Circular No. 04/2000/TT-NHNN guiding the implementation of Decree No. 91/1999/NĐ-CP dated September 4, 1999 of the Government on the organization and operation of banking inspection.

CIRCULAR

Guidelines for Implementing Decree No. 91/1999/NĐ-CP dated September 4, 1999

of the Government on the organization and operation of banking inspection

On September 4, 1999, the Government issued Decree No. 91/1999/NĐ-CP on the organization and operation of Banking Inspection. The State Bank of Vietnam guides its implementation as follows:

PART I

GENERAL PROVISIONS

1. Banking inspection is a specialized state inspection in the field of banking, organized into a system within the structure of the State Bank of Vietnam (hereinafter referred to as the State Bank) and has its own seal.

2. The objects of Banking Inspection include:

2.1. The organization and activities of credit institutions:

- State credit institutions (including commercial banks, development banks, investment banks, policy banks, and non-bank credit institutions);

- State-owned and people's joint-stock credit institutions (including commercial banks and non-bank credit institutions);

- Foreign credit institutions permitted to operate in Vietnam (including joint venture credit institutions, wholly foreign-owned non-bank credit institutions, branches of foreign banks in Vietnam, and representative offices of foreign credit institutions in Vietnam);

- Cooperative credit institutions;

2.2. Banking activities of entities that are not credit institutions but have been granted permission by the State Bank;

2.3. State agencies, economic and social organizations, and individuals in the implementation of laws related to currency, credit, and banking operations.

3. The content of the activities of Banking Inspection includes:

3.1. Regularly supervising the implementation of safety regulations in the operations of credit institutions through remote monitoring methods as prescribed by the Governor of the State Bank.

3.2. Conducting inspections, audits, and re-inspections regarding compliance with laws on currency and banking operations, and the implementation of regulations stipulated in banking operation permits for the subjects specified in Point 2 of this Circular and as prescribed by laws on inspection.

3.3. Reviewing, verifying, concluding, and recommending measures to resolve complaints and reports according to the Law on Complaints and Reports related to the organization and banking operations; advising and assisting the Governor of the State Bank in directing preventive and anti-corruption efforts in the banking sector.

3.4. Identifying, preventing, and imposing administrative penalties within their authority; recommending competent authorities to handle violations of laws on currency and banking operations.

3.5. Recommending the Governor of the State Bank, the Director of the State Bank Branches in provinces and cities, and other competent authorities to implement measures to ensure the enforcement of laws on currency and banking operations.

4. Principles of Operation of Banking Inspection:

4.1. The activities of inspection, supervision, and handling complaints and reports by Banking Inspection must comply with the provisions of laws on inspection, the Law on the State Bank, the Law on Credit Institutions, and other relevant legal documents; ensuring accuracy, objectivity, transparency, democracy, and timeliness.

4.2. No agency, organization, or individual may interfere illegally in the activities of banking inspection.

PART II

SPECIFIC PROVISIONS

PART I

RIGHTS AND RESPONSIBILITIES OF BANKING INSPECTION WHEN CONDUCTING INSPECTIONS

THE BANK WHEN CONDUCTING INSPECTION

5. When conducting inspections, Banking Inspection has the following powers:

5.1. Requesting inspected entities and related parties to provide documents, evidence, and answers to questions related to the inspection content;

5.2. Drafting inspection records, inspection conclusions, and recommending measures to resolve issues;

5.3. Applying preventive measures and handling administrative violations according to the law;

5.4. Exercising other rights as prescribed by laws on inspection.

6. When conducting inspections, Banking Inspection has the following responsibilities:

6.1. Presenting the inspection decision (for the Head of the Inspection Team) and the Inspector's card;

6.2. Adhering to the inspection procedures and formalities as prescribed by the Governor of the State Bank, the General Inspector of the State, and other legal documents on inspection, without causing undue inconvenience, harassment, hindering normal banking operations, or causing damage to the legitimate interests of the inspected entity.

6.3. Reporting the results of the inspection and recommendations for resolution measures to the person issuing the inspection decision;

6.4. Complying with the law, being accountable before the person issuing the Inspection Decision and the law for the inspection conclusion and all actions and decisions made.

PART II

TASKS AND POWERS OF THE HEAD OF BANKING INSPECTION OF THE STATE BANK, HEAD OF BRANCHES OF THE STATE BANK

STATE, HEAD OF THE BRANCH INSPECTION AUTHORITY OF THE STATE BANK

7. Tasks and powers of the Head of Banking Inspection of the State Bank:

7.1. Deciding on plans, contents, and inspection measures according to the approved inspection program by the Governor of the State Bank;

7.2. Managing, directing, and guiding inspection business and the handling of complaints and reports for units under the State Bank;

7.3. Periodically reporting the results of inspection activities to the Governor of the State Bank and the General Inspector of the State according to the law on inspection;

7.4. Deciding to establish inspection teams or dispatch inspectors to inspect inspection targets;

7.5. Having the right to summon inspection officers from provincial and city State Bank branches to perform inspection tasks when necessary;

7.6. Requesting credit institutions to conduct self-inspection and report the results to the Banking Inspection of the State Bank;

7.7. Requesting the temporary suspension, amendment, or abolition of regulations of credit institutions and other organizations engaged in banking activities if such regulations contravene the Law on the State Bank, the Law on Credit Institutions, and the Ordinance on Inspection; and simultaneously reporting to the Governor of the State Bank.

7.8. Temporarily suspend the execution of disciplinary decisions and job transfers made by the head of agencies or units directly under the management of the Governor of the State Bank of Vietnam for individuals who are cooperating with banking inspection organizations or are subjects of inspection, if it is deemed that the execution of such decisions would hinder the inspection process; the suspension period shall not exceed the date when the decision on handling is announced by the person issuing the inspection decision. Within five working days from the date of suspension, report to the Governor of the State Bank of Vietnam. If the decision mentioned above is made by the head of an agency or unit not directly managed by the Governor of the State Bank of Vietnam, recommend the competent authority to make the decision, while reporting to the Governor of the State Bank of Vietnam.

7.9. Issue warnings and temporarily suspend the work of individuals from agencies or units directly under the management of the Governor of the State Bank of Vietnam who intentionally obstruct inspections or fail to comply with requests, recommendations, and decisions of banking inspection organizations. The suspension period shall not exceed the date when the decision on handling is announced by the person issuing the inspection decision. Within five working days from the date of suspension, report to the Governor of the State Bank of Vietnam; if the individual is the head of an agency or unit directly managed by the Governor of the State Bank of Vietnam or does not fall under the direct management of the Governor of the State Bank of Vietnam, recommend the competent authority to make the decision, while reporting to the Governor of the State Bank of Vietnam.

7.10. Temporarily suspend the work of individuals from credit institutions and other organizations engaged in banking activities if there is evidence that they have violated laws related to currency and banking operations. The suspension period shall not exceed the date when the decision on handling is announced by the person issuing the inspection decision. Within five working days from the date of suspension, report to the Governor of the State Bank of Vietnam.

7.11. Temporarily suspend illegal banking activities of credit institutions and other organizations engaged in banking activities if there is evidence that these activities have violated laws related to currency and banking operations; simultaneously report to the Governor of the State Bank of Vietnam.

7.12. Handle administrative violations within their authority and recommend the Governor of the State Bank of Vietnam to impose administrative penalties in the field of currency and banking operations according to the provisions of the law.

7.13. Exercise other rights stipulated in Article 9, Article 14, and relevant inspection ordinances concerning the inspected objects and related units and individuals within the scope of the State Bank of Vietnam's management.

7.14. Manage inspection officers and civil servants under their authority; coordinate with related units to organize the implementation of examination regulations for appointing inspector ranks according to state regulations.

7.15. Coordinate with related agencies and units (both inside and outside the sector) to organize training courses for inspection business skills for officers and civil servants in the banking inspection system.

7.16. Sign on behalf of the Governor of the State Bank of Vietnam on documents within the authority of the Chief Inspector of the State Bank of Vietnam as prescribed by law.

7.17. Perform other tasks assigned by the Governor of the State Bank of Vietnam.

8. Tasks and powers of the Chief Inspector of the State Bank Branches.

8.1. Organize and implement inspection programs and plans of the Banking Inspection Department of the State Bank of Vietnam for units within the responsibility scope of the State Bank Branches.

8.2. Issue decisions or propose the Director of the State Bank Branch in provinces and cities to issue inspection and supervision decisions regarding credit institutions and other organizations engaged in banking activities within the management responsibility scope of the State Bank Branches.

8.3. Temporarily suspend the execution of decisions made by credit institutions and other organizations engaged in banking activities if such decisions contravene the Law on the State Bank of Vietnam, the Law on Credit Institutions, and inspection laws. The suspension period shall not exceed the date when the decision on handling is announced by the person issuing the inspection decision; simultaneously report to the Director of the State Bank Branch and the Chief Inspector of the State Bank of Vietnam.

8.4. Recommend the Director of the State Bank Branch to take the following measures:

a) Suspend certain banking activities of credit institutions and other organizations engaged in banking activities within the authority of the Director of the State Bank Branch.

b) Revoke the establishment and operation licenses of credit institutions and revoke the operation licenses of other organizations engaged in banking activities within the authority of the Director of the State Bank Branch.

8.5. Impose administrative penalties within their authority and recommend the Director of the State Bank Branch to impose administrative penalties in the field of currency and banking operations according to the provisions of the law, while reporting to the Chief Inspector of the State Bank of Vietnam.

8.6. Temporarily suspend the execution of disciplinary decisions and job transfers made by the head of agencies or units under the management of the Director of the State Bank Branch for individuals who are cooperating with banking inspection organizations or are subjects of inspection, if it is deemed that the execution of such decisions would hinder the inspection process. The suspension period shall not exceed the date when the decision on handling is announced by the person issuing the inspection decision; if the decision mentioned above is made by the head of an agency or unit not directly managed by the Director of the State Bank Branch, recommend the competent authority to make the decision; simultaneously report to the Director of the State Bank Branch and the Chief Inspector of the State Bank of Vietnam.

8.7. Issue warnings and temporarily suspend the work of individuals who intentionally obstruct inspections or fail to comply with requests, recommendations, and decisions of banking inspection organizations. The suspension period shall not exceed the date when the decision on handling is announced by the person issuing the inspection decision; if the individual is the head of an agency or unit directly managed by the Director of the State Bank Branch or belongs to an agency or unit not under the management of the Director of the State Bank Branch, recommend the competent authority to make the decision: simultaneously report to the Director of the State Bank Branch and the Chief Inspector of the State Bank of Vietnam.

8.8. During the inspection process, the activities of banks that violate the law shall be temporarily suspended upon request, while reporting to the Director of the Branch of the State Bank and the Chief Inspector of the State Bank.

8.9. Perform other rights stipulated in Clauses 1, 2, 3, 4, 5, 8, and 9 of Article 9 of the Inspection Ordinance, and perform other rights assigned by the Director of the Branch of the State Bank.

PART III

OBJECTS OF SUPERVISION AND INSPECTION BY THE STATE BANK INSPECTOR AND BRANCH INSPECTOR OF THE STATE BANK

STATE AND BRANCH INSPECTION AUTHORITY OF THE STATE BANK

9. The State Bank Inspector is responsible for supervising and inspecting:

9.1. State credit organizations, directly inspecting the headquarters, trading offices, and independent accounting companies under these organizations.

9.2. The Central People's Credit Fund;

9.3. Banking activities of organizations that are not credit organizations but have been granted licenses by the State Bank;

9.4. Joint venture banks located in Vietnam; non-bank credit organizations with 100% foreign capital; foreign bank branches;

9.5. Units within the responsibility of supervision and inspection of the State Bank branch in provinces and cities (when deemed necessary).

10. The State Bank branch inspector in provinces and centrally-administered cities is responsible for supervising and inspecting on their respective territories, including:

10.1. Branches and subsidiaries of state credit organizations;

10.2. State-owned and people's joint-stock credit organizations; branches of state-owned and people's joint-stock credit organizations. For branches of joint-stock credit organizations whose main office is located in another province or city, after completing the inspection, the inspection report and conclusions must be sent to the State Bank branch in the province or city where the credit organization has its main office for coordination.

10.3. Representative offices of foreign credit organizations in Vietnam;

10.4. Branches of the Central People's Credit Fund, regional People's Credit Funds, grassroots People's Credit Funds, cooperative banks, credit cooperatives;

10.5. Banking activities of organizations that are not credit organizations but have been granted licenses by competent authorities (under delegation);

10.6. Agencies, economic and social organizations, and individuals in implementing laws and regulations on currency, credit, and banking activities;

10.7. Units within the responsibility of the State Bank Inspector (when delegated).

11. Units implementing the responsibilities of supervision and inspection as stipulated in Points 9 and 10 above must organize regular supervision and direct inspections; promptly detect and handle violations strictly according to the law against credit organizations and banking activities of other organizations, and must bear legal responsibility before the Governor of the State Bank regarding their duties.

PART IV

ORGANIZATION OF THE STATE BANK INSPECTOR

12. Organization of the State Bank Inspector

12.1. The State Bank Inspector is organized as follows:

a) The State Bank Inspector at the headquarters of the State Bank is called the State Bank Inspector.

b) The State Bank Inspector at the branches of the State Bank in provinces and centrally-administered cities is called the Branch State Bank Inspector.

12.2. Organization of the State Bank Inspector:

a) The structure, organization, tasks, and powers of the State Bank Inspector are implemented according to the provisions of the Governor of the State Bank regarding the organization and operation of the State Bank Inspector.

b) The State Bank Inspector has a Chief Inspector and Deputy Chief Inspectors.

c) The appointment and removal of the Chief Inspector of the State Bank Inspector are carried out according to Article 12 of Decree No. 91/1999/ND-CP dated September 4, 1999, of the Government on the organization and operation of the State Bank Inspector.

d) The appointment and removal of Deputy Chief Inspectors of the State Bank Inspector are proposed by the Chief Inspector of the State Bank Inspector and decided by the Governor of the State Bank.

12.3. Organization of the Branch State Bank Inspector:

a) The Branch State Bank Inspector is a unit belonging to the organizational structure of the Branch of the State Bank in provinces and centrally-administered cities.

b) The Branch State Bank Inspector has a Chief Inspector and Deputy Chief Inspectors.

c) The appointment and removal of the Chief Inspector of the Branch State Bank Inspector are proposed by the Director of the Branch of the State Bank in provinces and centrally-administered cities and reported to the Chief Inspector of the State Bank for decision by the Governor of the State Bank.

d) The appointment and removal of Deputy Chief Inspectors of the Branch State Bank Inspector are decided by the Director of the Branch of the State Bank in provinces and centrally-administered cities.

12.4. The tasks of the Branch State Bank Inspector are defined by the Director of the Branch of the State Bank according to Article 6 of Decision No. 25/1999/QĐ-NHNN dated January 11, 1999, of the Governor of the State Bank promulgating the Regulations on the organization and operation of the Branch of the State Bank in provinces and centrally-administered cities, Decree No. 91/1999/NĐ-CP dated September 4, 1999, of the Government on the organization and operation of the State Bank Inspector, and this Circular.

PART V

BANK INSPECTORS

13. Bank Inspectors are civil servants of the State appointed according to the Inspector Regulation. Management of Bank Inspectors is carried out according to the law on inspection.

14. Standards for Bank Inspectors are implemented according to Decision No. 818/TCCC-VC dated October 21, 1993, of the Minister, Head of the Organizational Cadre Department of the Government, promulgating the professional standards for inspector positions in the State Inspectorate.

15. Bank Inspectors enjoy benefits according to the Inspector Regulations of the State and the State Bank, and are equipped with technical means to serve the activities of the State Bank Inspector.

16. When performing their duties, Bank Inspectors have the rights stipulated in Clause 24.3 of the Inspection Ordinance dated April 1, 1990, the Law on the State Bank of Vietnam, the Law on Credit Organizations dated December 12, 1997, and this Circular.

PART VI

RELATIONSHIP BETWEEN BANK INSPECTION AND RELATED AUTHORITIES:

17. Bank inspection shall be subject to the guidance and direction on organization and inspection operations by State Inspection and shall implement other relationships with State Inspection in accordance with the laws on inspection.

The State Bank of Vietnam's Inspection Department shall have the responsibility to send State Inspection the annual inspection work program and reports on inspection activities in accordance with State Inspection regulations.

Cooperate with State Inspection in appointing levels of bank inspectors; training and enhancing inspection skills for staff within the bank inspection system.

Implement other relationships as prescribed by the laws on inspection.

18. Relationships between bank inspection and inspections of Ministries, agencies at the level of ministries, government agencies, and local state inspection organizations with law enforcement agencies shall be carried out in accordance with Article 20.21 of the Decree on the organization and operation of bank inspection.

19. Bank inspection may utilize cooperating inspectors in inspection activities in accordance with current laws on inspection.

PART VII

IMPLEMENTATION OF REPORTING SYSTEM:

20. The State Bank of Vietnam's Inspection Department shall implement the reporting system in accordance with the Governor of the State Bank of Vietnam and the laws on inspection.

21. Inspectors of provincial and municipal branches of the State Bank of Vietnam shall have the responsibility to compile and report the results of quarterly inspections (first quarter, half-year, third quarter), and annual inspections on organizational structure and inspection activities to the State Bank of Vietnam's Inspection Department as follows (except in cases of emergency and upon request of the Governor of the State Bank of Vietnam):

- Quarterly report for the first quarter shall be submitted no later than March 20th of each year;

- Half-yearly report shall be submitted no later than June 10th of each year;

- Quarterly report for the third quarter shall be submitted no later than September 20th of each year;

- Annual report shall be submitted no later than November 20th of each year.

PART VIII

REWARD AND DISCIPLINE IN INSPECTION ACTIVITIES

OF THE BANK

22. Staff members, civil servants, cooperating inspectors, and bank inspection organizations who achieve outstanding results in inspection work shall be rewarded according to the current reward system of the State and the Governor of the State Bank of Vietnam.

23. Staff members, civil servants, bank inspectors who violate provisions stipulated in Article 14 of the Law on the State Bank of Vietnam, fail to fulfill their responsibilities while performing duties, cover up for organizations or individuals violating laws on currency and banking activities, provisions in this Circular; or abuse their positions and powers for personal gain or other motives thereby infringing upon the legitimate rights and interests of agencies, organizations, and citizens shall be subject to administrative disciplinary action, criminal prosecution, or compensation for damages as prescribed by law depending on the severity of the violation.

Individuals obstructing, bribing, retaliating against bank inspectors shall also be subject to administrative disciplinary action or criminal prosecution as prescribed by law depending on the nature and severity of the violation.

CHAPTER III

IMPLEMENTING PROVISIONS

24. The Head of the State Bank of Vietnam's Inspection Department, Heads of Departments and Bureaus under the State Bank of Vietnam, Governors of provincial and municipal branches of the State Bank of Vietnam, Chairmen of the Board of Directors and General Managers (Directors) of credit institutions shall be responsible for implementing this Circular.

25. This Circular shall take effect fifteen days from the date of signature and shall replace Decision 85/NH-QĐ dated October 10, 1990 issued by the Governor of the State Bank of Vietnam on the Regulations on the Organization and Operation of the State Bank of Vietnam's Inspection Department, and Decision No. 17/NH-QĐ dated February 28, 1991 issued by the Governor of the State Bank of Vietnam on the Inspection System of the State Bank of Vietnam.

26. Any supplementation or amendment to this Circular shall be decided by the Governor of the State Bank of Vietnam./.