1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/12/2019
1.1. Circular No. 16/2019/TT-NHNN regulations on the issuance of Sate Bank bills
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Name of legal document: Circular No. 16/2019/TT-NHNN issued on 22/10/2019 by the State Bank of Viet Nam regulations on the issuance of Sate Bank bills (referred to as the “Circular No. 16/2019/TT-NHNN”).
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Effective date: 09/12/2019.
Some content should be noted:
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Firstly, providing basic terms and conditions of the State Bank bills.
Specifically, Article 4 Circular No. 16/2019/TT-NHNN stipulates: “Article 4. Basic terms and conditions of the State Bank bills
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Subjects: State Bank bills shall be issued to credit institutions having Vietnamese dong payment accounts at the State Bank.
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Issuing currency: The State Bank bills are issued, accounted and paid in Vietnam dong.
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Term: The term of the State Bank bills shall be decided by the State Bank and must not exceed 364 days.
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Par value: The State Bank bills have par value of 100,000 dong (one hundred thousand dong) or multiple of 100,000 dong.
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Form: State Bank bills shall be issued in book form.
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Interest rate: The interest rate of the State Bank bills is decided by the State Bank, suitable to the movements of the monetary market and the objectives of operating monetary policy in each period.
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The State Bank bills are issued at a price lower than the par value and shall be repaid in a lump sum equal to the par value on the date when the State Bank bills are due.”
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Secondly, providing on payment of State Bank bills
Specifically, Article 7 Circular No. 16/2019/TT-NHNN stipulates: “Article 7. Payment of the State Bank bills
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Credit institutions shall pay for the purchase amount of bills issued by the State Bank in the mode of bidding in accordance with the State Bank’s regulations on open market operations.
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Credit institutions shall pay for the purchase amount of bills issued by the State Bank issued in the following obligatory manner: Credit institutions must transfer money to buy State Bank bills into their accounts as designated by the State Bank on the date of payment of the State Bank bills. Credit institutions must ensure to fully write information on the money transfer order at the request of the State Bank.
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On the date when the State Bank bills are due, the State Bank shall make payment of the amount equal to the par value of the State Bank bills to the credit institutions. In case the due date of a State Bank bills is a weekend or public holiday, the payment of the State Bank bills shall be made on the business day immediately following that holiday.”
1.2. Decree No. 88/2019/ND-CP penalties for administrative violations against regulations in the field of currency and banking
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Name of legal document: Decree No. 88/2019/ND-CP issued on 14/11/2019 by the Government penalties for administrative violations against regulations in the field of currency and banking (referred to as the “Decree No. 88/2019/ND-CP”).
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Effective date: 31/12/2019.
Some contents should be noted:
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Firstly, penalties for violations against regulations on offer and acceptance of the trusteeship.
Specifically, Article 15 of Decree No. 88/2019/ND-CP stipulates: “Article 15. Violation against regulations on offer and acceptance of the trusteeship
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A fine of between VND 80,000,000 and VND 100,000,000 shall be imposed for one of the following violations:
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a) Offering and accepting of the trusteeship improperly with subjects or scope as prescribed by law;
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b) Making trusteeship contracts in contravention of law provisions.
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A fine of between VND 100,000,000 and VND 150,000,000 shall be imposed for acts of offering and accepting of the trusteeship failing to comply with the principles of trusteeship in accordance with law.
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Additional sanctioning forms:
Suspension of trusteeship operations of credit institutions and branches of foreign banks for a period from 01 month to 03 months for acts of violations specified in this Article.
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Remedies:
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a) Forcible return/withdrawal of consigned assets to the trusteeship or, for violations specified in this Article;
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b) Proposing or requesting the competent authority to consider and apply the suspension measure for between 01 month and 03 months or dismissing the post of management, administration or control; It is forbidden to hold administrative, executive or controlling posts at credit institutions or branches of foreign banks for violating individuals and / or individuals responsible for the violations specified in this Article.
Requesting credit institutions and branches of foreign banks to dismiss and implement other handling measures in accordance with the provisions of law on violating individuals under the jurisdiction of credit institutions and / or branches of foreign banks.”
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Secondly, penalties for violations against internal regulations on money laundering prevention.
Specifically, Article 40 of Decree No. 88/2019/ND-CP stipulates: “Article 40. Violation of regulations on internal regulations on prevention of money laundering
A fine of from VND 60,000,000 to VND 100,000,000 shall be imposed for any of the following violations:
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Failing to promulgate a process to manage risks of transactions related to new technologies as prescribed in Article 15 of the Law on prevention of money laundering;
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Failing to formulate regulations on customer classification based on risks as prescribed in Clause 1, Article 12 of the Law on prevention of money laundering;
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Failure to promulgate internal regulations or promulgating internal regulations which lack one or some contents specified in Article 20 of the Law on prevention of money laundering.”
2. LEGAL DOCUMENTS ISSUED IN 11/2019
2.1. Decision No. 2307/QĐ-NHNN dated on 05/11/2019 regarding the announcement of administrative procedures for amendments and supplements to the field of foreign exchange activities at the one-door department under the management function of the State bank of Viet Nam
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Name of legal document: Decision No. 2307/QĐ-NHNN issued on 05/11/2019 by the Governor of the State Bank of Viet Nam regarding the announcement of administrative procedures for amendments and supplements to the field of foreign exchange activities at the one-door department under the management function of the State bank of Viet Nam (referred to as the “Decision No. 2052/QD-NHNN”).
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Effective date: 25/11/2019.
The content should be noted: Proving procedures for approval of registration of foreign currency payment agent of credit institutions and economic organizations.
Specifically, subsection 3, Section 3, Part B of Decision No. 2307/QD-NHNN stipulates: “B. Administrative procedures at the State Bank branch in provincial government
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1. Administrative procedures at the State Bank branches in the provincial government
2. Procedures for approving the direct reception and payment of foreign currencies by economic organizations
– The order of execution:
+ Step 1: Economic organizations send 01 (one) set of dossier to the State Bank branch in the provincial government where the economic organization’s headquarters is located.
+ Step 2: In case the dossier is incomplete and invalid, within 10 (ten) working days from the date of receiving the dossier, the State Bank branch in the provincial government shall issue a document request additional dossier.
+ Step 3: Within 30 (thirty) working days from the date of receipt of a complete and valid dossier, the State Bank branches in the provincial government where the economic organization’s headquarters is located considers, issuing written approval of direct reception and payment of foreign currencies. In case of refusal, the State Bank branch in the provincial government where the economic organization is headquartered shall notify in writing the reason.
– How to perform:
+ Headquarters of administrative agencies (directly at the One-stop Section);
+ or postal service.
– Dossier components:
+ Application for approval of direct foreign currency receipt and payment foreign currencies (according to the form in Appendix 01 of Circular No. 34/2015/TT-NHNN);
+ A copy of documents proving the organization is legally established and operated: Certificate of enterprise registration, certificate of investment registration or other equivalent documents as prescribed by law;
+ A copy and a Vietnamese translation copy of the foreign currency receipt and payment contract signed with a foreign partner, including the following main contents:
(i) Names, addresses, representatives and legal status of the parties;
(ii) The account number, the bank where the specialized foreign currency account is opened of the head quarter of the economic organization;
(iii) Rights and obligations of contracting parties;
(iv) Principles of applying exchange rates in case the beneficiary wishes to receive Vietnam dong (if any);
(v) Commission fees;
(vi) Other agreements (regarding liability due to breach of contract, term of contract, termination of contract ahead of time, settlement of disputes arising and other agreements in accordance with law);
+ Plan to perform foreign currency receipt and payment of foreign currencies, including the following main contents:
(i) Operating area and expected human resources;
(ii) Content, method, process of receiving and paying foreign currencies;
(iii) Estimated turnover, income from foreign currency receipt and payment activities;
+ A copy and a the Vietnamese translation copy of a written document issued by a foreign competent authority determining the legal status of the foreign partner.
+ Plan to perform foreign currency receipt and payment of foreign currencies, including the following main contents:
(i) Operating area and expected human resources;
(ii) Content, method, process of receiving and paying foreign currencies;
(iii) Estimated turnover, income from foreign currency receipt and payment activities;
+ A copy and a the Vietnamese translation copy of a written document issued by a foreign competent authority determining the legal status of the foreign partner.
– Number of dosser: 01 set
– Handling time: 30 days from the day State Bank branches in provinces, cities receive complete and valid dossier.
– Subjects implementing administrative procedures: Economic organizations.
– Implementing agency: State Bank branch in province, city.
– Results of the implementation of administrative procedures: Written approval of direct receipt and payment of foreign currencies.
– Fees: None
– Name of the application form, declaration form: Application for approval of direct receipt and payment of foreign currencies (Appendix 01 of Circular No. 34/2015/TT-NHNN).
– Requirements and conditions for implementation of administrative procedures:
+ Having contracts with foreign partners on services of receiving and paying foreign currencies;
+ There is a plan to provide foreign currency receipt and payment service signed by a legal representative.
Legal grounds of administrative procedures:
+ Decree No. 89/2016/ND-CP dated July 1st, 2016 of the Government on requirements applicable to business entities acting as currency exchange agents or providing foreign currency receipt and payment services;
+ Decree No. 16/2019/ND-CP dated February 1st, 2019 amending and supplementing decrees on business conditions under the state management of the State bank of Vietnam;
+ Decision No. 170/1999/QD-TTg of August 19th, 1999 of the Prime Minister on encouraging money transfer of overseas Vietnamese;
+ Circular No. 15/2019/TT-NHNN dated October 11th, 2019 of the State Bank of Vietnam amending and supplementing a number of legislative documents on dossiers and administrative procedures in the field of foreign exchange management;
+ Circular No. 34/2015/TT-NHNN dated December 31st, 2015 of the State Bank of Vietnam guidelines for the provision of foreign currency receipt and payment services;
+ Circular No. 11/2016/TT-NHNN dated June 29th, 2016 of the State Bank of Vietnam amendments to a number of legislative documents on provision of foreign currency payment services, and activities of foreign exchange agents and foreign exchange desks.”
2.2. Decree No. 86/2019/NĐ-CP dated on 14/11/2019 prescribing legal capital of credit institutions and foreign bank branches
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Name of legal document: Decree No. 86/2019/NĐ-CP issued on 14/11/2019 by the Gorverment prescribing legal capital of credit institutions and foreign bank branches (referred to as the “Decree No. 86/2019/NĐ-CP”).
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Effective date: 15/01/2020.
Some content should be noted:
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Firstly, regulating levels of legal capital.
Specifically, Clause 1, Clause 2, Clause 3, Clause 4 Article 2 stipulates: “Article 2. Levels of legal capital
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Commercial banks: 3,000 billion dong.
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Policy banks: 5,000 billion dong.
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Cooperative banks: 3,000 billion dong.
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Foreign bank branches: 15 million U.S. dollars (USD).”
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Secondly, regulating on transitional provisions for credit institutions (except people’s credit funds) or foreign bank branches licensed regarding to legal capital.
Specifically, Clause 1 Article 3 stipulates: “Article 3. Transitional provisions
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Credit institutions (except people’s credit funds) or foreign bank branches licensed before the entry into force of this Decree must ensure that the minimum amount of their actually contributed or allocated charter capital is at least equal to legal capital levels stated in Article 2 herein from the effective date of this Decree.”
2.3. Circular No. 24/2019/TT-NHNN provisions on refinanced loanS in the form of re-lending according to credit dossier for credit institutions
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Name of legal document: Circular No. 24/2019/TT-NHNN issued on 18/11/2019 by the State Bank of Viet Nam provisions on refinanced loans in the form of -re-lending according to credit dossier for credit institutions (referred to as the “Circular No. 24/2019/TT-NHNN”).
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Effective date: 18/01/2020.
Some content should be noted:
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Firstly, proving interest rate.
Specifically, Article 6 of Circular No. 24/2019/TT-NHNN stipulates: “Article 6. Interest rate
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The interest rate of refinanced loan, extension of refinanced loan in the form of re-lending according to credit dossier is the interest rate of refinanced loan announced by the State Bank in each period at the time when the refinanced loan amount is disbursed, extended.
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Overdue interest on the refinanced loan principal equals 150% of the interest rate applicable to refinanced loan.”
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Secondly, providing terms of refinanced loan and extension of refinanced loan.
Specifically, Article 7 of Circular No. 24/2019/TT-NHNN stipulates: “Article 7. Term of refinanced loan, extension of refinanced loan
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The term of refinanced loan in the form of re-lending according to the credit dossier shall be considered and decided by the State Bank and must be less than 12 months.
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Each extension period must not exceed the term of refinanced loan; total refinanced loan time and refinanced loan extension must not exceed 12 months.”
2.4. Decision No. 2415/QĐ-NHNN dated on 18/11/2019 regarding the maximum interest rate applicable to VND deposits of entities, individuals at credit institutions and branches of foreign banks under the provisions of Circular 07/2014/TT-NHNN March 17, 2014
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Name of legal document: Decision No. 2415/QĐ-NHNN issued on 18/11/2019 by the Governor of the State Bank of Viet Nam regarding the maximum interest rate applicable to VND deposits of entities, individuals at credit institutions and branches of foreign banks under the provisions of Circular 07/2014/TT-NHNN March 17, 2014 (referred to as the “Decision No. 2052/QD-NHNN”).
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Effective date: 19/11/2019.
Some content should be noted:
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Firstly, regulating the maximum interest rate applicable to VND deposits of entities (except for credit institutions, branches of foreign banks) and individuals at credit institutions and foreign bank branches as prescribed at Circular No. 07/2014/TT-NHNN of March 17, 2014.
Specifically, Article 1 Decision No. 2052/QD-NHNN stipulates: “Article 1. The maximum interest rate applicable to VND deposits of entities (except for credit institutions, branches of foreign banks) and individuals at credit institutions and foreign bank branches as prescribed at Circular No. 07/2014/TT-NHNN of March 17, 2014, as follows:
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The maximum interest rate applicable to demand deposits and deposits with terms of less than 1 month is 0.8%/year.
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The maximum interest rate applicable to deposits with terms from 1 month to less than 6 months is 5.0%/year; particularly for People’s Credit Funds and Microfinance Institutions, the maximum interest rate applicable to deposits with a term of between 1 month and under 6 months shall be 5.5%/year.”
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Secondly, the transitional provisions for interest rate applicable to vnd deposits with term of entities and individuals at credit institutions and branches of foreign banks arising before the Decision No. 2415/QD-NHNN takes effect.
Specifically, Clause 2, Article 2 of Decision No. 2415/QD-NHNN stipulates:“Article 2
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For interest rate applicable to VND deposits with term of entities and individuals at credit institutions and branches of foreign banks arising before the effective date of this Decision, implemented for until the expiry date; if upon the expiry of the agreed time limit, entities or individuals fail to come to deposit, the credit institutions or branches of foreign banks shall apply the interest rates applicable to deposits according to the provisions of this Decision.”
2.5. Decision No. 2416/QĐ-NHNN dated on 18/11/2019 regarding the maximum interest rate applicable to VND deposits of entities, individuals at credit institutions and branches of foreign banks under the provisions of Circular 07/2014/TT-NHNN March 17, 2014
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Name of legal document: Decision No. 2415/QĐ-NHNN issued on 18/11/2019 by the Governor of the State Bank of Viet Nam regarding the maximum interest rate applicable to VND deposits of entities, individuals at credit institutions and branches of foreign banks under the provisions of Circular 07/2014/TT-NHNN March 17, 2014 (referred to as the “Decision No. 2052/QD-NHNN”).
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Effective date: 19/11/2019.
The content should be noted: Providing the interest rate on short-term loan denominated in Vietnamese dong prescribed in Clause 2, Article 13 of Circular No. 39/2016/TT-NHNN dated December 30, 2016.
Specifically, Article 1 of Decision No. 2052/QD-NHNN stipulates: “Article 1. Maximum interest rate on short-term loans in Vietnam Dong as prescribed in Clause 2, Article 13 of Circular No. 39/2016 / TT -NHNN dated December 30, 2016 as follows:
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Credit institutions and branches of foreign banks (except for People’s credit funds and microfinance institutions), which apply the maximum interest rate on short-term loan in Vietnam dong, shall be 6.0%/year.
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People’s credit funds and microfinance institutions shall apply the maximum interest rate on short-term loan in Vietnam dong at 7.0%/year.”
2.6. Circular No. 22/2019/TT-NHNN regulations on limitations and ratio of security assurance in operations of banks and branches of foreign banks
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Name of legal document: Circular No. 22/2019/TT-NHNN issued on 15/11/2019 by the State Bank of Viet Nam regulations on limitations and ratio of security assurance in operations of banks and branches of foreign banks (referred to as the “Circular No. 22/2019/TT-NHNN”).
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Effective date: 01/01/2020.
Some content should be noted:
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Firstly, regulating restrictions and limits on credit extension.
Specifically, Article 10 of Circular No. 22/2019/TT-NHNN stipulates: “Article 10. Restrictions and limits on credit extension
1. Banks, branches of foreign banks comply with the regulations on cases which are not granted credit extension, which are credit restriction and credit limit according to Article 126, Article 127 and Article 128 of the Law on Credit Institutions (amended and supplemented).
2. Banks, branches of foreign banks shall base themselves on the own capital to be determined according to the provisions of Clause 3 of this Article at the end of the latest working day to determine credit extension restrictions and limits according to the provisions of Clause 1 this.
3. The own capital is determined as follows:
a) For banks and/or branches of foreign banks that implement the minimum capital adequacy ratio in accordance with this Circular, banks using separate equity capital, branches of foreign banks shall use their own capital in accordance with regulations at Article 9 of this Circular.
b) For banks, branches of foreign banks implement capital adequacy ratio according to Circular 41/2016/TT-NHNN, banks, branches of foreign banks use own capital as prescribed in Circular No. 41/2016/TT-NHNN.”
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Secondly, providing on management of credit extension.
Specifically, Article 13 of Circular No. 22/2019/TT-NHNN stipulates: “Article 13. Management of credit extension
1. Banks and branches of foreign banks shall manage credit extension activities according to the provisions of law and the internal regulations on credit extension and loan management to ensure the use of loan capital for the right purposes provided at Clause 1, Article 4 of this Circular.
2. Banks and branches of foreign banks must prepare and update immediately upon any change of the list of founding shareholders, major shareholders, capital contributing members, members of the Board of Directors and members of the Board of members, members of the Supervisory Board, executives and other management titles in accordance with the laws, the organization and operation charter of the bank and related persons of these people. This list must be made public throughout the system of banks, branches of foreign banks and sent directly or via postal service to the State Bank as prescribed at Points a and b, Clause 6, Article 4 of this Circular.
3. Banks and branches of foreign banks must report to:
a) The General Meeting of Shareholders, the Members’ General Meeting of credit extensions to the subjects specified in Clause 1, Article 127 of the Law on Credit Institutions (amended and supplemented) arising until the time of taking the number whether to convene a General Meeting of Shareholders, a General Meeting of Members;
b) Owners, capital contributors, managers, executives when giving credit to subjects defined in Clause 1, Article 127 of the Law on Credit Institutions (amended and supplemented) );
c) The State Bank shall comply with the State Bank’s regulations on the regime of statistical reporting of credit extension to subjects defined in Clause 1, Article 127 of the Law on Credit Institutions (amended and supplemented).
4. Credit extension to subsidiaries, associated companies and entities listed in Clause 2 of this Article (except for cases where credit is not provided for in Article 126 of the Law on Credit Institutions (already amended, supplemented)) must be approved by the Board of Directors, Board of Members (for banks), General Director/Director (for branches of foreign banks), except for credit extension under the authority of the General Meeting of Shareholders. The Supervisory Board must supervise credit approval for these subjects.”
