in respective establishments; banned by the Court from holding certain positions, practicing certain professions or doing certain jobs;

c) Convicts of serious or more serious crimes;

d) Convicts of crimes of infringement upon ownership whose criminal records have not been written off;

dd) Officials, civil servants, public employees, managers at department level or higher in enterprises whose 50% or more of the charter capital is held by the State, other than those appointed as representatives managing the capital contributions of the State or State-run enterprises, which hold 50% or more the charter capital thereof, in the credit institution, or those assigned, designated, or appointed to participate in the management, administration, and control of a credit institution depending on their task requirements;

e) Officers, non-commissioned officers, warrant officers, civilian personnel and cadres working for authorities and units of the Vietnam People’s Army; officers, non-commissioned officers, and civilian personnel working for authorities and units of the Vietnam People’s Public Security Forces, other than those appointed as representatives managing the capital contributions of the State or State-run enterprises, which holds 50% or more the charter capital thereof, in credit institutions;

g) Other cases specified in the charter of the credit institution.

3. Spouses, parents, children and siblings of members of the Board of Directors and Members’ Council, General Directors (Directors) of the credit institution and the spouses of such persons may not act as chief accountant or finance manager of such credit institution.

Article 43. Cases banned from concurrently holding different positions

1. The chairperson of the Board of Directors or the chairperson of the Members’ Council of a credit institution may not concurrently be an executive or Supervisory Board member of such credit institution or another credit institution or a manager of any enterprise, unless otherwise the chairperson of the Board of Directors of a people’s credit fund is concurrently a member of the Board of Directors or a Supervisory Board member of a cooperative bank.

2. Members of the Board of Directors who are not independent members; members of the Members' Council of a credit institution may not concurrently hold any of the following positions:

a) Executives of such credit institution, other than Chief Executive Officer (Director) of such credit institution;

b) Managers, executives of other credit institutions, managers of other enterprises, unless otherwise they are managers or executives of a subsidiary of such credit institution or of the parent company of such credit institution or under an approved mandatory transfer plan;

c) Supervisors, members of the Supervisory Board of other credit institutions or other enterprises.

3. Independent members of the Board of Directors of a credit institution may not concurrently hold any of the following positions:

a) Manager of such credit institution:

b) Managers and executives of other credit institutions; managers of 02 or more other enterprises;

c) Supervisors, members of the Supervisory Board of other credit institutions or other enterprises.

4. A member of the Supervisory Board of a credit institution may not concurrently hold any of the following positions, unless he/she is a manager, executive, or employee of the credit institution receiving a compulsory transfer under an approved compulsory transfer plan:

a) Managers and executives of such credit institution, other credit institutions, and other enterprises; employees of such credit institution or any subsidiary of such credit institution;

b) Employees of an enterprise whose members of the Board of Directors, executives or major shareholders are also members of the Board of Directors or Members' Council of the credit institution.

5. The Chief Executive Officer (Director), Deputy Chief Executive Officer (Deputy Director) and holders of equivalent positions as specified in the charter of the credit institution must not concurrently be managers, executives, supervisors, members of the Supervisory Board of other credit institutions, other enterprises, unless otherwise the Deputy Chief Executive Officer (Deputy Director) and holders of equivalent positions as specified in the charter of the credit institution are the managers or executives of a subsidiary of such credit institution or of the parent company of such credit institution.

Article 44. Approval of lists of nominees for the positions of member of the Board of Directors or Members’ Council and Supervisory Board and Chief Executive Officer (Director) of a credit institution

1. The list of nominees for the positions of members of the Board of Directors or Members’ Council and Supervisory Board and Chief Executive Officer (Director) of a credit institution; chairperson of the Board of Directors, head of the Supervisory Board of a cooperative bank or a people's credit fund shall be approved in writing by the State Bank before such nominees are elected and appointed. Those who are elected and appointed to be members of the Board of Directors, Members’ Council and Supervisory Board and the Chief Executive Officer (Director) of a credit institution; elected and appointed to be the chairperson of the Board of Directors or the head of Supervisory Board of a cooperative bank or people's credit fund must be on the list approved by the State Bank.

2. The Governor of the State Bank shall specify dossiers and procedures for approval of lists of nominees for the positions specified in Clause 1 of this Article.

3. A credit institution shall notify the State Bank of the list of elected and appointed holders of the positions specified in Clause 1 of this Article within 10 days after such election and appointment.

Article 45. Cases of automatic loss of membership status

1. A member of the Board of Directors or Members’ Council or Supervisory Board or a Chief Executive Officer (Director) of a credit institution automatically loses membership status when:

a) He/she is banned from holding the position as specified in Article 42 of this Law.

b) He/she represents the capital share of an organization which is a shareholder or capital contributor of the credit institution when this organization cessations its existence;

c) He/she is no longer the authorized representative of the capital contribution of an institutional shareholder or institutional capital contributor;

d) He/she is expelled from the Socialist Republic of Vietnam;

dd) Such credit institution has its license revoked;

e) The contract on Chief Executive Officer (Director) hiring terminates;

g) He/she is no longer a member of such cooperative bank or people’s credit fund.

h) He/she is dead.

2. The Board of Directors or Members’ Council of a credit institution shall send a report enclosed with documents evidencing a holder’ automatic loss of his/her position as specified at Points a, b, c, d, e, g and h, Clause 1 of this Article to the State Bank within 5 working days after finding out such loss, take responsibility for the accuracy and truthfulness of this report, and carry out procedures to elect and appoint holder of the vacant position in accordance with the law regulations.

3. After automatically losing his/her membership status, a member of the Board of Directors, Members’ Council or Supervisory Board or Chief Executive Officer (Director) of a credit institution must be liable for his/her decisions made during his/her office term.

Article 46. Relief from duty and dismissal

1. Unless automatically losing his/her membership status as specified in Article 45 of this Law, the chairperson or another member of the Board of Directors; the chairperson or another member of the Members’ Council; the head or another member of the Supervisory Board; or the Chief Executive Officer (Director) of a credit institution shall be:

a) Relieved from office, if he/she gives his/her resignation to the Board of Directors, Members’ Council or Supervisory Board of the credit institution;

b) Dismissed if he/she fails to join activities of the Board of Directors, Members’ Council or Supervisory Board for 6 consecutive months, except in force majeure circumstances;

c) Dismissed if he/she fails to meet the standards and conditions specified in Article 41 of this Law;

d) Dismissed if an independent member of the Board of Directors fails to meet the standards and conditions specified in Clause 2, Article 41 and Clause 3, Article 43 of this Law;

dd) Other cases of relief from office or dismissal in accordance with the charters of the credit institution.

2. After being relieved from duty or dismissed, the chairperson or another member of the Board of Directors; the chairperson or another member of the Members’ Council; the head or another member of the Supervisory Board; or the Chief Executive Officer (Director) of a credit institution must be liable for his/her decisions made during his/her term of office.

3. Within 10 days after approving a decision on relief from duty or dismissal of a position holder specified in Clause 1 of this Article, the Board of Directors or Members’ Council of a credit institution shall send a report enclosed with relevant documents to the State Bank.

Article 47. Termination and suspension of the exercise of rights and the performance obligations of members of the Board of Directors, Members' Council, Board of Supervisors and executives of credit institutions

1. The State Bank may terminate or suspend the performance of the rights and obligations of the chairperson and other members of the Board of Directors; the chairperson and other members of the Members’ Council; the head and other members of the Supervisory Board; and executives of a credit institution who violate Article 43 and Clause 10, Article 48 of this Law or other relevant law regulations when performing their rights and obligations or fail to meet the standards and conditions specified in Article 41 of this Law; and request competent authorities to relieve from duty or dismiss them, and elect, appoint or designate, when necessary, replacements.

2. The special control board may terminate or suspend the performance of the rights and obligations of the chairperson and other members of the Board of Directors; the chairperson and other members of the Members’ Council; the head and other members of the Supervisory Board, and executives of a credit institution under special control, when necessary.

3. A person who is terminated or suspended from performing his/her rights and obligations under Clause 1 or 2 of this Article shall join efforts to remedy problems and violations related to his/her personal responsibilities when so requested by the State Bank, Board of Directors, Members’ Council and Supervisory Board of the credit institution or the special control board.

Article 48. Rights and obligations of managers and executives of a credit institution

1. To comply with the law regulations, the credit institution’s charter and resolutions and decisions of the Shareholders’ General Meeting, Members’ General Meeting or owners or capital contributors of the credit institution.

2. To exercise their rights and fulfill their obligations honestly and prudently in the interests of the credit institution and its shareholders, capital contributors and owners.

3. To neither use information, secrets and business opportunities of the credit institution nor abuse their positions and titles and the credit institution’s assets for self-seeking purposes or in the interests of other organizations and individuals, harming the interests of the credit institution and its shareholders, capital contributors and owners.

4. To comply with restrictive regulations to ensure safety in banking operations of credit institutions in accordance with this Law.

5. To keep dossiers and records of the credit institution in order to provide statistics for the credit institution to manage, administer and control its activities and for the State Bank’s inspection, supervision and examination.

6. To be knowledgeable about risks in credit institution operations.

7. To promptly, fully and accurately notify the credit institution of possible conflicts of interests arising from the credit institution’s benefits in other institutions or its transactions with other organizations and individuals and to only conduct such transactions when so consented by Board of Directors or Members’ Council.

8. Not to facilitate themselves or their affiliated persons to take loans or use other banking services of the credit institution with conditions more preferential and favorable than those in accordance with the credit institution’s general regulations.

9. Not to increase remuneration or salaries or require bonuses for managers and executives when such credit institution suffers losses.

10. To abide, within the ambit of rights and obligations assigned to them, with written requests of the State Bank for issues falling under the competence of the State Bank. To implement recommendations, risk and prudential warnings, warn of risks leading to violations of monetary and banking law regulations; inspection conclusions, recommendations, and decisions.

11. To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

Article 49. Provision and disclosure of information

1. A member of the Board of Directors, Members’ Council or Supervisory Board or the Chief Executive Officer (Director) or Deputy Chief Executive Officer (Deputy Director) and the holder of another equivalent position as specified in the charter of a credit institution shall provide the credit institution with the following information:

a) Name, enterprise ID, head office address of the enterprise or other economic institution in which he/she him/herself or together with his/her affiliated persons own capital contributions or hold shares worth 05% or more of the charter capital, including capital contributions and shares authorized or entrusted to other organizations and individuals in the name thereof;

b) Name, enterprise ID, head office address of the enterprise or other economic institution of which he/she and his/her affiliated persons are members of the Board of Directors, members of the Members' Council, supervisors, or members of the Supervisory Board, Chief Executive Officer (Director);

c) Information about affiliated persons who are individuals, including: full name; personal identification number; nationality, passport number, date of issue, place of issue if they are foreigners; relationship with the informant;

d) Information about affiliated persons that are organizations, including: name, enterprise ID, head office address of the enterprise, serial number of Business Registration Certificate or equivalent legal documents; representative at law, relationship with the informant.

2. Shareholders holding 01% or more of the charter capital of a credit institution must provide the credit institution with the following information:

a) Full name; personal identification number; nationality, passport number, date of issue, place of issue if they are foreign shareholders; serial number of Business Registration Certificate or any equivalent legal document if they are organizations; Date of issue and place of issue of such document;

b) Information about affiliated persons as specified at Points c and d, Clause 1 of this Article;

c) Quantity of shares and shareholding ratios of themselves in such credit institution;

d) Quantity of shares and shareholding ratios of their affiliated persons in such credit institution.

3. Those specified in Clauses 1 and 2 of this Article must send their information in witting to the credit institution in the first time and upon any change to such information within 07 working days from the date of such occurrence or change.

Shareholders must only provide information specified at Points c and d, Clause 2 of this Article to credit institutions in case of any change in the shareholding ratios of themselves and together with their affiliated persons worth 01% or more of the charter capital of such credit institution compared to the information provided previously.

4. Credit institutions must post and store information specified in Clauses 1 and 2 of this Article at their headquarters and send written reports to the State Bank within 07 working days from the date the credit institutions receive such information. On an annual basis, the credit institution shall disclose information specified at Points a, b, d, Clause 1 and Points a, c, d, Clause 2 of this Article to the Shareholders’ General Meeting, Members’ General Meeting, and Members’ Council of the credit institution.

5. Credit institutions must disclose full names of individuals and organizations that are shareholders holding 01% or more of their charter capital and information specified at Points c and d Clause 2 of this Article on their websites within 07 working days from the date the credit institutions receive such information.

6. Those that provide and disclose information must ensure that such information is truthful and accurate and is provided or disclosed in full and on time, and take responsibility for such information.

Section 2

GENERAL PROVISIONS APPLICABLE TO CREDIT INSTITUTIONS BEING JOINT-STOCK COMPANIES AND LIMITED LIABILITY COMPANIES

Article 50. Board of Directors and Members’ Council and their structures

1. The Board of Directors or Members’ Council is a managerial body having the full power to decide and exercise the rights and fulfill the obligations of a credit institution on its behalf, except matters to be decided by the Shareholders’ General Meeting or owners.

2. In the case where the Board of Directors or Members' Council is composed of fewer members than specified in Clause 1, Article 69 and Point a, Clause 1, Article 73 of this Law, within 90 days from the date of such occurrence, the credit institution shall elect additional members to ensure the required minimum quantity of members, unless otherwise specified in Clause 5, Article 166 of this Law.

3. The Board of Directors or Members’ Council shall use the credit institution’s seal to perform its tasks and powers.

4. The Board of Directors or Members’ Council may establish its own secretariat. The responsibilities and tasks of the secretariat shall be specified by the Board of Directors or Members’ Council.

5. The Board of Directors or Members’ Council shall set up committees to assist it in performing its tasks and powers, including the risk management committee and personnel committee. The Board of Directors or Members’ Council shall decide on the tasks and powers of such 02 committees in accordance with the regulations of the Governor of the State Bank.

Article 51. Supervisory Board

1. The Supervisory Board shall supervise and assess the observance of law, internal regulations, charter, resolutions and decisions of the Shareholders’ General Meeting or owners and the Board of Directors or Members’ Council.

2. The Supervisory Board of a commercial bank shall be composed of at least 05 members. The Supervisory Board of another type of credit institution shall be composed of at least 03 members. The quantity of members of the Supervisory Board shall be specified in the charter of the credit institution.

3. The Supervisory Board may establish its own internal audit unit and secretariat to help it perform its tasks.

4. The term of office of a Supervisory Board is 5 years at most. The term of office of members of the Supervisory Board follows the term of the Supervisory Board, unless otherwise specified in Clause 5 of this Article. The term of office of office of an additional member or replacement is the remaining term of office of the Supervisory Board. The Supervisory Board of the term of office that has just expired shall operate until a new Supervisory Board takes over its work.

5. The term of office of the head and other members of the Supervisory Board of a credit institution being a one-member limited liability company shall be specified in the charter of the credit institution, but must not exceed 05 years.

6. In the case where the Supervisory Board is composed of fewer members than specified in Clause 2 of this Article, within 90 days from the date of such occurrence, the credit institution shall elect additional members to ensure the required minimum quantity of members, unless otherwise specified in Clause 5, Article 166 of this Law.

Article 52. Tasks and powers of the Supervisory Board

1. To supervise the administration and management of the credit institution regarding compliance with law regulations, internal regulations, charter and resolutions and decisions of the Shareholders’ General Meeting, owners, Board of Directors, Members’ Council; take responsibility before the Shareholders’ General Meeting, owners, and capital contributors for the performance of assigned tasks and exercise of vested powers in accordance with this Law and the charter of the credit institution.

2. To issue its internal regulations; to review on an annual basis its internal regulations and the credit institution’s internal regulations on accounting and reporting.

3. To conduct internal auditing; have access to and be provided fully, accurately and promptly with information and documents related to the management and administration of the credit institution, and use the credit institution's resources to perform assigned tasks and exercise vested powers; to hire experts, independent consultants and outsourced institutions to perform its tasks but take responsibility for the performance of such tasks.

4. To supervise the actual financial situation and appraise biannual and annual financial statements of the credit institution; to report to the Shareholders’ General Meeting, owners or capital contributors on its appraisal of financial statements and its assessment of the reasonability, lawfulness, truthfulness and prudence in accounting, statistical work and financial reporting. To consult the Board of Directors or Members’ Council before escalating its reports and recommendations to the Shareholders’ General Meeting or owners or capital contributors.

5. To supervise the approval and implementation of investment projects, purchase and sale of fixed assets, other contracts and transactions of the credit institution to be decided by the Shareholders’ General Meeting, Board of Directors, and Members’ Council. To prepare and send, on an annual basis, reports on supervision results to the Shareholders’ General Meeting, owners, Board of Directors, and Members' Council.

6. To supervise the compliance with Chapter VII of this Law on restrictions to ensure safe operations of credit institutions.

7. To check accounting books, other documents and the management and operations of the credit institution when deemed necessary or in the following cases:

a) Under the resolutions and decisions of the Shareholders’ General Meeting;

b) Upon request of the State Bank or of major shareholders, groups of major shareholders, owners, capital contributors, and the Members' Council in accordance with the law regulations. Such examination shall be conducted within 7 working days after receiving a request. Within 15 days after completing examination, to report and explain examined matters to requesting organizations and individuals.

8. To promptly notify the Shareholders’ General Meeting, owners, Board of Directors, and Members' Council when detecting that managers or executives of the credit institution have violated the law regulations or the charter, internal regulations of the credit institution, resolutions and decisions of the Shareholders’ General Meeting, owners, Board of Directors, Council of Members; to request the violators to immediately stop the violations and find remedies for the consequences (if any).

9. To make a list of founding shareholders within 05 years since they became founding shareholders, shareholders holding 01% or more of the charter capital, or capital contributors and affiliated persons of members of the Board of Directors or Members’ Council and Supervisory Board and the Chief Executive Officer (Director) of the credit institution, and the shareholders holding 01% or more of the charter capital; to keep and update changes in such list.

10. To request the Board of Directors or Members’ Council to convene extraordinary meetings or request the Board of Directors to convene extraordinary meetings of the Shareholders’ General Meeting in accordance with this Law and the credit institution’s charter.

11. To convene an extraordinary meeting of the Shareholders’ General Meeting when the Board of Directors makes a decision seriously violating this Law or beyond its vested powers or in other cases in accordance with the credit institution’s charter.

12. To appoint, relive from duty, take disciplinary actions against, suspend, and decide on salaries and other benefits for, the positions in the internal audit department.

13. To promptly report to the State Bank on violations specified in Clauses 6, 8 and 11 of this Article and violations of shareholding and capital contribution ratios, and affiliated persons in accordance with this Law.

14. To perform other tasks and exercise other rights specified in law regulations and the charter of the credit institution.

Article 53. Rights and obligations of the head of a Supervisory Board

1. To perform the tasks and powers of the Supervisory Board specified in Article 52 of this Law and take responsibility for the implementation of its rights and obligations.

2. To convene and chair meetings of the Supervisory Board.

3. On behalf of the Supervisory Board, to sign documents under the Supervisory Board’s competence.

4. On behalf of the Supervisory Board, to convene extraordinary meetings of the Shareholders’ General Meeting in accordance with Clause 11, Article 52 of this Law or request the Board of Directors or Members’ Council to convene extraordinary meetings.

5. To attend meetings of the Board of Directors or Members’ Council, to give opinions in such meetings but to have no right to vote.

6. To request the inclusion of his/her opinions in minutes of meetings of the Board of Directors or Members’ Council when such opinions differ from resolutions and decisions of the Board of Directors or Members’ Council and report such before the Shareholders’ General Meeting or owners or capital contributors.

7. To prepare working plans for the Supervisory Board and assign specific tasks to each Supervisory Board member.

8. To ensure that Supervisory Board members receive complete, objective and accurate information and have enough time to discuss on matters to be considered by the Supervisory Board.

9. To supervise and direct Supervisory Board members in performing their tasks, rights and obligations.

10. To authorize only one other member of the Supervisory Board to exercise the rights and perform the obligations of the head of the Supervisory Board while he/she is absent or unable to perform his/her tasks.

11. To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

Article 54. Rights and obligations of Supervisory Board members

1. To comply with the law regulations, the charter of the credit institution, and the internal regulations of the Supervisory Board, honestly and diligently exercise their rights and perform their obligations as assigned by the head of the Supervisory Board in the interests of the credit institution and its shareholders, capital contributors, and owners; to take responsibility for the exercise of their rights and the performance of their obligations.

2. To elect a member of the Control Board to be the head of the board, unless otherwise specified at Point c, Clause 1, Article 73 of this Law.

3. To request the head of the Supervisory Board to convene an extraordinary meeting of the Supervisory Board.

4. To control business activities, accounting books, assets and financial statements and recommend remedies.

5. To request managers to report and explain the financial situation, business results of subsidiaries, plans, projects, development investment programs and other decisions related to the management and administration of the credit institution.

6. To request managers, executives, and employees of the credit institution to provide statistics and explain business operations in order to perform assigned tasks.

7. To report on abnormal financial activities of the credit institution to the Supervisory Board head and take responsibility for their own evaluation and conclusions.

8. To attend Supervisory Board’s meetings, to discuss and vote on matters within the scope of tasks and powers of the Supervisory Board, other than those involving conflicts of their interests.

9. To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

Article 55. Chief Executive Officer (Director)

1. The Board of Directors, Members' Council, and owners shall appoint the Chief Executive Officer (Director) for a term of office which must not exceed 5 years.

2. The Chief Executive Officer (Director) is the supreme executive of the credit institution and shall take responsibility before the Board of Directors or Members’ Council and the owners for the performance of his/her rights and obligations.

3. In the case where the position of Chief Executive Officer (Director) is vacant, the Board of Directors, Members' Council, and owners of the credit institution shall appoint a Chief Executive Officer (Director) within 90 days from the date of such occurrence.

Article 56. Rights and obligations of the Chief Executive Officer (Director)

1. To organize the implementation of resolutions and decisions of the Shareholders’ General Meeting, Board of Directors or Members’ Council.

2. To decide on matters related to day-to-day business activities of the credit institution under his/her competence.

3. To set up the internal control system and maintain its effective operation.

4. To prepare and escalate financial statements to the Board of Directors and Members' Council for approval by itself or for it to further escalate to competent authorities for approval thereof; To take responsibility for the accuracy and truthfulness of financial statements, statistical reports, settlement statistics and other financial information.

5. To issue according to his/her competence internal regulations; professional processes and procedures to operate business administration and management information systems.

6. To report on the credit institution’s business activities and results to the Board of Directors, Members’ Council, Supervisory Board and Shareholders’ General Meeting and competent state authorities.

7. To decide on the application of measures beyond his/her competence in cases of natural disasters, enemy sabotage, fires and incidents, take responsibility for such decisions and promptly report them to the Board of Directors or Members’ Council.

8. To recommend and propose the management organizational structure of the credit institution to the Board of Directors or Members’ Council or the Shareholders’ General Meeting for decision according to its competence.

9. To request the Board of Directors or Members’ Council to convene extraordinary meetings.

10. To appoint, relieve from duty and dismiss holders of managerial and executive positions of the credit institution, other than those to be decided by the Shareholders’ General Meeting, owners, capital contributors, Board of Directors or Members’ Council.

11. On behalf of the credit institution, to sign other contracts and transactions in accordance with the credit institution’s charter and internal regulations.

12. To propose plans to use profits and handle losses of the credit institution.

13. To recruit employees; to decide on salaries and bonuses of employees according to his/her competence.

14. To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

Article 57. Internal control system

1. Internal control system means a combination of mechanisms, policies, processes, internal regulations and organizational structure of a credit institution and implemented to prevent, detect or promptly handle risks.

2. A credit institution shall develop its internal control system to meet the following requirements:

a) Efficient and safe operations; safe and efficient protection, management and use of assets and resources;

b) Truthful, appropriate, full and prompt financial and managerial information system;

c) Observance of the law regulations, mechanisms, policies, internal regulations and processes.

3. The State Bank may request a credit institution to hire an independent auditing organization to evaluate part or all of the internal control system when deemed necessary.

4. Credit institutions shall develop their internal control systems and apply technologies in internal control in accordance with regulations of the Governor of the State Bank.

Article 58. Internal audit

1. A credit institution shall set up an internal audit unit under its Supervisory Board for conducting internal audit of the credit institution.

2. The internal audit unit shall objectively and independently review and assess the conformity and observance of mechanisms, policies, internal regulations and processes of the credit institution; and give recommendations in order to raise the effectiveness of systems, processes and regulations, contributing to ensure safe, efficient and lawful operations of the credit institution.

3. Internal audit results shall be promptly reported to the Supervisory Board and sent to the Board of Directors or Members’ Council and to the Chief Executive Officer (Director) of the credit institution.

Article 59. Independent audit

1. Before the end of the fiscal year, a credit institution must select an independent auditing organization that meets the requirements specified in the regulations of the Governor of the State Bank to audit financial statements and perform assurance services for the operations of the internal control system in formulating and presenting financial statements in the next fiscal year.

2. Within 30 days after selecting an independent audit institution, the credit institution shall notify the State Bank of such audit institution.

Section 3

CREDIT INSTITUTIONS BEING JOINT-STOCK COMPANIES

Article 60. Types of shares, shareholders

1. A credit institution that is a joint-stock company must have common shares. Holders of common shares are common shareholders.

2. A credit institution that is a joint-stock company may have preferred shares. Holders of preferred shares are preferred shareholders. Preferred shares take the following types:

a) Dividend preferred shares;

b) Voting preferred shares.

3. Dividend preferred shares are shares for which higher dividends are paid than those paid for common shares or than annual stable dividends. Annual dividends include fixed dividends and bonus dividends. Fixed dividends do not depend on business results of the credit institution and may be paid only when the credit institution earns profits. When a credit institution suffers losses or earns profits but such profits are insufficient for paying fixed dividends, fixed dividends to be paid for dividend preferred shares shall be accrued in subsequent years. The specific levels of fixed dividends and method of determining bonus dividends shall be decided by the Shareholders’ General Meeting and indicated on stocks of dividend preferred shares. The total par value of dividend preferred shares must not exceed 20% of the charter capital of a credit institution.

Members of the Board of Directors and Supervisory Board, the Chief Executive Officer (Director), other managers and executives of a credit institution may not purchase dividend preferred shares issued by such credit institution. Eligible purchasers of dividend preferred shares shall be specified in the charter of a credit institution or decided by its Shareholders’ General Meeting.

Dividend preferred shareholders have the rights and obligations like common shareholders, except the rights to vote, attend meetings of the Shareholders’ General Meeting and nominate candidates for the Board of Directors and Supervisory Board.

4. Only institutions authorized by the Government and founding shareholders may hold voting preferred shares. The voting preferred right of founding shareholders is valid for only 3 years after the credit institution obtains a license. Past this time limit, voting preferred shares of founding shareholders may be converted into common shares. Voting preferred shareholders have the rights and obligations like common shareholders, except the right to transfer such shares to others.

5. Common shares may not be converted into preferred shares. Preferred shares may be converted into common shares under resolutions of the Shareholders’ General Meeting.

6. A credit institution being a joint stock company must have a minimum of 100 shareholders without maximum limitation, unless otherwise it is a credit institution under special control or a commercial bank subject to compulsory transfer under a compulsory transfer plan as specified in Section 4, Chapter X of this Law.

Article 61. Rights of common shareholders

1. To attend and give opinions at meetings of the Shareholders’ General Meeting and exercise the right to vote directly or through their authorized representatives. Each common share has one vote.

2. To receive dividends under resolutions of the Shareholders’ General Meeting.

3. To have pre-emptive right to purchase newly offered shares in proportion to the percentage of their common shares within the credit institution.

4. To transfer their shares and share-purchasing rights to other shareholders within the credit institution or to other organizations or individuals in accordance with this Law and the charter of such credit institution.

5. To view, search, extract information about names and contact addresses in the list of voting shareholders; to request correction of inaccurate information.

6. To view, search, extract, copy the charter of the credit institution, books of minutes of meetings of the Shareholders’ General Meeting, resolutions and decisions of the Shareholders’ General Meeting.

7. To receive part of the remaining assets in proportion to the number of their shares in the credit institution when it is dissolved or bankrupt.

8. To authorize in writing others to exercise their rights and perform their obligations. Authorized persons may not stand as candidates in their own capacity.

9. To stand as candidates or nominate others to the Board of Directors or Supervisory Board in accordance with the charter of the credit institution or in accordance with the law regulations if such is not provided in the charter. The list of candidates shall be sent to the Board of Directors by the deadline set by the Board of Directors.

10. Shareholders or groups of shareholders holding 05% or more of the total number of common shares or a lower percentage as specified in the charter of the credit institution have may nominate candidates for the Board of Directors and Supervisory Board.

Article 62. Obligations of common shareholders

1. Shareholders of a credit institution shall fulfill the following obligations:

a) To fully pay within the time limit set by the credit institution an amount commensurate with the number of shares they commit to purchase; to take responsibility for debts and other asset-related obligations of the credit institution within the limit of share capital already contributed to the credit institution;

b) To refrain from withdrawing contributed share capital from the credit institution in any form resulting in the decrease of the charter capital of the credit institution, unless otherwise specified in Article 65 of this Law;

c) To take responsibility before the law for the legality of capital contributions, purchases and transfers of shares at credit institutions; not to use capital from credit institutions, foreign bank branches, or capital from issuing corporate bonds to purchase or transfer shares of credit institutions; not to contribute capital or purchase shares of a credit institution under the name of another individual or legal entity in any form, unless such contribution or purchase is entrusted as specified in the law regulations;

d) To comply with the charter and internal regulations of the credit institution;

dd) To observe resolutions and decisions of the Shareholders’ General Meeting and Board of Directors;

e) To take responsibility for, when acting in the name of the credit institution in any form, any law-breaking acts they have committed or business activities and other transactions they have conducted for self-seeking purposes or for the interests of other institutions or individuals;

g) To hold in confidence information provided by the credit institution in accordance with the law regulations and the charter of the credit institution; only use the information provided to exercise and protect their legitimate rights and interests; not distribute, copy or send information provided by the credit institution to other organizations or individuals.

2. Shareholders making entrusted investment for other institutions or individuals shall provide the credit institution with information on actual holders of entrusted shares in such credit institution. The credit institution may terminate the shareholder’s rights of shareholders making entrusted investments in the case such shareholders fail to provide or untruthfully or incompletely provide information on actual owners of such shares.

Article 63. Shareholding ratio

1. An individual shareholder may not hold shares worth over 05% of the charter capital of a credit institution.

2. An institutional shareholder may not hold shares worth over 10% of the charter capital of a credit institution.

3. A shareholder together with his/her/its affiliated persons may not hold shares worth over 15% of the charter capital of a credit institution. A major shareholder of a credit institution together with his/her/its affiliated persons may not hold shares worth 05% or more of the charter capital of another credit institution.

4. Clauses 2 and 3 are not applicable to those:

a) Holding shares of a subsidiary or an affiliated company that is a credit institution as specified in Clause 2 and Clause 3, Article 111 of this Law;

b) Holding state shares at an equitized credit institution;

c) Holding shares of foreign investors in accordance with Clause 7 of this Article 16.

5. The shareholding ratios specified in Clauses 1 and 2 of this Article cover shares indirectly held. The shareholding ratio specified in Clause 3 of this Article covers shares that shareholders entrust other organizations or individuals to purchase and does not include shares held by affiliated persons who are subsidiaries of such shareholders as specified at Point a, Clause 9, Article 4 of this Law.

6. Within 5 years after the credit institution obtains a license, founding shareholders must hold shares at least equal to 50% of the charter capital of the credit institution; founding shareholders being legal entities must hold shares at least equal to 50% of the total shares held by founding shareholders.

7. Foreign investors may purchase shares of Vietnamese credit institutions. The Government shall specify the maximum total shareholding of foreign investors, the maximum shareholding ratio of a foreign institutional investor, the maximum shareholding ratio of a foreign individual investor and his/her affiliated persons in a Vietnamese credit institution; conditions and procedures for foreign investors to purchase shares of Vietnamese credit institutions; conditions for Vietnamese credit institutions to sell shares to foreign investors.

Article 64. Offering and transfer of shares

1. Individual shareholders and institutional shareholders with their representatives of capital contributions in the credit institution being members of the Board of Directors or Supervisory Board or Chief Executive Officers (Directors) of credit institutions may not transfer their shares during their incumbency.

Representatives of capital contributions specified in this Clause do not include representatives of the State's capital contributions to credit institutions.

2. Pending the remedy of consequences caused by personal responsibility under the Shareholders’ General Meeting’s resolution or decision or the State Bank’s decision, members of the Board of Directors or Supervisory Board or the Chief Executive Officer (Director) may not transfer their shares, unless:

a) They act as authorized representatives of institutional shareholders which are merged, consolidated, divided, split-up, dissolved or bankrupt in accordance with the law regulations;

b) They are ordered to transfer their shares under a legally effective court judgment or ruling;

c) Members of the Board of Directors, members of the Supervisory Board, Chief Executive Officer (Director) transfer shares to other investors to implement approved recovery plans, plans for transfer of all capital contributions, compulsory transfer plans.

3. Listed or registered shares of credit institutions shall be transferred in accordance with the law regulations on securities.

4. Within 5 years after the credit institutions obtains a license, founding shareholders may only transfer their common shares or dividend preferred shares to other founding shareholders provided that they ensure the shareholding ratios specified in Article 63 of this Law.

Article 65. Redemption of shareholders’ shares

A credit institution may redeem shares from shareholders if, after fully paying for the shares to be redeemed, the prudential ratio for banking operations and the real value of the charter capital are not reduced below the legal capital of such credit institution.

Article 66. Stocks

When stocks are issued as certificates, a credit institution shall issue such stocks to shareholders within 30 days after inaugurating its operation, for newly established credit institutions, or within 30 days after shareholders fully pay for shares they commit to purchase, for credit institutions increasing their charter capital.

Article 67. Shareholders’ General Meeting

1. The Shareholders’ General Meeting shall hold an annual meeting within 4 months after the end of a fiscal year.

2. The Board of Directors shall convene an extraordinary Shareholders’ General Meeting in the following cases:

a) The Board of Directors considers such meeting necessary for the interests of the credit institution;

b) The quantity of remaining members of the Board of Directors is smaller than the minimum quantity of members provided in Clause 1, Article 69 of this Law;

c) The quantity of remaining members of the Supervisory Board is smaller than the minimum quantity of members provided in Clause 2, Article 51 of this Law;

d) Upon request of shareholders or groups of shareholders holding more than 10% of the total number of common shares or a lower percentage as specified in the charter of the credit institution;

dd) Upon request of the Supervisory Board;

e) In order to decide on the issues upon request of the State Bank when an event that affects the safety of the credit institution's operations occurs;

g) Other cases specified in the charter of the credit institution.

3. The Shareholders’ General Meeting is composed of all shareholders with the voting right and is the supreme decision-making body of a credit institution that is a joint-stock company. The Shareholders’ General Meeting has the following tasks and powers:

a) To adopt development orientations of the credit institution;

b) To adopt or modify the charter of the credit institution;

c) To adopt regulations on the organization and operation of the Board of Directors and Supervisory Board;

d) To decide on the quantity of members of the Board of Directors and Supervisory Board in each term of office; to elect, relieve from duty, dismiss, add or replace members of the Board of Directors and Supervisory Board according to the criteria and conditions specified in this Law and the charter of the credit institution;

dd) To decide on remuneration, bonuses and other benefits for members of the Board of Directors and Supervisory Board and on operating budgets of the Board of Directors and Supervisory Board;

e) To consider and handle according to its competence violations of the Board of Directors or Supervisory Board which cause damage to the credit institution and its shareholders;

g) To decide on the management organizational structure of the credit institution;

h) To adopt plans on adjustment of the charter capital and share offering plans covering types and quantity of new shares to be offered;

i) To adopt the redemption of sold shares;

k) To adopt plans on the issue of convertible bonds;

l) To adopt plans specified in Article 143 of this Law;

m) To adopt annual financial statements and plans on distribution of profits after the credit institution’s tax and other financial obligations are fulfilled;

n) To adopt the Board of Directors’ and Supervisory Board’s reports on the performance of their assigned tasks and vested powers;

o) To decide on establishment or change of legal forms of overseas commercial presence, subsidiaries of the credit institution;

p) To adopt plans on contribution of capital, purchase or sale of shares or capital contributions of the credit institution in enterprises or other credit institutions where the value of the capital contributions or the expected purchasing price or the book value, in the case of selling shares and capital contributions, accounts for 20% or more of the credit institution’s charter capital indicated in the latest audited financial statement or any lower percentage specified in the credit institution’s charter;

q) To adopt decisions on investment in, purchase or sale of the credit institution’s fixed assets of which the investment value, the expected purchasing price or the original cost, in the case of selling fixed assets, accounts for 20% or more of the credit institution’s charter capital indicated in the latest audited financial statement or any lower percentage specified in the credit institution’s charter;

r) To adopt other contracts and transactions valued at 20% or more of the credit institution’s charter capital indicated in the latest audited financial statement or any lower percentage specified in the credit institution’s charter, between the credit institution and members of the Board of Directors or Supervisory Board, the Chief Executive Officer (Director), major shareholders of the credit institution; affiliated persons of managers, Supervisory Board members or major shareholders of the credit institution; subsidiaries or affiliated companies of the credit institution, unless the credit institution is a commercial bank undergoing mandatory transfer;

s) To decide on the division, split-up, consolidation, merger, transformation or dissolution of, or to request a court to open bankruptcy procedures for, the credit institution;

t) To decide on the independent auditing organization in accordance with Article 59 of this Law;

u) To decide on solutions to major financial changes of the credit institution.

4. Decisions of the Shareholders’ General Meeting shall be adopted as follows:

a) The Shareholders’ General Meeting shall adopt decisions falling within its competence by voting at meetings or collecting written opinions;

b) Except the case specified at Points c, d and dd of this Clause, a decision of the Shareholders’ General Meeting shall be adopted when it is voted in favor by shareholders representing over 50% of total votes of all attending shareholders at a meeting or when it is approved by shareholders representing over 50%, or any higher percentage specified in the credit institution’s charter, of total votes of all shareholders in the case where their opinions are gathered in writing;

c) A decision on any issue specified at Points h and q, Clause 3 of this Article shall be adopted when it is voted in favor by shareholders representing over 65% of total votes of all attending shareholders at a meeting or when it is approved by shareholders representing over 65%, or any higher percentage specified in the credit institution’s charter, of total votes of all shareholders in the case where their opinions are gathered in writing;

d) Decisions on the matters specified at Point s, Clause 3 of this Article must be adopted by shareholders representing over 65% of total votes of all attending shareholders or any higher percentage specified in the credit institution’s charter;

dd) Members of the Board of Directors and Supervisory Board shall be elected based on accrued votes.

5. Decisions on the matters specified at Points a, d, e and s, Clause 3 of this Article shall be adopted by voting at meetings of the Shareholders’ General Meeting.

Article 68. Reports, resolutions and decisions of the Shareholders’ General Meeting

Within 15 days from the end of the Shareholders’ General Meeting or from the end of vote counting in the case of collecting written opinions, the credit institution must send to the State Bank all resolutions and decisions approved by the Shareholders’ General Meeting.

Article 69. Board of Directors of a credit institution being a joint-stock company

1. The Board of Directors of a credit institution being a joint-stock company must have between at least 05 and no more 11 members. The quantity of members for each term of office shall be decided by the Shareholders’ General Meeting. A Board of Directors shall have at least 02 independent members and at least two-thirds of its total members must be independent members and non-executive members of the credit institution.

2. The term of office of the Board of Directors is 5 years at most. The term of office of the members of the Board of Directors is the same as that of the Board of Directors. The office term of office of an additional member or replacement of the Board of Directors is the remaining term of office of the Board of Directors. The Board of Directors or Members’ Council of the term of office that has just expired shall operate until a new Board of Directors or Members’ Council takes over its work.

3. An individual and his/her affiliated persons or representatives of the capital contribution of an institutional shareholder and their affiliated persons may participate in the Board of Directors in a number not exceeding 02 members of the Board of Directors of a credit institution being a joint-stock company, unless they are representatives of the capital contribution of the State of the mandatory transferee.

4. The Board of Directors shall take responsibility before the Shareholders’ General Meeting for the performance of the performance of assigned tasks and exercise of vested powers in accordance with this Law and the charter of the credit institution.

Article 70. Tasks and powers of the Board of Directors of a credit institution being a joint-stock company

1. To organize the establishment and inauguration of the credit institution after the first meeting of the Shareholders’ General Meeting.

2. To escalate to the Shareholders’ General Meeting for decision and approval matters falling within its tasks and powers specified in Clause 3, Article 67 of this Law.

3. To decide on the establishment of branches, representative offices and non-business units of the credit institution.

4. To appoint, relive from duty, take disciplinary actions against, suspend and decide on salaries, bonuses and other benefits for the Chief Executive Officer (Director), Deputy Chief Executive Officer (Deputy Director) and other executives under its ambit in accordance with internal regulations of the Board of Directors.

5. To appoint representatives of capital contributions of the credit institution at other enterprises and credit institutions.

6. To adopt plans on contribution of capital, purchase or sale of shares or capital contributions of the credit institution in enterprises or other credit institutions where the value of the capital contributions or the expected purchasing price or the book value, in the case of selling shares and capital contributions, accounts for less than 20% of the credit institution’s charter capital indicated in the latest audited financial statement or any lower percentage specified in the credit institution’s charter.

7. To adopt decisions on investment in, purchase or sale of the credit institution’s fixed assets of which the investment value, the expected purchasing price or the original cost, in the case of selling fixed assets, accounts for 10% or more of the credit institution’s charter capital indicated in the latest audited financial statement or any lower percentage specified in the credit institution’s charter, other than the investment in, purchase or sale of fixed assets to be decided by the Shareholders’ General Meeting.

8. To decide on credit extension in accordance with Clause 7, Article 136 of this Law, except other contracts and transactions to be decided by the Shareholders’ General Meeting.

9. To adopt other contracts and transactions valued at less than 20% of the credit institution’s charter capital indicated in the latest audited financial statement or any lower percentage specified in the credit institution’s charter, between the credit institution and members of the Board of Directors or Supervisory Board, the Chief Executive Officer (Director), major shareholders of the credit institution; affiliated persons of managers, Supervisory Board members or major shareholders of the credit institution; subsidiaries or affiliated companies of the credit institution.

10. To adopt other contracts and transactions valued at 10% or more of the credit institution’s charter capital indicated in the latest audited financial statement or any lower percentage specified in the credit institution’s charter.

11. To examine, supervise and direct the Chief Executive Officer (Director) in performing his/her assigned tasks; to evaluate on an annual basis the work performance of the Chief Executive Officer (Director).

12. To issue internal regulations related to the credit institution’s organization, governance and operation in accordance with law regulations, other than issues to be decided by the Shareholders’ General Meeting.

13. To decide on risk management policies and supervise the implementation of risk prevention measures by the credit institution.

14. To consider and approve annual reports.

15. To decide to offer new shares within the limit of shares eligible for offering.

16. To decide on offer prices of shares and convertible bonds of the credit institution.

17. To decide on the redemption of shares of the credit institution under the approved plan.

18. To propose plans on distribution of profits and dividends to be paid; to decide on the time limit and procedures for paying dividends or offsetting losses in the course of conducting business.

19. To prepare relevant details and documents for submission to the Shareholders’ General Meeting to decide on and adopt matters falling within its competence, other than those falling within the ambit of the Supervisory Board’s tasks and powers.

20. To adopt operation programs and plans of the Board of Directors, programs, details and documents for meetings of the Shareholders’ General Meeting; to convene meetings of the Shareholders’ General Meeting or collect written opinions of shareholders in order to adopt resolutions or decisions of the Shareholders’ General Meeting.

21. To implement, and examine and supervise the implementation of, resolutions or decisions of the Shareholders’ General Meeting and Board of Directors.

22. To promptly notify the State Bank of information adversely affecting the conduct of members of the Board of Directors or Supervisory Board or the Chief Executive Officer (Director).

23. To perform other obligations specified in law regulations and the charter of the credit institution.

Article 71. Rights and obligations of the chairperson of the Board of Directors of a credit institution being a joint-stock company

1. To elaborate working programs and plans of the Board of Directors; to take responsibility for the exercise of his/her rights and the performance of his/her obligations.

2. To convene and chair meetings of the Board of Directors.

3. On behalf of the Board of Directors, to sign documents falling under the competence of the Board of Directors.

4. To organize the adoption of resolutions and decisions of the Board of Directors.

5. To supervise and organize the supervision of the implementation of resolutions and decisions of the Board of Directors.

6. To chair meetings of the Shareholders’ General Meeting.

7. To ensure that all members of the Board of Directors receive adequate, objective and accurate information and have sufficient time for discussing matters to be considered by the Board of Directors.

8. To assign specific tasks to each member of the Board of Directors.

9. To supervise the performance of rights, obligations and tasks of members of the Board of Directors.

10. To authorize only one other member of the Board of Directors to exercise the rights and perform the obligations of the chairperson of Board of Directors while he/she is absent or unable to perform his/her tasks.

11. To evaluate on an annual basis the work performance of each member of the Board of Directors and commissions of the Board of Directors and report evaluation results to the Shareholders’ General Meeting.

12. To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

Article 72. Rights and obligations of members of the Board of Directors of a credit institution being a joint-stock company

1. To honestly and diligently exercise their rights and perform their obligations in accordance with internal regulations of the Board of Directors and as assigned by the chairperson of the Board of Directors in the interests of the credit institution and shareholders; to promote the independence of independent members of the Board of Directors in exercising their rights and performing their obligations; to take responsibility for the exercise of their rights and the performance of their obligations.

2. To examine auditor’s reports on financial statements prepared by independent auditors, give opinions on or request executives of the credit institution, independent auditors and internal auditors to explain and clarify matters related to these statements.

3. To propose the chairperson of the Board of Directors to convene an extraordinary meeting of the Board of Directors.

4. To attend meetings of the Board of Directors, discuss and vote on matters falling within the tasks and powers of the Board of Directors in accordance with this Law, take responsibility before the Shareholders’ General Meeting and the Board of Directors for their decisions.

In the case where the voting involves a conflict of interest with any member, such member may not vote.

5. Members of the Board of Directors may not authorize others to attend meetings of the Board of Directors where issues specified in Clauses 2, 4, 6, 7, 8, 9, 10, 12, 13, 14 and 18 Article 70 of this Law are decided.

6. To implement resolutions and decisions of the Shareholders’ General Meeting and Board of Directors.

7. To explain the performance of their assigned tasks before the Shareholders’ General Meeting and Board of Directors upon request.

8. To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

Section 4

CREDIT INSTITUTIONS BEING ONE-MEMBER LIMITED LIABILITY COMPANIES

Article 73. Rights and obligations of the owner of a credit institution being a one-member limited liability company

1. An owner shall have the following rights:

a) To decide on the quantity of members of the Members’ Council which shall then be stated in the credit institution’s charter, which must be between 5 and 09;

b) To appoint authorized representatives with a term of office of up to 5 years for exercising the owners' rights and performing the owners’ obligations in accordance with this Law. Authorized representatives must satisfy all the criteria and conditions specified in Clause 1, Article 41 of this Law;

c) To appoint with a term of office of no more than 05 years, relieve from duty or dismiss the chairperson and other members of the Members’ Council; the head and other members of the Supervisory Board, the Chief Executive Officer (Director), Deputy Chief Executive Officers (Chief Executive Officers) and the chief accountant;

d) To decide on the adjustment of the charter capital of the credit institution; to transfer part or the whole of the charter capital of the credit institution and change the legal form of the credit institution;

dd) To decide on the policy of establishment, acquisition, capital contribution, increase or decrease in capital contribution, transfer of investment in subsidiaries and affiliated companies;

e) To adopt annual financial statements; to decide on the use of profits after the credit institution’s tax and other financial obligations are fulfilled;

g) To decide to reorganize, dissolve, or request the court to open bankruptcy procedures for, the credit institution;

h) To decide on remuneration, salaries, bonuses, and other benefits of the chairperson and other members of the Members’ Council, the head and other members of the Supervisory Board and the Chief Executive Officer (Director).

2. An owner shall have the following obligations:

a) To contribute capital fully and on time as committed;

b) To observe the charter of the credit institution;

c) To identify and separate assets of the owners from those of the credit institution;

d) To observe law regulations in purchase, sale, borrowing, lending, rent and lease and signing of other contracts and transactions between the credit institution and owners;

dd) To perform other obligations specified in this Law and the charter of the credit institution.

Article 74. Tasks and powers of the Members’ Council of a credit institution being a one-member limited liability company

1. The Members’ Council of a credit institution being a one-member limited liability company is composed of all authorized representatives of the owners and shall, in the owners' name, exercise the rights and perform the obligations of the owner. It shall, in the name of the credit institution, exercise the rights and perform the obligations of the credit institution; and take responsibility before the owners for performing its tasks and exercising its powers in accordance with this Law and the charter of the credit institution.

2. The Members’ Council has the following duties and powers:

a) To issue and modify the charter of the credit institution;

b) To issue annual development strategies and business plans of the credit institution;

c) To escalate to the owners of the credit institution for adoption and decision matters specified at Points c, d, dd, e and g, Clause 1, Article 73 of this Law which fall within the owners' competence;

d) To consider and approve annual reports;

dd) To decide on the independent auditing organization in accordance with Article 59 of this Law;

e) To examine, supervise and direct the Chief Executive Officer (Director) in performing the tasks assigned to him/her; to evaluate on an annual basis the work performance of the Chief Executive Officer.

g) To decide to offset losses arising in the course of conducting business;

h) To decide on credit extension in accordance with Clause 7, Article 136 of this Law;

i) To adopt plans on contribution of capital, purchase or sale of shares or capital contributions of the credit institution in enterprises or other credit institutions where the value of the capital contributions or the expected purchasing price or the book value, in the case of selling shares and capital contributions, accounts for 20% or more of the credit institution’s charter capital indicated in its latest audited financial statement or any lower percentage specified in the credit institution’s charter;

k) To adopt decisions on investment in, purchase or sale of the credit institution’s fixed assets of which the investment value, the expected purchasing price or the original cost, in the case of selling fixed assets, accounts for 20% or more of the credit institution’s charter capital indicated in the latest audited financial statement or any lower percentage specified in the credit institution’s charter;

l) To approve contracts and other transactions between the credit institution and its subsidiaries and affiliated companies; and contracts and other transactions between the credit institution and the chairperson and other members of the Members’ Council, the head and other members of the Supervisory Board, the Chief Executive Officer (Director) or their affiliated persons. In this case, the relevant members do not have voting rights, unless they sign other contracts and transactions with the owners of the credit institution;

m) To decide on market development, marketing and technology transfer solutions;

n) To issue internal regulations related to the credit institution’s organization, governance and operation in accordance with law regulations;

o) To supervise and assess business activities of the credit institution;

p) To perform other tasks and exercise other rights specified in law regulations and the charter of the credit institution.

Article 75. Rights and obligations of the chairperson of the Members’ Council of a credit institution being a one-member limited liability company

1. To elaborate working programs and plans of the Members’ Council; to take responsibility for the exercise of his/her rights and the performance of his/her obligations.

2. To convene and chair meetings of the Members’ Council, to collect opinions of meetings of the Members’ Council.

3. To supervise and organize the supervision of the implementation of resolutions and decisions of the Members’ Councils.

4. To sign resolutions and decisions on behalf of the Members’ Council.

5. To ensure that members of the Members’ Council receive adequate, objective and accurate information and have sufficient time for discussing matters to be considered by the Members’ Council.

6. To assign specific tasks to each member of the Members’ Council.

7. To supervise the performance of rights, obligations and tasks of members of the Members’ Council.

8. To authorize only one other member of the Members’ Council to exercise the rights and perform the obligations of the chairperson of Members’ Council while he/she is absent or unable to perform his/her tasks.

9. To evaluate on an annual basis the work performance of each member of the Members’ Council and report evaluation results to the owners.

10. To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

Article 76. Rights and obligations of members of the Members’ Council of a credit institution being a one-member limited liability company

1. To honestly and diligently exercise their rights and perform their obligations in accordance with internal regulations of the Members’ Council and as assigned by the chairperson of the Members’ Council in the interests of the credit institution and owners; to take responsibility for the exercise of their rights and the performance of their obligations.

2. To examine auditor’s reports on financial statements prepared by independent auditors, give opinions on or request executives of the credit institution, independent auditors and internal auditors to explain and clarify matters related to such statements.

3. To propose the chairperson of the Members’ Council to convene an extraordinary meeting of the Members’ Council.

4. To attend meetings of the Members’ Council, discuss and vote on matters falling within the tasks and powers of the Members’ Council in accordance with this Law, take responsibility before the owners and the Members’ Council for their decisions.

In the case where the voting involves a conflict of interest with any member, such member may not vote.

5. To implement decisions of the owners, resolutions and decisions of the Members’ Council.

6. To explain the performance of their assigned tasks before the owners and Members’ Council upon request.

7. To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

Section 5

CREDIT INSTITUTIONS BEING LIMITED LIABILITY COMPANIES WITH TWO OR MORE MEMBERS

Article 77. Rights and obligations of capital contributors

1. Capital contributors of a credit institution being a limited liability company with two or more members must be legal entities. The total quantity of capital contributors must not exceed 5. The maximum capital contribution ratio for a member or a member together with his/her affiliated persons must not exceed 50% of the charter capital of a credit institution.

The capital contribution and ownership ratios of domestic and foreign organizations at microfinance institutions shall comply with the regulations of the Governor of the State Bank.

2. Capital contributors have the following rights:

a) To appoint their representatives as members of the Members’ Council or Supervisory Board member and relieve from duty or dismiss them on the basis of their capital contributions in the credit institution or as agreed upon among capital contributors;

b) To receive information and reports on the operation of the Members’ Council and Supervisory Board, annual accounting books and financial statements and other documents and data of the credit institution;

c) To receive shared profits in proportion to their capital contributions after the credit institution has fulfilled tax and other financial obligations;

d) To be shared the remaining assets of the credit institution in proportion to their capital contributions when the credit institution is dissolved or bankrupt;

dd) To initiate a lawsuit against a member of the Members' Council, a member of the Supervisory Board, or the Chief Executive Officer (Director) in the case where such person fails to comply or improperly or tardily complies with the law regulations, the charter of the credit institution, resolutions and decisions of the Members' Council with respect to the assigned rights and obligations and in other cases specified by law regulations and the charter of the credit institution.

3. Capital contributors have the following obligations:

a) Not to withdraw contributed capital in any form;

b) To observe the charter of the credit institution;

c) To perform other obligations specified in law regulations and the charter of the credit institution.

Article 78. Transfer of capital contributions

1. Capital contributors may transfer their capital contributions and be prioritized to additionally contribute capital when the credit institution increases its charter capital.

2. The Governor of the State Bank shall specify conditions for receiving transferred capital contributions of credit institutions.

Article 79. Members’ Council of a credit institution being a limited liability company with two or more members

1. The term of office of the Members' Council shall be specified in the charter of the credit institution and must not exceed 05 years. The term of office of the members of the Members’ Council is the same as that of the Members’ Council. The office term of office of an additional member or replacement of the Members’ Council is the remaining term of office of the Members’ Council. The Members’ Council of the term of office that has just expired shall operate until a new Members’ Council takes over its work.

2. The Members’ Council has the following duties and powers:

a) The tasks and powers specified at Points a, d, dd, e, h, i, k, m and n, Clause 2, Article 74 of this Law;

b) To decide on the increase or decrease of the charter capital as well as the time and mode of capital raising;

c) To adopt other contracts and transactions between the credit institution and its subsidiaries and affiliated companies; and other contracts and transactions between the credit institution and members of the Members’ Council, members of the Supervisory Board, the Chief Executive Officer (Director) or their affiliated persons. In this case, relevant members of the Members’ Council have no voting right;

d) To report on the financial situation and business results of the credit institution, the performance of assigned tasks and exercise of vested powers by the Members’ Council and its members upon request of capital contributors or competent state authorities;

dd) To decide to redeem capital contributions in accordance with this Law;

e) To elect, relieve from duty or dismiss the chairperson of the Members’ Council; to appoint, relieve from duty, dismiss, sign and terminate contracts with, the Chief Executive Officer (Director), Deputy Chief Executive Officers General (Deputy Directors), the chief accountant, managers and other executives under their ambit as in accordance with internal regulations of the Members’ Council;

g) To decide on remuneration, salaries, bonuses, and other benefits of the chairperson and other members of the Members’ Council, the head and other members of the Supervisory Board and the Chief Executive Officer (Director);

h) To adopt annual financial statements, and plans on profit use and sharing or loss offsetting of the credit institution;

i) To decide on the establishment of subsidiaries, branches and representative offices; to contribute capital to affiliated companies;

k) To decide to reorganize, dissolve, or request the court to open bankruptcy procedures for, the credit institution;

i) To issue annual development strategies and business plans of the credit institution;

m) To perform other tasks and exercise other rights specified in law regulations and the charter of the credit institution.

3. The chairperson of the Members' Council has the following rights and obligations:

a) The rights and obligations specified in Clauses 1, 2, 3, 4, 5, 6, 7 and 8, Article 75 of this Law;

b) To evaluate on an annual basis the work of each member and committees of the Members’ Council;

c) To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

4. Members of the Members' Council have the following rights and obligations:

a) To exercise the rights and perform the obligations specified in Clauses 1, 2 and 3, Article 76 of this Law;

b) To attend meetings of the Members’ Council, discuss and vote on matters falling within the tasks and powers of the Members’ Council in accordance with this Law, take responsibility before the Members’ Council for their decisions.

In the case where the voting involves a conflict of interest with any member, such member may not vote;

c) To implement resolutions and decisions of the Members’ Council;

d) To explain the performance of their assigned tasks to capital contributors and the Members’ Council upon request;

dd) To exercise other rights and perform other obligations specified in law regulations and the charter of the credit institution.

Section 6

CREDIT INSTITUTIONS BEING COOPERATIVES

Article 80. Operation characteristics and objectives

Credit institutions being cooperatives mean credit institutions organized as cooperatives operating in the banking sector to provide mutual assistance among members for effectively conducting production, business and service activities and improving their life. cooperative bank or people's credit funds being cooperatives include cooperative banks and people’s credit funds.

Article 81. Members of credit institutions being cooperatives

1. Members of a cooperative bank include people’s credit funds and other capital-contributing legal entities.

2. Members of a people’s credit fund include individuals, households and capital-contributing legal entities.

Article 82. Management organizational structure of a credit institution being a cooperative

1. The organizational and managerial structure of a cooperative bank or people’s credit fund is composed of the Members’ General Meeting, Board of Directors, Supervisory Board and Chief Executive Officer (Director).

2. Cooperative banks and people’s credit funds must have internal audit and internal control systems and conduct independent audit in accordance with the regulations of the Governor of the State Bank.

Article 83. Charter capital

1. The charter capital of a cooperative bank includes:

a) Capital contributions of members;

b) State-subsidized capital.

2. The charter capital of the people's credit fund includes capital contributions of members.

3. The charter capital of a cooperative bank or a people's credit fund shall be replenished from the following sources:

a) Capital contributions of members;

b) State-subsidized capital if it is a cooperative bank;

c) Reserve for replenishment of the charter capital and other funds as specified by law;

d) Other lawful funding sources.

4. The Members’ General Meeting shall decide on the capital contribution by each member in accordance with the regulations of the Governor of the State Bank.

Article 84. Rights of members

1. To attend the Members’ General Meeting or elect delegates to the Members’ General Meeting, vote on matters falling within the competence of the Members’ General Meeting.

2. To stand as candidates or nominate others to the Board of Directors or Supervisory Board and other to-be-elected titles in accordance with the charter of the cooperative bank or the charter of the people’s credit fund.

3. To make deposits; take out loans; receive distributed profits depending on the service levels and their capital contribution ratios.

4. To enjoy benefits of the cooperative bank or people’s credit fund.

5. To be provided with necessary information related to the operations of the cooperative bank or people's credit fund; receive support for training, refresher and improving professional qualifications.

6. To request and require the Board of Directors, Chief Executive Officer (Director), and Supervisory Board to explain their activities.

7. To request the Board of Directors and the Supervisory Board to convene an extraordinary Members’ General Meeting.

8. To transfer capital contribution, rights and obligations to others in accordance with the regulations of the Governor of the State Bank.

9. To be refunded a part or the whole of the capital contribution in accordance with the regulations of the Governor of the State Bank.

10. To end their membership of the people's credit fund in accordance with the charter of the people’s credit fund; to end their membership of the cooperative bank, if such members are other capital-contributing legal entities, in accordance with the charter of the cooperative bank.

11. To exercise other rights specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Article 85. Obligations of members

1. To comply with the ideals, missions, charter, regulations of the cooperative bank or people's credit fund, resolutions and decisions of the Members’ General Meeting and the Board of Directors.

2. To fully and timely contribute capital as committed in accordance with the charter of the cooperative bank or the charter of the people’s credit fund and other relevant law regulations.

3. To provide cooperation and mutual assistance and contribute to building, and promoting the development of, the cooperative bank or people’s credit fund.

4. To take responsibility for debts and financial obligations of the cooperative bank or people's credit fund within the scope of capital contributions to such cooperative bank or people's credit fund.

5. To repay principals and interests of the cooperative bank or people’s credit fund as committed.

6. To compensate for the damages they cause to the cooperative bank or people’s credit fund in accordance with the law regulations and the charter of the cooperative bank or people’s credit fund.

7. To take responsibility for, when acting in the name of the cooperative bank or people's credit fund in any form, any law-breaking acts they have committed or business activities and other transactions they have conducted for self-seeking purposes or for the interests of other institutions or individuals.

8. To perform other obligations specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Article 86. Members’ General Meeting

1. The Members’ General Meeting is the highest decision-making body of a cooperative bank or people’s credit fund.

2. The Members’ General Meeting shall be a meeting of all members or just their proxies. In case of organizing a meeting of members’ proxies, the quantity of attending proxies as specified by the charter of the cooperative bank or people’s credit fund shall not be less than 100.

3. The Members’ General Meeting has the following tasks and powers:

a) To adopt development orientations of the cooperative bank or people’s credit fund;

b) To adopt or modify the charter of the cooperative bank or the charter of the people’s credit fund;

c) To approve regulations on the organization and operation of the Board of Directors and Supervisory Board of the cooperative bank or people's credit fund;

d) To approve the Board of Directors’ and Supervisory Board’s reports on the performance of their assigned tasks and vested powers;

dd) To adopt annual financial statements and plans on distribution of profits after the credit institution’s tax and other financial obligations, and settlement of losses;

e) To adopt business plans and annual membership development plans; member's capital contributions;

g) To approve the plan to change the charter capital, unless otherwise the change in charter capital is resulted from the change in capital contributions of members;

h) To approve the quantity of members of the Board of Directors and Supervisory Board for each term of office; to elect, relive from duty, dismiss the chairperson and other members of the Board of Directors, the head and other members of the Supervisory Board; to approve the policy for having a member of the Board of Directors to concurrently serve as the Director or hiring a Director for the people's credit fund;

i) To approve the investment in, purchase or sale of the cooperative bank’s or people’s credit fund’s fixed assets of which the investment value, the expected purchasing price or the original cost, in the case of selling fixed assets, accounts for 20% or more of the cooperative bank’s or people’s credit fund’s charter capital indicated in the latest audited financial statement or the latest financial statement in the case where the people's credit fund is exempt from auditing or any lower percentage specified in the charter of the cooperative bank or people’s credit fund;

k) To decide on solutions to major financial changes of the cooperative bank or people’s credit fund.

g) To decide on remuneration, bonuses, and other benefits of the chairperson and other members of the Board of Directors, the head and other members of the Supervisory Board;

m) To consider and handle, within its competence, violations of the Board of Directors or Supervisory Board which cause damage to the cooperative bank or people's credit fund and its members;

n) To decide on the management organizational structure of the cooperative bank or people's credit fund;

o) To decide on exclusion of members being other capital-contributing legal entities of the cooperative bank or members of the people's credit fund;

p) To divide, split up, consolidate, merge or voluntarily dissolve the cooperative bank or people’s credit fund;

q) To decide on the independent auditing organization in accordance with Clause 2, Article 82 of this Law;

r) Other matters upon request of the Board of Directors, Supervisory Board or requested by at least one-third of total members;

s) To exercise other rights and perform other tasks specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Article 87. Board of Directors of a credit institution being a cooperative

1. The Board of Directors is a body which administers a cooperative bank or people’s credit fund and composed of the chairperson and other members.

2. The quantity of members of the Board of Directors for each term shall be decided by the Members’ General Meeting, with between at least 03 members and no more than 09 members. In the case where the Board of Directors is composed of fewer members than required, within 90 days from the date of such occurrence, the cooperative bank or people’s credit fund shall elect additional members to ensure the required minimum quantity of members, unless otherwise specified in Clause 5, Article 166 of this Law.

3. The term of office of the Board of Directors shall be decided by the Members’ General Meeting and indicated in the charter, which must be no more than 05 years. The office term of office of an additional member or replacement of the Board of Directors is the remaining term of office of the Board of Directors. The Board of Directors or Members’ Council of the term of office that has just expired shall operate until a new Board of Directors or Members’ Council takes over its work.

The quantity of terms of office of the chairperson of the Board of Directors of the people’s credit fund shall be specified by the Governor of the State Bank.

4. Members of the Board of Directors must be individual members or representatives of capital contributions of members that are legal entities.

5. The Board of Directors of a cooperative bank may establish its own secretariat. The responsibilities and tasks of the secretariat shall be specified by the Board of Directors.

6. The chairperson or other members of the Board of Directors may not authorize any person who is not a member of the Board of Directors to exercise their rights and perform their obligations.

7. The Board of Directors shall use the seal of the cooperative bank or people's credit fund to perform its tasks and exercise its powers.

Article 88. Tasks and powers of the Board of Directors of a credit institution being a cooperative

1. To escalate to the Members’ General Meeting for consideration and approval of issues falling under the competence of the Members’ General Meeting.

2. To organize the implementation of resolutions and decisions of the Members’ General Meeting. To report to the Members’ General Meeting on results of the business activities of a cooperative bank or people’s credit fund. To take responsibility before the Members' General Meeting for the performance of assigned tasks and exercise of vested powers in accordance with this Law and the charter of the cooperative bank or people’s credit fund.

3. To decide on the establishment of branches, representative offices and non-business units of the credit institution being a cooperative.

4. To approve the investment in, purchase or sale of the cooperative bank’s or people’s credit fund’s fixed assets of which the investment value, the expected purchasing price or the original cost, in the case of selling fixed assets, accounts for between 10% and less than 20% of the cooperative bank’s or people’s credit fund’s charter capital indicated in the latest audited financial statement or the latest financial statement in the case where the people's credit fund is exempt from auditing or any lower percentage specified in the charter of the cooperative bank or people’s credit fund.

5. To approve other contracts and transactions between the cooperative bank or people's credit fund and members of the Members’ Council, members of the Supervisory Board, the Chief Executive Officer (Director) or their affiliated persons. In this case, relevant members of the Board of Directors have no voting right.

6. To appoint, relive from duty, take disciplinary actions against, suspend and decide on salaries, bonuses and other benefits of the Chief Executive Officer (Director), Deputy Chief Executive Officer (Deputy Director) and other executives under its ambit in accordance with internal regulations of the Board of Directors and the law regulations.

7. To prepare agendas of the Members’ General Meeting and convene the Members’ General Meeting.

8. To admit new members and resolve applications of other capital-contributing legal entities for ending their membership of the cooperative bank, resolve members' applications to end their membership of the people's credit fund and report such resolution to the forthcoming Members' General Meeting.

9. To examine, supervise and direct the Chief Executive Officer (Director) in performing the tasks assigned to him/her; to evaluate on an annual basis the work performance of the Chief Executive Officer.

10. To issue internal regulations related to the organization, governance and operation of the cooperative bank or people’s credit fund in accordance with law regulations, other than issues to be decided by the Members’ General Meeting.

11. To supervise the implementation of risk prevention measures of the cooperative bank or people's credit fund.

12. To exercise other rights and perform other tasks specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Article 89. Rights and obligations of the chairperson of the Board of Directors of a credit institution being a cooperative

1. To elaborate working programs and plans of the Board of Directors; to take responsibility for the exercise of his/her rights and the performance of his/her obligations.

2. To convene and chair meetings of the Board of Directors.

3. To chair meetings of the Members’ General Meeting.

4. To assign specific tasks to each member of the Board of Directors.

5. To supervise the performance of rights, obligations and tasks of members of the Board of Directors.

6. To ensure that members of the Board of Directors receive adequate, objective and accurate information and have sufficient time for discussing matters to be considered by the Board of Directors.

7. To take responsibility before the Board of Directors and Members’ General Meeting for his/her assigned tasks.

8. To sign resolutions and decisions on behalf of the Board of Directors.

9. To authorize only one other member of the Board of Directors to exercise the rights and perform the obligations of the chairperson of Board of Directors while he/she is absent or unable to perform his/her tasks.

10. To exercise other rights and perform other obligations specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Article 90. Rights and obligations of members of the Board of Directors of a credit institution being a cooperative

1. To honestly and diligently exercise their rights and perform their obligations in accordance with internal regulations of the Board of Directors and as assigned by the chairperson of the Board of Directors in the interests of the cooperative bank or people’s credit fund and its members; to take responsibility for the exercise of their rights and the performance of their obligations.

2. To examine financial statements and auditor’s reports on financial statements, give opinions on or request executives of the cooperative bank or people's credit fund, independent auditors and internal auditors to explain and clarify matters related to such statements.

3. To propose the chairperson of the Board of Directors to convene an extraordinary meeting of the Board of Directors.

4. To attend meetings of the Board of Directors, discuss and vote on matters falling within the tasks and powers of the Board of Directors, take responsibility before the Members’ General Meeting and the Board of Directors for their decisions.

In the case where the voting involves a conflict of interest with any member, such member may not vote.

5. To implement resolutions and decisions of the Shareholders’ General Meeting and Board of Directors.

6. To explain the performance of their assigned tasks before the Members’ General Meeting and Board of Directors upon request.

7. To exercise other rights and perform other obligations specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Article 91. Supervisory Board of a credit institution being a cooperative

1. The Supervisory Board of a cooperative bank shall be composed of at least 03 members. The quantity of members of the Supervisory Board of the people’s credit fund must be consistent with the scale of operations and comply with the regulations of the Governor of the State Bank.

2. The Supervisory Board may establish its own internal audit unit and secretariat to help it perform its tasks.

3. Members of the Cooperative Bank's Supervisory Board must be representatives of the capital contributions of members who are people's credit funds and individuals nominated by members who are other capital-contributing legal entities. Members of the Supervisory Board of a people's credit fund must be individual members or representatives of capital contributions of the fund’s members that are legal entities. In the case where the Supervisory Board is composed of fewer members than specified in Clause 1 of this Article, within 90 days from the date of such occurrence, the cooperative bank or people’s credit fund shall elect additional members to ensure the required minimum quantity of members, unless otherwise specified in Clause 5, Article 166 of this Law.

4. The term of office of the Supervisory Board is the same as that of the Board of Directors. The term of office of members of the Supervisory Board is the same as that of the Supervisory Board. The term of office of office of an additional member or replacement is the remaining term of office of the Supervisory Board. The Supervisory Board of the term of office that has just expired shall operate until a new Supervisory Board takes over its work.

The quantity of terms of office of the head of the Supervisory Board of the people’s credit fund shall be specified by the Governor of the State Bank.

Article 92. Tasks and powers of the Supervisory Board of a credit institution being a cooperative

1. To supervise the administration and management of the cooperative bank or people’s credit fund regarding compliance with law regulations, the charter of the cooperative bank or people’s credit fund and resolutions and decisions of the Members’ General Meeting, Board of Directors; take responsibility before the Members’ General Meeting for the performance of assigned tasks and exercise of vested powers in accordance with this Law and the charter of the cooperative bank or people’s credit fund.

2. To issue its internal regulations; to review on an annual basis its internal regulations and the cooperative bank’s or people’s credit fund’s internal regulations on accounting and reporting.

3. To appraise annual financial statements of the cooperative bank or people's credit fund; to report to the Members’ General Meeting on its appraisal of financial statements and its assessment of the reasonability, lawfulness, truthfulness and prudence in accounting, statistical work and financial reporting. To consult the Board of Directors before escalating its reports and recommendations to the Members’ General Meeting.

4. To examine financial operations and supervise the observance of accounting regimes, distribution of profits, handling of losses, use of funds, assets and state supports; to supervise safety in the operations of the cooperative bank or people’s credit fund.

5. To conduct internal auditing; have access to and be provided fully, accurately and promptly with information and documents related to the management and administration of the cooperative bank or people’s credit fund, and use resources of the cooperative bank or people’s credit fund to perform assigned tasks and exercise vested powers; to hire experts, independent consultants and outsourced institutions to perform its tasks but take responsibility for the performance of such tasks.

6. To promptly notify the Board of Directors when detecting that managers or executives of the cooperative bank or people’s credit fund have violated the law regulations or the charter, internal regulations of such cooperative bank or people’s credit fund; to request the violators to immediately stop the violations and find remedies for the consequences (if any).

7. To convene an extraordinary Members’ General Meeting in accordance with the law regulations.

8. To notify the Board of Directors of, and report to the Members’ General Meeting and the State Bank on, control results; to propose the Board of Directors and Chief Executive Officer (Director) to redress weaknesses and handle violations in the operation of the cooperative bank or people’s credit fund.

9. To appoint, relive from duty, take disciplinary actions against, suspend, and decide on salaries and other benefits for, the positions in the internal audit department.

10. To receive recommendations related to the cooperative bank or people's credit fund; resolve them if they fall under its competence or propose solutions therefor to the Board of Directors or the Members’ General Meeting.

11. The head of the Supervisory Board may attend but may not vote at meetings of the Board of Directors; request to write down his/her opinions in the minutes of such meetings if such opinion is different from the resolutions and decisions of the Board of Directors and report it to the Members’ General Meeting.

12. To exercise other rights and perform other tasks specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Article 93. Rights and obligations of the Head of the Supervisory of a credit institution being a cooperative

1. To perform the tasks and powers of the Supervisory Board specified in Article 92 of this Law; to take responsibility for the implementation of its rights and obligations.

2. To convene and chair meetings of the Supervisory Board.

3. On behalf of the Supervisory Board, to sign documents under the Supervisory Board’s competence.

4. To prepare working plans for the Supervisory Board and assign specific tasks to each Supervisory Board member.

5. To ensure that Supervisory Board members receive complete, objective and accurate information and have enough time to discuss on matters to be considered by the Supervisory Board.

6. To supervise and direct Supervisory Board members in performing their tasks, rights and obligations.

7. To authorize only one other member of the Supervisory Board to exercise the rights and perform the obligations of the head of the Supervisory Board while he/she is absent or unable to perform his/her tasks.

8. To exercise other rights and perform other obligations specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Article 94. Rights and obligations of members of the Supervisory Board of a credit institution being a cooperative

1. To honestly and diligently comply with the law regulations, the charter of the cooperative bank people’s credit fund and the internal regulations of the Supervisory Board in the interests of the cooperative bank or people’s credit fund and its members; to take responsibility for the exercise of their rights and the performance of their obligations.

2. To request the head of the Supervisory Board to convene an extraordinary meeting of the Supervisory Board.

3. To control business activities, accounting books, assets and financial statements and recommend remedies.

4. To request managers, executives, and employees of the cooperative bank or people’s credit fund to provide statistics and explain business operations in order to perform assigned tasks.

5. To report on abnormal financial activities to the Supervisory Board head and take responsibility for their own evaluation and conclusions.

6. To attend Supervisory Board’s meetings, to discuss and vote on matters within the scope of tasks and powers of the Supervisory Board, other than those involving conflicts of their interests.

7. To exercise other rights and perform other obligations specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Article 95. Chief Executive Officer (Director) of the credit institution which is a cooperative.

1. The Chief Executive Officer (Director) of a cooperative bank or people’s credit fund shall be appointed by its Board of Directors with the term of office no longer than 05 years.

2. The Chief Executive Officer (Director) is the supreme executive officer responsible for administering day-to-day business activities of the cooperative bank or people's credit fund. He/she shall be supervised by and take responsibility before the Board of Directors and the law regulations for the performance of his/her tasks and vested powers.

3. In the case where the position of Chief Executive Officer (Director) is vacant, the Board of Directors shall appoint a Chief Executive Officer (Director) within 90 days from the date of such occurrence.

Article 96. Rights and obligations of Chief Executive Officer (Director) of a credit institution being a cooperative

1. To escalate to the Board of Directors issues falling under the competence of the Board of Directors.

2. To organize the implementation of resolutions and decisions of the Members’ General Meeting or of the Board of Directors.

3. To implement business plans; to decide on issues related to day-to-day business activities of the cooperative bank or people's credit fund falling under his/her competence.

4. To set up the internal control system and maintain its effective operation.

5. To prepare and escalate financial statements to the Board of Directors for approval by itself or for it to further escalate to competent authorities for approval thereof; To take responsibility for the accuracy and truthfulness of financial statements, statistical reports, settlement statistics and other financial information.

6. To issue according to his/her competence internal regulations; professional processes and procedures to operate business administration and management information systems.

7. To report to the Board of Directors, Supervisory Board, Members’ General Meeting and competent State authorities on operations and business results of the cooperative bank or people's credit fund.

8. To decide on the application of measures beyond his/her competence in cases of natural disasters, enemy sabotage, fires and incidents, take responsibility for such decisions and promptly report them to the Board of Directors.

9. To request the Board of Directors to convene extraordinary meetings.

10. To appoint, relive from duty, and dismiss executive positions of the cooperative bank or people's credit fund, other than those to be decided by the Members’ General Meeting and the Board of Directors.

11. On behalf of the cooperative bank or people's credit fund, to sign other contracts and transactions under its charter and internal regulations.

12. To propose plans to use profits and handle losses of the cooperative bank or people's credit fund.

13. To recruit employees; to decide on salaries and bonuses of employees according to his/her competence.

14. To exercise other rights and perform other obligations specified in law regulations and the charter of the cooperative bank or the charter of the people’s credit fund.

Section 7

FOREIGN BANK BRANCHES

Article 97. Management organizational structure of foreign bank branches

1. Foreign banks shall decide on the management organizational structure of their branches in accordance with this Law on administration, the provisions in Articles 57 and 59 of this Law on internal control system and independent audit; Internal audit shall be carried out in accordance with regulations of foreign banks.

2. In the case where a foreign bank has two or more branches operating in Vietnam and implementing a uniform financial, accounting and reporting regime, it shall authorize the Chief Executive Officer (Director) of a branch to take responsibility before law for all operations of their branches in Vietnam

Article 98. Chief Executive Officers (Directors) of foreign bank branches

1. The Chief Executive Officer (Director) of a foreign bank branch shall represent this foreign bank branch before law and take responsibility for all operations of such branch and shall, according to his/her rights and obligations, administer day-to-day activities in accordance with this Law and other relevant laws; When absent from Vietnam, the Chief Executive Officer (Director) of a foreign bank branch shall authorize in writing another person currently residing in Vietnam to exercise his/her rights and obligations.

2. The Chief Executive Officer (Director) of a foreign bank branch may not concurrently act as the head of a representative office of the foreign bank in Vietnam, or a manager or an executive of a credit institution or other economic institution.

3. The Chief Executive Officer (Director) of a foreign bank branch must satisfy all the criteria and conditions specified in Clause 4, Article 41 of this Law. The appointment of the Chief Executive Officer (Director) of a foreign bank branch must be subject to the State Bank’s prior written approval.

Dossiers and procedures for approving the person expected to be appointed as the Chief Executive Officer (Director) of a foreign bank branch and notification of the appointed person shall comply with Clauses 2 and 3, Article 44 of this Law.

Chapter V

OPERATIONS OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES

Section 1

GENERAL PROVISIONS ON OPERATIONS OF CREDIT INSTITUTIONS

Article 99. Contents of licensed operations of credit institutions

1. Contents of banking operations and other business activities of a credit institution shall be specified in the license granted to such credit institution

2. Banking operations of a credit institution specified in this Law shall comply with the regulations of the State Bank Governor.

Article 100. Interests and charges in business activities of credit institutions

1. Credit institutions may fix and shall publicize deposit interest rates and service charge rates applied in their business activities.

2. Credit institutions and their clients may agree on interest rates and credit extension charges to be applied to their banking operations in accordance with the law provisions on credit institutions.

3. In the case where banking operations experience abnormal developments, in order to assure safety for the credit institution system, the State Bank Governor may provide a mechanism for determining interest rates and charges applicable to business activities of credit institutions.

Article 101. Internal regulations

1. Pursuant to this Law, regulations of the State Bank Governor and other relevant laws, credit institutions shall formulate and issue internal regulations on their professional operations, including carrying out professional operations by electronic means, ensuring the availability of internal control and audit and risk management mechanisms applicable to each business activity and plans to tackle cases of emergency.

2. Credit institutions must issue internal regulations on the following contents:

a) Credit extension and management of credit extension;

b) Classification of assets and deduction and use of allowances for loan and lease losses;

c) Assessment of assets and observance of capital prudential ratio;

d) Liquidity management, covering procedures and limit for liquidity management;

dd) Internal control and internal audit in conformity with the nature and size of credit institutions

e) Internal credit rating system for credit institutions, ensuring in accordance with the law provisions on credit institutions;

g) Administration of risks in credit institutions’ operations;

h) Prevention and combat of money laundering;

i) Plans to tackle cases of emergency.

3. Credit institutions shall send internal regulations specified in Clause 2 of this Article to the State Bank within 10 days after their issuance

Article 102. Consideration and approval of credit extension, and inspection of use of loans and assets under financial lease

1. Credit institutions shall request clients to provide documents and data proving their financial capability, feasible capital use plans, and lawful capital use purposes before deciding on credit extension, except for the cases specified in Clause 2 of this Article.

2. Credit institutions must have at least information about the lawful capital use purposes and financial capability of clients before deciding on credit extension for the following small-value credit extensions:

a) Loans to serve daily life needs, credit extensions via cards of commercial banks or foreign bank branches;

b) Financial leases, consumer loans, credit extensions via cards of non-bank credit institutions;

c) Loans to serve daily life needs, granted by people’s credit funds;

d) Loans of microfinance institutions.

3. Clients must provide information, documents and data as specified in Clauses 1 and 2 of this Article, and information about affiliated persons to credit institutions upon application for credit extension.

4. Credit institutions shall consider and approve credit extension on the principle of clearly separating the responsibility of credit evaluation and extension decision.

5. Credit institutions are entitled and obliged to inspect and supervise the use of loans, assets under financial leasing and debt repayment by their clients specified in Clause 1 of this Article; are entitled to request clients subject to loan and financial leasing to report the use of loans and assets under financial leasing, and provide documents and data proving the lawful use purposes of loans and assets under financial leasing.

6. Clients are obliged to use loans and assets under financial leasing for the committed proper purposes, and make full payment of principals, interests and charges on time as agreed upon.

7. Credit institutions and clients shall agree on application or non-application of security measures in credit extension.

8. The State Bank Governor shall prescribe the small value of credit extensions, the inspection and supervision of use of loans and assets under financial leasing, and the repayment of debts by clients specified in Clause 2 of this Article; the determination of clients subject to provision of information about affiliated persons and information contents to be provided to credit institutions upon application for credit extension, and consideration and approval of credit extension by electronic means.

Article 103. Termination of credit extension, settlement of debts and interest rate exemption and reduction

1. Credit institutions may terminate credit extension and recover debts ahead of schedule when detecting that clients have provided false information or breached credit contracts or agreements, or guarantee contracts.

2. In the case where the parties have no other agreement, a credit institution is entitled to settle debts and assets used as loan security according to the credit contract or agreement, or guarantee contract and law provisions. The rescheduling, sale and purchase of debts by credit institutions shall comply with the State Bank Governor’s regulations.

3. In the case where a borrower or its/his/her guarantor cannot pay a debt due to bankruptcy, the credit institution shall recover the debt in accordance with the law provisions on bankruptcy.

4. Credit institutions may decide on exemption or reduction of interest rates and charges for clients in accordance with their internal regulations.

Article 104. Archive of credit dossiers

1. Credit institutions must keep credit dossiers, including:

a) Documents and data requesting for credit extension;

b) Documents and data on appraisal for and decision on credit extension;

c) Credit contracts or agreements; dossiers of security measures in the case where security measures are applied;

d) Documents and data made in the use of credit related to credit contracts or agreements.

2. The time limit for keeping credit dossiers shall comply with the law provisions on archives.

Article 105. E-transactions in operations of credit institutions

Credit institutions may carry out operations through electronic means in accordance with the State Bank Governor’s regulations and the law provisions on e-transactions.

Article 106. Controlled testing mechanism in the banking sector

1. The controlled testing mechanism in the banking sector means an environment for testing the application of technology and deployment of new products, services, and business models in the banking sector with limited scope, space and duration of implementation; Institutions participating in the controlled testing mechanism must satisfy the conditions and criteria for approval of participants, and be subject to supervision by competent state authorities.

2. The Government shall detail this Article.

Section 2

OPERATIONS OF COMMERCIAL BANKS

Article 107. Banking operations of commercial banks

1. Taking demand deposits, time deposits, savings deposits and deposits of other types.

2. Issuing deposit certificates.

3. Extending credit by:

a) Lending;

b) Discounting and re-discounting;

c) Providing bank guarantee;

d) Issuing credit cards;

dd) Domestic factoring; international factoring, for banks licensed for international payment;

e) Letter of credit;

g) Other forms of credit in accordance with the State Bank Governor’s regulations.

4. Opening payment accounts for clients.

5. Providing payment instruments.

6. Providing via-account payment services as follows:

a) Providing domestic payment services, including check, payment order, authorized payment, collection, authorized collection, money transfer, bank card, and collection and payment services.

b) Providing international payment services after obtaining the State Bank’s written approval; or other payment services in accordance with the State Bank Governor’s regulations.

Article 108. Borrowing, depositing, purchase and sale of valuable papers of commercial banks

1. Commercial banks may borrow loans from the State Bank in the form of re-financing in accordance with the Law on the State Bank of Vietnam.

2. Commercial banks may purchase and sell valuable papers with the State Bank in accordance with the Law on the State Bank of Vietnam.

3. Commercial banks may lend, borrow, deposit money, take deposits, purchase and sell valuable papers on a definite term with credit institutions and foreign bank branches in accordance with the State Bank Governor’s regulations.

4. Commercial banks may borrow loans from foreign countries in accordance with the law provisions.

Article 109. Opening of accounts of commercial banks

1. A commercial bank must open a payment account at the State Bank and maintain a compulsory reserve amount on this account.

2. A commercial bank may open a payment account at a credit institution that may provide via-account payment services.

3. A commercial bank may open an offshore payment account in accordance with the law provisions on foreign exchange.

Article 110. Organization of and participation in payment systems of commercial banks

1. Commercial banks may organize their own internal payment systems and participate in the national inter-bank payment system.

2. Commercial banks may participate in international payment systems when they satisfy the conditions specified by the Government and obtain the State Bank’s written approval.

3. The State Bank Governor shall prescribe dossiers and procedures for approving commercial banks to participate in international payment systems.

Article 111. Capital contribution and share purchase of commercial banks

1. Commercial banks may only use their charter capital and reserve funds to contribute capital or purchase shares in accordance with Clauses 2, 3, 4 and 8 of this Article.

2. Commercial banks shall establish or acquire subsidiaries or affiliated companies in case of conducting the following business activities:

a) Securities issue underwriting, and securities brokerage; management and distribution of securities investment fund certificates; and securities investment portfolio management and stock trading;

b) Financial leasing;

c) Insurance.

3. Commercial banks may establish or acquire subsidiaries, affiliated companies operating in such areas as debt management and asset exploitation, local currency exchange for overseas Vietnamese, gold trading, factoring, issuance of credit cards, consumer credit, intermediary payment services and credit information.

4. Commercial banks may contribute capital to, or purchase shares from, enterprises operating in the following areas:

a) Insurance, securities, local currency exchange for overseas Vietnamese, gold trading, factoring, issuance of credit cards, consumer credit, intermediary payment services and credit information;

b) Other areas not specified at Point a of this Clause after obtaining the State Bank’s written approval.

5. Commercial banks may establish and acquire subsidiaries or affiliated companies in accordance with Clauses 2 and 3 of this Article after obtaining the State Bank’s written approval.

6. The State Bank Governor shall prescribe the conditions, dossiers, and procedures for approval of establishment and acquisition of subsidiaries or affiliated companies, capital contribution and share purchase of commercial banks; conditions for increasing capital at subsidiaries or affiliated companies of commercial banks; activities of subsidiaries or affiliated companies of commercial banks in debt management and asset exploitation.

7. Commercial banks shall establish subsidiaries or affiliated companies in accordance with this Law and other relevant laws.

8. Commercial banks or subsidiaries of commercial banks may purchase and hold shares of other credit institutions under the conditions and within the limits specified by the State Bank Governor.

Article 112. Dealing in foreign exchange, provision of foreign exchange services and derivative products

1. After obtaining the State Bank’s written approval, commercial banks may deal in and provide to domestic and overseas clients the following services and products:

a) Foreign exchange;

b) Derivatives regarding interest rates, foreign exchange, currency and other financial assets.

2. The State Bank Governor shall prescribe the scope of foreign exchange trading, provision of foreign exchange services, trading and supply of derivative products; conditions, dossiers, procedures for approval of foreign exchange trading, provision of foreign exchange services, trading and supply of derivative products of commercial banks.

3. The foreign exchange trading and provision of foreign exchange services by commercial banks to clients shall comply with the law provisions on foreign exchange.

Article 113. Entrustment, agency and agency assignment of commercial banks

1. Commercial banks may entrust, undertake entrustment or act as agents in banking activities, or assign agents to make payment in accordance with the State Bank Governor’s regulations.

2. Commercial banks may carry out insurance agency activities in accordance with the law provisions on insurance business within the scope of insurance agency activities as specified by the State Bank Governor.

Article 114. Other business activities of commercial banks

1. Commercial banks may carry out other business activities in accordance with the State Bank Governor’s regulations as follows:

a) Cash management services; treasury services for credit institutions and foreign bank branches; asset preservation and safe keeping;

b) Provision of money transfer, collection, payment and other payment services without an account;

c) Purchase and sale of the State Bank’s bills and corporate bonds; purchase and sale of other valuable papers, except for the valuable papers specified at Point a, Clause 2 of this Article;

d) Currency brokerage services;

dd) Gold trading;

e) Other services related to factoring and letters of credit;

g) Consultancy on banking activities and other business activities specified in the License.

2. Commercial banks may carry out other business activities in accordance with relevant laws as follows:

a) Purchase and sale of government debt instruments, government-guaranteed bonds, local government bonds;

b) Issuance of bonds;

c) Securities depository;

d) Supervising banking operations;

dd) Security asset management agent for lenders that are international financial institutions, foreign credit institutions, credit institutions, foreign bank branches.

3. Commercial banks may carry out other business activities related to banking operations in addition to the activities specified in Clauses 1 and 2 of this Article in accordance with the State Bank Governor’s regulations and other relevant laws.

Section 3

OPERATIONS OF GENERAL FINANCE COMPANIES

Article 115. Banking operations of general finance companies

1. Taking demand deposits and term deposits of institutions.

2. Issuing deposit certificates to mobilize capital from institutions.

3. Providing loans.

4. Providing bank guarantee.

5. Discounting and re-discounting.

6. Issuing credit cards, factoring, financial leasing.

7. Other forms of credit extension in accordance with the State Bank Governor’s regulations.

Article 116. Borrowing, depositing, purchase and sale of valuable papers of general finance companies

1. General finance companies may borrow loans from the State Bank in the form of re-financing in accordance with the Law on the State Bank of Vietnam.

2. General finance companies may purchase and sell valuable papers with the State Bank in accordance with the Law on the State Bank of Vietnam.

3. General finance companies may lend, borrow, deposit money, take deposits, purchase and sell valuable papers on a definite term with credit institutions and foreign bank branches in accordance with the State Bank Governor’s regulations.

4. General finance companies may borrow loans from foreign countries in accordance with the law provisions.

Article 117. Opening of accounts of general finance companies

1. A general financial company involved in deposit taking activities must open a payment account at the State Bank and maintain a compulsory reserve amount on this account.

2. A general finance company may open a payment account at a commercial bank or foreign bank branch.

3. A general finance company licensed to issue credit cards may open an account at a foreign bank in accordance with the law provisions on foreign exchange.

4. A general finance company may open deposit accounts and loan management accounts for clients.

Article 118. Capital contribution and share purchase of general finance companies

1. General finance companies may only use their charter capital and reserve funds to contribute capital or purchase shares in accordance with Clauses 2 and 3 of this Article.

2. General finance companies may only contribute capital or purchase shares of enterprises and investment funds.

3. General finance companies may only establish and acquire subsidiaries or affiliated companies operating in such areas as insurance, securities, debt management and asset exploitation after obtaining the State Bank’s written approval.

4. The State Bank Governor shall prescribe the conditions, dossiers and procedures for approval of establishment and acquisition of subsidiaries or affiliated companies of general finance companies; conditions for increasing capital at subsidiaries or affiliated companies of general finance companies; activities of subsidiaries or affiliated companies of general finance companies in debt management and asset exploitation.

5. General finance companies shall establish subsidiaries or affiliated companies in accordance with this Law and other relevant laws.

Article 119. Other business activities of general finance companies

1. General finance companies may carry out other business activities in accordance with the State Bank Governor’s regulations as follows:

a) Receiving capital entrusted organizations and individuals to carry out licensed credit extension; entrusting capital to other credit institutions to carry out credit extension of such general finance companies.

b) Purchasing and selling state bank bills and corporate bonds; purchasing and selling other valuable papers, except for purchasing and selling valuable papers specified at Point a, Clause 2 of this Article;

c) Dealing in foreign exchange, providing foreign exchange services;

d) Providing asset preservation services for clients;

dd) Other services related to factoring;

e) Consulting on banking operations and other business activities specified in the License.

2. General finance companies may carry out other business activities in accordance with relevant laws as follows:

a) Purchasing and selling government debt instruments, government bonds, local government bonds;

b) Issuing bonds to mobilize capital from institutions;

c) Acting as insurance agents in accordance with the law provisions on insurance business, under the scope of insurance agents specified by the State Bank Governor.

3. General finance companies may carry out other business activities related to banking operations in addition to the activities specified in Clauses 1 and 2 of this Article in accordance with the State Bank Governor’s regulations and other relevant laws.

Section 4

OPERATIONS OF SPECIALIZED FINANCE COMPANIES

Article 120. Banking activities of specialized finance companies

1. Factoring finance companies may carry out the following banking operations:

a) Factoring;

b) Banking operations specified in Clauses 1, 2, 3, 5 and 7, Article 115 of this Law.

2. Consumer credit finance companies may carry out the following banking operations:

a) Issuing credit cards;

b) Banking operations specified in Clauses 1, 2, 3, 5 and 7, Article 115 of this Law.

3. Financial leasing companies may carry out the following banking operations:

a) Financial leasing;

b) Banking operations specified in Clauses 1, 2, 3 and 7, Article 115 of this Law;

c) Purchasing and subleasing in the form of financial leasing.

4. Financial leasing means the extension of medium- or long -term credit under a financial leasing contract and must satisfy one of the following conditions:

a) Upon the termination of the lease term under contract, the lessee is entitled to ownership right over the leased asset or continue the asset lease as agreed upon by the two parties;

b) Upon the termination of the lease term under contract, the lessee is prioritized to purchase the leased asset at a nominal price lower than the actual value of the leased asset at the time of purchase;

c) The lease term of an asset is at least equal to 60% of the time required for its depreciation;

d) The total rent of an asset specified in the financial leasing contract is at least equal to the value of that asset at the time of contract signing.

5. Specialized finance companies must maintain the ratio of outstanding main credit to the total outstanding credit in accordance with the State Bank Governor’s regulations.

Article 121. Borrowing, depositing, purchase and sale of valuable papers of specialized finance companies

Specialized finance companies shall borrow, lend, deposit, take deposits, purchase and sell valuable papers in accordance with Article 116 of this Law.

Article 122. Opening of accounts of specialized finance companies

1. Specialized finance companies shall open accounts in accordance with Clauses 1, 2 and 4, Article 117 of this Law.

2. Consumer credit finance companies involved in credit card issuance activities may open accounts at foreign banks in accordance with the law provisions on foreign exchange.

Article 123. Capital contribution and share purchase of specialized finance companies

1. Specialized finance companies may only use their charter capital and reserve funds to contribute capital or purchase shares in accordance with Clauses 2 and 3 of this Article.

2. Specialized finance companies may only contribute capital or purchase shares of enterprises operating in such areas as debt management and asset exploitation.

3. Specialized finance companies may only establish and acquire subsidiaries or affiliated companies operating in such areas as debt management and asset exploitation after obtaining the State Bank’s written approval.

4. The State Bank Governor shall prescribe the conditions, dossiers and procedures for approving the establishment and acquisition of subsidiaries or affiliated companies of specialized finance companies; conditions for increasing capital at subsidiaries or affiliated companies of specialized finance companies; activities of subsidiaries or affiliated companies of specialized finance companies in debt management and asset exploitation.

5. Specialized finance companies shall establish subsidiaries or affiliated companies in the areas of debt management and asset exploitation in accordance with this Law and other relevant laws.

Article 124. Other business activities of specialized finance companies

1. Specialized finance companies may carry out other business activities in accordance with the State Bank Governor’s regulations as follows:

a) Receiving entrusted capital to carry out licensed credit extension activities;

b) Entrusting capital for other credit institutions to carry out lending and main credit extension of such specialized finance companies;

c) Purchasing and selling state bank bills, deposit certificates issued by credit institutions and foreign bank branches;

d) Dealing in foreign exchange, providing foreign exchange services;

dd) Consulting on banking operations and other business activities specified in the license;

e) Financial leasing companies may provide operating leases on the condition that the total value of assets under operating leases does not exceed 30% of their total assets.;

g) Factoring finance companies may provide other services related to factoring.

2. Specialized finance companies may carry out other business activities in accordance with relevant laws as follows:

a) Purchasing and selling government debt instruments, government guaranteed bonds, local government bonds;

b) Issuing bonds to mobilize capital from institutions;

c) Acting as insurance agents in accordance with the law provisions on insurance business under the scope of insurance agency activities as specified by the State Bank Governor.

3. Specialized finance companies may carry out other business activities related to banking operations in addition to the activities specified in Clauses 1 and 2 of this Article in accordance with the State Bank Governor’s regulations and other relevant laws.

Section 5

OPERATIONS OF CREDIT INSTITUTIONS BEING COOPERATIVES

Article 125. Operations of cooperative banks

1. Cooperative banks shall carry out the following activities:

a) Regulating capital and carrying out banking operations for people's credit funds. Capital regulation activities of cooperative banks include lending and deposit taking activities of people's credit funds;

b) Some banking operations and other business activities specified in Section 2 of this Chapter;

c) Supporting product and service development and professional training for people's credit funds;

d) Inspecting and supervising people's credit funds;

dd) Conducting internal audit of people's credit funds in case of necessity;

e) Appointing qualified personnel to hold the titles of Chairperson of the Board of Directors, Director and other managerial titles of people's credit funds as required by the State Bank.

2. Cooperative banks shall manage and use the fund for ensuring the safety of the people’s credit fund system.

3. The State Bank Governor shall detail Clause 1 of this Article and the deduction, management and use of the fund for ensuring the safety of the people’s credit fund system.

Article 126. Operations of people's credit funds

1. People's credit funds take deposits in Vietnam dong.

2. People's credit fund provide loans in Vietnam dong.

3. People's credit funds provide money transfer services, perform collection and payment operations for their members and clients, except for opening of payment accounts for clients.

4. Other business activities of people's credit funds, including:

a) Receiving loans entrusted by organizations and individuals;

b) Acting as agents providing payment services for cooperative banks for their members and clients;

c) Borrowing loans and depositing money at cooperative banks; borrowing loans from credit institutions and foreign bank branches. People's credit funds shall not lend or deposit money with each other;

d) Participating in capital contribution at cooperative banks;

dd) Opening payment accounts at the State Bank, commercial banks, cooperative banks, foreign bank branches;

e) Acting as agents in a number of areas related to banking operations and asset preservation;

g) Acting as insurance agents in accordance with the law provisions on insurance business under the scope of insurance agency activities as specified by the State Bank Governor;

h) Consulting on banking operations and other business activities specified in the License.

5. The State Bank Governor shall detail this Article and the operating area of each people's credit fund in the License.

Section 6

OPERATIONS OF MICROFINANCE INSTITUTIONS

Article 127. Banking operations of microfinance institutions

1. Microfinance institutions may take deposits in Vietnam dong in the following forms:

a) Compulsory savings under their regulations;

b) Deposits of organizations and individuals, including voluntary deposits of microfinance clients, except those for payment purposes.

2. Microfinance institutions may provide loans in Vietnam dong. Microfinance institutions' loans may be guaranteed with compulsory deposits or guarantee of group of savings depositors or loan borrowers.

3. Microfinance institutions shall maintain a ratio of the total balance of loans provided to low-income individuals and households and micro-sized enterprises to the total loan balance; and maximum loan balance for a client.

4. The State Bank Governor shall detail this Article and the determination of clients as low-income individuals and households.

Article 128. Opening of accounts of microfinance institutions

1. Microfinance institutions may open payment accounts at the State Bank, commercial banks, and foreign bank branches.

2. Microfinance institutions shall not open payment accounts for their clients.

Article 129. Borrowing and depositing of microfinance institutions

1. Microfinance institutions may borrow loans, deposit money, and take deposits with credit institutions and foreign bank branches in accordance with the State Bank Governor’s regulations.

2. Microfinance institutions may borrow foreign loans in accordance with the law provisions.

Article 130. Other business activities of microfinance institutions

1. Other business activities of microfinance institutions include:

a) Entrusting capital, receiving loans entrusted by organizations and individuals;

b) Acting as agents providing payment services to banks for their clients;

c) Providing collection, payment and money transfer services for their clients;

d) Acting as insurance agents in accordance with the law provisions on insurance business under the scope of insurance agency activities as specified by the State Bank Governor;

dd) Consulting on banking operations and other business activities specified in the License.

2. The State Bank Governor shall detail this Article.

Section 7

OPERATIONS OF FOREIGN BANK BRANCHES

Article 131. Operations of foreign bank branches

1. Foreign bank branches may carry out operations specified in Sections 1 and 2 of this Chapter, except for the following operations:

a) Those specified in Article 111 of this Law;

b) Operations that the parent bank of foreign bank branches is not licensed to conduct in the countries in which it is headquartered.

2. Foreign bank branches may provide some foreign exchange services in the international market to their clients in Vietnam in accordance with the law provisions on foreign exchange.

Chapter VI

FOREIGN REPRESENTATIVE OFFICES

Article 132. Establishment of foreign representative offices

Foreign credit institutions and other foreign institutions engaged in banking operations may establish representative offices in provinces and centrally run cities in the Vietnamese territory. In each province or centrally run city, a foreign credit institution or another foreign institution engaged in banking operations may establish only one representative office.

Article 133. Operations of foreign representative offices

Foreign representative offices may carry out the following operations according to the contents stated in their licenses:

1. Functioning as a liaison office;

2. Conducting market surveys;

3. Promoting investment projects of foreign credit institutions or other foreign institutions engaged in banking operations in Vietnam;

4. Accelerating and monitoring the performance of contracts, other transactions, and agreements signed between foreign credit institutions or other foreign institutions engaged in banking operations and Vietnamese credit institutions or businesses, and projects funded by foreign credit institutions or other foreign institutions engaged in banking operations in Vietnam;

5. Other operations in accordance with Vietnam’s law.

Chapter VII

RESTRICTIONS FOR SAFE OPERATIONS OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES

Article 134. Cases of ineligibility for credit extension

1. A credit institution or foreign bank branch may not extend credit to the following organizations and individuals:

a) Members of the Board of Directors, Members’ Council or Supervisory Board, the Chief Executive Officer (Director), Deputy Chief Executive Officer(s) (Deputy Director(s)) and holders of equivalent posts as specified in the Charter of such credit institution; the Chief Executive Officer (Director), Deputy Chief Executive Officer(s) (Deputy Director(s)) of such foreign bank branch; legal entities being shareholders whose capital share representatives are members of the Board of Directors or Supervisory Board of the credit institution, for credit institutions being joint-stock companies, or legal entities being capital contributors or owners of the credit institution, for credit institutions being limited liability companies;

b) Spouses, parents, children or siblings of members of the Board of Directors, Members’ Council or Supervisory Board, the Chief Executive Officer (Director), Deputy Chief Executive Officer(s) (Deputy Director(s)) and holders of equivalent posts as specified in the Charter of such credit institution; the Chief Executive Officer (Director), Deputy Chief Executive Officer(s) (Deputy Director(s)) of such foreign bank branch.

2. Clause 1 of this Article is not applicable to people’s credit funds and cases of credit extension in the form of issuing credit cards to individuals.

3. Credit institutions and foreign bank branches may not extend credit to clients on the basis of guarantee provided by entities specified in Clause 1 of this Article. Credit institutions and foreign bank branches may not provide guarantee in any forms for credit extended to the entities defined in Clause 1 of this Article by other credit institutions or foreign bank branches.

4. Credit institutions may not extend credit to securities trading enterprises in which they are their subsidiaries or affiliated companies.

5. Credit institutions may not extend credit on the basis of accepting their own securities or securities of their subsidiaries or affiliated companies as guarantee.

6. Credit institutions and foreign bank branches may not extend credit to contribute capital or buy shares of credit institutions.

7. Credit extension specified in Clauses 1, 3, 4, 5 and 6 of this Article includes operations of purchasing, holding and investing in corporate bonds.

Article 135. Credit extension restrictions

1. A credit institution or foreign bank branch may extend neither unsecured credit nor concessional credit to the following organizations and individuals:

a) The audit institution and auditors that are auditing the credit institution or foreign bank branch; the person competent to make the decision on inspection, members of the inspection team, the person supervising the inspection team's operations who are inspecting the credit institution or foreign bank branch;

b) The chief accountant of the credit institution or foreign bank branch; the Chairperson and other members of the Board of Directors, the Head and other members of the Supervisory Board, the Director and Deputy Director(s) of the people's credit fund;

c) Major shareholders and founding shareholders of the credit institution;

d) An enterprise in which one of the entities specified in Clause 1, Article 134 of this Law owns more than 10% of its charter capital;

dd) The person who appraises and approves the credit extension at that credit institution or foreign bank branch, except for the cases of credit extension in the form of issuing credit cards to individuals;

e) Subsidiaries and affiliated companies of the credit institution, except for the cases of credit extension to subsidiaries that are credit institutions subject to mandatory transfer.

2. The total outstanding credit extended to the entities defined at Points a, b, c, d and dd, Clause 1 of this Article must not exceed 5% of a credit institution’s or foreign bank branch’s own capital.

3. Credit extension to the entities defined in Clause 1 of this Article must be approved by the Board of Directors or the Members’ Council of the credit institution, except for the cases where the credit extension to the entities specified at Point dd, Clause 1 of this Article must comply with the State Bank Governor's regulations. Credit extension must be publicized in the credit institution and foreign bank branch.

4. The total outstanding credit extended to an entity defined at Point e, Clause 1 of this Article must not exceed 10% of a credit institution’s own capital; and the total outstanding credit extended to all entities defined at Point e, Clause 1 of this Article must not exceed 15% of a credit institution’s own capital.

5. The total outstanding credit specified in Clause 2 of this Article include the total amount of purchasing, holding, and investing in bonds issued by the entities specified at Points a, c and d, Clause 1 of this Article; The total outstanding loans specified in Clause 4 of this Article include the total amount of purchasing, holding, and investing in bonds issued by the entities specified at Point e, Clause 1 of this Article.

Article 136. Credit extension limits

1. The total outstanding credit extended to a single client or a single client and his/her affiliated persons of a commercial bank, cooperative bank, foreign bank branch, people's credit fund or microfinance institution must not exceed the following ratio:

a) From the effective date of this Law to before January 1, 2026: 14% of its own capital for a single client; 23% of its own capital for a single client and his/her affiliated persons;

b) From January 1, 2026 to before January 1, 2027: 13% of its own capital for a single client; 21% of its own capital for a single client and his/her affiliated persons;

c) From January 1, 2027 to before January 1, 2028: 12% of its own capital for a single client; 19% of its own capital for a single client and his/her affiliated persons;

d) From January 1, 2028 to before January 1, 2029: 11% of its own capital for a single client; 17% of its own capital for a single client and his/her affiliated persons;

dd) From January 1, 2029: 10% of its own capital for a single client; 15% of its own capital for a single client and his/her affiliated persons.

2. The total outstanding credit of a non-bank credit institution extended to a single client must not exceed 15% of its own capital; the total outstanding credit of a non-bank credit institution extended to a single client and affiliated persons must not exceed 25% of its own capital.

3. The total outstanding credit specified in Clauses 1 and 2 of this Article do not include loans sourced from capital entrusted by the Government, organizations and individuals in which entrusted credit institutions or foreign bank branches do not bear the risk, or loans to borrowers being other credit institutions or foreign bank branches.

4. The total outstanding credit specified in Clauses 1 and 2 of this Article include the total amount of purchasing, holding, and investing in bonds issued by clients and their affiliated persons.

5. The limits and conditions for credit extension for investment and trading in securities and corporate bonds of credit institutions and foreign bank branches shall comply with the State Bank Governor's regulations.

6. In the case where a single client and his/her affiliated persons need capital in excess of the limits specified in Clause 1 or 2 of this Article, credit institutions and foreign bank branches may extend syndicated credit in accordance with the State Bank Governor's regulations.

7. In special cases, in order to perform socio-economic tasks, if the extension of syndicated credit by credit institutions and foreign bank branches fail to meet capital needs of a single client, the Prime Minister may decide on a maximum credit extension amount in the case where the total outstanding credit exceeds the limits specified in Clause 1 or 2 of this Article on a case-by-case basis.

The Prime Minister shall prescribe the conditions, dossiers, and procedures for requesting approval for the maximum credit extension amount in the case where the total outstanding credit exceeds the limits specified in Clause 1 or 2 of this Article.

8. The total credit extended by a credit institution or foreign bank branch under Clause 7 of this Article must not exceed 4 times of its own capital.

9. Credit card limits for individuals specified in Clause 1, Article 134 and Point dd, Clause 1, Article 135 of this Law shall be carried out in accordance with the State Bank Governor's regulations.

Article 137. Limits on capital contribution and share purchase

1. The level of capital contribution and share purchase of a credit institution and its subsidiaries and affiliated companies in a single enterprise operating in the sectors specified in Clause 4, Article 111 of this Law must not exceed 11% of the charter capital of the latter.

2. The total level of capital contribution and share purchase of a commercial bank to enterprises and credit institutions, including its subsidiaries and affiliated companies as specified in Clause 2, 3, 4 and 8, Article 111 of this Law, must not exceed 40% of its charter capital and reserve fund.

3. The level of capital contribution and share purchase of a finance company and its subsidiaries and affiliated companies in a single enterprise or investment fund as specified in Clause 2, Article 118 and Clause 2, Article 123 of this Law must not exceed 11% of the charter capital of the latter.

4. The total level of capital contribution and share purchase of a finance company to enterprises and investment funds, including its subsidiaries and affiliated companies as specified in Clauses 2 and 3 of Article 118, Clauses 2 and 3, Article 123 of this Law, must not exceed 40% of its charter capital and reserve funds.

5. A credit institution and its subsidiaries may not contribute capital to, or purchase shares of, the following enterprises and credit institutions:

a) Enterprises and other credit institutions that are shareholders and capital contributors of the credit institution;

b) Enterprises and other credit institutions that are affiliated persons of major shareholders and capital contributors of the credit institution.

6. The levels of capital contribution and share purchase specified in Clauses 1 and 3 of this Article do not include the levels of capital contribution and share purchase of fund management companies that are subsidiaries or affiliated companies of commercial banks, or finance companies into a single enterprise from funds managed by such companies.

Article 138. Prudential ratios

1. Credit institutions and foreign bank branches must maintain the following prudential ratios:

a) The solvency ratio;

b) The minimum capital prudential ratio of 8% or higher as specified by the State Bank Governor in each period;

c) The maximum foreign currency and gold status against own capital;

d) The ratio of purchasing, holding, and investing in government bonds and government-guaranteed bonds;

dd) Other prudential ratios.

2. Commercial banks, cooperative banks, and foreign bank branches participating in the national inter-bank payment system must deposit at the State Bank and hold a minimum quantity of mortgageable valuable papers as specified by the State Bank Governor in each period.

3. The State Bank Governor shall specify the prudential ratios defined in Clause 1 of this Article for each type of credit institution and foreign bank branch.

 4. The total capital invested by a credit institution in other credit institutions and subsidiaries by capital contribution and share purchase and investment in the form of capital contribution, share purchase of enterprises operating in banking, insurance, and securities shall not be included in its own capital when calculating prudential ratios.

Article 139. Real estate trading

Credit institutions may not deal in real estate, except in the following cases:

1. Purchasing, investing in and owning real estates used as their business buildings and offices or warehouses in direct service of their professional operations;

2. Leasing part of their own business buildings which are not yet used;

3. Holding real estate as a result of debt handling. Within 5 years after issuing a decision to handle a security asset being real estate, credit institutions shall sell, transfer or purchase this real estate. In case of purchasing the real estate, it must ensure the use purposes specified in Clause 1 of this Article and the ratio of investments in fixed assets specified in Clause 3, Article 144 of this Law.

Article 140. Requirements on safety of e-transactions in banking operations

Credit institutions and foreign bank branches shall ensure safety and confidentiality of e-transactions in banking operations in accordance with to the State Bank Governor's regulations and the law provisions on e-transactions.

Article 141. Rights and obligations of controlling companies

1. Exercising their rights and performing their obligations in the capacity of capital contributors, owners or shareholders in the relations with subsidiaries or affiliated companies in accordance with this Law and other relevant laws.

2. Establishing and effecting contracts, transactions and other relations between the controlling company and the subsidiary or affiliated company in an independent and equitable manner under the conditions applicable to independent legal subjects;

3. Not intervening in the organization and operation of the subsidiary or affiliated company beyond the rights and obligations of the owner, capital contributor or shareholder.

Article 142. Capital contribution and share purchase between subsidiaries or affiliated companies and controlling companies

1. A subsidiary or affiliated company of a credit institution may neither contribute capital to, nor purchase shares of, such credit institution.

2. A credit institution being a subsidiary or affiliated company of a controlling company may neither contribute capital to, nor purchase shares of, such controlling company or other subsidiaries or affiliated companies of such controlling company, except in the case of implementing an approved mandatory transfer plan.

Article 143. Formulation of expected remedial plans in case of early intervention

1. A commercial bank and foreign bank branch must formulate an expected remedial plan in case of early intervention.

2. A remedial plan specified in Clause 1 of this Article must include the following main contents:

a) Information and assessment of the organizational structure and business activities of the commercial bank and foreign bank branch;

b) Financial status and operations of the commercial bank and foreign bank branch;

c) Remedial measures for each case specified in Clause 1, Article 156 of this Law;

d) Roadmap and time limit for taking each remedial measure.

3. The measures specified at Point c, Clause 2 of this Article must include the following main measures:

a) Increasing charter capital, allocated capital and implementation time; roadmap to reduce the shareholding ratio and capital contribution of shareholders and capital contributors specified at Point b, Clause 1, Article 159 of this Law;

b) Improving liquidity; increasing the holding of highly liquid assets; selling, transferring assets and other solutions to meet safety requirements in banking operations;

c) Enhancing business efficiency;

d) Strengthening management and administration capacity;

dd) Handling existing financial problems and weaknesses, bad debts, assets used as loan security and measures to remedy legal violations;

e) Taking communication and information technology measures to overcome liquidity difficulties.

4. A remedial plan specified in Clause 1 of this Article must be approved by the Shareholders’ General Meeting, the Board of Members, the owner or the owner's representative authority of the commercial bank, the parent bank of foreign bank branches, and sent to the State Bank within 10 days from the date of approval.

5. Periodically at least 02 years, the commercial bank and foreign bank branch shall update and adjust the remedial plan specified in Clause 1 of this Article. The following updated and adjusted plan must be approved by the Shareholders’ General Meeting, the Board of Members, the owner or the owner's representative authority of the commercial bank, the parent bank of foreign bank branches, and sent to the State Bank within 10 days from the date of approval.

6. In the case where a commercial bank or foreign bank branch does not have a remedial plan specified in Clause 4 of this Article or does not update or adjust the remedial plan specified in Clause 5 of this Article, the State Bank shall apply one or several restriction measures specified in Clause 2, Article 157 of this Law.

7. The remedial plan specified in this Article must be developed and approved before July 1, 2025 or within 1 year from the date of issuance of the commercial bank's establishment and operation license or the foreign bank branch's establishment license.

Chapter VIII

FINANCE, ACCOUNTING AND REPORTING

Article 144. Capital and capital use of credit institutions and foreign bank branches

1. A credit institution or foreign bank branch's capital includes the owner's capital, mobilized capital, and other capital as specified by the law provisions.

2. A credit institution or foreign bank branch may use capital for business in accordance with this Law and other relevant laws.

3. A credit institution or foreign bank branch may purchase and invest in fixed assets in direct service of their operations, ensuring the remaining value ratio of fixed assets as follows:

a) Must not exceed 50% of its charter capital and reserve fund for supplementation of its charter capital as recorded in accounting books for commercial banks, cooperative banks, non-bank credit institutions and microfinance institutions;

b) Must not exceed 100% of its charter capital and reserve fund for supplementation of its charter capital as recorded in accounting books for people's credit funds;

c) Must not exceed 50% of its allocated capital and reserve fund for supplementation of its allocated capital as recorded in accounting books for foreign bank branches.

Article 145. Revenue and revenue recognition principles

1. Revenue from business activities of credit institutions and foreign bank branches includes:

a) Interest income and similar income;

b) Income from service activities;

c) Revenue from foreign exchange and gold trading activities;

d) Revenue from securities trading activities, excluding stocks;

dd) Revenue from capital contribution activities, transfer of capital contributions and shares;

e) Revenue from other activities;

g) Other income as prescribed by law.

2. Revenues of credit institutions and foreign bank branches must be determined in accordance with Vietnamese accounting standards and other relevant legal regulations, with sufficient valid invoices and documents. and must be fully accounted for in revenue.

3. For receivables that have been accounted for as revenue but are later assessed as uncollectible or uncollectible when due, credit institutions and foreign bank branches must account for a decrease in revenue if same accounting period or accounted for expenses if different accounting period and monitor off-balance sheet to urge recovery and handling according to the provisions of law; When received, it is accounted into revenue.

4. For revenue from credit granting activities, credit institutions and foreign bank branches are responsible for assessing the ability to collect debt and classify debt according to the provisions of law as a basis. Accounting for interest receivable and accounting for interest receivable from credit granting activities into revenue according to Government regulations.

Article 146. Expenses and principles of expense determination

1. Expenses of a credit institution or foreign bank branch include:

a) Interests and similar expenses;

b) Service costs;

c) Expenses for dealing in foreign exchange and gold;

d) Expenses for dealing in securities permitted for trading in accordance with this Law;

dd) Expenses for capital contributions, transfer of capital contributions and shares;

e) Expenses for other business activities;

g) Taxes, fees and charges;

h) Expenses for managers, executives, and employees;

i) Expenses for management activities and public affairs;

k) Expenses on assets;

l) Expenses for setting up provisions;

m) Costs for deposit preservation and insurance;

n) Other expenses

2. Expenses of a credit institution or foreign bank branch are actual expenses incurred related to the business activities of the credit institution or foreign bank branch; ensuring the principle of balance between revenues and expenses; recorded with enough valid invoices and documents in accordance with the law provisions. A credit institution or foreign bank branch may not account for expenses covered by other funding sources. The determination and accounting of expenses shall be carried out in accordance with Vietnam's accounting standards and other relevant laws.

3. The determination of expenses when calculating corporate income tax shall be carried out in accordance with the law provisions on corporate income tax.

Article 147. Allowance for loan and lease losses

1. Credit institutions and foreign bank branches shall set up provisions for risks in their operations. These allowances for loan and lease losses shall be accounted as operating costs.

2. The classification of assets shall be carried out in accordance with the State Bank Governor's regulations.

3. The use of allowances for loan and lease losses does not change the debt repayment obligations of clients for the debts for which allowances for loan and lease losses are used and the responsibilities of organizations and individuals related to the debts. The levels and methods of allowances for loan and lease losses, and the use of allowances to handle risks in operations of credit institutions and foreign bank branches shall comply with the Government's regulations.

4. In special cases, in order to carry out socio-economic tasks and foreign affairs, the Prime Minister shall decide on the classification of assets, levels and methods of allowances for loan and lease losses, and the use of allowances to handle risks in operations of each specific case based on the proposal of the State Bank.

5. In the case where a credit institution or foreign bank branch recovers a capital amount already offset by allowances for loan and lease losses, this amount shall be accounted in revenue of the credit institution or foreign bank branch.

Article 148. Distribution of profits and funds

1. The remaining profits of credit institutions and foreign bank branches after offsetting losses in the previous year in accordance with the Law on Corporate Income Tax and paying corporate income tax shall be distributed in accordance with the Government's regulations.

2. On an annual basis, a credit institution or foreign bank branch must deduct from after-tax profits to establish and maintain the following funds:

a) The reserve fund for supplementation of its charter capital or the reserve fund for supplementation of its allocated capital that must be appropriated annually at the ratio of 10% of after-tax profits. The maximum level of this fund must not exceed its charter capital or allocated capital;

b) Financial reserve fund;

c) Development investment fund for a credit institution in which the State holds more than 50% of its charter capital and a credit institution being a cooperative;

d) Other reserve funds as specified by the law provisions.

3. A commercial bank being a joint stock company in which the State holds more than 50% of its charter capital may pay dividends in shares to increase its charter capital. The share dividend ratio shall be decided by the Prime Minister.

4. Credit institutions and foreign bank branches shall manage and use funds in accordance with the law provisions.

Article 149. Fiscal year

1. A fiscal year of credit institutions and foreign bank branches starts on January 1 and ends on December 31 of the same calendar year.

2. The first fiscal year of credit institutions and foreign bank branches starts on the date of issuance of licenses and ends on December 31 of the same calendar year.

Article 150. Accounting

Credit institutions and foreign bank branches shall conduct accounting in accordance with the law provisions on accounting; be responsible before the law for the accuracy and truthfulness of revenues and expenditures, and comply with regulations on invoices and accounting documents.

Article 151. Financial regime

1. Credit institutions and foreign bank branches have autonomy in finance.

2. The financial regime of credit institutions and foreign bank branches shall be implemented in accordance with this Law and other relevant laws.

3. The Government shall detail the financial regime, revenue, expenses, and profit distribution of credit institutions and foreign bank branches.

Article 152. Reporting

1. Credit institutions and foreign bank branches must implement a reporting and information provision regime in accordance with the la provisions on accounting, statistics and statistical investigation.

2. Credit institutions and foreign bank branches must periodically report their professional operations in accordance with the State Bank Governor's regulations.

3. In addition to the reports specified in Clauses 1 and 2 of this Article, credit institutions and foreign bank branches shall be responsible for promptly reporting to the State Bank in the following cases:

a) Upon the occurrence of abnormal developments in professional operations which may seriously affect their business;

b) Upon the occurrence of changes in the organizational or executive structure or the financial status of a major shareholder or other changes which may seriously affect their business activities; purchase, sale, transfer of shares and capital contributions of major shareholders;

c) Upon the change in names of a credit institution's branches; suspension of transactions for less than 05 working days; listing of shares on the domestic securities market.

4 Subsidiaries and affiliated companies of credit institutions shall send their financial statements and operation reports to the State Bank when so requested.

5. Within 90 days after the end of a fiscal year, credit institutions and foreign bank branches shall send annual reports to the State Bank in accordance with the law provisions.

6. Within 180 days after the end of a fiscal year, joint-venture credit institutions, wholly foreign-owned credit institutions, foreign bank branches, foreign representative offices must send to the State Bank annual financial statements of the following subjects:

a) Capital contributors of joint-venture credit institutions or wholly foreign-owned credit institutions that are foreign credit institutions;

b) Owners of wholly foreign-owned credit institutions;

c) Parent bank of foreign bank branches;

d) Foreign credit institutions and other foreign organizations that have banking operations and foreign representative offices.

7. Joint-venture credit institutions, wholly foreign-owned credit institutions, and foreign bank branches must promptly report in writing to the State Bank when the foreign credit institutions specified at Points a, b and c, Clause 6 of this Article undergo the following changes:

a) Division, split-up, merger, consolidation, liquidation, bankruptcy or dissolution;

b) Renaming or relocation of the headquarters;

c) Change of major shareholders, members of the Board of Directors, Executive board;

d) Extraordinary changes which greatly affect their organization and operation.

Article 153. Report of controlling companies

1. Within 120 days after the end of a fiscal year, in addition to reports and documents prescribed by law, a controlling company shall make and send to the State Bank a consolidated financial statement which has been audited under the accounting law.

2. Within 90 days after the end of a fiscal year, a controlling company shall make and send to the State Bank a general report on trading transactions and other transactions between it and its subsidiaries and affiliated companies.

 Article 154. Disclosure of financial statements

Within 120 days after the end of a fiscal year, credit institutions and foreign bank branches shall disclose their financial statements in accordance with the law provisions, except the cases where the credit institutions are under special control.

Article 155. Transfer of profits and assets abroad

1. Foreign bank branches and wholly foreign-owned credit institutions in Vietnam may transfer aboard profits left after making deductions to set up funds and performing all financial obligations under Vietnam’s law.

2. Foreign capital contributors in joint-venture credit institutions may transfer abroad their shared profits after the joint-venture credit institutions make deductions to set up funds and perform all financial obligations under Vietnam’s law.

3. When terminating operation in Vietnam, foreign bank branches, wholly foreign owned credit institutions and foreign capital contributors in joint-venture credit institutions may transfer abroad assets left after liquidation.

4. The transfer of money and other assets abroad prescribed in Clauses 1, 2 and 3 of this Article complies with Vietnam’s law.

Chapter IX

EARLY INTERVENTION FOR CREDIT INSTITUTIONS AND

FOREIGN BANK BRANCHES

Article 156. Early intervention for credit institutions and foreign bank branches

1. The State Bank shall consider and decide to implement early intervention when a credit institution or foreign bank branch falls into one or more of the following cases:

a) It has a cumulative loss exceeding 15% of the value of its charter capital, allocated capital and reserve funds stated in the latest audited financial statement or under the inspection and audit conclusions of competent state authorities, and violates the minimum capital prudential ratio specified at Point b, Clause 1, Article 138 of this Law;

b) It has been ranked below the average in accordance with the State Bank Governor's regulations;

c) It has violated the solvency ratio specified at Point a, Clause 1, Article 138 of this Law for 30 consecutive days;

d) It has violated the minimum capital prudential ratio specified at Point b, Clause 1, Article 138 of this Law for 6 consecutive months;

dd) Mass withdrawal of money, which has been reported to the State Bank.

2. The State Bank shall issue a written request to credit institutions and foreign bank branches falling into one or more cases specified in Clause 1 of this Article to implement the following main contents:

a) One or several requirements and restriction measures specified in Article 157 of this Law and implementation time limit;

b) Requesting credit institutions to immediately update and implement the remedial plan specified in Article 143 of this Law or develop the remedial plan as specified in Article 158 of this Law, time limit for completing the formulation and adoption of the remedial plan; time limit for cooperative banks to give opinions on the people's credit fund's remedial plan as specified in Clause 2, Article 158 of this Law;

c) Requesting foreign bank branches to immediately update and implement the remedial plan specified in Article 143 of this Law or develop the remedial plan as specified in Article 158 of this Law, time limit for completing the formulation and adoption of the remedial plan.

3. Credit institutions and foreign bank branches shall be responsible for immediately implementing the requirements and restriction measures in the State Bank's documents specified in Clause 2 of this Article. In the case where a credit institution or foreign bank branch does not comply with these requirements and restriction measures, the State Bank shall apply one or more additional restriction measures specified in Clause 2, Article 157 of this Law.

4. If necessary, the State Bank shall request credit institutions and foreign bank branches to hire an independent auditing organization to audit financial statements and evaluate the financial status as a basis for developing the remedial plan.

Article 157. Requirements and restriction measures for credit institutions and foreign bank branches subject to early intervention

1. Requirements for credit institutions and foreign bank branches subject to early intervention include:

a) Increasing charter capital and allocated capital; increasing the holding of highly liquid assets and taking other solutions to meet safety requirements in banking operations;

b) Reducing operating expenses, management costs, remuneration, salaries and bonuses; requesting refund of remuneration and bonuses for managers, executives, and members of the Supervisory Board;

c) Strengthening risk management; reorganizing the management and administration apparatus.

2. Restriction measures for credit institutions and foreign bank branches subject to early intervention include:

a) Not paying dividends, profits, or distributing after-tax profits after making deductions to set up funds or transferring profits back to the country; restricting the transfer of shares, capital contributions, and assets;

b) Restricting ineffective and high-risk business activities; reducing the limits of credit extension, capital contribution and share purchase; and restricting credit growth;

c) Implementing suspension or temporary suspension of one or several banking operations or other business activities that show signs of violating the law; not supplementing banking operations or other new business activities, and not expanding the operating network;

d) Suspending managers and operators who violate the law or pose major risks to the operations of credit institutions and foreign bank branches; requesting the election or appointment to replace managers and executives who violate the law or pose major risks to the operations of credit institutions and foreign bank branches subject to early intervention;

dd) Other measures according to the State Bank's authority.

Article 158. Formulation, updating, and approval of remedial plans

1. For a commercial bank or foreign bank branch that has the approved remedial plan as specified in Article 143 of this Law, based on the State Bank's documents specified in Clause 2, Article 156 of this Law, such commercial bank or foreign bank branch must determine the cause of early intervention and update the remedial plan, submit it to the Board of Directors, Board of Members, and the parent bank of foreign bank branches for approval, and send it to the State Bank within 10 days from the date of approval.

2. A credit institution or foreign bank branch, except for the cases specified in Clause 1 of this Article, must determine the cause of early intervention and formulate the remedial plan with the contents specified in Clauses 2 and 3, Article 143 of this Law, submit to the Board of Directors, Board of Members, and the parent bank of foreign bank branches for approval, and send it to the State Bank within 10 days from the date of approval.

For people's credit funds, the remedial plan must be sent and obtain opinions from the cooperative bank before approval.

3. In the case where the State Bank has opinions on the remedial plan specified in Clauses 1 and 2 of this Article, the credit institution or foreign bank branch must adjust the remedial plan and send it to the State Bank within the time limit required by the State Bank.

4. In the case where the remedial plan’s contents include supporting measures specified in Article 159 of this Law, within 30 days from the date of receiving the remedial plan that meets the requirements of the State Bank, the State Bank shall consider and approve the application of supporting measures for the credit institution subject to early intervention.

Article 159. Supporting measures for credit institutions subject to early intervention

1. During the implementation of the remedial plan, a credit institution subject to early intervention may apply the following supporting measures after obtaining the State Bank’s written approval:

a) Roadmap for compliance with one or several limits and ratios specified in Articles 136 and 138 of this Law;

b) When implementing the solution to increase charter capital under the remedial plan, shareholders and capital contributors may own shares and capital contributions that exceed the limits on shareholding ratio and capital contributions specified in Articles 63 and 77 of this Law. Shareholders and capital contributors must have a roadmap to reduce the shareholding and capital contribution ratios to comply with the limits.

2. During the implementation of the remedial plan, if the credit institution subject to early intervention has cumulative losses exceeding 50% of its charter capital and reserve funds stated in the latest audited financial statement or under the inspection and audit conclusions of competent state authorities, in addition to the measures specified in Clause 1 of this Article, it may apply one or more of the following supporting measures after obtaining the State Bank’s written approval:

a) In the case where the required amount of allowances for loan and lease losses exceeds the difference in revenue and expenditure from annual business performance, excluding the amount of allowances for loan and lease losses temporarily set during the year, the amount of allowances for loan and lease losses is equal to the difference in revenue and expenditure;

b) In the case where a credit institution has receivable interests that must be divested, the credit institution may allocate the receivable interests that must be divested according to its financial capacity on the principle in which the total allocation of receivable interests that must be divested and the amount of allowances for loan and lease losses are equal to the difference in revenues and expenditures from the credit institution's annual business performance. The maximum time limit for allocating receivable interests that must be divested is 05 years from the date of approval by the State Bank and only applies to receivables arising up to the time the State Bank issues a document specified in Clause 2, Article 156 of this Law. The Government shall specify the cases where the credit institution has the time limit for allocating receivable interests that must be divested of between 5 years and 10 years in case of necessity;

c) People's credit funds may borrow loans from the fund to ensure the safety of the people's credit fund system with preferential interest rates in accordance with the State Bank Governor's regulations;

d) People's credit funds may receive the cooperative bank's support in sending personnel to participate in management and administration; and information technology support;

dd) Other measures according to the State Bank's authority.

Article 160. Implementation of remedial plans

1. Credit institutions and foreign bank branches shall implement the remedial plan specified in Article 158 of this Law immediately after its approval.

2. During the implementation of the remedial plan, credit institutions and foreign bank branches shall be responsible for reporting the progress and results of implementing the remedial plan at the request of the State Bank.

3. The State Bank shall be responsible for supervising the implementation of the remedial plan and have the right to adjust requirements and restriction measures applicable to credit institutions and foreign bank branches specified at Point a, Clause 2, Article 156 of this Law and request credit institutions and foreign bank branches to adjust the remedial plan's contents.

4. In case of extending the time limit for implementing the remedial plan, credit institutions and foreign bank branches must comply with Article 158 of this Law.

5. In case of amending or supplementing supporting measures specified in Article 159 of this Law, credit institutions and foreign bank branches must report to and obtain written approval of the State Bank before implementation.

6. During the implementation of the remedial plan, if there is a credit institution receiving merger or consolidation, the credit institution subject to early intervention shall carry out the merger or consolidation under the regulations on reorganization of credit institutions as specified in Article 201 of this Law.

7. During the implementation of the remedial plan, if the transfer of shares, capital contribution, or increase in charter capital leads to the conversion of the legal form of the credit institution subject to early, such conversion shall comply with Article 201 of this Law.

8. In the case where the time limit for implementing the remedial plan expires and the foreign bank branch fails to remedy the situation causing early intervention, the foreign bank branch must dissolve and terminate operations, liquidate and freeze capital and assets in accordance with Chapter XIII of this Law.

Article 161. Termination of early intervention

1. A credit institution may terminate early intervention in the following cases:

a) The State Bank issues a document to terminate the implementation of the written request specified in Clause 2, Article 156 of this Law when the credit institution has remedied the situation causing early intervention as specified in Clause 1, Article 156 of this Law, and send a written report to the State Bank;

b) The State Bank has a written approval for its merger or consolidation with other credit institutions as specified in Article 201 of this Law;

c) A competent state authority has a decision to dissolve or bankrupt the credit institution in accordance with the law provisions;

d) The State Bank has a decision to place the credit institution under special control specified in Article 162 of this Law.

2. A foreign bank branch may terminate early intervention in the following cases:

a) The State Bank issues a document to terminate the implementation of the written request specified in Clause 2, Article 156 of this Law when the foreign bank branch has remedied the situation causing early intervention specified in Clause 1, Article 156 of this Law, and send a written report to the State Bank;

b) The State Bank issues a written approval for dissolving the foreign bank branch or terminating its operations in accordance with the law provisions.

Chapter X
SPECIAL CONTROL OF CREDIT INSTITUTIONS

Section I
GENERAL PROVISIONS

Article 162. Imposition of special control over credit institutions

1. The State Bank shall consider and decide to place a credit institution under special control in the following cases:

a) The credit institution subject to early intervention does not have a remedial plan escalated to the State Bank or does not adjust the remedial plan in accordance with the State Bank's written request;

b) During the time limit for implementing the remedial plan, the credit institution subject to early intervention is not able to implement the remedial plan;

c) At the end of the time limit for implementing the remedial plan, the credit institution cannot remediate the situation leading to early intervention;

d) A bank run occurs, leading to the risk of harming in the credit institution system;

dd) The credit institution's capital adequacy ratio is lower than 04% for 06 consecutive months;

e) The dissolved credit institution is unable to fully pay its debts during the asset liquidation process.

2. From the date a credit institution is placed under special control, owners, capital contributors, and shareholders of the credit institution under special control shall report the use of shares and capital contributions; shall not transfer their shares and capital contributions nor use their shares and capital contributions as collateral, unless required by a competent State authority.

3. From the date a credit institution is placed under special control, the outstanding principal and interest of such credit institution's refinanced loans at the State Bank will be converted into the outstanding principal and interest of the special loans and continue to comply with the refinancing loan mechanism of such refinanced loans. The outstanding principal and interest of the loans of the people's credit funds at the cooperative bank will be converted into the outstanding principal and interest of the special loans and continue to comply with the lending mechanism of the cooperative bank applicable to people's credit funds.

4. In order to ensure the safety of the credit institution system and the social order and safety when dealing with credit institutions under special control, the Government shall decide to apply special measures at the proposal of the State Bank and report this to the National Assembly at the most recent session.

Article 163. Tasks and powers of the State Bank and the Governor of the State Bank toward credit institutions placed under special control

1. The State Bank shall establish a special control board to control the operations of a credit institution under special control.

2. Tasks and powers of the State Bank toward credit institutions placed under special control include:

a) Respond to recommendations of special control boards;

b) Appoint the chairperson and other members of the Board of Directors; chairperson, other members of the Members' Council; head and other members of the Supervisory Board; Chief Executive Officer (Director), Deputy Chief Executive Officer (Deputy Director) and equivalent positions as specified in the Charter of the credit institution under special control;

c) Decide and adjust the operations, operational scope, and operational network of the credit institutions under special control;

d) Request the owners, capital contributors, and shareholders of the credit institution under special control to report the use of shares and capital contributions; not to transfer their shares and capital contributions nor use their shares and capital contributions as collateral.

dd) Other tasks and powers as specified in this Law.

3. The Governor of the State Bank shall specify special control of credit institutions, including the following issues:

a) The form and period of special control, extension of the time limit of special control, termination of special control, disclosure of information about special control of credit institutions;

b) The composition, quantity of members, structure, operating mechanism, tasks and powers of the special control board, which shall be suitable to the form of special control and the actual situation of the credit institutions under special control;

c) Responsibility of related authorities, institutions and individuals;

d) Other issues in service of special control and formulation of restructuring plans for credit institutions under special control.

Article 164. Tasks and powers of special control boards

1. To request credit institutions under special control to review and adjust their organizational structure, operational networks, and business activities, with importance attached to debt collection, disposition of collateral and reduction of costs.

2. To request credit institutions under special control to propose, formulate and implement recovery plans, plans for merger, consolidation, transfer of all shares and capital contributions, and dissolution plans. To request the transferees to formulate, complete and implement mandatory transfer plans in accordance with this Law.

3. To coordinate with credit institutions under special control to formulate bankruptcy plans in accordance with this Law.

4. To suspend one activity or several business activities of a credit institution under special control if such activity/activities may increase risks for such credit institution or is/are not consistent with the approved mandatory transfer plan or bankruptcy plan.

5. To terminate or suspend the rights to manage, operate and control credit institutions and recommend to the State Bank the replacement of the chairperson and other members of the Board of Directors; chairperson, other members of the Members' Council; head and other members of the Supervisory Board; Chief Executive Officer (Director), Deputy Chief Executive Officer (Deputy Director) and equivalent positions as specified in the Charter of the credit institution under special control;

6. To request the Board of Directors, Members' Council, General Manager (Director) to terminate or suspend those who commit law violations or fail to comply with the approved restructuring plan or the directions of the special control board.

7. To request the State Bank to decide to change the form of special control, extend or terminate the period of special control; land special loans and extend special loan terms, collect special loans; liquidate assets and revoke licenses of credit institutions under special control.

8. To perform other tasks and powers as specified in this Law.

Article 165. Responsibilities of credit institutions placed under special control

1. A credit institution under special control and its owners, capital contributors, and shareholders shall:

a) Formulate a restructuring plan upon the request of the special control board;

b) Implement the restructuring plan approved by the competent authority;

c) Comply with the State Bank’s decisions and requests specified in Article 163 of this Law.

d) Comply with the special control board’s decisions and requests specified in Article 164 of this Law.

2. The Board of Directors, Members’ Council, Supervisory Board and the Chief Executive Officer (Director) of a credit institution placed under special control shall:

a) Perform the responsibilities specified in Clause 1 of this Article;

b) Administer, operate and control business activities of the credit institution, ensure the safety of assets of the credit institution;

c) The Board of Directors of the credit institution under special control shall decide on issues within the decision-making authority of the General Meeting of Shareholders and the General Meeting of Members and approve the restructuring plan in accordance with this Law.

Article 166. Management, administration and operations of credit institutions under special control

1. During the period of special control, credit institutions shall not comply with Articles 136, 137, 138 and Clause 3, Article 144 of this Law. In the case where the required allowance for loan losses is greater than the difference between revenues and expenses on the annual income statement excluding the allowance for loan losses temporarily set aside during the year, the allowance for loan losses shall be equal to such difference between revenues and expenses.

2. Credit institutions under special control may not maintain mandatory reserves.

3. Credit institutions under special control shall be exempt from paying deposit insurance premiums and fees for participating in the fund for ensuring the safety of the people's credit fund system.

4. The organization of the General Meeting of Shareholders, the General Meeting of Members, and the disclosure of information of credit institutions under special control shall be carried out upon written request of the State Bank with the goal of ensuring security of the credit institution system.

5. The quantity of members, structure, and term of office of the Board of Directors, Members' Council, and Supervisory Board of a credit institution under special control shall be decided by the State Bank depending on the actual operational situation of the credit institution under special control.

In the case where the term of office of the Board of Directors, Members' Council, or Supervisory Board of a credit institution expires and the credit institution under special control has not elected or appointed a new Board of Directors, Members' Council, or Supervisory Board, the Board of Directors, Members' Council, or Supervisory Board whose term of office has just expired shall continue to carry out the administration and control of the credit institution in accordance with the law regulations until the new Board of Directors, Members' Council, or Supervisory Board takes over.

Article 167. Assessment of the actual situation of credit institutions placed under special control

1. Special control boards shall request credit institutions under special control specified at Points a, b, c, d and dd, Clause 1, Article 162 of this Law to hire independent auditing organizations to audit their financial statements, except for people's credit funds. The hiring of independent audit organizations shall be completed within 60 days from the date of the decisions to establish the special control boards.

2. Within 30 days from the date of the auditor’s reports, the credit institutions under special control shall complete the self-assessment of their actual situation.

3. Within 60 days from the date of the auditor’s reports, the special control boards shall complete the assessment of the actual situation of the credit institutions under special control, even in cases where the credit institutions fail to complete the self-assessment as specified in Clause 2 of this Article.

4. The periods of time specified in Clauses 2 and 3 of this Article of people's credit funds under special control shall start from the date the State Bank decides to establish the respective special control boards.

5. The assessment of the actual situation of credit institutions under special control specified in Clauses 2 and 3 of this Article, except for people's credit funds, shall be based on the results of the independent auditing organizations specified in Clause 1 of this Article.

6. Details of the assessment of the actual situation of a credit institution under special control as specified in Clauses 2 and 3 of this Article shall be decided by the special control board in writing sent to such credit institution, including the following main detail:

a) Organization, management and administration;

b) Information technology system

c) Banking operations and other business activities, including accumulated profits and losses of the credit institution.

7. Based on the results of the assessment of the actual situation of credit institutions under special control by the special control boards, the special control boards shall send written requests to the credit institutions under special control asking them to propose and formulate restructuring plans as specified in this Law.

8. The cost of hiring independent auditing organizations and other costs related to the assessment of the actual situation of a credit institution under special control shall be paid by such credit institution and included in the expense accounts of such credit institution.

9. The State Bank may extend the periods of time specified in Clauses 1, 2, 3, and 4 of this Article, but for no more than twice their original duration.

Article 168. Termination of special control

The State Bank shall consider and decide to terminate the special control placed over a credit institution in the following cases:

1. The credit institution under special control overcomes the situation that led to the credit institution being placed under special control and ensure the prudential ratio as specified in Article 138 of this Law;

2. The credit institution under special control completes the recovery plan, or the plan for merger, consolidation, or transfer of all shares or capital contributions, or the mandatory transfer plan that has been approved in accordance with Sections 2, 3 and 4 of this Chapter;

3. The credit institution under special control is dissolved or merged or consolidated in accordance with Section 5 of this Chapter, Chapter XIII of this Law and other relevant law regulations;

4. The judge appoints an administrator or an asset administration and liquidation enterprise to conduct bankruptcy proceedings for the credit institution under special control.

Section 2
RECOVERY PLANS OF CREDIT INSTITUTIONS UNDER SPECIAL CONTROL

Article 169. Formulation and approval of a recovery plan

1. Within 60 days from the date of receiving the written request from the special control board specified in Clause 7, Article 167 of this Law, the credit institution under special control shall complete the formulation of a recovery plan and send it to the special control board.

2. Within 30 days from the date of receiving the recovery plan of the credit institution under special control, the special control board shall evaluate it and send a report to the State Bank on the feasibility of the recovery plan.

The special control board shall coordinate with the deposit insurer and the cooperative bank to evaluate the feasibility of the recovery plan of the people's credit fund.

3. The State Bank shall consider and approve the recovery plan within 60 days from the date of receiving the report of the special control board specified in Clause 2 of this Article or within 60 days from the date of Prime Minister's decision on special loans specified in Clause 4 of this Article. In case of non-approval, the State Bank shall send a document to the credit institution and the special control board.

4. In the case where the recovery plan proposes taking out unsecured special loans from the State Bank at an interest rate of 0%/year, the State Bank shall escalate it to the Prime Minister for consideration and decision on such unsecured special loans before approving the recovery plan.

5. The State Bank may extend the periods of time specified in Clauses 1, 2, and 3 of this Article, but for no more than twice their original duration.

Article 170. Details of a recovery plan

1. A recovery plan shall contain the following main details:

a) Plan to increase the charter capital and time limit for implementing the plan to increase the charter capital in the following cases: actual value of the charter capital is lower than the legal capital; the capital adequacy ratio is below the level specified by the Governor of the State Bank; at the written request of the State Bank to ensure safety in the operations of the credit institution;

b) Plan for business operations during the recovery period;

c) plan for organizational structure, management and administration;

d) Plan to handle shortcomings, financial weaknesses, non-performing loans, collateral and measures to remediate law violations;

dd) Plan for scheduled payment of deposits to clients that are legal entities, deposits and loans from other credit institutions; plan for settlement off special loans, including those specified in Clause 3, Article 162 of this Law;

e) Supporting measures specified in Article 171 of this Law that should be taken;

g) Schedule and time limit for implementation of the recovery plan.

2. In the case where there is a supporting credit institution, in addition to the details specified in Clause 1 of this Article, the credit institution under special control shall coordinate with the supporting credit institution to add the following details to the recovery plan:

a) Information about the credit institution supporting the implementation of the recovery plan;

b) Plan of the supporting credit institution to support the credit institution under special control; support plan of the supporting credit institution itself;

c) Plan to pay remunerations, salaries, bonuses and other benefits for personnel seconded to support the administration, operation and control of the credit institution under special control;

d) Plan to pay salaries for employees of the credit institution under special control during the special control period.

Article 171. Measures to support the implementation of recovery plans

1. Credit institutions under special control which are commercial banks, cooperative bank, and finance companies may take one or more of the following supporting measures:

a) Special loans from the State Bank, deposit insurers other credit institutions in accordance with Point b, Clause 1, Clause 2, Article 192 of this Law;

b) Exemption from interest on refinanced loans and special loans from the State Bank;

c) Receipt of deposits or loans from supporting credit institutions at preferential interest rates;

 d) Purchase of debts and corporate bonds held by supporting credit institutions that are classified as qualified debts; resale of such debts and corporate bonds to the supporting credit institutions;

dd) Agreement and selection of one or several supporting credit institutions to involve in the recovery plan;

e) Receipt of personnel assigned by the supporting credit institution(s) to participate in administration and management; information technology support;

g) In the case where a credit institution has recorded diminishable interest receivable, such credit institution may allocate such interest receivable, depending on its financial capacity, on the principle that the total amount of diminishable interest receivable and required provisions shall be equal to the difference between revenues and expenses on the annual income statement of the credit institution. The maximum allocation period for diminishable interest receivable shall be 10 years from the date of approval by the State Bank and only apply to account receivables incurred by the time the credit institution is placed under special control;

h) When increasing the charter capital under the recovery plan, shareholders may hold shares and capital contributors may make capital contributions exceeding the limit on shareholding and capital contribution ratios specified in Article 63 and Article 77 of this Law. Shareholders and capital contributors shall have schedules to reduce their shareholding and capital contribution ratios to comply with the limit;

i) Other measures under the authority of the State Bank.

2. Credit institutions under special control which are people's credit funds and microfinance institutions may take one or more of the following supporting measures:

a) Those specified at Points b, c, d, dd, e, g and i, Clause 1 of this Article;

b) Microfinance institutions may take out special loans from the State Bank, deposit insurers, and other credit institutions in accordance with Point b, Clause 1, Clause 2, Article 192 of this Law;

c) People's credit funds may take out special loans from the cooperative bank covered by the fund for ensuring the safety of the people's credit fund system at an interest rate of 0%/year.

Article 172. Implementation of a recovery plan

1. The credit institution under special control are responsible for implementing the approved recovery plan.

2. The special control board shall inspect and supervise the implementation of the approved recovery plan by the credit institution under special control.

3. The State Bank shall decide to amend and supplement the recovery plan, including extending the time limit for implementing the recovery plan upon the request of the special control board.

4. In case of amending the proposal of taking out unsecured special loans at the interest rate of 0%/year in the recovery plan, the State Bank shall escalate such amendment to the Prime Minister for consideration and decision.

5. In the case where the recovery plan of a credit institution under special control is not approved in accordance with Clause 3, Article 169 of this Law, or the recovery under the plan fails, or the time limit for implementing the recovery plan ends but the credit institution under special control cannot remediate the situation leading to such credit institution being placed under special control, the special control board shall request the credit institution to propose and formulate a mandatory transfer plan if it is a commercial bank or a dissolution or bankruptcy plan in accordance with this Law.

Article 173. Conditions for supporting credit institutions

A supporting credit institution shall fully meet the following conditions:

1. Its business activities have been profitable for at least 02 consecutive years prior to the time of involving in the support in accordance with independently audited financial statements;

2. The prudential ratios specified in Article 138 of this Law shall be ensured;

3. The quantity of members and structure of a Members' Council, Board of Directors, and Supervisory Board shall comply with the law regulations;

4. Its internal control and internal audit system shall meet the requirements specified in Article 57 and Article 58 of this Law.

Article 174. Rights and obligations of supporting credit institutions

1. To coordinate with credit institutions under special control to formulate recovery plans in accordance with Clause 1, Article 169 of this Law.

2. To select, introduce and assign qualified, experienced and qualified personnel to participate in the management, administration and control of credit institutions under special control upon written request of the State Bank.

3. To organize the implementation, management, and supervision of the organization and operations of credit institutions under special control in accordance with the approved recovery plans. Propose to the special control board amendments and supplements to the approved recovery plans.

4. To provide loans and make deposits at preferential interest rates at credit institutions under special control in accordance with the approved recovery plans.

5. To sell debts and corporate bonds that are classified as qualified debts to credit institutions under special control upon written request of the State Bank.

6. To redeem debts and corporate bonds sold as specified in Clause 5 of this Article upon written request of the State Bank.

7. To refinance loans with interest rates equal to the interest rates of the supporting credit institutions’ loans to or deposits at the credit institutions under special control. The amount and term of the refinanced loans shall not exceed those of the supporting credit institutions’ loans or deposits at the credit institution under special control. The reserve requirement may be reduced by 50%.

8. To be released from restrictions on the rate of purchasing, holding, or investing in Government bonds or Government-guaranteed bonds specified at Point d, Clause 1, Article 138 of this Law.

9. To apply a risk coefficient of 0% to loans and deposits at the credit institutions under special control when calculating the capital adequacy ratios, with such loans and deposits may be classified into as qualified debts.

10. To record payments of remunerations, salaries, and bonuses to people seconded to participate in administration, management, and control of the credit institutions under special control as operating expenses.

11. To apply other supporting measures as decided by the State Bank under its competence.

Section 3
PLANS FOR MERGER, CONSOLIDATION, TRANSFER OF ALL SHARES AND CAPITAL CONTRIBUTIONS OF CREDIT INSTITUTIONS UNDER SPECIAL CONTROL

Article 175. Merger, consolidation, transfer of all shares and capital contributions of credit institutions under special control

Merger, consolidation, or transfer of all shares or capital contributions of a credit institution under special control shall be carried out when the following conditions are fully met:

1. There is another credit institution that accepts the merger or consolidation or there is an investor that receives the transfer of all shares or capital contributions meeting the conditions specified in law regulations;

2. The credit institution after merger or consolidation shall ensure that the actual value of its charter capital is at least equal to the legal capital and ensures the prudential ratio as specified in Article 138 of this Law.

Article 176. Formulation and approval of a plan for merger, consolidation or transfer of all shares or capital contributions;

1. Within 60 days from the date of receiving the written request from the special control board specified in Clause 7, Article 167 of this Law, the credit institution under special control shall complete the formulation of a plan for merger, consolidation or transfer of all shares or capital contributions and send it to the special control board.

2. The order and time limit for approving plans for merger, consolidation, and transfer of all shares and capital contributions are implemented in accordance with Clauses 2, 3 and 5, Article 169 of this Law.

Article 177. Details of a plan for merger, consolidation or transfer of all shares or capital contributions;

1. A plan for merger, consolidation, or transfer of all shares or capital contributions shall include the following main details:

a) Name of the plan for merger, consolidation or transfer of all shares and capital contributions, and the process for implementing such plan;

b) Information about the credit institution that receive the merger or is merged or consolidated, about the investor that receives the transfer of all shares or capital contributions, including demonstrations of their capacity and satisfaction of the conditions specified in law regulations;

c) Plan for organizational structure, governance, and administration, including integration and conversion of information technology systems in case of merger or consolidation;

d) Business operation plan for a period of 03 years after the merger, consolidation, or transfer of all shares or capital contributions, including expected prudential ratios as specified in Article 138 of this Law;

dd) Plan for settlement of special loans, including special loans specified in Clause 3, Article 162 of this Law;

e) Remedial plan for the situation leading to the credit institution being placed under special control in the case of transfer of all shares or capital contributions;

g) Supporting measures specified in Article 171 of this Law, other than those specified at Point a, Clause 1, Points b and c, Clause 2, Article 171 of this Law;

h) Schedule and time limit for implementation of the plan.

2. The shareholding and capital contribution ratios of the investors receiving the transfer of all shares or capital contributions shall comply with the ratios specified in the approved plan for transfer of all shares or capital contributions and may exceed the limit on shareholding and capital contribution ratios specified in Clauses 2 and 3, Article 63, Clause 1, Article 77 and Clause 2, Article 137 of this Law and there shall be a schedule to reduce the shareholding and capital contribution ratios to meet the limit.

Article 178. Implementation of plans for merger, consolidation and transfer of all shares and capital contributions;

1. The credit institution under special control are responsible for implementing the approved plan for merger, consolidation or transfer of all shares or capital contributions.

2. The special control board shall inspect and supervise the implementation of the approved plan for merger, consolidation or transfer of all shares or capital contributions by the credit institution under special control.

3. The State Bank shall inspect and supervise the implementation of the approved plan for merger, consolidation or transfer of all shares or capital contributions.

4. The State Bank shall decide to amend and supplement the plan for merger, consolidation or transfer of all shares or capital contributions, including extending the implementation time limit upon the request of the special control board.

5. The order and procedures for merger, consolidation, and transfer of all shares and capital contributions shall comply with law regulations.

6. In the case where the plan for merger, consolidation or transfer of all shares or capital contributions of a credit institution under special control is not approved by the State Bank or the time limit for implementing the plan for merger, consolidation or transfer of all shares or capital contributions ends but the credit institution under special control cannot implement such plan, the special control board shall request the credit institution to propose and formulate a mandatory transfer plan if it is a commercial bank or a dissolution or bankruptcy plan in accordance with this Law.

Section 4
MANDATORY TRANSFER PLANS OF COMMERCIAL BANKS UNDER SPECIAL CONTROL

Article 179. Formulation and approval of a plan for mandatory transfer of commercial banks under special control upon the written request of the mandatory transferee

1. The mandatory transfer of a commercial bank under special control shall be carried out when the following conditions are fully met:

a) The commercial bank has a cumulative loss exceeding 100% of the value of its charter capital and reserve funds stated in the latest audited financial statement;

b) There is a mandatory transferee that fully meets the conditions specified in Article 184 of this Law within 60 days from the date the commercial bank under special control receives the written request from the special control board as specified in Clause 7, Article 167 or Clause 5, Article 172 or Clause 6, Article 178 of this Law.

2. Within 180 days from the date the commercial bank under special control receives the written request from the special control board as specified in Clause 7, Article 167 or Clause 5, Article 172 or Clause 6, Article 178 of this Law, the mandatory transferee shall complete the formulation of a mandatory transfer plan and send it to the special control board.

3. Within 30 days from the date of receiving the mandatory transfer plan from the expected mandatory transferee, the special control board shall evaluate it and send a report to the State Bank on the feasibility of the mandatory transfer plan for the commercial bank under special control.

4. After receiving the report of the special control board, the State Bank shall consider and approve the mandatory transfer plan for the commercial bank under special control.

5. In the case where the mandatory transfer plan proposes unsecured special loans from the State Bank at an interest rate of 0%/year, the State Bank shall escalate it to the Prime Minister for consideration and decision on such unsecured special loans before approving the mandatory transfer plan.

6. The State Bank may extend the periods of time specified in Clauses 2 and 3 of this Article, but for no more than twice their original duration.

7. In the case where the mandatory transfer plan is not approved and a mandatory transferee is not designated as specified in Clause 1, Article 180 of this Law, the State Bank shall request the commercial bank under special control to formulate a bankruptcy plan in accordance with this Law.

Article 180. Formulation and approval of a plan for mandatory transfer of commercial banks under special control in the case where a mandatory transferee is designated

1. The State Bank shall escalate to the Government the designation of a mandatory transferee for a commercial bank under special control when the following conditions are fully met:

a) The commercial banks under special control falls into the case specified at Point a, Clause 1, Article 179 of this Law;

b) There is no mandatory transferee as specified at Point b, Clause 1, Article 179 of this Law or the mandatory transfer plan is not approved as specified in Clause 4, Article 179 of this Law;

c) The bankruptcy of the commercial bank under special control poses a risk of unsafety to the credit institution system.

2. The designated mandatory transferee shall fully meet the conditions specified in Article 184 of this Law.

3. After the Government decides to designate a mandatory transferee, the party designated as the mandatory transferee shall complete the formulation of a mandatory transfer plan for the commercial bank under special control within 180 days from the date of receiving the written request from the State Bank.

4. The order and time limit for approving the mandatory transfer plan in the case where a mandatory transferee is designated shall comply with Clauses 3, 4, 5 and 6, Article 179 of this Law.

5. In the case where the mandatory transferee cannot be designated or the mandatory transfer plan is not approved, the State Bank shall request the commercial bank under special control to formulate a bankruptcy plan in accordance with this Law.

Article 181. Details of a mandatory transfer plan

A mandatory transfer plan shall contain the following main details:

1. Information about the mandatory transferee;

2. Plan to increase the charter capital and time limit for implementation;

3. Plan for business activities suitable to the actual situation of the commercial bank under special control from time to time;

4. Plan for organizational structure, management and administration;

5. Plan for settlement of existing problems, shortcomings, non-performing loans, and collateral;

6. Plan for settlement of deposits of clients that are legal entities, deposits and loans from other credit institutions; plan for settlement off special loans, including those specified in Clause 3, Article 162 of this Law;

7. Plan for handling of shares and capital contributions of the mandatory transferee at the commercial bank subject to mandatory transfer, which exceed the limits specified in Article 186 of this Law;

8. Supporting measures specified in Article 182 of this Law;

9. Schedule to comply with Articles 136, 137, 138, and Clause 3, Article 144 of this Law;

10. Schedule and time limit for implementation of a mandatory transfer plan.

Article 182. Supporting measures for commercial banks subject mandatory transfer

1. The commercial bank subject to mandatory transfer shall apply one or more of the following measures:

a) Sale of non-performing loans, unsecured or secured with collateral that are being distrained or have no valid records and documents, to debt trading and settlement institutions;

b) Receipt of deposits or loans from the mandatory transferee under the mandatory transfer plan or agreement;

c) Purchase of debts and corporate bonds held by the mandatory transferee, which are classified as qualified debts; resale of debts and corporate bonds to the mandatory transferee under agreement or in case such debts are converted into non-performing loans;

d) The mandatory transferee shall assign personnel to participate in administration, management, and control; provide information technology support and other activities under agreement;

dd) Exemption from interests on refinanced loans and special loans from the State Bank;

e) Special loans from the State Bank, deposit insurers other credit institutions in accordance with Point b, Clause 1, Clause 2, Article 192 of this Law;

g) Other measures under the authority of the State Bank.

2. The mandatory transferee and other credit institutions shall apply a risk coefficient of 0% to their loans, guarantees, deposits to the commercial bank subject to mandatory transfer when calculating the capital adequacy ratio and such loans, guarantees, and deposits shall be classified as qualified debts during the period of implementing the mandatory transfer plan.

Article 183. Implementation of a mandatory transfer plan

1. The State Bank shall decide on the mandatory transfer and approve the mandatory transfer plan.

From the date the State Bank decides on the mandatory transfer, all rights and interests of the owners, capital contributors, and shareholders of the commercial bank subject to mandatory transfer shall terminate.

2. The State Bank shall decide to record the reduction of the entire charter capital of the commercial bank subject to mandatory transfer in order to reduce corresponding accumulated losses.

3. A decision on mandatory transfer shall contain the following main details:

a) Name of the mandatory transferee; name of the commercial bank subject to mandatory transfer before and after the mandatory transfer; Legal form, charter capital, owners, capital contributors, and shareholders of the commercial bank subject to mandatory transfer;

b) Termination of all rights and interests of the owners, capital contributors, and shareholders of the commercial bank subject to mandatory transfer;

c) Responsibilities of the mandatory transferee and the commercial bank subject to mandatory transfer under the approved mandatory transfer plan and in accordance with the law regulations.

4. A mandatory transferee shall:

a) Exercise the rights of owners, capital contributors, and shareholders of the commercial bank subject to mandatory transfer;

b) Abide by the approved mandatory transfer plan.

5. A commercial bank subject to mandatory transfer shall:

a) Carry out procedures to change the license;

b) Abide by the approved mandatory transfer plan.

6. In case of necessity, the State Bank shall decide to amend and supplement the mandatory transfer plan, including extending the time limit for implementing the mandatory transfer plan.

7. In case of amending the proposal of taking out unsecured special loans at the interest rate of 0%/year in the mandatory transfer plan, the State Bank shall escalate such amendment to the Prime Minister for consideration and decision.

8. The State Bank shall inspect and supervise the implementation of the approved mandatory transfer plan.

9. In the case where the time limit for implementing the recovery plan ends but the commercial bank under special control cannot remediate the situation leading to such bank being placed under special control, the special control board shall request the commercial bank under special control to propose and formulate a dissolution or bankruptcy plan in accordance with this Law.

Article 184. Mandatory transferee

1. The mandatory transferee shall be one or several of the following organizations:

a) Domestic credit institutions, foreign credit institutions;

b) Domestic enterprises, foreign enterprises;

c) Other organizations.

2. The mandatory transferee that is a domestic credit institution shall fully meet the following conditions:

a) Its business activities have been profitable for at least 02 consecutive years prior to the time of requesting to receive the mandatory transfer in accordance with independently audited financial statements;

b) The prudential ratios specified in Article 138 of this Law shall be ensured;

c) Has a feasible mandatory transfer plan.

3. The mandatory transferee that is not a domestic credit institution shall fully meet the following conditions:

a) Is legal status entity;

b) Those specified at Points a and c, Article 2 of this Article;

Article 185. Rights and obligations of the mandatory transferee

1. The mandatory transferee that is a credit institution shall have the following rights and obligations:

a) To own 100% of the charter capital of the commercial bank subject to mandatory transfer in the case where the commercial bank subject to mandatory transfer is converted into a one-member limited liability company;

b) To make/purchase the capital contributions and shares of the mandatory transferee in the commercial bank subject to mandatory transfer at the ratios specified in the approved mandatory transfer plan, which may exceed the limit on shareholding and capital contribution ratios specified in Clauses 2 and 3, Article 63, Clause 1, Article 77 and Clause 2, Article 137 of this Law;

c) To refrain for consolidating financial statements of the commercial bank subject to mandatory transfer;

d) To exclude the commercial bank subject to mandatory transfer when calculating the consolidated capital adequacy ratio;

dd) To exclude outstanding loans of the commercial bank subject to mandatory transfer when calculating the ratios and limits specified in Clause 4, Article 135, Clause 1 and Clause 2, Article 136 of this Law;

e) To record payments of remunerations, salaries, and bonuses to people seconded, assigned, designated, or promoted to participate in administration, management, and control of the commercial bank subject to mandatory transfer as operating expenses.

g) To coordinate with the commercial bank under special control to formulate a mandatory transfer plan; to implement, amend and supplement the approved mandatory transfer plan;

h) To select and introduce qualified personnel to participate in the management, administration and control of the commercial bank subject to mandatory transfer;

i) To manage and supervise the organization and operations of the commercial bank subject to mandatory transfer;

k) To provide loans to and make deposits at the commercial bank subject to mandatory transfer under the mandatory transfer plan or agreement;

l) To sell or conduct forward trade of debts and corporate bonds that are classified as qualified debts to the commercial bank subject to mandatory transfer under agreement. Redeem debts and corporate bonds sold to the commercial bank subject to mandatory transfer in the case where such debts are converted into non-performing loans;

m) To exclude capital contributions to commercial banks subject to mandatory transfer from the provision for loss of financial investments and upon calculation of capital contribution or share purchase limits of the mandatory transferee;

n) To sell or issue shares of the credit institution receiving the mandatory transfer to foreign investors under the mandatory transfer plan;

o) To refinance loans with interest rates equal to the interest rates of the mandatory transferee’s loans to or deposits at the commercial bank subject to mandatory transfer. The amount and term of the refinanced loans shall not exceed those of the mandatory transferee’s loans or deposits at the commercial bank subject to mandatory transfer;

p) To reduce its reserve requirement by 50%;

q) To be released from restrictions on the rate of purchasing, holding; investing in Government bonds or Government-guaranteed bonds specified at Point d, Clause 1, Article 138 of this Law.

r) To issue long bonds to deposit insurers under the decision of the State Bank;

s) To apply other supporting measures as decided by the State Bank under its competence.

2. The mandatory transferee that is not a credit institution shall have the rights and obligations specified at Points a, b, c, e, g, h, i, m and n, Clause 1 of this Article and may make deposits at the commercial bank subject to mandatory transfer under the mandatory transfer plan or agreement.

Article 186. Handling of excess shares and capital contributions

1. The mandatory transferee shall reduce its shareholding and capital contribution ratios in the commercial bank subject to mandatory transfer by increasing the charter capital, transferring shares and capital contributions to new investors and taking other measures as specified in law regulations to ensure compliance with the limit specified in Clauses 2 and 3, Article 63, Clause 1, Article 77 and Clause 2, Article 137 of this Law within the time limit specified in the mandatory transfer plan.

2. In the case where the requirements specified in Clause 1 of this Article cannot be met, the mandatory transferee shall merge, consolidate, or dissolve the commercial bank subject to mandatory transfer.

3. Shares and capital contributions specified in Clause 1 of this Article shall be disposed before the deadline determined in the approved mandatory transfer plan when the following conditions are fully met:

a) When the increase in the charter capital is completed under the approved mandatory transfer plan;

b) After 01 year, from the date the decision on mandatory transfer takes effect.

Section 5
DISSOLUTION AND BANKRUPTCY OF CREDIT INSTITUTIONS UNDER SPECIAL CONTROL

Article 187. Dissolution of a credit institution placed under special control

1. A credit institution under special control shall dissolve itself when it falls into one of the following cases:

a) Be able to fully repay debts;

b) There is a credit institution that accepts all liabilities.

2. In case of dissolution as specified at Point a, Clause 1 of this Article, the special control board shall escalate to the State Bank a decision to dissolve the credit institution under special control.

3. In case of dissolution as specified at Point b, Clause 1 of this Article, the special control board shall request the credit institution under special control to coordinate with the credit institution accepting all liabilities to formulate an asset liquidation plan, including a plan to purchase part or all of the assets, as well as to receive the transfer of all liabilities of the credit institution under special control, supporting measures for the credit institution accepting all liabilities, and escalate it to the State Bank for approval.

For asset liquidation plans of people's credit funds, comments of the cooperative bank shall be collected before the plans are sent to the State Bank.

4. A credit institution that accepts all liabilities shall fully meet the following conditions:

 a) Its business activities have been profitable for at least 02 consecutive years prior to the time of requesting to receive all liabilities in accordance with independently audited financial statements;

b) Satisfy the prudential ratio requirement specified in Clause 1, Article 138 of this Law at the time of requesting to accept all liabilities.

5. The dissolution and the liquidation of assets of credit institutions under special control upon dissolution shall comply with Clause 1, Article 204 of this Law and other relevant law regulations.

Article 188. Bankruptcy of a credit institution placed under special control

1. A bankruptcy plan of a credit institution under special control shall be formulated when it falls into one of the following cases:

a) The credit institution under special control fails to have a restructuring plan within the time limit specified in Clause 1, Article 169, Clause 1, Article 176 of this Law and fails to meet neither the conditions for mandatory transfer specified in Clause 1 Article 179, Clause 1, Article 180 of this Law nor the conditions for dissolution specified in Clause 1, Article 187 of this Law;

b) The commercial bank falling into any case specified in Clause 7, Article 179, Clause 5, Article 180, and Clause 9, Article 183 of this Law;

c) The credit institutions falling into any case specified in Clause 2, Article 204 of this Law;

d) The credit institution under special control proposes a bankruptcy plan within 60 days from the date of receiving the written request from the special control board specified in Clause 7, Article 167 or Clause 5, Article 172, or Clause 6, Article 178 of this Law.

2. The special control board shall coordinate with credit institutions under special control and deposit insurers to formulate bankruptcy plans for credit institutions under special control and advise the State Bank to escalate them to the Government for approval, unless otherwise specified in Clause 3 of this Article.

After the bankruptcy plan is approved, the State Bank shall propose the limit of deposit insurance payouts to depositors, which shall be maximally equal to the insured's deposits at the people's credit fund to the Prime Minister for decision.

3. The special control board shall coordinate with the people's credit fund under special control, the deposit insurer and the cooperative bank to formulate a bankruptcy plan for such people's credit fund and advise the State Bank to propose the limit of deposit insurance payouts to depositors, which shall be maximally equal to the insured's deposits at the people's credit fund to the Prime Minister for decision.

After the Prime Minister decides on the deposit insurance limit, the special control board shall coordinate with the people's credit fund under special control, the deposit insurer and the cooperative bank to complete the bankruptcy plan for such people's credit fund and escalate it to the State Bank for approval.

Article 189. Details of a bankruptcy plan

A bankruptcy plan shall contain the following main details:

1. Actual situation of the credit institution placed under special control;

2. Assess the impact of implementing the bankruptcy plan of the credit institution under special control on the safety of the credit institution system;

3. Expected limit of deposit insurance payouts to individual depositors; payment schedule and deadlines;

4. Schedule and responsibilities for implementation of the bankruptcy plan.

Article 190. Implementation of a bankruptcy plan

1. After the bankruptcy plan has been approved, the deposit insurer shall coordinate with the credit institution under special control to make deposit insurance payouts to depositors under the bankruptcy plan.

2. In the case where the technical reserve of the deposit insurer is not enough to pay depositors as specified in Clause 1 of this Article, the State Bank will provide a special loan to the deposit insurer.

The deposit insurer shall formulate a plan to increase deposit insurance premiums to compensate for the special loan; use the special loan repayment of the credit institution, proceeds from selling valuable papers held by the deposit insurer and from liquidating assets of the credit institution taking out the special loan, and the deposit insurance premiums to repay the special loan to the State Bank.

3. The State Bank shall inspect and supervise the implementation of the approved bankruptcy plan, including requiring the credit institution under special control to send petition to the court to instigate bankruptcy proceedings in accordance with law regulations on bankruptcy.

4. In case of necessity, the State Bank shall decide to amend and supplement bankruptcy plans for people's credit funds or propose amendments and supplements to bankruptcy plans for other credit institutions to the Government for decision.

5. The order and procedures for bankruptcy of credit institutions shall comply with Article 203 of this Law and the law regulations on bankruptcy.

Chapter XI
HANDLING OF THE CASES WHERE CREDIT INSTITUTIONS FACE BANK RUNS; SPECIAL LOANS AND LENDING OF SPECIAL LOANS

Article 191. Handling of the cases where credit institutions face bank runs

1. Credit institutions facing bank runs shall report to the State Bank and immediately:

a) Not pay dividends in cash; suspend or limit credit extensions and other activities using their funds; take other solutions to meet clients’ deposit withdrawal requirements;

b) Take measures in the remedial plan in the case of bank runs specified in Article 143 of this Law; update and adjust the plan if necessary.

2. In the case where a credit institution subject to early intervention faces a bank run, such credit institution shall report to the State Bank on such bank run and review and reassess the actual situation to formulate and adjust the remedial plan as specified in Article 158 and Article 160 of this Law. The credit institution shall implement the remedial plan that has been formulated and adjusted.

3. Credit institutions may take the following supporting measures when facing bank runs:

a) Sale of valuable papers to the State Bank via open market operations at the interest rate of 0%;

b) Foreign currency exchange with the State Bank to ensure liquidity in accordance with regulations of the Governor of the State Bank;

c) Commercial banks, the cooperative bank, people's credit funds, microfinance institutions may take out special loans from the State Bank; special loans from deposit insurers in accordance with the law regulations on deposit insurance; special loans from other credit institutions.

Article 192. Cases eligible for special loans

1. A credit institution may borrow special loans from the State Bank and other credit institutions in the following cases:

a) To pay deposits to depositors in accordance with Article 191 of this Law;

b) To implement the recovery plan or the mandatory transfer plan.

2. Commercial banks, the cooperative bank, people's credit funds, microfinance institutions may take out special loans from deposit insurers in accordance with the law regulations on deposit insurance.

3. The cooperative bank shall only provide special loans to people's credit funds in accordance with the regulations of the Governor of the State Bank.

Article 193. Competence to decide on lending, interest rates and collateral of special loans

1. The State Bank shall decide to provide special loans with interest rates and collateral for credit institutions. The interest rates and collateral of special loans from the State Bank shall comply with the regulations of the Governor of the State Bank.

2. The cooperative bank shall decide to provide special loans to people's credit funds.

3. Deposit insurers and other credit institutions shall decide to provide special loans to credit institutions.

4. The Prime Minister shall decide on lending of unsecured special loans at an interest rate of 0%/year by the State Bank at the proposal of the State Bank.

Article 194. Principles for settlement of special loans

1. Repayment of special loans shall be prioritized over all other debts and financial obligations, including those secured by assets of the of the special borrower.

2. The cooperative bank may account for reduction of the fund for ensuring the safety of the people's credit fund system to settle irrecoverable special loans.

3. The Governor of the State Bank shall provide detailed regulations on special loans.

Chapter XII
SETTLEMENT OF NON-PERFORMING LOANS AND DISPOSITION OF COLLATERAL

Article 195. Non-performing loans

Non-performing loans to which this Chapter apply include:

1. Non-performing loans of credit institutions and foreign bank branches, including non-performing loans currently recorded on the balance sheet in accordance with regulations of the Governor of the State Bank, non-performing loans which the allowance for loan losses have been used to settle but have yet been recovered and are being monitored as off-balance-sheet items;

2. Non-performing loans that debt trading and settlement institutions have purchased from credit institutions and foreign bank branches but have yet recovered.

Article 196. Sale of non-performing loans and collateral of non-performing loans

Credit institutions, foreign bank branches, debt trading and settlement institutions shall sell non-performing loans and collateral for non-performing loans in a public and transparent manner in accordance with the law regulations. The selling price of non-performing loans and collateral of non-performing loans may be higher or lower than the principal balance of the non-performing loans.

Article 197. Purchase and sale of non-performing loans by debt trading and settlement institutions

1. Debt trading and settlement institutions may purchase non-performing loans from credit institutions at market value or purchase them with special bonds, and may convert non-performing loans purchased with special bonds into non-performing loans purchased at market value in accordance with regulations of the Governor of the State Bank. Debt trading and settlement institutions may only purchase non-performing loans from joint-venture credit institutions, wholly foreign-owned credit institutions, and foreign bank branches at market value.

2. Debt trading and settlement institutions may sell non-performing loans to legal entities and individuals.

3. Debt trading and settlement organizations may agree with credit institutions to divide the remaining value of the recoveries from non-performing loans after deducting the purchase price and settlement costs.

Article 198. Purchase and sale of non-performing loans with collateral that are land use rights, existing and future and-attached assets

1. The purchaser of a debt originating from a non-performing loan of a credit institution or foreign bank branch whose collateral are land use rights or existing or future and-attached assets may receive or register mortgages of such land use rights or existing or future and-attached assets.

2. The purchaser of a debt originating from a non-performing loan of a credit institution or foreign bank branch whose collateral are land use rights or existing or future and-attached assets shall inherit the rights and obligations of the mortgagee.

3. Debt trading and settlement institutions may register mortgages upon receiving additional collateral that are land use rights or existing or future and-attached assets for the purchased debt.

4. Registration of land-related changes with respect to the collateral that are land use rights and land-attached assets for debts originating from non-performing loans of credit institutions and foreign bank branches; Registration of mortgages for land use rights and existing and future and-attached assets for debts originating from non-performing loans of credit institutions and foreign bank branches shall comply with the Government's regulations.

Article 199. Order of priority for disposition of collateral of non-performing loans

1. Proceeds from the disposition of collateral on non-performing loans shall be applied in the following order of priority:

a) Costs of preserving the collateral;

b) Costs of seizing and disposing of the collateral;

c) Court costs associated with judgments and decisions related to the disposition of the collateral;

d) Taxes and fees directly related to the collateral transfer, including personal income tax and registration fees;

dd) Secured liabilities owed to credit institutions, foreign bank branches, and debt trading and settlement institutions;

e) Other unsecured obligations specified in law regulations.

2. In the case where an asset is used to secure the performance of multiple obligations, the order of priority for payment among the secured parties shall comply with civil law and other relevant law regulations.

Article 200. Transfer of collateral

1. The authority competent to register asset ownership and use rights shall carry out procedures for transferring the asset ownership and use rights to the purchaser or transferee of collateral for non-performing loans of a credit institution or foreign bank branch.

2. Upon carrying out registration procedures or changing the ownership and use rights of the collateral for non-performing loans, the amount paid by the secured party or transferee for the transfer of such collateral shall not be used to pay on behalf of, or fulfill any tax obligations, fees, or other charges of the securing party other than court fees, taxes, and fees directly related to the collateral transfer as specified in Article 199 of this Law. Payment of taxes by the securing party and the transferee related to the transfer of collateral of such non-performing loans shall comply with law regulations on taxation.

3. Credit institutions, foreign bank branches, asset management companies of credit institutions, asset management companies of Vietnamese credit institutions being established and operating in accordance with law regulations on credit institutions may transfer all or part of real estate projects as collateral to recover debts in accordance with the regulations on transfer of all or part of real estate projects of the Law on Real Estate Business and other relevant law regulations. However, such real estate project transferors are not required to meet the conditions to be real estate business entities.

Chapter XIII
REORGANIZATION, DISSOLUTION, BANKRUPTCY, LIQUIDATION AND CAPITAL AND ASSET BLOCKAGE

Article 201. Reorganization of credit institutions

1. Credit institutions may be reorganized by split-up, division, consolidation, merger or transformation of the legal form, transformation into non-bank financial institutions after take outing the State Bank’s written approval.

2. The Governor of the State Bank shall specify conditions, dossiers, and procedures for approving the reorganization of credit institutions.

Article 202. Credit institutions and foreign bank branches eligible for dissolution and cessation of operations

1. Credit institutions and foreign bank branches that do not request an extension or request an extension but are not approved in writing by the State Bank at the end of their operational duration.

2. Credit institutions and foreign bank branches that have their licenses revoked.

3. Credit institutions and foreign bank branches that voluntarily apply for the dissolution in case they can repay all debts and the State Bank so approves in writing.

4. Credit institutions subject to early intervention or special control whose all liabilities have been taken over by other credit institutions.

Article 203. Bankruptcy of credit institutions

1. After the State Bank issues a document on termination of special control or on non-application or termination of solvency restoration measures, if the credit institution remains insolvent, it shall file a petition to a court to instigate bankruptcy proceedings in accordance with law regulations on bankruptcy.

2. After accepting the request to instigate bankruptcy proceedings for a credit institution, the court shall immediately carry out procedures for liquidating the credit institution's assets in accordance with law regulations on bankruptcy.

3. After the judge appoints an administrator or enterprise to administer and liquidate assets, the State Bank shall revoke the credit institution's license.

Article 204. Liquidation of assets of credit institutions and foreign bank branches in case of dissolution or cessation of operations

1. In case of dissolution or cessation of operations under Article 202 of this Law, the credit institution or foreign bank branch shall liquidate its assets under the supervision of the State Bank and follow the order and procedures for asset liquidation specified by the Governor of the State Bank.

2. In the process of supervising the liquidation of assets of a credit institution subject to dissolution, if detecting that the credit institution cannot repay all debts, the State Bank shall issue a decision to terminate the liquidation of assets and implement the bankruptcy plan for such credit institution in accordance with Section 5, Chapter X and Article 203 of this Law.

3. Credit institutions or foreign bank branches whose assets are liquidated shall pay all costs related to the liquidation of assets

Article 205. Blockage of capital and assets of foreign bank branches

1. When necessary, in order to protect the interests of depositors, the State Bank shall block part or whole of capital and assets of a foreign bank branch.

2. The Governor of the State Bank shall specify cases of blockage and termination of blockage of capital and assets of foreign bank branches.

Chapter XIV
STATE-LEVEL GOVERNANCE

Article 206. Responsibilities of State regulatory authorities

1. The Government shall perform the uniform state management of banking operations throughout the country.

2. The State Bank is the point of contact that helps the Government uniformly perform state-level governance of the organization and operations of credit institutions, foreign bank branches, and foreign representative offices.

3. The Ministry of Finance is responsible for state-level governance of securities and stock market operations and insurance agency operations of credit institutions, foreign bank branches, subsidiaries, and affiliated companies of credit institutions in accordance with the Law on Securities, the Law on Insurance Business and other relevant laws.

4. Ministries and ministerial-level agencies shall, within the scope of their tasks and powers, perform the state management of credit institutions, foreign bank branches and foreign representative offices in accordance with the law regulations.

5. People’s Committees at all levels shall perform the state management of credit institutions, foreign bank branches, and foreign representative offices operating in their localities according to law.

Article 207. Examining, inspecting and supervising competence

1. The State Bank is competent to examine, inspect and supervise credit institutions, foreign bank branches and foreign representative offices in accordance with the Law on the State Bank of Vietnam and other relevant law regulations.

2. The Government Inspectorate shall inspect credit institutions and foreign bank branches in accordance with law regulations on inspection.

3. The Ministry of Finance shall:

a) Examine, inspect and supervise the securities and stock market operations of credit institutions, foreign bank branches, subsidiaries, and affiliated companies of credit institutions in accordance with the Law on Securities and other relevant laws.

b) Examine, inspect and supervise the insurance agency operations of credit institutions, foreign bank branches, subsidiaries, and affiliated companies of credit institutions in accordance with the Law on Insurance Business and other relevant laws.

c) Assume the prime responsibility for, coordinate and share information with the State Bank during, the implementation of Points a and b of this Clause.

4. Within the scope of their functions, tasks, and powers, ministries and ministerial-level authorities shall examine, inspect, and supervise credit institutions, foreign bank branches, and foreign representative offices under their ambit.

Article 208. Rights and obligations of entities subject to inspection and supervision

1. To provide complete and accurate information and documents on a timely basis upon request of the State Bank and other competent State regulatory authorities during the examination, inspection and supervision.

2. To take responsibility for the accuracy and truthfulness of the information and documents provided.

3. To ensure the connectivity and access to online data for the State Bank's supervisory activities in accordance with the regulations of the Governor of the State Bank.

4. To report and explain about risk and operational safety recommendations and warnings issued by the State Bank.

5. To comply with the State Bank’s risk and operational safety recommendations and warnings.

6. To implement inspection conclusions and punishment decisions of the State Bank, Government Inspectorate and other authorities in accordance with law regulations.

7. To exercise other rights and perform other obligations specified in law regulations.

Chapter XV
IMPLEMENTATION PROVISIONS

Article 209. Effect

1. This Law takes effect on July 01, 2024, except for Clause 2 of this Article.

2. Clause 3, Article 200 and Clause 15, Article 210 of this Law shall take effect from January 1, 2025.

3. Law No. 47/2010/QH12 on Credit Institutions, which had a number of articles amended and supplemented under Law No. 17/2017/QH14, cessations to be effective on the effective date of this Law, except for Clauses 1, 2, 3, 4, 8, 9, 12, Article 210 of this Law.

Article 210. Transitional provisions

1. Credit institutions, foreign bank branches and foreign representative offices that were established and have been operating under licenses granted by the State Bank before the effective date of this Law are not required to request renewal of their licenses under this Law. In case of modifying their licenses, this Law shall prevail.

2. For contracts, other transactions, and agreements signed before the effective date of this Law, credit institutions, foreign bank branches and clients may continue implementing such signed contracts, other transactions, and agreements until their expiration. Amendments, supplements, and extensions of contracts, other transactions, and agreements may only be made if such amendments, supplements, or extensions comply with this Law, except for debt rescheduling of the contracts, other transactions, and credit agreements, which shall comply with law regulations on banking.

For contracts, other transactions, and agreements of indefinite term which are inconsistent with this Law and signed before the effective date of this Law, credit institutions or foreign bank branches and clients shall continue implementing them until June 30, 2025. After this date, credit institutions, foreign bank branches and clients shall terminate or amend and supplement such contracts, other transactions and security agreements to comply with this Law.

3. If a credit institution under special control has an outstanding special loan from the State Bank on the effective date of this Law, and no rescheduling plan is approved for such loan, the parties may continue to perform the signed special loan contract. Such contract may be eligible for extension in accordance with the regulations of the Governor of the State Bank.

4. Credit institutions, foreign bank branches, and holders of promissory notes and treasury bills issued before this Law's effective date that remain outstanding shall continue to comply with the existing agreements until all such promissory notes and treasury bills are paid in full.

5. Credit institutions in which enterprises and other credit institutions hold capital contributions and purchased shares as specified at Point b, Clause 5, Article 137 of this Law, and subsidiaries of credit institutions that hold capital contributions or purchase shares as specified in Clause 5, Article 137 of this Law before the effective date of this Law, as well as shareholders, or shareholders and their affiliated persons of commercial banks who own shares exceeding the ratio specified in Article 55 of the Law No. 47/2010/QH12 on Credit Institutions, which had a number of articles amended and supplemented under Law No. 17/2017/QH14, shall prepare and implement a schedule to ensure compliance with this Law in accordance with regulations of the Governor of the State Bank.

6. The collateral of non-performing loans, which are real estate projects already seized in accordance with Article 7 of Resolution No. 42/2017/QH14 on pilot settlement of non-performing loans of credit institutions (hereinafter referred to as Resolution No. 42/2017/QH14) or being undergone transfer procedures as specified in Article 10 of Resolution No. 42/2017/QH14 before the effective date of this Law but the settlement has not yet been completed by the effective date of this Law, shall comply with Article 10 of Resolution No. 42/2017/QH14 from January 1, 2024 until the settlement this completed.

7. The recorded accrued interest on non-performing loans of credit institutions that have not yet been diminished in accordance with regulations, the difference between the book value of the debts recorded on the balance sheet and the selling price of the non-performing loans and the specific allowance set aside for such debts being allocated in accordance with Article 16 of Resolution No. 42/2017/QH14 shall continue to comply with Article 16 of Resolution No. 42/2017/QH14 from January 1, 2024 until August 14, 2027.

8. Managers, executives and other positions of credit institutions and foreign bank branches elected and appointed before the effective date of this Law but do not meet the conditions specified in Articles 41, 42 and 43 of this Law may continue to hold their positions until the end of their terms of office or electoral or appointment tenures.

The Board of Directors of a credit institution elected before the effective date of this Law that does not meet the conditions specified in Clauses 1 and 3, Article 69 of this Law may continue to work until the end of its term of office.

By the effective date of this Law, the quantity of members of the Members' Council of a credit institution which is a one-member limited liability company exceeding the quantity specified at Point a, Clause 1, Article 73 of this Law shall be adjusted to ensure compliance with Point a, Clause 1, Article 73 of this Law before July 1, 2025.

By the effective date of this Law, the Supervisory Board of a commercial bank whose quantity of members does not comply with Clause 2, Article 51 of this Law may continue to maintain its quantity of members in accordance with Clause 2, Article 44 of the Law No. 47/2010/QH12 on Credit Institutions, which had a number of articles amended and supplemented under Law No. 17/2017/QH14, until the end of its and its members’ terms of office, unless otherwise the commercial bank elects or appoints additional or replaces members of the Supervisory Board.

9. For credit institutions under special control whose restructuring policy has been decided before the effective date of this Law and does not fall into the cases specified in Clause 10 of this Article, the adjustment of the policy for, and formulation and approval of, the restructuring plan shall comply with Sections 1, 1b, 1c, 1d, 1dd and 1e, Chapter VIII of the Law on Credit Institutions No. 47/2010/QH12, which had a number of articles amended and supplemented under Law No. 17/2017/QH14, regarding adjustment of policies for, and formulation and approval of, plans.

Plans to restructure credit institutions under special control that have been approved before the effective date of this Law will continue to be implemented. Amendments and supplements to such approved restructuring plans shall comply with this Law.

10. For credit institutions whose licenses have been revoked or have not conducted banking operations for 12 consecutive months before the effective date of this Law:

a) Credit institutions subject to dissolution in accordance with Article 202 of this Law shall be dissolved in accordance with this Law and other relevant law regulations;

b) Credit institutions subject to dissolution in accordance with Article 202 of this Law shall proceed with bankruptcy in accordance with Article 203 of this Law and other relevant law regulations.

11. From the effective date of this Law, shareholders, stockholders and related persons who own shares in excess of the shareholding ratios specified in Article 63 of this Law may continue to maintain their shares but may not increase shares until compliance with the regulations on shareholding ratios as specified by this Law, except in the case of receiving dividends in shares.​

A major shareholder or a shareholder together with his/her affiliated person who has the maximum shareholding ratios at a commercial bank performing national defense tasks exceeding the shareholding ratios specified in Article 63 of this Law before the effective date of this Law shall continue to maintain the shareholding ratios as specified in Clauses 2, 3 and 4, Article 55 of the Law on Credit Institutions No. 47/2010/QH12, which had a number of articles amended and supplemented under Law No. 17/2017/QH14.

12. Any credit institution that is implementing a restructuring plan under the decision of a competent authority before the effective date of this Law may continue to implement such plan until it is completed, unless otherwise specified in Clause 9 of this Article.

13. Microfinance programs and projects, socio-political organizations and non-governmental organizations which have been implemented before the effective date of this Law are not required to adjust their organization and operation according to this Law but the regulations of the Government.

14. Credit institutions and foreign bank branches that have been licensed to perform factoring and letter of credit operations before the effective date of this Law may perform the operations specified at Points dd and e, Clause 3, Article 107, Point e, Clause 1, Article 114, Clause 6, Article 115, Point dd, Clause 1, Article 119, Point a, Clause 1, Article 120 and Point g, Clause 1, Article 124 of this Law and may not modify their licenses.

15. Credit institutions, foreign bank branches, asset management companies of credit institutions, asset management companies of Vietnamese credit institutions being established and operating in accordance with law regulations on credit institutions may transfer all or part of real estate projects received as collateral before the effective date of this Law to recover debts. However, such real estate project transferors are not required to meet the conditions to be real estate business entities as specified in the law regulations on real estate business but the following conditions shall be met:

a) The transferred real estate projects shall meet the conditions specified at Points a, d, dd, g and h, Clause 1, Article 40 of the Law No. 29/2023/QH15 on Real Estate Business under decisions on land allocation or land lease of competent State authorities;

b) The project transferees shall meet the conditions specified in Clauses 2, 4 and 5, Article 40 of the Law on Real Estate Business No. 29/2023/QH15.

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This Law was passed on January 18, 2024, by the 15^th National Assembly of the Socialist Republic of Vietnam, at its 5^th extraordinary session.