Circular No. 05/2018/TT-NHNN on the dossier, procedures, and formalities for approving changes and lists of proposed personnel for credit unions that are financial cooperative organizations.

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of Banking Inspection and Supervision;

The Governor of the State Bank of Vietnam shall issue a Circular to provide provisions on the dossier, procedure, and process for approving changes, the list of candidates for election and appointment of personnel of credit organizations that are cooperatives.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates:

1. Dossier, procedure, and process for approving changes of credit organizations that are cooperatives, including:

a) Name and location of the main office;

b) Authorized capital amount;

c) Content, scope, and duration of operation;

d) Suspension of business operations for five working days or more, except in cases of suspension due to force majeure events.

2. Dossier, procedure, and process for approving the list of candidates for election and appointment of personnel serving as Chairperson and other members of the Board of Directors, Head and other members of the Supervisory Board, dedicated supervisors, General Director, Director (hereinafter referred to as the list of proposed personnel) of credit organizations that are cooperatives.

3. The transfer of contributed capital shares of members of people's credit funds.

Article 2. Applicability

1. Credit organizations that are cooperatives include:

a) Cooperative banks;

b) People's Credit Funds.

2. Organizations and individuals related to the approval of changes, proposed list of personnel of credit organizations that are cooperatives as stipulated in this Circular.

Article 3. Competence and Approval Documents

1. The Governor of the State Bank of Vietnam shall approve changes and the list of proposed personnel of cooperative banks according to the provisions of Clause 1 and Clause 2, Article 1 of this Circular.

2. The Governor of the State Bank of Vietnam shall delegate the Governor of the State Bank branch in the province or centrally-run city where the headquarters of the People's Credit Fund is located to approve or not approve changes and the list of proposed personnel of the People's Credit Fund within its jurisdiction according to the provisions of Clause 1 and Clause 2, Article 1 of this Circular.

a) Decision to amend and supplement the License for Establishment and Operation (hereinafter referred to as the License) of credit organizations that are cooperatives for cases stipulated in Points a, b, c Clause 1 Article 1 of this Circular;

a) Decision to amend and supplement the Business License (hereinafter referred to as the License) of credit organizations that are cooperatives in cases provided for in points a, b, c, Clause 1, Article 1 of this Circular;

1. The document of credit organizations that are cooperatives requesting the State Bank of Vietnam or the State Bank branch in the province or centrally governed city (hereinafter collectively referred to as the State Bank) to approve changes,

Article 4. Principles for the preparation and submission of documents

1. A document from credit organizations that are cooperatives requesting the State Bank of Vietnam or the State Bank branch in the province or centrally-run city (hereinafter collectively referred to as the State Bank) to approve changes and the list of proposed personnel signed by the legal representative of the credit organization that is a cooperative. In case of signature by an authorized representative, the dossier must include an authorization letter complying with the relevant laws.

2. The dossier shall be prepared in one set in Vietnamese.

3. In case the documents in the dossier are copies that are not certified true copies or issued from the original book, when submitting the dossier, the original must be presented for comparison, and the person comparing must sign confirmation on the copy and bear responsibility for the accuracy of the copy compared to the original.

4. Credit organizations that are cooperatives shall submit the dossier requesting approval of changes and the list of proposed personnel through postal service or direct submission as follows:

a) Cooperative banks shall submit to the State Bank of Vietnam;

b) People's Credit Funds shall submit to the State Bank branch in the province or centrally governed city (hereinafter referred to as the State Bank branch) where their headquarters is located.

Chapter II

SPECIFIC PROVISIONS

Section 1

Changes must be approved

Article 5. Change of Name

1. Application documents include:

a) A document requesting approval of change of name, including at least the following contents: name specified in the License, proposed name change ensuring compliance with relevant laws on naming, reasons for the change;

b) The decision of the Members' Assembly approving the change of name.

2. Procedure for implementing the approval process:

a) Credit organizations that are cooperatives shall prepare the dossier in accordance with the provisions of Clause 1 of this Article and submit it to the State Bank;

b) Within 15 days from the date of receiving a complete and valid dossier, the State Bank shall issue a decision to amend and supplement the License regarding the name of the credit organization that is a cooperative; in case of rejection, the State Bank shall reply in writing and specify the reasons.

Article 6. Change of Head Office Location

1. Application documents include:

(i) The location specified in the License;

(ii) The proposed new location, clearly identifying: the building name (for rented office buildings), house number, street name (alley) or commune, ward, town, district, city, centrally-run city. The proposed new location must meet the following conditions:

(ii) Proposed location for change, clearly identifying: building name (for rented office buildings), house number, street (alley) or village, ward, town, district, centrally-run city, provincial capital. The proposed location for change must meet the following conditions:

Located within the operational area specified in the License of the credit organization established as a cooperative;

- Located within the operational area specified in the License of the credit organization that is a cooperative;

(iii) Reasons for the change;

(iii) Reason for the change;

b) The decision

  b) Resolution of the Members' Congress approving the change of the main office location;

c) Documents proving that the credit cooperative has the right to use or legally own the headquarters at the new location.

2. Procedure for implementing the approval process:

a) Credit organizations that are cooperatives shall prepare the dossier in accordance with the provisions of Clause 1 of this Article and submit it to the State Bank. In case the dossier is incomplete, within three working days from the date of receipt of the dossier, the State Bank shall issue a written request for the credit organization that is a cooperative to supplement the dossier;

b) Within 20 days from the date of receiving a complete and valid dossier, the State Bank shall issue a decision to amend and supplement the License regarding the main office location of the credit organization that is a cooperative; in case of rejection, the State Bank shall reply in writing and specify the reasons.

3. Within twelve months from the date the State Bank issues a decision to amend and supplement the License, the credit organization that is a cooperative must operate at the new location. Beyond this period, if the credit organization that is a cooperative does not operate at the new location, the decision to amend and supplement the License becomes invalid.

4. Fifteen days before operating at the new location, the credit organization that is a cooperative shall report the expected start date of operation at the new location in writing to the State Bank branch where the main office is located. The credit organization that is a cooperative may not operate at the new location if the main office does not meet the requirements for the proposed location change as stipulated in point a, Clause 1 of this Article.

5. In case of address change without resulting in a change of the main office location, the credit organization that is a cooperative shall send the State Bank a notification of the change of the address of the main office and request to amend and supplement the License regarding the address of the main office of the credit organization that is a cooperative.

Within ten days from the date of receipt of the notification from the credit organization that is a cooperative, the State Bank shall issue a decision to amend and supplement the License regarding the address of the main office of the credit organization that is a cooperative.

Article 7. Changing the Content and Scope of Operations

1. Application documents include:

a) The document requesting approval to change the content and scope of operations of credit cooperatives must include at least the following contents:

(i) The proposed content and scope of operations for approval;

(ii) Reasons and necessity for changing the content and scope of operations;

b) The decision of the General Assembly approving the change in the content and scope of operations;

c) Implementation plan for the scope and content of operations, at minimum including the following contents: description of the content, implementation procedures, analysis of effectiveness and risk prevention measures, control measures, and implementation schedule;

d) Draft internal regulations on the process for implementing business activities to ensure management and risk control.

2. Procedure for implementing the approval process:

a) Credit organizations that are cooperatives shall prepare the dossier in accordance with the provisions of Clause 1 of this Article and submit it to the State Bank. In case the dossier is incomplete, within three working days from the date of receipt of the dossier, the State Bank shall issue a written request for the credit organization that is a cooperative to supplement the dossier;

b) Within thirty days from the date of receiving a complete and valid dossier, the State Bank shall issue a decision to amend and supplement the License regarding the scope and content of operations of the credit organization that is a cooperative; in case of rejection, the State Bank shall reply in writing and specify the reasons.

Article 8. Changing the Term of Operation

1. Application documents include:

a) The document requesting approval to change the operating period of credit cooperatives must include at least the following contents:

(i) The operating period specified in the Business License;

(ii) The proposed changed operating period;

(iii) Reasons for changing the operating period;

b) An overview report on organizational structure and operations, including:

(i) Assessment of the results of operations in the last five years, including key performance indicators related to capital structure, capital utilization, and business results; organizational structure and activities of the management board, executive board, internal audit, and internal control system;

(ii) Objectives and business plans for the next three years;

c) The decision of the General Assembly regarding the change in the operating period;

d) In the case of changing to shorten the operating period, the credit cooperative shall submit the documents specified in points a, b, and c of Clause 1 of this Article and evidence proving the necessity of changing to shorten the operating period.

2. Procedure for implementing the approval process:

a) The credit cooperative shall prepare the documents in accordance with Clause 1 of this Article and send them to the State Bank. If there is a need to extend the operating period, the credit cooperative must submit the documents at least 180 days before the end of the operating period. If the documents are incomplete, within three working days from the date of receipt of the documents, the State Bank shall issue a document requesting the credit cooperative to supplement the documents.

b) Within thirty days from the date of receiving complete and valid documents, the State Bank shall issue a decision to amend and supplement the License regarding the operating period of the credit cooperative; if it rejects, the State Bank shall reply in writing and specify the reasons.

Article 9. Changing the Registered Capital

1. Application documents include:

a) The document requesting approval to change the registered capital of credit cooperatives must include at least the following contents:

(i) The level of charter capital specified in the License;

(ii) Proposed changed registered capital;

(iii) Reasons and necessity for changing the registered capital;

(iv) Sources for increasing the registered capital (in the case of increasing the level of registered capital).

(v) Plan and expected time to complete the reduction of registered capital (in the case of reducing the level of registered capital). The credit cooperative may only implement the plan to reduce the registered capital after obtaining approval from the State Bank.

b) Decision of the Members' Congress approving the change in the level of registered capital. In the case of requesting approval to reduce the level of registered capital, the proposed reduced level of registered capital must comply with the legal provisions on the minimum capital requirement and have measures ensuring the prescribed safety ratios in the operation of the credit cooperative.

c) Documents proving the contribution of members (receipts or payment certificates or member contribution books) certified by the credit cooperative for the case where the credit cooperative requests approval to increase the level of registered capital.

2. Procedure for implementing the approval process:

a) Credit organizations that are cooperatives shall prepare the dossier in accordance with the provisions of Clause 1 of this Article and submit it to the State Bank. In case the dossier is incomplete, within three working days from the date of receipt of the dossier, the State Bank shall issue a written request for the credit organization that is a cooperative to supplement the dossier;

b) Within twenty days from the date of receiving complete and valid documents, the State Bank shall issue a decision to amend and supplement the License regarding the level of registered capital of the credit cooperative (in the case of increasing the level of registered capital) or issue a document approving the reduction of the level of registered capital of the credit cooperative (in the case of reducing the level of registered capital); if it rejects, the State Bank shall reply in writing and specify the reasons.

3. Within thirty days from the date of receiving the approval document from the State Bank, the credit cooperative must implement the reduction of registered capital and notify the State Bank that the reduction of registered capital has been completed. Beyond this deadline, if the credit cooperative does not implement the reduction of registered capital, the approval document from the State Bank will become invalid.

Within ten days from the date of receiving the notification of completion of the reduction of registered capital from the credit cooperative, the State Bank shall issue a decision to amend and supplement the License regarding the level of registered capital of the credit cooperative.

Article 10. Suspension of business operations for five working days or more, except in cases where suspension is due to force majeure events.

1. Application documents include:

a) The document of the credit cooperative proposing approval for the suspension of business operations, which must include at least the following contents:

(i) The number of days and time period expected for the suspension of business operations;

(ii) The reasons for the suspension of business operations and evidence proving the necessity of such suspension;

b) The decision of the Members' Congress regarding the suspension of business operations;

c) Plan to handle risks arising from the temporary cessation of business operations, including anticipated measures to minimize the impact of the temporary cessation of business operations on the rights and interests of customers.

2. Procedure for implementing the approval process:

a) At least sixty days before the planned date of ceasing business operations, the credit cooperative shall prepare the documents in accordance with Clause 1 of this Article and send them to the State Bank. If the documents are incomplete, within three working days from the date of receipt of the documents, the State Bank shall issue a document requesting the credit cooperative to supplement the documents.

b) Within fifteen days from the date of receiving a complete and valid dossier, the State Bank shall examine and approve the proposal for the suspension of business operations submitted by the credit cooperative.

3. After receiving the approval document from the State Bank regarding the temporary cessation of business operations, at the latest seven working days before the planned date of ceasing business operations, the credit cooperative shall be responsible for posting a notice about the time and reason for the temporary cessation of business operations at its headquarters, transaction locations, and inform the People's Committee of the commune, ward, town (People's Committee of the commune) where the headquarters is located (for people's credit funds).

Section 2

Approval of the list of proposed personnel

Article 11. Dossier for requesting approval of the proposed personnel list

1. The document of the credit cooperative proposing the State Bank to approve the proposed personnel list, which must include at least the following contents:

a) Reasons for electing or appointing personnel;

b) The proposed personnel list including full name, current position (if applicable), and the position to be elected or appointed at the credit cooperative;

c) Structure of the Board of Directors and Supervisory Board currently in place and after the election and appointment. This includes specifying the number of Board of Directors members, the number of Supervisory Board members, the number of specialized members of the Board of Directors and Supervisory Board.

d) Commitment that the proposed elected and appointed personnel meet the requirements stipulated in the Law on Credit Institutions, relevant laws, and the Charter of the credit cooperative.

2. The resolution of the Board of Management approving the proposed personnel list of the credit cooperative.

3. Personal resumes of the proposed personnel to be elected or appointed according to Appendix No. 01 issued together with this Circular.

4. Criminal record certificate of the proposed personnel to be elected or appointed, which must include complete information about criminal records (including both expunged and unexpunged records);

The criminal record certificate must be issued by the competent authority before the credit cooperative organization submits the dossier for approval of the proposed personnel list, at most six months prior to the submission;

5. Declaration of related parties of the proposed personnel to be elected or appointed according to Appendix No. 02 issued together with this Circular.

6. Certificates and diplomas of the proposed elected and appointed personnel proving compliance with the requirements set by the State Bank for cooperative banks and people's credit funds. In cases where the certificates and diplomas are issued by educational institutions abroad, they must be recognized by the competent authority of Vietnam in accordance with relevant laws.

Article 12. Procedure for Implementing Approval of the Proposed Personnel List

1. At least thirty days before the planned date of convening the Members' Congress (General Meeting of Members) or the date when the Board of Directors plans to appoint (including hiring) the General Director (Director), the credit cooperative shall prepare the documents in accordance with Article 11 of this Circular and send them to the State Bank requesting approval of the list of proposed personnel. If the documents are incomplete, within three working days from the date of receipt of the documents, the State Bank shall issue a document requesting the credit cooperative to supplement and complete the documents.

2. Within ten days from the date of receiving complete and valid documents, the State Bank shall issue an approval document for the proposed list of the credit cooperative; if it rejects, the State Bank shall reply in writing and specify the reasons.

Section 3

Transfer of share contributions

Article 13. Transfer of Contributed Capital Shares of Members of People's Credit Funds

1. The transfer of share contributions of members of people's credit funds must comply with the regulations of the State Bank on people's credit funds.

2. The people's credit fund must report to the State Bank branch where its headquarters is located about the transfer of share contributions for members holding a shareholding ratio of 5% to 10% of the registered capital of the people's credit fund within ten days from the date of completing the transfer.

Chapter III

RESPONSIBILITIES OF RELATED UNITS

Article 14. Responsibilities of the Banking Inspection and Supervision Authority

1. Review and submit to the Governor of the State Bank of Vietnam for approval decisions on the contents of changes and the proposed list of personnel of the cooperative bank as stipulated in Clauses 1 and 2, Article 1 of this Circular.

2. Submit to the Governor of the State Bank of Vietnam for issuance of a document seeking opinions from the People's Committee of the province or centrally governed city where the cooperative bank intends to relocate regarding the change of the main office location if the new location is outside the current province or centrally governed city where the cooperative bank's main office is currently located.

3. Seek opinions of the State Bank of Vietnam branch regarding the extension of the operating period of the cooperative bank ensuring the time specified in Article 8 of this Circular.

4. Seek opinions from the Department of Organization and Cadres of the State Bank of Vietnam branch on the proposed list of personnel to be elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, and General Director of the cooperative bank to ensure compliance with the timeframes set out in Article 12 of this Circular.

5. Review the notification of the cooperative bank as specified in Point a, Clause 3, Article 16 of this Circular. In case of discovering errors, the Banking Inspection and Supervision Authority shall require the cooperative bank to rectify them promptly or propose measures to the Governor of the State Bank of Vietnam for handling if beyond their authority.

Article 15. Responsibilities of the State Bank of Vietnam Branch

1. Review and approve the contents of changes and the proposed personnel list of people's credit funds as stipulated in Clause 1 and Clause 2 of Article 1 of this Circular.

2. Seek opinions from the People's Committee of the commune where the credit union intends to relocate regarding the change of the main office location if the new location is outside the current commune where the credit union's main office is currently located, ensuring compliance with the timeframe set out in Article 6 of this Circular.

3. Check whether the main office meets all conditions upon receiving the report from the credit union cooperative organization regarding the expected date of commencement of operations at the new location as stipulated in Clause 4, Article 6 of this Circular.

4. Seek opinions from the People's Committee of the commune where the credit union's main office is located, the Banking Inspection and Supervision Bureau (for provinces or centrally governed cities with such bureaus), and the cooperative bank (if necessary) on the proposed list of personnel to be elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, and Director of the credit union, ensuring compliance with the timeframe set out in Article 12 of this Circular.

5. Review the notification of the credit union as specified in Point a, Clause 3, Article 16 of this Circular. In case of discovering errors, the State Bank shall require the credit union to rectify them promptly or take measures within its authority.

6. Participate in providing opinions at the request of the Banking Inspection and Supervision Authority on other related matters within its assigned functions and tasks.

Article 16. Responsibilities of credit organizations that are cooperatives

1. Shall be responsible under the law for the accuracy and completeness of the information provided in the application dossier.

2. Implement the nomination and proposal of candidate lists as follows:

a) The Board of Directors of the cooperative credit institution has the responsibility to notify members about the nomination and recommendation process for candidates for the positions of Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board according to the law and the Charter of the cooperative credit institution. The notification must include the following information:

(i) The number of members expected to be elected to the Board of Directors and the Supervisory Board, including the expected number of independent members of the Board of Directors and the number of full-time members of the Supervisory Board (if applicable);

(ii) Standards and conditions that must be met for each position;

b) Based on the nomination or recommendation lists provided by members for the positions specified in Point a of this Clause, the Board of Directors will assess the standards and conditions; establish and approve the proposed list of personnel. If members do not nominate or recommend enough candidates for the positions of Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, or if the candidates do not meet the required standards and conditions, the Board of Directors and the Supervisory Board have the right to nominate additional candidates who meet the required standards and conditions for these positions.

c) In cases where the nominated candidate or the proposed candidate does not meet the required standards and conditions, the Board of Directors shall be responsible for informing the reasons to the nominated candidate or the member proposing the personnel;

3. Implement the notification of contents related to the approval of the proposed personnel list as follows:

a) Notify the State Bank in writing of any changes related to the qualifications and conditions of the proposed personnel to be elected or appointed that arise during the State Bank's review of the application for approval of the proposed list of personnel or within the period from the date the State Bank issues the approval decision until the personnel are elected or appointed.

b) Within ten working days from the date of election or appointment of the positions of Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, dedicated supervisors, and General Director (Director), the cooperative credit institution must send a written notification to the State Bank listing those elected or appointed, as detailed in Appendix No. 03 issued together with this Circular, specifically:

 (i) Cooperative banks shall notify the Banking Inspection and Supervision Authority and the State Bank branch.

(ii) Credit unions shall notify the State Bank branch and the Banking Inspection and Supervision Bureau (in provinces or centrally governed cities with such bureaus).

4. After the State Bank of Vietnam issues a decision to amend or supplement the License, credit organizations that are cooperatives must:

a) Amend and supplement the changed contents in the Charter;

b) Register with competent state authorities regarding the changed contents in accordance with the law;

c) Announce information about the changes within seven working days from the date the State Bank issues a decision to amend or supplement the License as follows:

(i) Cooperative banks shall announce on the State Bank's communication channels and one daily newspaper for three consecutive issues or on one Vietnamese online newspaper for seven consecutive days;

(ii) Credit unions shall post the information at the headquarters of the People's Committee of the commune and announce it on the commune radio station (if available) within seven consecutive days in the area of operation.

Chapter IV

IMPLEMENTING PROVISIONS

Article 17. Transitional Provisions

Cooperative credit institutions that have submitted complete and valid applications for approval of changes in one or more of the contents specified in Clause 1, Article 1 of this Circular or the proposed list of personnel as specified in Clause 2, Article 1 of this Circular before the effective date of this Circular and which comply with the laws in effect at that time may continue to proceed according to the current laws or amend their applications to comply with the provisions of this Circular.

Article 18. Effective Date

1. This Circular takes effect from June 1, 2018.

2. From the date this Circular takes effect, the following provisions shall cease to be effective:

a) Decision No. 05/2007/QĐ-NHNN dated January 30, 2007 of the Governor of the State Bank of Vietnam promulgating regulations on the procedures and formalities for implementing changes to people's credit funds that must be approved by the State Bank;

b) Decision No. 35/2008/QĐ-NHNN dated December 16, 2008 of the Governor of the State Bank amending and supplementing certain provisions of the regulations on the procedures and formalities for implementing changes to people's credit funds that must be approved by the State Bank issued together with Decision No. 05/2007/QĐ-NHNN dated January 30, 2007 of the Governor of the State Bank;

The Chief of the Office, the Chief Inspector and Supervisor of Banks, Heads of units under the State Bank of Vietnam, Governors of State Bank of Vietnam branches, Chairmen and members of the Board of Members, Heads and members of the Supervisory Board, General Directors (Directors) of credit organizations that are cooperatives are responsible for implementing this Circular./.

Sample Curriculum Vitae

Article 19. Implementation

The Heads of the Office, the Inspectorate and Supervision Department, the Heads of units under the State Bank of Vietnam, the Governors of State Bank branches, the Chairmen and members of the Board of Members, the Heads and members of the Supervisory Board, and the General Directors (Directors) of credit organizations that are cooperatives are responsible for implementing this Circular. /./