Tiếng Việt

Legal update relating to Finance and Credit (Monthly Legal Update – 11/2018)

by | Oct 1, 2019 | Banking, EN, Legal Update | 0 comments

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/11/2018

1.1. Decree No. 117/2018/NĐ-CP on keeping confidential and providing customer information of credit institutions and foreign bank branches

  • Name of legal document: Decree No. 117/2018/NĐ-CP issued on 11/9/2018 by Goverment on keeping confidential and providing customer information of credit institutions and foreign bank branches (hereinafter referred to as the “Decree No. 117/2018/NĐ-CP”).

  • Effective date: 01/11/2018.

Some contents should be noted:

  • Firstly, providing for the principles of confidentiality and supply of customer information by credit institutions and foreign bank branches.

Specifically, Article 4 of Decree No. 17/2018/NĐ-CP stipulates: “Principles of confidentiality and supply of customer information

  1. Customer information of credit institutions and foreign bank branches must be kept secret and only be provided in accordance with the provisions of the Law on credit institutions 2010, amended and supplemented in 2017, this Decree and related laws.

  2. Credit institutions and branches of foreign banks are not allowed to provide identification customer information when accessing banking services, including secret codes, biometrics data, and access passwords of customers and other identification customer information for any agency, organization or individual, unless agreed by the customer in writing or in another form as agreed with the customer.

  3. State agencies, other organizations and individuals may request credit institutions and foreign bank branches to supply customer information according to the right purposes, contents, scope and competence as prescribed of the law or the acceptance of the customer and are liable for the request for the provision of customer information.

  4. State agencies, other organizations and individuals must keep customer information confidential, use customer information for the right purpose when requesting information and not provide to third parties without approval of customers, except for cases provided under the provisions of law.

  5. Agencies, organizations and individuals must archive and preserve according to the law provisions on archive and preservation of dossiers and documents on customer information, dossiers of request for supply of customer information, the delivery of customer information.”

  • Secondly, stipulating cases of providing customer information for organizations and individuals.

Specifically, Article 11 of Decree No. 117/2018/NĐ-CP stipulates: “Cases of providing customer information

1. Credit institutions and foreign bank branches may only provide customer information to other organizations and individuals in one of the following cases:

a) Other organizations and individuals may request credit institutions or foreign bank branches to supply customer information specified in laws and resolutions of the National Assembly.

b) Approved by the customers in writing or in another form as agreed with the customers.

2. Credit institutions and foreign banks branches shall be responsible for providing customer information to their customers or their lawful representatives.”

  • Thirdly, regulating the rights and responsibilities of credit institutions and foreign bank branches in keeping confidential and providing customer information.

Specifically, Article 14 of Decree No. 117/2018/NĐ-CP stipulates: “Rights and responsibilities of credit institutions and foreign bank branches

1. Credit institutions and foreign bank branches have the following rights:

a) Requesting state agencies, other organizations or individuals to supplement information and documents requesting the supply of customer information in accordance with the provisions of this Decree;

b) Refusing to supply customer information to other State bodies, organizations or individuals for requests for supply of customer information not being in accordance with the provisions of laws or this Decree or requests for supply customer information being duplicated, not being within the scope of customer information that the credit institution or foreign bank branches are maintaining in accordance with the law.

2. Credit institutions and foreign bank branches have the following responsibilities:

a) Providing right scope of customer information provided honestly, fully, timely for the right subjects;

b) Ensuring safety and confidentiality of customer information in the process of supplying, managing, using and storing customer information;

c) Settling complaints of customers in the supply of customer information according to law provisions;

d) Organizing the supervision, inspection and handling of violations of internal regulations on keeping secret, archiving and supplying customer information;

e) Taking responsibility according to the provisions of law, for cases of violating the provisions of this Decree and relevant laws.”

1.2. Circular No. 22/2018/TT-NHNN guiding on procedures and documents for approving the list of tentative personnel of commercial banks, non-bank credit institutions and foreign bank branches

  • Name of legal document: Circular No. 22/2018/TT-NHNN issued on 05/9/2018 by the State Bank of Vietnam guiding on procedures and documents for approving the list of tentative personnel of commercial banks, non-bank credit institutions and foreign bank branches (hereinafter referred to as the “Circular No. 22/2018/TT-NHNN”).

  • Effective date: 01/11/2018.

Some contents should be noted:

  • Firstly, proving for necessary documents in the dossier of request for approving the list of tentative personnel of credit institutions.

Specifically, Article 6 of Circular No. 22/2018/TT-NHNN stipulates that dossier of request for approving the list of tentative personnel of credit institutions includes:

  1. “Documents of the credit institution shall be proposed to the State Bank for approval of the list of tentative personnel” (Clause 1 of Article 6 of Circular No. 22/1018/TT-NHNN);

  2. “The written approval of tentative personnel list of credit institutions (for the Board of Directors, the Board of members and the Control Board must clearly state the term)” (Clause 2 of Article 6 of Circular No. 22/1018/TT-NHNN);

  3. “The personal background of the personnel proposed to be elected or appointed according to the form in Appendix 01 attached to this Circular” (Clause 3 of Article 6 of Circular No. 22/1018/TT-NHNN);

  4. “The judicial record of the personnel proposed to be elected or appointed” (Clause 4 of Article 6 of Circular No. 22/1018/TT-NHNN);

  5. “The list of related persons of the personnel proposed to be elected or appointed according to the form in Appendix 02 attached to this Circular” (Clause 5 of Article 6 of Circular No. 22/1018/TT-NHNN);

  6. “Copies of diplomas and certificates proving the professional qualifications of personnel proposed for election or appointment, of which the diploma of Vietnamese nationality personnel issued by a foreign educational establishment must be approved by the Ministry of Education and Training recognize in accordance with relevant laws” (Clause 6 of Article 6 of Circular No. 22/1018/TT-NHNN);

  7. “Documents evidencing the satisfaction of criteria and conditions for personnel who intend to hold the post of member of the Board of Directors, the Board of members of the credit institution as stipulated in Point d[1] Clause 1 of Article 50 of the Law on credit institutions” (Clause 7 of Article 6 of Circular No. 22/1018/TT-NHNN);

  8. “Documents evidencing the satisfaction of criteria and conditions for personnel expected to hold the post of General Director (Director) of the credit institution as stipulated in Point d[2] Clause 4 of Article 50 of the Law on credit institutions” (Clause 8 of Article 6 of Circular No. 22/1018/TT-NHNN);

  9. “Documents proving the satisfaction of standards and conditions “having at least 03 years working directly in banking, finance, accounting or auditing fields” with regard to personnel expected to hold the post of member of the Control Board Control of credit institutions as stipulated in Point c[3] Clause 3 of Article 50 of the Law on credit institutions: Documents of the authorized representative of the unit where the personnel has been or is working confirming the direct working personnel in banking, finance, accounting or auditing fields and the working time in the field, or copies of documents proving the field of working, working time of personnel in the fields” (Clause 9 of Article 6 of Circular No. 22/1018/TT-NHNN);

  10. “For personnel who are expected to be elected or appointed under the cases specified at Points e[4] and [5]f, Clause 2, Article 33 of the Law on credit institutions: Documents of competent agencies appointing personnel who are expected to act as management representatives contributed capital of the State at credit institutions” (Clause 10 of Article 6 of Circular No. 22/1018/TT-NHNN).

  • Secondly, issuing written forms of documents in the dossier of request for approving the list of tentative personnel of credit institutions.

Specifically, form of personal background, form of table of related person list, form of Notification of List of people elected, appointment to be members of Board of Directors, the Board of members, the Control Board, General Director (Director), etc. are stipulated in Appendixes 01, 02, 03, etc. respectively issued together with Circular No. 22/2018/TT-NHNN.

1.3. Circular No. 23/2018/TT-NHNN providing for the reorganization and revocation of licenses and liquidation of assets of people’s credit funds

  • Name of legal document: Circular No. 23/2018/TT-NHNN issued on 14/9/2018 by the State Bank of Vietnam providing for the reorganization and revocation of licenses and liquidation of assets of people’s credit funds (hereinafter referred to as the “Circular No. 23/2018/TT-NHNN”).

  • Effective date: 01/11/2018.

Some contents should be noted:

  • Firstly, providing for the principles of reorganizing people’s credit funds.

Specifically, Article 6 of Circular No. 23/2018/TT-NHNN stipulates: “Principles of reorganizing people’s credit funds

  1. Complying with the provisions of this Circular and relevant law provisions.

  2. The reorganization of people’s credit funds shall be effected on the basis of the reorganization plans approved by the State Bank in accordance with the provisions of law.

  3. Ensuring the safe and continuous operation of people’s credit funds; ensuring the legitimate rights and interests of members of the people’s credit funds and customers in the course of reorganization.

  4. The transfer or sale of assets in the process of reorganizing the people’s credit funds must be public and transparent, comply with law provisions and the agreement of parties, ensure the property safety and does not affect the interests of people’s credit funds to reorganize, organizations and individuals involved in the reorganization.

  5. People’s credit funds after the reorganization inherit of the rights and obligations of the people’s credit funds reorganized in accordance with the provisions of law and agreements between the parties.

  6. The licenses of the divided people’s credit funds or the people’s credit funds participating in the consolidation shall cease to be effective when new people’s credit funds are inaugurated. The license of the merged people’s Credit Fund shall cease to be effective when the people’s credit fund for merger completes the procedures for changing the registration of the cooperative.”

  • Secondly, providing for cases of revocation of licenses of people’s credit funds.

Specifically, Article 16 of Circular No. 23/2018/TT-NHNN stipulates: “Cases of revocation of licenses

  1. People’s credit funds voluntarily apply for dissolution when they are able to repay all debts and fulfill other property obligations.

  2. A dossier of application for a people’s credit fund has fraudulent information so as to be eligible for a license.

  3. People’s credit funds operate in contravention of the contents prescribed in their permits.

  4. People’s credit funds seriously violate the law provisions on limits and prudential ratios in operation.

  5. People’s Credit Funds fail to implement or implement inadequately handling decisions of the State Bank’s branches to ensure safety in banking operations.

  6. People’s credit funds are divided, merged, consolidated or bankrupt.

  7. People’s Credit Funds are expired but did not apply for extension or apply for extension but have not been approved in writing by the State Bank’s branches.”

1.4. Circular No. 24/2018/TT-NHHN amending, supplementing and annulling a number of articles of circulars and documents which stipulate the regime of periodical reporting

  • Name of legal document: Circular No. 24/2018/TT-NHNN issued on 28/9/2018 by the State Bank of Vietnam (hereinafter referred to as the “Circular No. 24/2018/TT-NHNN”).

  • Effective date: 15/11/2018.

Some contents should be noted:

  • Firstly, amending the regulation on reporting regime in the activities of purchasing and selling foreign currency cash of individuals with authorized credit institutions[6].

Specifically, point a Clause 3 Article 1 of Circular No. 24/2018/TT-NHNN stipulates: “”Article 10 of Circular No. 20/2011 / TT-NHNN is amended and supplemented as follows:

Article 10. Reporting regime

Authorized credit institutions to make reports on the situation of buying and selling foreign currencies in cash with individuals according to the regulations of the State Bank on the regime of statistical reporting applicable to credit institutions and foreign bank branches.””

  • Secondly, abolishing Appendix 3 – Appendix on the form attached to Circular No. 20/2011/TT-NHNN.

Specifically, point b Clause 3 Article 1 of Circular No. 24/2018/TT-NHNN stipulates: “Abolishing Appendix 3 attached to Circular No. 20/2011/TT-NHNN.”

  • Thirdly, annulling the annual report on the implementation of technical requirements on security and confidentiality of equipment in service of payment of bank cards in Circular No. 47/2014/TT-NHNN.

Specifically, Clause 4 Article 1 of Circular No. 24/2018/TT-NHNN stipulates: “Annulling the annual report on the implementation of technical requirements on security and confidentiality of equipment in service of payment of bank cards in Circular No. 47/2014/TT-NHNN issued on December 31st, 2014 of the Governor of the State Bank of Vietnam stipulating technical requirements on security and confidentiality of equipment for payment of bank cards (hereinafter called Circular No. 47/2014/TT-NHNN for short) as follows:

Annulling Clause 1, Article 20 of Circular No. 47/2014/TT-NHNN.”

  • Fourthly, annulling the annual report on security and safety for the provision of Internet banking services in Circular No. 35/2016/TT-NHNN.

Specifically, Clause 5 Article 1 of Circular No. 24/2018/TT-NHNN stipulates: “Annulling the annual report on security and safety for the provision of Internet banking services in Circular No. 35/2016/TT-NHNN dated December 29th, 2016 of the Governor of the State Bank of Vietnam on the safety and security of the provision of Internet banking services (hereinafter referred to as Circular No. 35/2016/TT-NHNN) as follows:

Annulling Clause 3, Article 20 of Circular No. 35/2016/TT-NHNN.”

2. LEGAL DOCUMENTS ISSUED IN 09/2018 AND 10/2018

2.1. Consolidated Document No. 17/VBHN-NHNN consolidated the decrees on credit policy for agricultural and rural development issued by the State Bank of Vietnam

  • Name of legal document: Consolidated Document No. 17/VBHN-NHNN issued on 25/9/2018 by the State Bank of Vietnam consolidated the decrees on credit policy for agricultural and rural development issued by the State Bank of Vietnam (hereinafter referred to as the “Consolidated Document No. 17/VBHN-NHNN”).

  • Effective date: 25/9/2018.

The content should be noted: consolidating Decree No. 55/2015/NĐ-CP of June 9th, 2015 of Government on credit policies in service of agricultural and rural development and take effect from October 25th, 2018 and Decree No. 116/2018/NĐ-CP of September 7, 2018 of the Government amending and supplementing a number of articles of Decree No. 55/2015/NĐ-CP

2.2.  Circular No. 25/2018/TT-NHNN amending and supplementing a number of articles of the Decree No. 10/2015/TT-NHNN of July 22nd, 2015 of Government guiding the implementation of a number of contents of the Decree No. 55/ND-CP of June 9th, 2015 of Government on credit policies in service of agricultural and rural development

  • Name of legal document: Circular No. 25/2018/TT-NHNN issued on 24/10/2018 by the State Bank of Vietnamamending and supplementing a number of articles of the Decree No. 10/2015/TT-NHNN of July 22nd, 2015 of Government guiding the implementation of a number of contents of the Decree No. 55/NĐ-CP of June 9th, 2015 of Government on credit policies in service of agricultural and rural development (hereinafter referred to as the “Circular No. 24/2018/TT-NHNN”).

  • Effective date: 10/12/2018.

Some contents should be noted:

  • Firstly, amending the regulation on subjects of application of Circular No. 10/2015/TT-NHNN.

Specifically, Clause 2 Article 2 of Circular No. 25/2018/TT-NHNN stipulates: “Clause 2 of Article 2 is amended and supplemented as follows:

“2. Customers are entitled to borrow capital in accordance with Clause 2 and Clause 3 of Article 2 of Decree 55/2015/NĐ-CP (as amended and supplemented by Clause 1 Article 1 of Decree No. 116/2018/NĐ-CP). “”

  • Secondly, adding the provision on debt grace.

Specifically, Clause 4, Article 1 of Circular No. 24/2018/TT-NHNN stipulates: “Adding Article 4a as follows:

“Article 4a. Debt grace

For borrowers to plant, care for and re-plant perennial trees, the credit institution and the customer shall agree on the grace period for debt repayment in accordance with the construction period of the perennial crop. The grace period is the period from the time when the credit institution begins to disburse the loan until the customer commences repayment of principal and interest as agreed in the credit agreement.””

  • Thirdly, abolishing Form 01, 02, 03, 04, 05, 06 issued together with Circular No. 10/2015/TT-NHNN.

Specifically, Article 2 of Circular No. 25/2018/TT-NHNN stipulates: “Abolishing Point d of Clause 4 of Article 8 and Form 01, 02, 03, 04, 05, 06 issued together with Circular No. 10/2015/TT-NHNN.”

[1] “Has at least 03 years’ experience of working as a manager or executive of a credit institution, at least 05 year’s experience of working as an executive of a finance, banking, accounting or audit enterprise or an enterprise whose equity is not smaller than the legal capital of a credit institution, or at least 05 years’ experience of working in a finance, banking accounting or audit department.”

[2] “Has at least 03 years’ experience of working as a manager or executive of a credit institution, at least 05 year’s experience of working as an executive of a finance, banking, accounting or audit enterprise or an enterprise whose equity is not smaller than the legal capital of a credit institution, or at least 05 years’ experience of working in a finance, banking accounting or audit department.”

[3] “Holding a tertiary or higher degree in economics, business administration, law, accounting or audit: having at least 3 years working directly in banking, finance, accounting or audit”

[4] “Cadres and civil servants and managers of division or higher level of enterprises in which the State holds 50% or more of the charter capital, except those appointed to represent the State’s capital share in the credit institution”

[5] “Officers, non-commissioned officers, professional army men and defense workers of agencies and units under the Vietnam People’s Army: officers, professional non-commissioned officers of agencies and units under the Vietnam People’s Police, except those appointed to represent the State’s capital share in the credit institution”

[6] Credit institutions, foreign bank branches are allowed to engage in foreign exchange activities