Circular No. 03/1998/TT-NHNN5 guides the issuance of Operating Licenses for finance companies within State-Owned Enterprises.

CIRCULAR

Guidelines for issuing operating licenses to finance companies within State-owned Corporations
State-owned Corporation

On January 7, 1991, the Governor of the State Bank issued Decision No. 05/NH-QĐ promulgating the "Regulations on Issuing Operating Licenses for Credit Organizations in Vietnam."

On May 2, 1996, the Governor of the State Bank issued Decision No. 104/QĐ-NH5 regarding the issuance of the "Model Charter for Finance Companies within State-Owned Corporations."

To implement the directives of the Prime Minister in Circular No. 3625/ĐMDN dated July 22, 1997, and Circular No. 160/CP-ĐMDN dated February 17, 1998 concerning the implementation of the "Model Charter for Finance Companies within State-Owned Corporations," the State Bank provides guidelines for issuing operating licenses to finance companies within State-Owned Corporations as follows:

I. GENERAL PROVISIONS:

1. A finance company within a State-Owned Corporation is a credit organization, an independent accounting entity of the State-Owned Corporation established under the Law on State Enterprises and permitted to operate according to the "Model Charter for Finance Companies within State-Owned Corporations" issued by Decision No. 104/QĐ-NH5 dated May 2, 1996 of the Governor of the State Bank of Vietnam (hereinafter referred to as the model charter).

2. To operate under the Model Charter, the finance company must be established by a decision of the Minister of the economic sector management authorized by the Prime Minister and must obtain an Operating License from the Governor of the State Bank.

II. ISSUING THE OPERATING LICENSE FOR FINANCE COMPANIES IN STATE-OWNED CORPORATIONS:
FINANCIAL MATTERS IN STATE-OWNED CORPORATIONS:

1. After receiving the establishment decision for the finance company within the State-Owned Corporation, the Corporation must submit an application file for the Operating License of the finance company to the State Bank of Vietnam for consideration and issuance of the Operating License.

2. The application file for the Operating License includes:

2.1. An application for the Operating License of the finance company signed by the Chairman of the Board of Directors of the Corporation (Annex 01 attached to this Circular);

2.2. A document from the Prime Minister approving the principle of allowing the establishment of the finance company and authorizing the Minister of the economic sector management to organize the review and issue the establishment decision for the finance company;

2.3. The establishment decision for the finance company signed by the Minister of the economic sector management;

2.4. A document from the Ministry of Finance (General Department of State Capital and Asset Management at Enterprises) approving the source and level of the Registered Capital granted to the finance company;

2.5. A document from the People's Committee of the province or city approving the location of the main office of the finance company within the province or city;

2.6. A certificate from the Branch of the State Bank of Vietnam in the province or city where the finance company's main office is located confirming that the finance company has opened a frozen account and the amount of capital deposited in that account up to the latest date;

2.7. The Charter of the finance company regarding its organizational structure and operations;

2.8. The business plan of the finance company, which includes the following main contents:

Justification for the necessity of having a finance company;

Prospects and capability of the finance company in fulfilling its functions and tasks for the operation and development of the Corporation; the area of operation, content of activities, registered capital, and annual growth of own capital;

Specific business plan of the finance company for the first three years after obtaining the Operating License (divided by year);

2.9. Certificate of lawful rights to use the house and land where the finance company's main office is located;

2.10. Decision of the Board of Directors of the Corporation appointing the General Director of the finance company;

2.11. Summary resume of the General Director of the finance company (Annex 02 of this Circular);

2.12. Relevant documents about the Corporation including:

Establishment decision for the Corporation;

The current Charter of the Corporation;

A confirmation document from the competent authority regarding the registered capital and actual paid-up capital for the current year of the Corporation;

A summary balance sheet, profit and loss statement, and report on operational status for the last three years of the Corporation, if audited, the audited report must be submitted in accordance with the Law on State-Owned Enterprises. In cases where the Corporation has been established for less than three years, the period shall be counted from the date of establishment of the Corporation.

All copies in the file must be certified by the agency that issued the original or by a Notary Public.

3. Within thirty days (30 days) from the date of receipt of the files as stipulated in point 2 above, the State Bank shall examine and consider to decide on granting or refusing the Business Operation License (Annex 3 Circular) and approve the Charter and the position of General Director of the Finance Company.

III. PROCEDURES FOR COMMENCING OPERATIONS:

Within twelve months (12 months) from the date of issuance of the Business Operation License, the Finance Company must complete the following procedures to commence operations:

1. Payment of fees:

No later than fifteen days (15 days) from the date the State Bank issues the Business Operation License, the Finance Company must pay a fee equal to 0.2% (two thousandths) of the registered capital at the branch of the State Bank in the province or city where the main office is located.

2. Registration of business: The Finance Company must complete the registration of business at the Department of Planning and Investment in the province or city where the main office is located, in accordance with the regulations of the Ministry of Planning and Investment.

3. Registration of the commencement date of operations.

4. Publication:

At least thirty days (30 days) before commencing operations, the Finance Company must publish in the local newspaper in the province or city where the main office is located and in five consecutive daily newspapers of the central government, the following key features so that the public is aware:

Full name and abbreviation of the Finance Company;

Main office address; Telephone number, Fax;

Operating area;

Nature of activities;

Name of the General Director of the Finance Company;

Charter capital;

Number and date of the Business Operation License issued by the State Bank;

Number and date of the Business Registration Certificate, issuing authority;

Other features (if deemed necessary);

Commencement date of operations.

IV. FREEZING ACCOUNT:

1. The Finance Company must deposit the full registered capital in cash into a freezing account opened at the branch of the State Bank in the province or city where the main office is located.

2. The Finance Company may release the freezing account after the commencement of operations or when the Finance Company's Business Operation License is revoked (due to non-compliance with the provisions set out in Section III of this Circular).

V. CHANGES AND EXTENSION OF THE BUSINESS OPERATION LICENSE:

1. Reporting changes of the Finance Company and the Corporation:

1.1. When changing any of the following points, the Finance Company must report in writing to the State Bank in advance:

Change of the name of the Company;

Change of the terms in the Charter of the Company;

Change of the location of the main office, branch or representative office (if any) of the Company;

Increase or decrease in the approved registered capital of the Company;

Adjustment of the nature and scope of activities;

Change of the General Director of the Finance Company;

Splitting into several independent organizations or merging with one or more organizations;

Establishing or dissolving branches or representative offices, if any.

After reviewing the above requests, the State Bank will issue a written approval or disapproval for the change requests of the Finance Company and notify the Finance Company. In case of approval, the approval document will be considered as an appendix to the initial Business Operation License.

1.2. Within thirty days (30 days) from the date of the following changes, the Finance Company must report in writing to the State Bank:

Changes in the Charter of the Corporation;

Changes in personnel in the Board of Directors, Supervisors, and General Manager of the Corporation;

Change of the main office address of the Corporation;

Merger of the Corporation;

Sudden financial fluctuations of the Corporation.

2. Extension of the Business Operation License

NH PHÓAt least six months (6 months) before the end of the term specified in the Business Operation License, if wishing to continue operations, the Finance Company must submit a request to the State Bank for extension of the Business Operation License.

3. Revocation of the Business Operation License:

3.1. The State Bank will revoke the Business Operation License granted to the Finance Company in the following cases:

Failure to commence operations or failure to complete all procedures for commencing operations as prescribed in Section III of this Circular;

Operating contrary to purpose;

Voluntary or compulsory dissolution;

Splitting, merging, consolidation, bankruptcy;

Expiration of the term specified in the Business Operation License without renewal.

3.2. After revoking the Business Operation License, the Finance Company must immediately cease operations.

3.3. The decision to revoke the Business Operation License will be announced by the State Bank through mass media.

VI. RESPONSIBILITY FOR ISSUANCE, REVOCATION OR EXTENSION
OF THE OPERATING LICENSE

1. The Governor of the State Bank decides on the issuance, revocation or extension of the Business Operation License for the Finance Company and approves the position of General Director of the Finance Company.

2. By delegation of the Governor of the State Bank, the heads of the units listed below are responsible for examining issues related to the issuance, extension or revocation of the Business Operation License of the Finance Company to present to the Governor of the State Bank;

2.1. Functional Departments of the State Bank:

Financial Institutions Department;

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State Bank Inspectorate.

2.2. Branch of the State Bank where the Finance Company's main office is located.

3. The Head of the Financial Institutions Department is responsible for:

3.1. Receiving applications for issuance of the Business Operation License from the Finance Company submitted by the Corporation and sending copies to relevant units as stipulated in point 2 above for review and examination.

3.2. Collecting opinions from the aforementioned units and presenting them to the Governor of the State Bank for consideration to issue the Business Operation License, approve the Charter, and approve the position of General Director for the Finance Company within the Corporation.

3.3. Receiving applications, reviewing and presenting to the Governor issues related to the change or extension of the Business Operation License.

4. The heads of relevant units specified in Point 2 above shall be responsible for examining the files sent by the Department of Financial Institutions, providing written comments and sending them back to the Department of Financial Institutions within the deadline proposed by the Department of Financial Institutions in the letter accompanying the file, so that the Department of Financial Institutions can compile and submit to the Governor of the State Bank of Vietnam.

5. The Chairman of the Inspectorate of the State Bank of Vietnam shall be responsible for handling and submitting to the Governor any issues related to the revocation of the business license of the financial company.

VII. OTHER PROVISIONS

1. This circular shall take effect 15 days after the date of signature.

2. This Circular shall only apply to financial companies established under Decision No. 91/TTg dated March 7, 1994 of the Prime Minister on "Pilot Establishment of Business Groups" within State-owned Corporations.

3. Any amendments or supplements to this Circular shall be decided by the Governor of the State Bank of Vietnam.

ANNEX 1

SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness

...day...month...year 199

APPLICATION FOR BUSINESS LICENSE

On...day...month...year,...the Minister of...signed the Decision establishing the financial company within the Corporation..., named:

..................................................................

Now, the Board of Directors of the Corporation...requests the State Bank of Vietnam to consider issuing a business license for the financial company:

1. Name of the financial company:

Full name in Vietnamese: Abbreviated name:

Name in English: Abbreviated name:

2. Head office location:

Branch locations:

3. Operating area.

4. Scope of operations: 5. Duration of operation.

6. Registered capital:

Already have:

Still need to submit:

7. Frozen account opened at the State Bank of Vietnam:

.......................................................

Account number:

Amount deposited:

8. Value of real estate and other operational assets already owned:

.................................................................

After being granted the business license, we will fulfill all remaining conditions, complete registration procedures, and announce the opening date within the prescribed period.

We commit to strictly comply with national laws and regulations of the organization; if violated, we accept responsibility under the law.

BOARD OF DIRECTORS SEAL

ATTACHED DOCUMENTS

ANNEX 2

BRIEF CURRICULUM VITAE

Includes the following main sections:

Full name (as per birth certificate and aliases);

Male/Female;

Date and place of birth;

Nationality;

Place of origin;

ID card number, issue date;

Permanent address (as per ID card);

Current residence address;

Education level (highest degrees, number of days and issuing authority);

Previous occupations and positions;

Position appointed at the financial company;

Current position at other organizations.

Family relationships of the General Director of the financial company: spouse, children, direct-line relatives up to three generations (parents and grandchildren), siblings-in-law;

The declarant must clearly state the commitment not to violate any of the four clauses stipulated in Article 16 of the Banking, Credit Cooperative, and Financial Company Ordinance and Articles 39 and 40 of the Law on State-Owned Enterprises, and not to breach legal provisions, and to bear legal responsibility for the declaration;

Name and signature of the declarant.

Confirmation by the managing authority.

 ANNEX 3

STATE BANK OF VIETNAM

OF THE OPERATING LICENSE

FINANCIAL COMPANY WITHIN A CORPORATION

Number:

Date:

Issued at:

Issuing unit:

The State Bank SOCIALIST REPUBLIC OF VIETNAM

VIETNAM INDEPENDENT - FREEDOM - HAPPINESS

No./GP-NH On the classification results for exported and imported goods

STATE BANK OF VIETNAM

Pursuant to Article 2 of the Banking, Credit Cooperative, and Financial Company Ordinance dated May 24, 1990;

Considering the application for issuance of a business license for the financial company within the State-owned Corporation and the attached documents,

Now, we issue a business license for the following financial company:

1. Name of the financial company:

2. Head office location:

Branch locations:

3. General Director:

4. Registered Capital:

5. Frozen account opened at the State Bank of Vietnam...

Account number...Amount deposited:...

6. Value of real estate and other operational assets already owned:

.................................................................

7. Operating area:...

8. Scope of operations:...

9. Duration of operation:...

10. Remaining conditions to be fulfilled before opening:

................................................................

STATE BANK OF VIETNAM