Circular No. 08/2015/TT-NHNN amending and supplementing certain articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011, issued by the Governor of the State Bank of Vietnam on the issuance of licenses and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations engaged in banking activities in Vietnam.

CIRCULAR

Amending and supplementing some articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011

of the Governor of the State Bank of Vietnam on the issuance of licenses and organization and operation

of commercial banks, foreign bank branches, representative offices

of foreign credit institutions, other foreign organizations engaged in banking activities in Vietnam

___________________________

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

No. 06/2013/UBTVQH13 dated March 18, 2013;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Inspectorate and Supervision Department,

The Governor of the State Bank of Vietnam issues this Circular amending and supplementing some articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011 on the issuance of Licenses and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, other foreign organizations engaged in banking activities in Vietnam.

Article 1. Amending and supplementing some articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011 on the issuance of Licenses and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, other foreign organizations engaged in banking activities in Vietnam:

1. Clause 4 of Article 13 shall be amended and supplemented as follows:

"4. In cases where the documents are copies that are not certified true copies issued from the original book, they must be presented together with the original for comparison; the person who compares them must sign to confirm the copy and bear responsibility for its accuracy compared to the original."

2. Point b of Clause 4 of Article 14 shall be amended and supplemented as follows:

"b) Copies of certificates proving professional qualifications."

3. Supplement Section 4 into Chapter II as follows:

"Section 4: PROVISIONS ON THE ISSUANCE OF LICENSES AND THE SUPPLEMENTATION OF ACTIVITIES INTO LICENSES

Article 18a. Principles for the issuance of licenses and the supplementation of activities into licenses The issuance of licenses and the supplementation of activities into licenses shall be carried out according to the following principles:

1. The State Bank of Vietnam will not issue licenses for activities that commercial banks and foreign bank branches are not permitted to carry out according to the laws at the time of issuance; simultaneously, adjust the name of the permitted activities to comply with the Law on Credit Institutions and Appendices 01a, 01b promulgated along with this Circular. The newly issued license will replace all previously issued licenses and approvals (which are integral parts of the license) granted by the State Bank of Vietnam to the commercial bank or foreign bank branch before the issuance date.

2. For foreign exchange trading and service provision activities; gold bullion trading activities; foreign exchange, currency, and other financial asset derivative product trading and service provision activities in domestic and international markets, the supplementation of activities into licenses shall be carried out according to specific regulations of the State Bank of Vietnam and other relevant laws.

3. For activities specified in Clause 21 of Article 4 of the Model License for the Establishment and Operation of Commercial Banks (Appendix 01a) and Clause 20 of Article 4 of the Model License for the Establishment of Foreign Bank Branches (Appendix 01b), commercial banks and foreign bank branches may implement these activities after obtaining approval from the State Bank of Vietnam; procedures, conditions, and documents for the supplementation of these activities into licenses shall be carried out according to specific regulations of the State Bank of Vietnam and other relevant laws.

4. In cases where commercial banks and foreign bank branches request to supplement activities into licenses while applying for a new license, the State Bank of Vietnam will consider issuing a new license including the supplementary activities requested based on the commercial bank or foreign bank branch fully complying with the requirements stipulated in Article 18c of this Circular.

Article 18b. Procedure for Requesting to Exchange License and Supplement Activities in the License

1. Commercial banks and foreign bank branches requiring the issuance of a new license or the supplementation of activities into licenses shall prepare documents in accordance with Article 18c of this Circular and send them through postal services or submit directly to the State Bank of Vietnam (through the Banking Inspection and Supervision Department).

2. Within 40 days from the date of receiving complete and valid documents from commercial banks and foreign bank branches, the State Bank of Vietnam will issue a new license or supplement activities into licenses or issue a new license including the supplementary activities requested for commercial banks and foreign bank branches. In case of rejection, the State Bank of Vietnam will provide a written response stating the reasons.

3. After being granted the exchanged license or supplemented activities in the license by the State Bank of Vietnam, commercial banks and foreign bank branches must:
a) Complete procedures with the business registration authority regarding changes in the license in accordance with the law;
b) Announce changes to the license on the State Bank of Vietnam's information channels and in three consecutive daily newspapers or online Vietnamese newspapers within seven working days from the date the State Bank of Vietnam issues the new license or supplements activities into the license;
c) Commercial banks must amend and supplement their Articles of Association to comply with the contents of the new or supplemented license and register with the State Bank of Vietnam in accordance with Clause 3 of Article 27 of this Circular.

Article 18c. Documents for Requesting to Exchange License and Supplement Activities in the License

1. For the case of amending the License:

a) A request for a new license signed by the legal representative of the commercial bank or foreign bank branch, specifying the activities to be conducted. For wholly foreign-owned banks, the request must include a commitment that these activities are those permitted for the owner or the foreign bank holding 50% of the charter capital of the wholly foreign-owned bank in the country where the owner or the foreign bank has its headquarters. For foreign bank branches, the request must include a commitment that these activities are those permitted for the parent bank in the home country.

b) A list of current licensed activities, other approvals from the State Bank of Vietnam along with copies of the current license and these approvals.

2. For the case of supplementing the content of the License:

a) An application for supplementing the scope of activities to the License signed by the legal representative of the commercial bank or foreign bank branch, which clearly states the proposed additional activities. For wholly foreign-owned banks, the application must include a commitment that these activities are those permitted for the owner or the foreign bank holding 50% of the charter capital of the wholly foreign-owned bank at the location where the owner or the foreign bank has its headquarters. For foreign bank branches, the application must include a commitment that these activities are those permitted for the parent bank in the home country.

b) A resolution of the Board of Directors (Board of Members) of the commercial bank agreeing to the application for supplementing the scope of activities to the License; a document from the parent bank signed by the legal representative agreeing to the application for supplementing the scope of activities to the License (for foreign bank branches).

c) In the case of applying for the addition of derivative interest rate activities and securities custody activities to the License, in addition to the documents specified in points a and b of this clause, the commercial bank or foreign bank branch must have internal procedures, including risk management measures appropriate to each proposed activity to be added to the License.

3. For cases simultaneously requesting to supplement activities in the license and exchange the license:

a) An application for supplementing the scope of activities to the License and for replacing the License signed by the legal representative of the commercial bank or foreign bank branch, containing the contents stipulated in point a of Clause 1 and point a of Clause 2 of this Article; b) The documents specified in point b of Clause 1 and points b and c of Clause 2 of this Article.

4. Article 36 shall be amended and supplemented as follows:

a) Point a Clause 1 is amended and supplemented as follows:

"a) The Appraisal Council shall be decided by the Governor of the State Bank of Vietnam, consisting of: The Governor or a Deputy Governor (authorized by the Governor) as Chairman, members being the heads of units specified in Clauses 2, 3, 4, 5, 6, 7, 8, and 10 of this Article;"

b) Points g and h are added to Clause 2 as follows:

"g) To act as the focal point for receiving, appraising, and submitting to the Governor of the State Bank of Vietnam the applications for replacing the License and supplementing the scope of activities to the License of commercial banks and foreign bank branches; h) To issue a document with the file seeking opinions from relevant units within the State Bank of Vietnam on the application for supplementing the scope of activities to the License for derivative interest rate activities and securities custody activities."

c) Clauses 10 and 11 are added to Article 36 as follows:

"10. Department of Foreign Exchange Management:"

a) Within thirty days from the date the Banking Inspection and Supervision Authority sends a letter requesting it, the Department of Foreign Exchange Management shall appraise the application for issuing the License and send a document to the Banking Inspection and Supervision Authority.

b) To provide comments on issues related to foreign exchange activities of commercial banks and foreign bank branches.

11. Within a maximum of ten days from the date of receipt of the Banking Inspection and Supervision Authority's document regarding the application for supplementing the scope of activities to the License for derivative interest rate activities and securities custody activities, relevant units within the State Bank of Vietnam must provide specific opinions in writing and clearly state their agreement or disagreement with the application of the commercial bank or foreign bank branch.

Article 2. Replacing Appendix 01 issued together with Circular No. 40/2011/TT-NHNN dated December 15, 2011, which provides for the issuance of Licenses and the organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations engaged in banking activities in Vietnam, with Appendix 01 issued together with this Circular, including: Appendix 01a (Model License for Establishment and Operation of Commercial Banks), Appendix 01b (Model License for Establishment of Foreign Bank Branches), Appendix 01c (Model License for Establishment of Representative Offices).

Article 3. Effectiveness

1. This Circular takes effect from August 13, 2015.

2. From the date this Circular takes effect, the following provisions cease to be effective: Point 23.3 Clause 23, Clause 24 Section X of Circular No. 03/2007/TT-NHNN dated June 5, 2007, guiding the implementation of certain Articles of Decree No. 22/2006/NĐ-CP dated February 28, 2006 of the Government on the organization and operation of foreign bank branches, joint venture banks, wholly foreign-owned banks, and representative offices of foreign credit institutions in Vietnam.

Article 4. Organization of Implementation

The Director of the Office, the Head of the Banking Inspection and Supervision Authority, the Heads of units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam branches in provinces and cities, the Chairmen of the Boards of Directors, the Chairmen of the Boards of Members, the General Managers (Directors) of commercial banks, the General Managers (Directors) of foreign bank branches, and the Heads of representative offices of foreign credit institutions and other foreign organizations engaged in banking activities are responsible for organizing the implementation of this Circular.