Directive No. 05/2001/CT-NHNN on lending outside the home territory of Vietnamese credit institutions

DIRECTIVE

OF THE GOVERNOR OF THE STATE BANK NO. 05/2001/CT-NHNN
DATE JUNE 20, 2001 ON LENDING
OUTSIDE HEADQUARTERS AREA BY VIETNAMESE CREDIT INSTITUTIONS

Recently, branches of the State Bank of Vietnam in provinces and cities and some joint-stock commercial banks have reported and proposed to the Governor of the State Bank regarding the establishment of transaction points or credit teams operating outside the headquarters and branch areas of credit institutions to provide loans for production, business, living, and social needs. Regarding this issue, the Governor of the State Bank requests that departments and units under the State Bank of Vietnam, Chairmen of the Board of Directors, General Directors (Directors) of credit institutions, and Directors of State Bank branches in provinces and cities implement the following contents:

1. Credit institutions establishing transaction points or credit teams operating in economic and residential areas with a need for bank loans to directly access those who require loans for better service of production, business, living, and social needs are in line with the policy of the State and the industry. Therefore, the Governor of the State Bank agrees to allow Vietnamese credit institutions, including state-owned credit institutions and joint-stock credit institutions (excluding credit institutions currently under special control and special supervision and basic credit funds) to establish transaction points or credit teams operating outside their headquarters and branch areas to provide loans to serve customers.

2. To be allowed to establish transaction points or credit teams outside the headquarters and branch areas, credit institutions must ensure compliance with the following requirements:

2.1. On the content of activities:

2.1.1. Studying, understanding, and introducing clients;

2.1.2. Receiving loan application files from clients with borrowing needs to transfer them to the head office or commercial bank branch for appraisal, review, and approval according to authority; 2.1.3. Disbursing funds according to the loan progress and credit contracts signed by the trading department or bank branch with clients;

2.1.4. Collecting debts according to credit contracts signed by the trading department or bank branch with clients.

2.2. Transaction points or credit teams can only carry out one or several of the above activities based on authorization from the General Director or Branch Director of the credit institution; they cannot perform other transactions.

2.3. Credit institutions must register the establishment of transaction points (or credit teams) at the State Bank branch in the province or city where the transaction point (or credit team) will be established 15 days before formal operation and report 10 days in advance when ceasing operations. Credit institutions do not need to apply for permission to establish transaction points (or credit teams) from the Central State Bank or local State Bank branch where the transaction point (or credit team) will be established.

2.4. Monthly reports must be submitted to the State Bank branch where the transaction point (or credit team) is located on the operational status of the transaction point (or credit team).

2.5. The Board of Directors of credit institutions shall issue internal regulations on organization, operation, security assurance, and decide on the establishment of transaction points (or credit teams) outside the area in accordance with the content of this directive.

3. The Director of the State Bank branch in the province or city where the credit institution's transaction point (or credit team) is located is responsible for managing and inspecting all activities of the transaction point (or credit team); simultaneously coordinating with the State Bank branch in the province or city where the headquarters or branch of the credit institution with the transaction point (or credit team) is located to handle arising issues to create favorable conditions for the credit institution's transaction point (or credit team) to operate effectively and safely.

4. Heads of relevant units under the State Bank; Directors of State Bank branches in provinces and cities; Chairmen of the Board of Directors and General Directors of credit institutions specified in Point 1 are responsible for strictly implementing this directive. Any difficulties during implementation must be promptly reflected and reported in writing for the Governor of the State Bank to consider and resolve.

4. The heads of relevant units under the State Bank; the Directors of provincial and municipal branches of the State Bank; the Chairmen of the Boards of Directors and General Managers of credit organizations specified in point 1 shall strictly implement this Directive. Any difficulties encountered during implementation must be promptly reflected and reported in writing for the Governor of the State Bank to consider and resolve.