Tiếng Việt

Legal update relating to Finance and Credit (Monthly Legal Update – 07/2019)

by | Jul 10, 2019 | Banking, EN, Legal Update | 0 comments

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/07/2019

1.1. Circular No. 35/2018/TT-NHNN amending and supplementing a number of articles of Circular No. 35/2016/TT-NHNN dated December 29th, 2016 of the Governor of the State Bank of Viet Nam providing regulations on safety and confidentiality over provision of banking services on the internet

  • Name of legal document: Circular No. 35/2018/TT-NHNN issued on 24/12/2018 by the State Bank of Viet Nam amending and supplementing a number of articles of Circular No. 35/2016/TT-NHNN dated December 29th, 2016 of the Governor of the State Bank of Viet Nam providing regulations on safety and confidentiality over provision of banking services on the internet.

(amending and supplementing a number of articles of Circular No. 35/2016/TT-NHNN dated December 29th, 2016 of the Governor of the State Bank of Viet Nam providing regulations on safety and confidentiality over provision of banking services on the internet hereinafter referred to as the “Circular No. 35/2016/TT-NHNN”

Circular No. 35/2018/TT-NHNN issued on 24/12/2018 by the State Bank of Viet Nam amending and supplementing a number of articles of Circular No. 35/2016/TT-NHNN dated December 29th, 2016 of the Governor of the State Bank of Viet Nam providing regulations on safety and confidentiality over provision of banking services on the internet hereinafter referred to as the “Circular No. 36/2018/TT-NHNN”).

  • Effective date: 01/07/2019.

Some contents should be noted:

  • Firstly, amending and supplementing regulations on Database management system.

Specifically, Clause 4 Article 1 of Circular No. 35/2018/TT-NHNN stipulates: “4. Clause 2 Article 6[1] (Circular No. 35/2016/TT-NHNN) is amended and supplemented as follows:

“2. The Internet Banking system must have a disaster backup database capable of replacing the main database and ensuring no loss of customers’ online transaction data.””.

  • Secondly, amending and supplementing regulations on compulsory functions of the application.

Specifically, Clause 5 Article 1 of Circular No. 35/2018/TT-NHNN stipulates: “5. Points c and đ, Clause 6, Article 7[2] (Circular No. 35/2016/TT-NHNN) are amended and supplemented as follows:

“c) Session control: the system has a mechanism that shall automatically disconnect the session when the user does not manipulate for a period of time specified by the unit or applies other protection measures”;

“đ) For institutional customers, application software is designed to ensure the transaction execution includes at least two steps: creating, approving transactions and being executed by different people. In case the customer is an organization permitted by law to apply a simple accounting regime, the execution of the transaction is similar to that of individual customers”.”

1.2. Circular No. 48/2018/TT-NHNN on savings deposits

  • Name of legal document: Circular No. 48/2018/TT-NHNN issued on 31/12/2018 by the State Bank of Viet Nam on savings deposits (hereinafter referred to as the “Circular No. 48/2018/TT-NHNN”)

  • Effective date: 05/07/2019.

Some contents should be noted:

  • Firstly, stipulating on savings deposit interest rate.

Specifically, Article 9 of Circular No. 48/2018/TT-NHNN stipulates: “Article 9. Interest rate

  1. Each credit institution sets forth regulations on savings deposit interest rate in accordance with regulations of the State Bank of Vietnam on interest rates in every period.

  2. Savings deposit interest calculation method shall be accordant with provisions of the State Bank of Vietnam.

  3. Savings deposit interest payment method shall be made as agreed upon between the credit institution and the depositor.”

  • Secondly, stipulating on procedures for making saving deposits at transaction offices of credit institutions.

Specifically, Article 12 of Circular No. 48/2018/TT-NHNN stipulates: “Article 12. Procedures for making saving deposits at transaction offices of credit institutions

  1. A depositor must come to a transaction office of a credit institution in person and present his/her identify proof; in case of a joint savings deposit, all depositors must present their identify proof in person. If the savings deposit is going to made by the legal representative, such legal representative must present his/her representative status proof and identity proof and identity proof of depositor.

  2. The depositor has to register his/her sample signature in a case where he/she wishes to change his/her old sample signature or he/she has not had such a sample signature registered at the credit institution. If the depositor is unable to write, read or see:  he/she will follow the guidelines of the credit institution.

  3. The credit institution shall compare and update information of depositors as per the law on anti-money laundering.

  4. The depositor will follow other procedures as guided by the credit institution.

  5. Upon completion of procedures prescribed in Clauses 1, 2, 3 and 4 of this Article, the credit institution shall take the savings deposit and give the passbook to the depositor.

  6. Adding credit to a savings account of an issued passbook:a) Adding credit in cash: The depositor shall comply with Clauses 1, 2, 3, and 4 of this Article and present the issued passbook.  The credit institution shall take the credit to the savings account, record the credit to the issued passbook and give the passbook to the depositor;b) Adding credit from a checking account of the depositor: the depositor will follow procedures as guided by the credit institution.”

  • Thirdly, Circular No. 48/2018/TT-NHNN supersedes Decision No. 1160/2004/QD-NHNN dated September 13, 2004 of the Governor of the State Bank of Vietnam on promulgation of Regulation on savings deposits, Decision No. 47/2006/QD-NHNN dated September 25, 2006 of the Governor of the State Bank of Vietnam on amendments to Regulation on savings deposits issued together with Decision No. 1160/2004/QD-NHNN dated September 13, 2004 of the Governor of the State Bank of Vietnam.

Specifically, Clause 1 of Article 22 of Circular No. 48/2018/TT-NHNN stipulates: “Article 22. Implementation provision

  1. This Circular comes into force as of July 5, 2019 and supersedes Decision No. 1160/2004/QD-NHNN dated September 13, 2004 of the Governor of the State Bank of Vietnam on promulgation of Regulation on savings deposits, Decision No. 47/2006/QD-NHNN dated September 25, 2006 of the Governor of the State Bank of Vietnam on amendments to Regulation on savings deposits issued together with Decision No. 1160/2004/QD-NHNN dated September 13, 2004 of the Governor of the State Bank of Vietnam.”

1.3. Circular No. 49/2018/TT-NHNN on term deposits

  • Name of legal document: Circular No. 49/2018/TT-NHNN issued on 31/12/2018 by the State Bank of Viet Nam on term deposits (hereinafter referred to as the “Circular No. 49/2018/TT-NHNN”)

  • Effective date: 05/07/2019.

Some contents should be noted:

  • Firstly, stipulating principles of carrying out term deposit transactions.

Specifically, Article 5 of Circular No. 49/2018/TT-NHNN stipulates: “Article 5. Principles of carrying out term deposit transactions

  1. A credit institution shall take term deposits in accordance with its scope of operation permitted by law and its establishment and operation licenses.

  2. A customer may only make a term deposit and receive payment thereof via his/her checking account.

  3. A customer shall, by himself/herself or through his/her legal representative, make a term deposit or receive payment thereof under guidance of the credit institution as per the law. If the customer is a person with limited legal capacity, legally incapacitated person as per the law or a person aged under 15 years, he/she shall make a term deposit or receive payment thereof via his/her legal representative; if the customer is a person with limited recognition and behavior control under law, he/she shall make a make a term deposit or receive payment thereof via his/her guardian (hereinafter referred to as legal representative).

  4. Regarding a joint term deposit, the customers shall make deposit or receive payment thereof via their joint checking account. Residents and non-residents may not jointly make a joint term deposit. Organizations and individuals may not jointly make a joint term deposit in foreign currency.

  5. The deposit term shall be determined according to the agreement made between the credit institution and the customer. With regard to a foreign organization or individual who is a non-resident, or a foreign individual who is a resident, the deposit term may not exceed the remaining validity period of their identity proof prescribed in Clause 4 and Clause 5 Article 4 hereof.

  6. The currency used in payment of principal and interest of the term deposit is the currency that the customer previously used to make the deposit.”

  • Secondly, amending certain articles of Circular No. 16/2014/TT-NHNN dated August 1, 2014 of the Governor of the State bank of Vietnam on guidelines for use of foreign currency and Vietnamese dong accounts of residents, non-residents held at authorized banks on (i) Using foreign currency account of residents as organizations; (ii) Using foreign currency account of non-residents as organizations; (iii) Using foreign currency account of residents as individuals; (iv) Using foreign currency account of non-residents as individuals.

Specifically, Clause 4 Article 17 of Circular No. 49/2018/TT-NHNN stipulates: “Article 17. Implementation provisions

…

4. This Circular amends certain articles of Circular No. 16/2014/TT-NHNN dated August 1, 2014 of the Governor of the State bank of Vietnam on guidelines for use of foreign currency and Vietnamese dong accounts of residents, non-residents held at authorized banks:

a) Add the third dash to Point d Clause 1 Article 3[3], the third dash to Point d Clause 1 Article [4]5 as follows:

“Foreign currency receipts from term deposit payout of principal and interest in foreign currency in accordance with regulations and laws on term deposits.”

[1] “Article 6. Database management system

…

2. The Internet Banking system must have backup database at the Disaster Recovery Center. The backup database must be updated within at least one hour compared to official database. The database shall be copied daily. Copies shall be managed and stored safely.”

[2] “Article 7. Internet Banking application

…

6. Compulsory functions of the application:

…

c) Have a mechanism to control transaction sessions and assess time of websites and applications. In a case where a user fails to manipulate within a certain time prescribed by the service provider but not exceeding five minutes, the system shall automatically disconnect the session or apply other protective measures;

…

đ) With regard to a client being an organization, the application is designed in a manner to ensure that the transaction will be conducted in two steps as follows: creating and approving transaction and conducted by at least two different persons.”

[3] “Article 3. Using foreign currency account of residents as organizations

The residents as organizations are entitled to use foreign currency accounts at the authorized banks for transactions of receipts and expenditures as follows:

1. Receipts:

…

d) Legal foreign currency revenues earned in the country, including:

– Receipts from the purchase of transferred foreign currency at the authorized credit institutions;

– Receipts of transferred foreign currency or remittance of foreign currency cash deposited into the account for cases entitled to receive foreign currency regulated by the State Bank of Vietnam on the use of foreign exchange in the territory of Vietnam.”

[4] “Article 5. Using foreign currency account of non-residents as organizations

The non-residents as organizations are entitled to use foreign currency accounts at the authorized banks to transact receipts and expenditures as follows:

1. Receipts:

…

d) Receipts of foreign currency from legal sources in the country, including:

– Receipts from the purchase of wired foreign currency at the authorized credit institutions;

– Receipts of wired foreign currency or remittance of foreign currency cash to the account for cases entitled to earn foreign currency regulated by the State Bank of Vietnam on the use of foreign exchange in the territory of Vietnam.”