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

1. LEGAL DOCUMENTS ISSUED IN 08/2019

1.1. Circular No. 11/2019/TT-NHNN regulations on special control for credit institutions

• 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”).

• 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.

• 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”).

• Effective date: 05/10/2019.

Some content should be noted:

• 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)

…

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

1. 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.

2. 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.

3. 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.””

• 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)

…

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. ”.”

• 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)

…

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.”

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/08/2019

1.1. Circular No. 08/2019/TT-NHNN amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN dated March 20th, 2015 of the Governor of the State Bank of Vietnam guiding the implementation of a number of articles of Decree No. 26/2014/ND-CP on April 7th, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities

• Name of legal document: Circular No. 08/2019/TT-NHNN issued on 04/07/2019 by the State Bank of Vietnam amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN dated March 20th, 2015 of the Governor of the State Bank of Vietnam guiding the implementation of a number of articles of Decree No. 26/2014/ND-CP on April 7th, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities (hereinafter referred to as the “Circular No. 08/2019/TT-NHNN”)

• Effective date: 19/08/2019.

Some contents should be noted:

• Firstly, amending and supplementing regulations on assignment of inspection responsibilities to the inspected entities.

Specifically, Clause 1 Article 1 of Circular No. 08/2019/TT-NHNN stipulates: “Article 1. Amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN

1. Article 4 is amended and supplemented as follows:

“Article 4. Assignment of inspection responsibilities to inspected entities

1. The Central Banking Inspection and Supervision Authorities shall have to inspect according to provisions of law on the following inspected entities:

a) Agencies, organizations and individuals under the management of the State Bank, except those managed by the State Bank branch under the assignment of the State Bank Governor;

b) Commercial banks with 100% charter capital owned by the State;

c) Policy bank;

d) Cooperative bank;

dd) Joint venture bank;

e) Banks with 100% foreign capital;

g) A number of branches of foreign banks as assigned by the Governor of the State Bank;

h) Joint stock commercial bank;

i) Non-bank credit institutions;

k) Microfinance institutions;

l) A number of microfinance programs and projects as assigned by the Governor of the State Bank;

m) Organizing of credit information activities;

n) Vietnam Asset Management Company;

o) Deposit Insurance of Vietnam;

p) National Banknote Printing Plant;

q) National Payment Corporation of Viet Nam;

r) Subsidiaries of credit institutions stipulated in Points b, d, dd, e and h of this Clause where this subsidiary is not a credit institution but under the inspection responsibility of the State Bank, except for entities under the inspection responsibility of the State Bank branch’s inspection and supervision;

s) The entities of inspection under the inspection responsibility of the State Bank branch’s inspection and supervision in case of re-inspection or when necessary and under the direction of the Governor of the State Bank;

t) Other entities assigned by the Governor of the State Bank.

2. Inspection and supervision of the branch of the State Bank shall be responsible for inspection in accordance with the law for the following banking inspected entities:

a) Agencies, organizations and individuals under the management of the State Bank branch;

b) Branches of foreign banks which are headquartered in provinces and cities where branches of the State Bank are located (hereinafter referred to as provinces and cities), except for statues prescribed at Point g, Clause 1 of this Article;

c) The attached units of the inspected entities are under the inspection responsibility of the Banking Inspection and Supervision Agency as prescribed in Clause 1 of this Article (except for subjects specified at Points p and q, Clause 1 of this Article) of the Inspection and Supervision of other branches of State Bank in which this subsidiaries are headquartered in the province and city;

d) People’s credit funds which are headquartered in the provinces or cities;

dd) Microfinance programs and projects in the province or city, except for subjects specified at Point 1, Clause 1 of this Article;

e) Representative offices of foreign credit institutions and other foreign organizations with banking activities based in the province or city;

g) Organizations with foreign exchange activities and gold business activities; non-banking intermediary service providers based in the province or city, except for subjects specified at Point q, Clause 1 of this Article;

h) Other agencies, organizations and individuals in the province or city are obliged to abide by law provisions in the domains under the State management scope of the State Bank;

i) Reporting subjects fall under the State management responsibility of the State Bank in their provinces and cities according to the provisions of law on the prevention of money laundering outside the subjects prescribed at Points b and c, d, dd, e, g, h This clause;

k) Other entities assigned by the Governor of the State Bank.

3. Inspection and supervision of the State Bank branch shall conduct inspections of inspected entities under the inspection responsibility of the State Bank’s inspection and supervision of other branches under the direction of the Governor of the State Bank.””.

• Secondly, amending and supplementing regulations on assignment of supervisory responsibilities to the supervised entities.

Specifically, Clause 2 Article 1 of Circular No. 08/2019/TT-NHNN stipulates: “Article 1. Amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN

…

2. Article 5 is amended and supplemented as follows:

“Article 5. Assignment of supervisory responsibilities to supervised entities

1. The Central Banking Inspection and Supervision Authority shall be responsible for supervising micro-security according to the provisions of law for the following supervised entities:

a) Commercial banks with 100% charter capital owned by the State;

b) Cooperative bank;

c) Joint venture bank;

d) Banks with 100% foreign capital;

dd) Branches of foreign banks as stipulated at Point g Clause 1 Article 4 of this Circular;

e) Joint stock commercial bank;

g) Non-bank credit institutions;

h) Microfinance institutions;

i) Other entities assigned by the Governor of the State Bank;

2. Inspection and supervision of the branch of the State Bank shall be responsible for supervising micro-security in accordance with the law for the following banking supervised entities:

a) Branches of foreign banks which are headquartered in provinces and cities, except for statues prescribed at Point dd, Clause 1 of this Article;

b) The attached units of the supervised entities are under the supervision responsibility of the Banking Inspection and Supervision Authorities as prescribed in Clause 1 of this of the Inspection and Supervision of other branches of State Bank in which this subsidiaries are headquartered in the province and city;

c) People’s credit funds which are headquartered in the provinces or cities;

d) Other entities assigned by the Governor of the State Bank.

3. The Central Banking Inspection and Supervision Authority shall perform macro safety supervising for the whole system of credit institutions and branches of foreign banks.

4. The Central Banking Inspection and Supervision Authority shall supervise according to the provisions of law for the following entities:

a) Policy bank;

b) Vietnam Asset Management Company;

c) Deposit Insurance of Vietnam;

d) Organizing of credit information activities;

dd) Subsidiaries of credit institutions stipulated in Points a, b, c, d, e, g of Clause 1 of this Article where this subsidiary is not a credit institution but under the inspection responsibility of the State Bank, except for entities under the inspection responsibility of the State Bank branch’s inspection and supervision;

e) Other entities assigned by the Governor of the State Bank.

5. Inspection and supervision of the branch of the State Bank shall supervise the following entities according to law provisions:

a) The attached units of the supervised entities fall under the supervisory responsibility of the Central Banking Inspection and Supervision Authority prescribed in Clause 4 of this Article, which have their head offices located in the provinces or cities.

b) Other entities assigned by the Governor of the State Bank.””.

• Thirdly, annulling the regulations on the relationship between the Banking Inspection and Supervision Department with the branch of State Bank in the locality stipulated in Article 12 of Circular No. 03/2015/TT-NHNN.

Specifically, Article 2 of Circular No. 08/2019/TT-NHNN stipulates: “Article 2. Annulling Article 12 of Circular No. 03/2015/TT-NHNN.”

1.2. Consolidated document No. 17/VBHN-NHNN in 2019 consolidated Circulars guidance for Decree 26/2014/ND-CP on organizational structure and operation of banking inspection and supervision authorities

• Name of legal document: Consolidated document No. 17/VBHN-NHNN in 2019 consolidated Circulars guidance for Decree 26/2014/ND-CP on organizational structure and operation of banking inspection and supervision authorities

• Consolidated date: 12/07/2019.

The content should be noted:

Consolidating the provisions stipulated at Circular No. 03/2015/TT-NHNN dated March 20, 2015 of the Governor of the State Bank of Vietnam guiding the implementation a number of articles of Decree No. 26/20143/ND-CP dated 07/04/2014 on organizational structure and operation of banking inspection and supervision authorities, effective from May 7, 2015, amended and supplemented by Circular No. 08/2019/TT-NHNN dated July 4, 2019 of the Governor of the State Bank of Vietnam amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN dated March 20, 2015 of the Governor of the State Bank of Vietnam guides the implementation of a number of articles of Decree No. 26/2014/ND-CP dated April 7, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities, effective from August 19, 2019.

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.”

1. LEGAL DOCUMENTS ISSUED IN 05/2019

Decree No. 43/2019/ND-CP amending and supplementing a number of articles of the Decree No. 26/2014/ND-CP issued on April 7th, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities

• Name of legal document: Decree No. 43/2019/ND-CP issued on 17/05/2019 by the Government amending and supplementing a number of articles of the Decree No. 26/2014/ND-CP issued on April 7th, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities

• Effective date: 17/05/2019.

Some contents should be noted:

• Firstly, amending the regulation on the power to issue inspection decision and re-inspection decisions.

Specifically, Clause 6 Article 1 of Decree No. 43/2019/TT-NHNN stipulates as follows: “Article 1. Amending and supplementing a number of articles of Decree No. 26/2014/ND-CP dated April 7th, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities

6. Amending Article 18 (Decree No. 26/2014/ND-CP)

“1. The Chief Inspector, the Director General of the Department of Banking Inspection and Supervision and the Chief Inspector of provincial banking inspection and supervision authority shall issue the inspection and decision on inspection and establishment of the inspectorate. When necessary, the Governor of the State Bank or the Director of the branch of the State Bank shall issue the decision on inspection and establishment of the inspectorate.

2. The Chief Inspector shall decide to re-inspect the case that has been concluded by the Chief Inspector of the provincial banking inspection and supervision authority, but violations of law are suspected; the case that has been concluded by the President of the People’s Committee of province, but violations of law are suspected as assigned by the Governor of the State Bank.””

• Secondly, amending and supplementing the regulation on contents of banking supervision.

Specifically, Clause 7 Article 1 of Decree No. 43/2019/TT-NHNN stipulates as follows: “Article 1. Amending and supplementing a number of articles of Decree No. 26/2014/ND-CP dated April 7th, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities

7. Amending and supplementing Point b, Point c Clause 1 Article 23 (Decree No. 26/2014/ND-CP) as follows:

“b) Consider and monitor the compliance with regulations on banking safety and other relevant laws; the implementation of conclusions, proposals and decisions on handling of inspections; the implementation of proposals and warnings on banking supervision and remedial measures when being subject to early intervention in accordance with Clause 25, Article 1 of the Law amending and supplementing a number of articles of the Law on Credit Institutions[1];

1. c) Regularly analyzing and assessing the financial, operational, management, operating and risk situation of credit institutions, foreign bank branches, systemic risks; ranking credit institutions, foreign bank branches annually according to the safety level;””

• Thirdly, amending and supplementing the regulation on licensing activities in banking inspection and supervision.

Specifically, Clause 9 Article 1 of Decree No. 43/2019/TT-NHNN stipulates as follows: “Article 1. Amending and supplementing a number of articles of Decree No. 26/2014/ND-CP dated April 7th, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities

9. Amending and supplementing Clause 1 Article 30 (Decree No. 26/2014/ND-CP) as follows:

“1. The Central Banking Inspection and Supervision Authority shall consult with or assist the Governor of the State Bank; provincial banking inspection and supervision authority shall consult with or assist the Director of the branch of the State Bank (in case the Director of the branch of the State Bank is authorized by the Governor of the State Bank) in:

a) issuing, adjusting, adding, revoking the license for establishment and operation of credit institutions, license for establishment of foreign banks’ branches, license for establishment of representative offices of foreign credit institutions or other foreign organizations involved in banking activities and other licenses for operation of banks;

b) issuing and revoking the license for provision of credit information services by institutions;

c) issuing and revoking registration certificates for microfinance projects and programs;

d) approving the trading, full division, partial division, consolidation, acquisition, conversion of legal forms, or dissolution of a credit institution or foreign bank’s branch; approving provisional lists of elected or appointed members of the Board of Members, Board of Directors, Board of Controllers and Director General (Director) of credit institutions, except for the personnel of commercial banks 100% of charter capital of which is held by the State, personnel that is appointed or introduced by the owner of state capital at Joint Stock Commercial Bank over 50% of charter capital of which is held by the State; approving the person expected to be appointed to the Director General (Director) of the foreign bank’s branch; approving the establishment, termination and dissolution of domestic branch, representative office, service provider, foreign branch, representative office and other forms of foreign commercial presence of a credit institution; approving the establishment, acquisition of subsidiary or associate company of a credit institution; approving the capital contribution or purchase of shares by a credit institution; approving other issues concerning management, organizational structure, finance and operations in accordance with law that must be granted approval or permission by the State;

dd) resolving issues concerning organizational structure and management of credit institutions and foreign banks’ branches to ensure credit institutions and foreign banks’ branches operate in a safe and sound manner and in accordance with regulations of law;

e) Implementing some contents on rights and responsibilities of the representative office of the owner of State capital in credit institutions, financial institutions and enterprises managed by the State Bank in accordance with the provisions of laws and assignments of the Governor of the State Bank;

g) formulating, organizing and monitoring the implementation of the scheme or policy for reorganizing, reinforcing, restructuring and special controlling credit institutions and foreign banks’ branches.””

[1] “Article 1. Amendments to some Articles of the Law on credit institutions

…

25. Clause 130a below is added after Article 130:

 “Article 130a. Early intervention in credit institutions and branches of foreign banks

1. In any of the following cases, the State bank will consider making early intervention in a credit institution that has not been placed under special control according to Article 145 of this Law:

a) The credit institution fails to maintain the solvency ratio specified in Point a Clause 1 Article 130 of this Law for 03 consecutive months;

b) The credit institution fails to maintain the capital adequacy ratio specified in Point b Clause 1 Article 130 of this Law for 06 consecutive months;

c) The credit institution is ranked below average according to the State bank.

2. The State bank will consider making early intervention in a foreign bank’s branch in any of the cases specified in Point a, b, c Clause 1 of this Article.

3. Within 30 days from the day on which the written decision on early intervention is received from the State bank, the credit institution or foreign bank’s branch shall submit a report to the State bank on the situation specified in Clause 1 of this Article and a remedial plan, and implement it. The State bank will request the credit institution or foreign bank’s branch to revise the remedial plan where necessary.

The time limit for implementing the remedial plan is 01 year from the issuance date of the decision on early intervention.

4. The remedial plan shall contain one or some of the following measures:

a) Reduction of operating scope, avoid high-value transactions;

b) Increase in charter capital or provided capital; increase assets with high liquidity; sale or transfer of assets and other measures for assurance of banking safety;

c) Reduce dividends and distribution of profit;

d) Cut operating costs, administrative costs; reduce payment of salaries and bonuses to managers and executives;

dd) Intensify risk management; reorganize the management, make redundancies;

e) Other measures prescribed by law.

5. If the credit institution or foreign bank’s branch fails to prepare a remedial plan in accordance with Clause 3 of this Article or fails to remedy the situation within the time limit specified in Clause 1 of this Article, the State bank, depending on the risk level, will request the credit institution or foreign bank’s branch to take one or some of the measures specified in Clause 4 of this Article.

6. The State bank shall issue a decision to stop the early intervention after the credit institution or foreign bank’s branch successfully remedies the situation mentioned in Clause 1 of this Article or when the credit institution is placed under special control.

7. The State bank shall elaborate this Article.””

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/05/2019

Circular No. 03/2019/TT-NHNN amending and supplementing a number of articles of the Circular No. 32/2013/TT-NHNN dated 26 December 2013 of the Governor of the State bank of Vietnam guiding the implementation of regulations on restricting the use of foreign exchange in the territory of Vietnam

• Name of legal document: Circular No. 03/2019/TT-NHNN issued on 29/03/2019 by the State Bank of Viet Namamending and supplementing a number of articles of the Circular No. 32/2013/TT-NHNN dated 26 December 2013 of the Governor of the State bank of Vietnam guiding the implementation of regulations on restricting the use of foreign exchange in the territory of Vietnam (hereinafter referred to as the “Circular No. 03/2019/TT-NHNN”).
• Effective date: 13/05/2019.

The content should be noted: Adding provisions on cases allowed to use foreign exchange in the territory of Vietnam.

Specifically, Article 1 of Circular No. 03/2019/TT-NHNN stipulates: “”Article 1. Amending and supplementing a number of articles of Circular No. 32/2013/TT-NHNN dated December 26, 2013 of the Governor of the State Bank of Vietnam guiding the implementation of regulations restricting the use of foreign exchange in Vietnamese territory

Adding point c to Clause 16 of Article 4[1] as follows:

“C) Foreign investors are entitled to deposit, escrow deposit in transferred foreign currency when participating in an auction in the following cases:

(i) Purchasing shares in equitized state enterprises shares approved by the Prime Minister;

(ii) Purchasing of shares, capital contribution of the state in state-owned enterprises, state-invested enterprises undergoing divestment approved by the prime minister;

(iii) Purchasing of shares, contributed capital of state-owned enterprises investing in other state-invested enterprises undergoing divestment approved by the prime minister.

In case of winning an auction, foreign investors shall transfer investment capital according to the provisions of law on foreign exchange management in order to pay the value of the purchase of shares or contributed capital. In case of unsuccessful auctions, foreign investors may remit abroad the amount of deposits or escrowing deposits in foreign currency after subtracting the related expenses (if any).”.”

2. LEGAL DOCUMENTS ISSUED IN 04/2019

Consolidated document No. 14/VBHN-NHNN guiding the implementation of regulations restricting the use of foreign exchange in the territory of Vietnam

• Name of legal document: Consolidated document No. 14/VBHN-NHNN issued on 04/04/2019 by the State Bank of Viet Nam guiding the implementation of regulations restricting the use of foreign exchange in the territory of Vietnam.
• Consolidated date: 04/04/2019.

The content should be noted: Consolidating the provisions stipulated at Circular No. 32/2013/TT-NHNN dated December 26, 2013 of the Governor of the State Bank of Vietnam guiding the implementation of regulations restricting the use of foreign exchange in the territory of Vietnam, effective from 10 February 2014, amended and supplemented by Circular No. 16/2015/TT-NHNN dated October 19, 2015 of the Governor of the State Bank of Vietnam amending and supplementing a number of articles of Circular No. 32/2013 / TT-NHNN dated 26/12/2013 of the Governor of the State Bank of Vietnam guiding the implementation of the regulations on restricting the use of foreign exchange in the territory of Vietnam, effective from December 3, 2015 and Circular No. 03/2019/TT-NHNN dated March 29, 2019 of the Governor of the State Bank of Vietnam amending and supplementing a number of articles of Circular No. 32/2013/TT-NHNN dated December 26, 2013 2013 by The governor of the State Bank of Vietnam guiding the implementation of the regulations on restricting the use of foreign exchange in the Vietnamese territory, effective from May 13, 2019.

[1] “Article 4. Cases allowed to use foreign exchange in the territory of Vietnam

…

16. Non-residents shall comply with the following provision:

a) They are allowed to transfer in foreign currency for other non-residents;

b) They are allowed for prices in contracts in foreign currency and payment of export goods and services in foreign currency by transfer for residents. Residents are allowed to make quotations, fix prices in foreign currency or receive payments in foreign currency by transfer when they supply goods and services for non-residents.

…”