Circular No. 08/2019/TT-NHNN amending and supplementing certain Articles of Circular No. 03/2015/TT-NHNN dated March 20, 2015, issued by the Governor of the State Bank of Vietnam guiding the implementation of certain provisions of Decree No. 26/2014/NĐ-CP dated April 7, 2014, of the Government on the organization and operation of banking inspection and supervision.

CIRCULAR

Amending and supplementing certain articles of Circular No. 03/2015/TT-NHNN

dated March 20, 2015 of the Governor of the State Bank of Vietnam

guiding the implementation of certain provisions of Decree No. 26/2014/NĐ-CP

dated April 7, 2014 of the Government on the organization and operation of the Inspection and Supervision of the Banking Industry,

supervision of the banking industry

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

Pursuant to the Law on Inspection dated November 15, 2010;

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

Pursuant to Decree No. 26/2014/NĐ-CP dated April 7, 2014 of the Government on the organization and operation of the Inspection and Supervision of the Banking Industry and Decree No. 43/2019/NĐ-CP dated May 17, 2019 of the Government amending and supplementing certain provisions of Decree No. 26/2014/NĐ-CP dated April 7, 2014 of the Government on the organization and operation of the Inspection and Supervision of the Banking Industry;

At the proposal of the Chief Inspector and Supervisor of the Banking Industry;

The Governor of the State Bank of Vietnam promulgates this Circular amending and supplementing certain articles of Circular No. 03/2015/TT-NHNN dated March 20, 2015 of the Governor of the State Bank of Vietnam guiding the implementation of certain provisions of Decree No. 26/2014/NĐ-CP dated April 7, 2014 of the Government on the organization and operation of the Inspection and Supervision of the Banking Industry (hereinafter referred to as Circular No. 03/2015/TT-NHNN).

Article 1. Amending and supplementing certain articles of Circular No. 03/2015/TT-NHNN

1. Article 4 is amended and supplemented as follows:

Article 4. Allocation of inspection responsibilities for banking inspection objects
1. The Inspection and Supervision Agency of the Banking Industry shall be responsible for inspecting the following banking inspection objects in accordance with the law:
a) Agencies, organizations, and individuals under the management of the State Bank of Vietnam, except for those managed by the State Bank branch as assigned by the Governor of the State Bank of Vietnam;
b) Commercial banks wholly owned by the state;
c) Policy banks;
d) Cooperative banks;
đ) Joint venture banks;
e) Foreign-owned banks;
g) Some foreign bank branches as assigned by the Governor of the State Bank of Vietnam;
h) Joint-stock commercial banks;
i) Non-bank credit institutions;
k) Microfinance organizations;
l) Some microfinance programs/projects as assigned by the Governor of the State Bank of Vietnam;
m) Credit information service organizations;
n) Asset Management Companies of Vietnamese Credit Institutions;
o) Deposit Insurance Corporation of Vietnam;
p) National Currency Printing Factory;
q) Vietnam National Payment Corporation;
r) Subsidiaries of credit institutions specified in Points b, d, đ, e, h, i of this Clause that are not credit institutions but fall within the inspection responsibility of the State Bank of Vietnam, except for those falling within the inspection responsibility of the Inspection and Supervision Branch of the State Bank of Vietnam;
s) Banking inspection objects falling within the inspection responsibility of the Inspection and Supervision Branch of the State Bank of Vietnam when re-inspection is required or deemed necessary and upon the directive of the Governor of the State Bank of Vietnam;
t) Other objects when assigned by the Governor of the State Bank of Vietnam.
2. The Inspection and Supervision Branch of the Banking Industry shall be responsible for inspecting the following banking inspection objects in accordance with the law:
a) Agencies, organizations, and individuals under the management of the State Bank branch;
b) Foreign bank branches with headquarters located in the province/city where the State Bank branch is headquartered (hereinafter referred to as the province/city), except for those specified in Point g of Clause 1 of this Article;
c) Subordinate units of banking inspection objects under the inspection responsibility of the Inspection and Supervision Agency of the Banking Industry specified in Clause 1 of this Article (except for those specified in Points p, q of Clause 1 of this Article) and subordinate units of other State Bank branches located in the province/city;
d) People's Credit Cooperatives with headquarters located in the province/city;
đ) Microfinance programs/projects in the province/city, except for those specified in Point l of Clause 1 of this Article;
e) Representative offices of foreign credit institutions and other foreign organizations engaged in banking activities with headquarters located in the province/city;
g) Organizations engaged in foreign exchange transactions, gold trading, and non-bank payment service providers located in the province/city, except for those specified in Point q of Clause 1 of this Article;
h) Other agencies, organizations, and individuals in the province/city who have the obligation to comply with laws in areas under the management of the State Bank;
i) Reporting entities under the management responsibility of the State Bank in the province/city according to the law on anti-money laundering, except for those specified in Points b, c, d, đ, e, g, h of this Clause;
k) Other objects when assigned by the Governor of the State Bank.

3. The Inspection and Supervision Branch of the Banking Industry shall conduct inspections on banking inspection objects under the inspection responsibility of another Inspection and Supervision Branch of the Banking Industry according to the directive of the Governor of the State Bank.

2. Article 5 is amended and supplemented as follows:

Article 5. Allocation of supervision responsibilities for banking supervision objects
1. The Inspection and Supervision Agency of the Banking Industry shall be responsible for micro-prudential supervision in accordance with the law for the following banking supervision objects:
a) Commercial banks wholly owned by the state;
b) Cooperative banks;
c) Joint venture banks;
d) Foreign-owned banks;
đ) Foreign bank branches specified in Point g of Clause 1 of this Article;
e) Joint-stock commercial banks;
g) Non-bank credit institutions;
h) Microfinance organizations;
i) Other entities when assigned by the Governor of the State Bank of Vietnam.
2. The State Bank of Vietnam branch shall be responsible for supervising micro-prudential safety in accordance with the provisions of the law for the following supervised banking entities:
a) Foreign bank branches with headquarters located in the province/city, except for entities specified in Point đ Clause 1 of this Article;
b) Subsidiaries of supervised entities under the responsibility of the Banking Inspection and Supervision Authority as stipulated in Clause 1 of this Article, whose headquarters are located in the province/city, of other State Bank of Vietnam branches;
c) People's Credit Funds with headquarters located in the province/city;
d) Other entities when assigned by the Governor of the State Bank of Vietnam.
3. The Banking Inspection and Supervision Authority shall carry out macro-prudential supervision over the entire system of credit institutions and foreign bank branches.
4. The Banking Inspection and Supervision Authority shall supervise the following entities in accordance with the provisions of the law:
a) Policy banks;
b) Asset Management Companies of Credit Institutions of Vietnam;
c) Vietnam Deposit Insurance Corporation;
d) Credit Information Service Organizations;
đ) Subsidiaries of credit institutions specified in Points a, b, c, d, e, g Clause 1 of this Article that are not credit institutions but fall within the supervisory responsibility of the State Bank of Vietnam, excluding entities under the supervisory responsibility of the State Bank of Vietnam branch;
e) Other entities when assigned by the Governor of the State Bank of Vietnam.
5. The State Bank of Vietnam branch shall supervise the following entities in accordance with the provisions of the law:
a) Subsidiaries of supervised entities under the responsibility of the Banking Inspection and Supervision Authority as stipulated in Clause 4 of this Article, whose subsidiaries are located in the province/city;

b) Other entities when assigned by the Governor of the State Bank of Vietnam."

   3. Point a, Point b Clause 1 Article 6 shall be amended and supplemented as follows:

"a) The Head of the Banking Inspection and Supervision Authority requests independent audit to be conducted on banking inspection objects and banking supervision objects as prescribed in Clause 1 Article 4, Clause 1 and Clause 4 Article 5 of this Circular;

b) The Head of the State Bank of Vietnam branch's Banking Inspection and Supervision Authority requests independent audit to be conducted on banking inspection objects and banking supervision objects as prescribed in Clause 2, Clause 3 Article 4, Clause 2 and Clause 5 Article 5 of this Circular."

   4. Point c Clause 1 Article 9 shall be amended and supplemented as follows:

"c) Regarding experience: Having participated in at least two inspections or at least one inspection (if serving as the head of the inspection team) and being evaluated by the head of the inspection team or the person issuing the inspection decision (if serving as the head of the inspection team) as having fulfilled duties and responsibilities at a satisfactory level or higher (this standard applies to the rank of inspector and senior inspector)."

   5. Article 10 shall be amended and supplemented as follows:

"Article 10. Information and Reporting System
1. The Banking Inspection and Supervision Authority shall be responsible for compiling and reporting to the Governor of the State Bank of Vietnam, the General Inspector of the Government, relevant agencies, organizations, and authorized individuals about the work of inspection, supervision, handling complaints and reports, receiving citizens, preventing corruption and crime, money laundering, and terrorist financing activities of the State Bank of Vietnam in accordance with the law and the requirements of the competent authority; compiling and reporting to the Governor of the State Bank of Vietnam on the performance of functions and tasks and all aspects of the work of the Banking Inspection and Supervision Authority.

2. The State Bank of Vietnam branch's Inspection and Supervision Authority shall compile and report to the Director of the State Bank of Vietnam branch to report to the Head of the Banking Inspection and Supervision Authority on all aspects of the work of the State Bank of Vietnam branch's Inspection and Supervision Authority.

3. Representative offices of foreign credit institutions; foreign organizations engaged in banking activities; organizations engaged in foreign exchange transactions, gold trading; non-bank payment service providers with headquarters located in the province/city shall be responsible for timely, fully, and accurately providing information, documents, and reports periodically or as required by the State Bank of Vietnam branch's Inspection and Supervision Authority in accordance with the regulations of the State Bank of Vietnam or the requirements of the Banking Inspection and Supervision Authority."

   6. Article 11 shall be amended and supplemented as follows:

"Article 11. Relationship between the Banking Inspection and Supervision Authority and the State Bank of Vietnam Branch
1. The relationship between the Banking Inspection and Supervision Authority and the State Bank of Vietnam Branch (including the State Bank of Vietnam Branch's Inspection and Supervision Authority):

a) The Banking Inspection and Supervision Authority shall take the lead in developing and implementing the annual inspection plan of the Banking Inspection and Supervision Authority; guiding, monitoring, urging, and inspecting the implementation of the inspection plan at the State Bank of Vietnam Branch;

b) The Banking Inspection and Supervision Authority shall lead, direct, and inspect the work of inspection, supervision, licensing management, anti-corruption, crime prevention, complaint and report resolution, citizen reception within the scope of state management of the State Bank of Vietnam; take the lead in resolving overlapping issues regarding scope, subjects, content, and time of inspection within the scope of state management of the State Bank of Vietnam; propose the Director of the State Bank of Vietnam Branch to assign banking inspectors and other civil servants to join the inspection team;

c) When discovering signs of law violations or risks threatening the safety of operations of credit institutions and foreign bank branches, the Banking Inspection and Supervision Authority shall request the Director of the State Bank of Vietnam Branch to conduct inspections on banking inspection subjects under the responsibility of the State Bank of Vietnam Branch's Inspection and Supervision Authority. In case the Director of the State Bank of Vietnam Branch disagrees, the Head of the Banking Inspection and Supervision Authority shall issue an inspection decision, report, and bear responsibility before the Governor of the State Bank of Vietnam for his/her decision."

d) When signs of law violations are detected or when there are signs of risks threatening the safety of operations of credit organizations, foreign bank branches, the State Bank branch shall request the Banking Inspection and Supervision Authority to conduct inspections on banking inspection objects within the responsibility of the Banking Inspection and Supervision Authority;

đ) The State Bank branch shall request the Banking Inspection and Supervision Authority to provide guidance on issues within the scope of work under the functions and responsibilities of the Banking Inspection and Supervision Authority;

e) The Banking Inspection and Supervision Authority shall direct and guide the State Bank branch's inspection and supervision activities regarding inspection and supervision tasks, licensing, complaint resolution, citizen reception, anti-corruption, anti-money laundering, and anti-terrorism financing;

g) The State Bank branch's inspection and supervision shall provide complete, timely, and truthful information and documents as required by the Banking Inspection and Supervision Authority;

h) The Banking Inspection and Supervision Authority shall provide the State Bank branch with inspection and supervision results related to banking inspection and supervision objects within the management responsibility of the State Bank branch;

2. Upon request from the State Bank branch, the Banking Inspection and Supervision Authority shall provide and exchange information and documents with the State Bank branch concerning banking management, inspection, and supervision activities related to managed, inspected, and supervised entities within its jurisdiction for the State Bank branch to fulfill its central bank's lead role in reporting, relations with local party committees, governments, and National Assembly Delegations; responding to inquiries and questions as required by local party committees, governments, and National Assembly Delegations; and handling monetary and banking complaints within its jurisdiction;

3. The Banking Inspection and Supervision Authority and the State Bank branch shall coordinate their work according to the State Bank's working regulations.

     7. Article 15 is amended and supplemented as follows:

"Article 15. Application of other provisions in inspection activities

The inspection activities of the Banking Inspection and Supervision Authority shall be carried out in accordance with the provisions of Decree No. 26/2014/ND-CP (amended and supplemented by Decree No. 43/2019/ND-CP dated May 17, 2019 of the Government amending and supplementing certain articles of Decree No. 26/2014/ND-CP dated April 7, 2014 of the Government on the organization and operation of the Banking Inspection and Supervision Authority) and this Circular. In cases where Decree No. 26/2014/ND-CP (amended and supplemented by Decree No. 43/2019/ND-CP) and this Circular do not provide, the provisions of the law on inspection and relevant provisions of the Governor of the State Bank shall apply."

     Article 2. Repeal Article 12 of Circular No. 03/2015/TT-NHNN.

     Article 3. Handling of inspections initiated by the Head of the Hanoi City Banking Inspection and Supervision Bureau, the Head of the Ho Chi Minh City Banking Inspection and Supervision Bureau under the Banking Inspection and Supervision Authority who issued the inspection decision and established the inspection team but have not yet issued the inspection conclusion

1. For inspections initiated by the Head of the Hanoi City Banking Inspection and Supervision Bureau under the Banking Inspection and Supervision Authority who issued the inspection decision and established the inspection team, if the inspection conclusion has not been issued by July 4, 2019, the Director of the State Bank branch in Hanoi City shall perform the duties and powers of the decision-making authority, including signing the issuance of the inspection conclusion.

2. For inspections initiated by the Head of the Ho Chi Minh City Banking Inspection and Supervision Bureau under the Banking Inspection and Supervision Authority who issued the inspection decision and established the inspection team, if the inspection conclusion has not been issued by July 4, 2019, the Director of the State Bank branch in Ho Chi Minh City shall perform the duties and powers of the decision-making authority, including signing the issuance of the inspection conclusion.

     Article 4. Responsibility for implementation

The Chief of the Office, the Head of the Banking Inspection and Supervision Authority, the Heads of units under the State Bank; the Directors of State Bank branches in centrally governed cities and provinces; the Chairmen of the Board of Directors, the Chairmen of the Board of Members, and General Managers (Directors) of credit institutions and foreign bank branches shall be responsible for implementing this Circular.

     Article 5. Effective date

1. This Circular shall take effect from August 19, 2019, except for the provisions of Clause 2 and Clause 3 of this Article.

2. Article 3 of this Circular shall take effect from July 5, 2019.

3. Clause 4 of Article 1 of this Circular shall take effect from November 15, 2019./.