1. LEGAL DOCUMENTS ISSUED IN 08/2019
1.1. Circular No. 11/2019/TT-NHNN regulations on special control for credit institutions
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Name of legal document: Circular No. 11/2019/TT-NHNN issued on 02/08/2019 by the Governor of the State Bank of Viet Nam NHNN regulations on special control for credit institutions (referred to as the “Circular No. 11/2019/TT-NHNN”).
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Effective date: 01/10/2019.
The content should be noted: providing the form of special control.
Specifically, Article 7 of Circular No. 11/2019/TT-NHNN stipulates: “Article 7. Special forms of control
1. Based on the actual situation and level of risks in operations of the credit institution, the Governor of the State Bank or the Director of the branch of State Bank shall consider and decide:
a) Put credit institutions under special control in the form of special supervision or comprehensive control;
b) The content, scope, measures and tasks of control of activities are specified in the Decision of special control, in accordance with the form of special control and content specified in Clause 1, Article 15[1] of this Circular.
2. Special supervision means the placement of a credit institution under the direct control of the State Bank through direct, remote direct control and on-spot inspection by the special control committee for the operation of the credit institution is under special control.
3. Comprehensive control means the placing of a credit institution under the direct control of the State Bank through the direct control and on-spot control of the Special Control Board for daily activities of Credit institutions are under special control.
4. The form of special control is changed as follows:
a) Based on the actual situation and level of risks in operations of the credit institution under special control, the Special Control Board shall propose the Governor of the State Bank (via The Central Banking Inspection and Supervision Authority) change the form of special control to the credit institution under special control specified in Clause 1, Article 6[2] of this Circular or propose the Director of the branch of State Bank to change the form of special control for with credit institutions under special control specified in Clause 2, Article 6 of this Circular;
b) Within 20 days after receiving the recommendations of the Special Control Board specified at Point a of this Clause, the Governor of the State Bank or the Directors of the branches of State Bank shall consider and decide to change the forms of special control for credit institutions are under special control according to their competence prescribed in Article 6 of this Circular.”
1.2. Circular No. 13/2019/TT-NHNN amending and supplementing a number of articles of Circular related to licensing, organization and operation of credit institutions and branches of foreign banks.
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Name of legal document: Circular No. 13/2019/TT-NHNN issued on 21/08/2019 by the Governor of the State Bank of Viet Nam NHNN amending and supplementing a number of articles of Circular related to licensing, organization and operation of credit institutions and branches of foreign banks (referred to as the “Circular No. 13/2019/TT-NHNN”).
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Effective date: 05/10/2019.
Some content should be noted:
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Firstly, amending and supplementing regulations on procedures for approval for provisional lists of personnel of credit institutions and branches of foreign banks.
Specifically, Clause 8 Article 2 Circular No. 13/2019/TT-NHNN stipulates: “Article 2. Amending and supplementing a number of articles of Circular No. 22/2018/TT-NHNN dated September 5, 2018 of the Governor of the State Bank of Vietnam guidelines for procedures and application for approval for provisional lists of personnel of commercial banks, non-bank credit institutions and foreign banks’ branches (hereinafter referred to as Circular No. 22/2018/TT-NHNN)
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8. Article 8 is amended and supplemented as follows:
“Article 8. Procedures for approval for provisional lists of personnel of credit institutions and foreign banks’ branches
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The credit institution or foreign bank’s branch shall prepare an application as prescribed in Articles 6 and 7 of this Circular and submit it to the State Bank for the subjects specified in Clause 1, Article 4 of this Circular or the branches of State Bank for the subjects defined in Clause 2, Article 4 of this Circular. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank (Central Banking Inspection and Supervision Authority) shall request the credit institution or foreign bank’s branch in writing to complete it.
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The credit institution or foreign bank’s branch shall complete the application at the request of the State Bank (Central Banking Inspection and Supervision Authority) or the branches of State Bank within up to 45 working days from the date on which additional documents are requested in writing by the State Bank (Central Banking Inspection and Supervision Authority). After the aforementioned time limit, the credit institution or foreign bank’s branch shall re-submit an application as prescribed in this Circular to the State Bank or the branches of State Bank for consideration and approval.
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Within 30 working days from the receipt of satisfactory application prescribed in Articles 6 and 7 of this Circular, the State Bank shall send a written approval or written rejection of the provisional list of the credit institutions or foreign bank’s branch. In case of rejection, a written explanation of the State Bank or the branches of State Bank shall be provided.””
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Secondly, amending and supplementing regulations on complying with reporting regulations
Specifically, Clause 9 Article 2 of Circular No. 13/2019/TT-NHNN stipulates: “Article 2. Amending and supplementing a number of articles of Circular No. 22/2018/TT-NHNN dated September 5, 2018 of the Governor of the State Bank of Vietnam guidelines for procedures and application for approval for provisional lists of personnel of commercial banks, non-bank credit institutions and foreign banks’ branches (hereinafter referred to as Circular No. 22/2018/TT-NHNN)
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9. Article 11 is amended and supplemented as follows:
“Article 11. Complying with reporting regulations
1. Credit institutions and branches of foreign banks shall promptly notify in writing to the State Bank of changes related to the satisfaction of criteria and conditions of the personnel to be elected or appointed arising in the course of the State Bank’s consideration of dossiers of application for approval of the list of personnel plans or from the date the State Bank issues written approval of the lists of expected personnel until the personnel are elected, appointed in accordance with the following provisions:
a) For credit institutions and branches of foreign banks defined in Clause 1, Article 4 of this Circular: send to the Central Banking Inspection and Supervision Authority;
b) For branches of foreign banks prescribed in Clause 2, Article 4 of this Circular: send to the branch of State Bank where the branch of foreign bank is located.
2. Within 10 working days after the election, appointment of titles of Chairman and members of the Board of Directors, Chairman and members of the Board of members, Head and members of the Control Board, General Director Directors (directors), credit institutions and branches of foreign banks must send written notices to the State Bank as prescribed at Points a and b, Clause 1 of this Article on the list of elected and appointed persons according to the form in Appendix 03 attached to this Circular. ”.”
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Thirdly, amending and supplementing regulations on responsibilities of the Central Banking Inspection and Supervision Authority
Specifically, Clause 10 Article 2 of Circular No. 13/2019/TT-NHNN stipulates: “Article 2. Amending and supplementing a number of articles of Circular No. 22/2018/TT-NHNN dated September 5, 2018 of the Governor of the State Bank of Vietnam guidelines for procedures and application for approval for provisional lists of personnel of commercial banks, non-bank credit institutions and foreign banks’ branches (hereinafter referred to as Circular No. 22/2018/TT-NHNN)
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9. Clause 1 Article 121 is amended and supplemented as follows:
“1. The Central Banking Inspection and Supervision Authority shall be the focal point to assess the fulfillment of dossiers, standards and conditions of expected personnel of credit institutions and foreign bank branches subject to regulation stipulated in Clause 1, Article 4 of this Circular according to the provisions of the Law on Credit Institutions and this Circular; get opinions from related units ; sum up and submit to the Governor of the State Bank for consideration, written approval or disapproval of expected personnel of the credit institution, branches of foreign banks. “.”
[1] “Article 15. Tasks and powers of the Special Control Board
1. The Special Control Board performs the tasks and powers prescribed in Article 146b of the Law on Credit Institutions (amended and supplemented in 2017). The special control board shall perform its tasks and powers through one or several of the following activities:
a) Request the specially controlled credit institution to provide complete, accurate and timely information, documents and records related to the operations of the specially controlled credit institution, including the following information, documents, records:
(i) Financial situation, actual value of charter capital and reserve funds;(ii) Actual situation on organization, personnel, management, administration, information technology system and internal control system;
(iii) Actual situation of operation, business, investment; solvency when due;
(iv) Situation of assets and collaterals, in which specific reports on bad debt situations, bad receivable debts, potential structural debts become bad debts, bad debts sold to the Management Company unresolved assets, accrued interests must be withdrawn as prescribed by law but not yet withdrawn;
(v) List of customers (excluding credit institutions, branches of foreign banks) receiving credit; list of organizations and individuals sending money; other creditors;
(vi) Other information serving the performance of tasks of the Special Control Board.
b) Requesting the specially controlled credit institution to inventory existing cash and cash equivalents in the whole system on the principle of performing cross-checking, cross – supervising and reporting on performance results within 05 days after completing the inventory;
c) Organizing the supervision of the inventory process specified at Point b of this Clause in accordance with the reality and operation scope of the credit institution under special control;
d) In the period where there is no plan for restructuring or restructuring the credit institution under special control that has not been approved by the competent authority, based on the information, documents and records approved by the group. Specially controlled credit institutions provided for in points a and b of this clause or information from independent audit reports, inspection conclusions and other sources of information, Special Control Board assesses the operational status of the credit institution under special control to actively implement or report to the Governor of the State Bank (via the Central Banking Inspection and Supervision Authority) or the Director of the State Bank branch handling measures in accordance with the reality of specially controlled credit institutions;
dd) Approving before the credit institution under special control performs a number of transactions and operations;
f) Requesting the specially controlled credit institution to report its operation results according to the contents and frequency suitable to the reality of the specially controlled credit institution;
g) Deciding to attend the meetings of the Board of Directors, Board of Members, Board of Controllers of the credit institution that are under special control and give opinions on the contents of the meeting related to powers, duties of the special control committee;
h) Directing, inspecting, supervising and controlling the operations of the credit institution under special control to prevent the hiding, dispersing, pledging, mortgaging, and transferring of assets and other acts that may cause damage to specially controlled credit institutions;
i) Periodically as prescribed in the Decision of special control or when necessary or at the request of the Governor of the State Bank, Director of the State Bank branch, report to the Governor of the State Bank (via the Central Banking Inspection and Supervision Authority, for Special Control Boards of credit institutions under special control specified in Clause 1, Article 6 of this Circular) or Directors of the branches of State Bank (for the Special Control Board of a credit institution under special control specified in Clause 2, Article 6 of this Circular) the situation of management, administration, operation, business, investment, finance, liquidity and other issues (if any) of the credit institution under special control and recommendations and handling measures (if any); results, difficulties and obstacles in the course of implementing the restructuring plan, already approved by the competent authorities, and proposing and proposing handling measures (if any);
k) Promptly reporting to the Governor of the State Bank (via the Central Banking Inspection and Supervision Authority, for the Special Control Board of the specially controlled credit institution specified in Clause 1, Article 6 of the Circular) this Circular) or the Directors of the branches of the State Bank (for the Special Control Board of the credit institution under special control specified in Clause 2, Article 6 of this Circular) unusual developments in activities, potential risks, risks of unsafety and law violations of credit institutions under special control; difficulties and obstacles arising in the process of special control of the credit institution and recommendations, recommendations for handling measures;
l) Promptly notifying the credit institution under special control to information and direction of competent authorities relating to operations and restructuring plans.
m) Other duties assigned by the Governor of the State Bank or the Directors of the branches of the State Bank.”
[2] “Article 6. Competence to make decisions in the special control of the credit institution
1. The Governor of the State Bank shall consider and decide the following contents regarding credit institutions which are not People’s Credit Funds:
a) Putting credit institutions in the cases specified in Clause 1, Article 145 of the Law on Credit Institutions (amended and supplemented in 2017), Article 4 and Article 5 of this Circular into special control;
b) Forms of special control prescribed in Article 7 of this Circular;
c) Establishing of a special control board under the provisions of Articles 14 and 15 of this Circular;
d) Duration of special control;
dd) Noticing of special control as prescribed in Article 9 of this Circular;
e) Disclosing special control information in accordance with Article 10 of this Circular;
g) Actual value of charter capital and reserve funds, record reduction of charter capital of commercial banks subject to special control approved by the Government for compulsory transfer as prescribed in Article 11 of this Circular;
h) Extending of the term of special control as prescribed in Article 12 of this Circular;
i) Terminating special control as prescribed in Article 13 of this Circular;
k) Other contents specified in the Law on Credit Institutions (amended and supplemented in 2017) and this Circular.
2. Directors of branches of State Bank in provinces, cities under the central Government’s management (hereinafter referred to as branches of the State Bank) shall consider and decide on the following issues for credit institutions being People’s Credit Funds are headquartered in the area:
a) The contents specified at Points a, b, c, d, dd, e, h and i, Clause 1 of this Article;
b) The contents specified at Points a and b, Clause 3, Article 146; Clauses 1, 2, 3, 4, 5 and 7 of Article 146a (except for the contents of special loans, extension of special loan terms of the State Bank); Clauses 2 and 6, Article 146dd; Points a, b and d, Clause 2, Article 148b; Clauses 2, 3 and 4 (except for the case specified in Clause 3 of this Article) Article 148c; Clauses 2, 3, 4, 5, 6 and 11 of Article 148d; Clauses 1 and 2, Article 149c and Clauses 1 and 2, Article 149d of the Law on Credit Institutions (amended and supplemented in 2017).
For the contents specified at Point dd, Clause 2, Article 148b; Clauses 7 and 12, Article 148, and Clause 3, Article 149c of the Law on Credit Institutions (amended and supplemented in 2017), the Directors of the branches of the State Bank reports to the Governor of the State Bank (via the Central Banking Inspection and Supervision Authority) to approved before implementation.
3. The Directors of the branches of the State Bank report and propose the Governor of the State Bank (via the Central Banking Inspection and Supervision Authority) to propose the Government to implement the contents specified in Clause 1, Article 146 of the Law on Credit Institutions (amended and supplemented in 2017) for credit institutions being People’s Credit Funds are headquartered in the area.”
