Circular No. 11/2019/TT-NHNN on special supervision of credit institutions

CIRCULAR

(vi) Agreement on the amount of reserve left behind and the deadline for selling the purchased cash foreign currency to the authorized credit institution. for on special supervision of credit institutions

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 Provisions 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 issues the Circular stipulating special supervision over credit institutions.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates on: situations where credit institutions lose or are at risk of losing their ability to pay; loss or risk of loss of payment capability; decision-making authority in special supervision of credit institutions; forms of special supervision; Decision on special supervision; notification and publication of information on special supervision; the actual value of charter capital and reserve funds, reduction of charter capital of commercial banks under special supervision approved by the Government for mandatory transfer schemes; extension, termination of special supervision; components, structure, operational mechanism, tasks, and authorities of the Special Supervision Board.

Article 2. Applicability

1. Credit institution (excluding policy banks).

2. Organizations and individuals related to the special supervision of credit institutions.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. Reserve Fund includes funds of credit institutions extracted from post-tax profits according to the provisions of the law, including supplementary capital reserve fund, development investment fund, financial provision fund.

2. Highly liquid assets is:

a) Highly liquid assets of credit institutions that are banks and non-bank credit institutions are determined according to the regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank) on limits and ratios ensuring safety in the operation of banks and non-bank credit institutions;

b) "Assets" that can be immediately settled of credit institutions that are people's credit funds are determined according to the regulations of the State Bank on limits and ratios ensuring safety in the operation of people's credit funds;

c) Cash, deposits at the State Bank, commercial banks (if any) of credit institutions that are microfinance organizations are determined according to the regulations of the State Bank on ratios ensuring safety in the operation of microfinance organizations.

3. Tier 1 capital adequacy ratio is:

a) Tier 1 capital adequacy ratio of credit institutions that are banks and non-bank credit institutions is determined according to the regulations of the State Bank on ranking of credit institutions and foreign bank branches;

b) Tier 1 capital adequacy ratio of credit institutions that are people's credit funds and microfinance organizations is the ratio between Tier 1 capital and total risky "Assets" according to the regulations of the State Bank on limits and ratios ensuring safety in the operation of people's credit funds and ratios ensuring safety in the operation of microfinance organizations.

4. Potential restructured debt becoming bad debt refers to debts that have been restructured with extended repayment terms and retained the same loan classification, and credit institutions have not yet classified them as bad debts according to the regulations of the State Bank.

5. Bad debt sold to Vietnam Asset Management Company (hereinafter referred to as Asset Management Company) not resolved refers to bad debts that credit institutions have sold to the Asset Management Company for settlement through special bonds and have not yet been resolved or recovered.

Chapter II

SPECIAL SUPERVISION, NOTIFICATION, ANNOUNCEMENT OF INFORMATION ON SPECIAL SUPERVISION, REDUCTION OF CHARTER CAPITAL

Article 4. Credit institution losing or at risk of losing its ability to pay

1. A credit institution is at risk of losing its ability to pay when it lacks highly liquid assets by 20% or more at the time of calculating the liquidity coverage ratio, leading to failure to maintain the liquidity coverage ratio prescribed in point a clause 1 Article 130 of the Law on Credit Institutions (amended and supplemented in 2017), and the guidance of the State Bank for three consecutive months.

2. A credit institution loses its ability to pay when it cannot fulfill its debt obligations within one month from the due date and has a ratio of total bad debts as defined by the State Bank, potential restructured debt becoming bad debt, and bad debt sold to the Asset Management Company not resolved compared to total debt as defined by the State Bank and bad debt sold to the Asset Management Company not resolved at 10% or more at the time immediately following one month from the due date of the debt obligation.

3. When there is a risk of losing or losing the ability to pay, credit institutions must promptly report to the State Bank about the current situation, causes, measures already applied, planned measures to address the issue, and proposals and recommendations to the State Bank.

Article 5. Credit institutions losing or at risk of losing payment capability

1. A credit institution is at risk of losing payment capability when the Tier 1 capital adequacy ratio is below 4% for a continuous period of six months and the ratio between total non-performing loans as defined by the State Bank of Vietnam, potential non-performing loans that may become non-performing loans, non-performing loans sold to asset management companies that have not been resolved, and the total loans as defined by the State Bank of Vietnam and non-performing loans sold to asset management companies that have not been resolved reaches 10% or more immediately following the six-month continuous period during which the credit institution's Tier 1 capital adequacy ratio is below 4%.

2. A credit institution loses payment capability when it is unable to fulfill its debt obligations within three months from the due date of such obligations.

3. When there is a risk of losing or losing payment capability, the credit institution must promptly report to the State Bank of Vietnam on the current situation, causes, measures already applied, proposed measures to be applied to address the issue, and recommendations to the State Bank of Vietnam.

Article 6. Authority to decide in special supervision of credit institutions

1. The Governor of the State Bank of Vietnam shall examine and decide on the following matters concerning credit institutions that are not people's credit funds:

a) Placing credit institutions falling under the provisions of Clause 1, Article 145 of the Law on Credit Institutions (amended and supplemented in 2017), Article 4, and Article 5 of this Circular into special supervision;

b) The form of special supervision as prescribed in Article 7 of this Circular;

c) Establishing a Special Supervision Board as prescribed in Articles 14 and 15 of this Circular;

d) Duration of special supervision;

d) Notifying about special supervision as prescribed in Article 9 of this Circular;

e) Publishing information on special supervision as prescribed in Article 10 of this Circular;

g) The actual value of charter capital and reserve funds, and the reduction of charter capital of commercial banks subject to special supervision approved by the Government according to the compulsory transfer plan as prescribed in Article 11 of this Circular;

h) Extending the term of special supervision as prescribed in Article 12 of this Circular;

i) Terminating special supervision as prescribed in Article 13 of this Circular;

k) Other contents prescribed in the Law on Credit Institutions (amended and supplemented in 2017) and this Circular.

2. The Director of the State Bank of Vietnam branch in provinces and centrally-administered cities (hereinafter referred to as the State Bank of Vietnam branch) shall examine and decide on the following matters concerning credit institutions that are people's credit funds with their main offices located in the area:

a) The contents prescribed in points a, b, c, d, đ, e, h, i of Clause 1 of this Article;

b) The contents prescribed in points a, b of Clause 3, Article 146; Clauses 1, 2, 3, 4, 5, 7 of Article 146a (excluding the content on special lending and extension of the term of special lending by the State Bank of Vietnam); Clauses 2, 6 of Article 146đ; points a, b, d of Clause 2, Article 148b; Clauses 2, 3, 4 (excluding the case prescribed in Clause 3 of this Article) of Article 148c; Clauses 2, 3, 4, 5, 6, 11 of Article 148đ; Clauses 1, 2 of Article 149c and Clauses 1, 2 of Article 149d of the Law on Credit Institutions (amended and supplemented in 2017).

For the contents prescribed in point đ of Clause 2, Article 148b; Clauses 7, 12 of Article 148đ and Clause 3, Article 149c of the Law on Credit Institutions (amended and supplemented in 2017), the Director of the State Bank of Vietnam branch shall report to the Governor of the State Bank of Vietnam (through the Banking Inspection and Supervision Agency) for approval before implementation.

3. The Director of the State Bank of Vietnam branch shall report and propose to the Governor of the State Bank of Vietnam (through the Banking Inspection and Supervision Agency) to request the Government to implement the contents prescribed in Clause 1, Article 146 of the Law on Credit Institutions (amended and supplemented in 2017) concerning credit institutions that are people's credit funds with their main offices located in the area.

Article 7. Special Supervision Form

1. Based on the actual situation and risk level in the operation of credit institutions, the Governor of the State Bank of Vietnam or the Director of the State Bank of Vietnam branch shall consider and decide:

a) Placing credit institutions under special control in the form of special supervision or comprehensive control;

b) The content, scope, measures, and tasks of supervising activities at the special supervision decision shall be consistent with the special supervision form and the provisions set out in Clause 1, Article 15 of this Circular.

2. Special supervision is the act of placing credit organizations under direct supervision by the State Bank through remote directive and direct supervisory activities, and on-site inspections conducted by the Special Supervision Board regarding the operations of credit organizations subject to special supervision.

3. Comprehensive control is the act of placing credit organizations under direct supervision by the State Bank through on-site directive and direct supervisory activities carried out by the Special Supervision Board concerning the daily operations of credit organizations subject to special supervision.

4. Changing the form of special control shall be implemented as follows:

a) Based on the actual situation and risk level in the operations of credit organizations subject to special supervision, the Special Supervision Board proposes to the Governor of the State Bank (through the Banking Inspection and Supervision Agency) to change the special supervision form for credit organizations subject to special supervision as stipulated in Clause 1, Article 6 of this Circular, or proposes to the Branch Director of the State Bank to change the special supervision form for credit organizations subject to special supervision as stipulated in Clause 2, Article 6 of this Circular;

b) Within twenty days from the date of receiving the proposal of the Special Supervision Board as provided in point a of this clause, the Governor of the State Bank or the Branch Director of the State Bank shall consider and decide to change the special supervision form for credit organizations subject to special supervision according to the authority prescribed in Article 6 of this Circular.

Article 8. Decision on Special Supervision

The Decision on Special Control includes the following contents:

1. Name of the credit institution subject to special control.

2. Reason for placing the credit institution under special control.

3. Duration of special control.

4. Form of special control, contents, scope, measures, and tasks of controlling operations for credit institutions subject to special control.

5. Names, positions of each member of the Special Supervision Board, duties, and powers of the Special Supervision Board, the Head of the Special Supervision Board, and other members of the Special Supervision Board.

6. Use of seals of the State Bank of Vietnam, including those of the State Bank of Vietnam branches.

7. Conversion of refinancing loans into special loans.

8. Other contents.

Article 9. Notification of Special Supervision

1. The notification on special supervision includes one or more of the following contents:

a) Decision on special supervision;

b) Change in form of special supervision;

c) Extension, termination of special supervision;

d) Approval document of the competent authority for the Restructuring Plan;

đ) Other contents.

2. The State Bank sends notifications about the special supervision of credit organizations subject to special supervision as stipulated in Clause 1, Article 6 of this Circular to one or more of the following entities:

a) Board of Directors or Board of Members, Supervisory Board, General Director (Director) of credit institutions subject to special supervision;

b) The State Bank branch where the main office of the credit organization subject to special supervision is located, and the State Bank branch where the dependent units of the credit organization subject to special supervision are operating;

c) Vietnam Deposit Insurance Corporation;

d) People's Committee of the province where credit institutions subject to special supervision have their main offices;

đ) Ministry of Finance (in cases where the credit organization subject to special supervision is a listed company, a trading company, a state-owned enterprise, a company with state capital exceeding 50% of the charter capital, a subsidiary or affiliate of an insurance company, a financial insurance group; the credit organization subject to special supervision has subsidiaries or affiliates operating in the securities or insurance sectors);

e) Other relevant agencies and organizations.

3. The State Bank branch sends notifications about the special supervision of credit organizations subject to special supervision as stipulated in Clause 2, Article 6 of this Circular to one or more of the following entities:

a) Board of Directors, Supervisory Board, General Director (Director) of credit institutions subject to special supervision;

b) Governor of the State Bank;

c) Vietnam Deposit Insurance Corporation;

d) Vietnam Rural Credit Cooperative;

đ) People's Committee of the province, district, commune where the main office of the credit organization subject to special supervision is located;

e) Other relevant agencies and organizations.

4. The Governor of the State Bank decides specifically on the scope, content, recipients of notifications about special supervision as provided in Clauses 1 and 2 of this Article and the time of notification about special supervision for credit organizations subject to special supervision as stipulated in Clause 1, Article 6 of this Circular.

5. The Branch Director of the State Bank decides specifically on the scope, content, recipients of notifications about special supervision as provided in Clauses 1 and 3 of this Article and the time of notification about special supervision for credit organizations subject to special supervision as stipulated in Clause 2, Article 6 of this Circular.

Article 10. Disclosure of Special Supervision Information

1. Information on special supervision of credit institutions disclosed includes one or more of the following information:

a) Name of credit institution subject to special supervision;

b) Form of special supervision, duration of special supervision, termination of special supervision;

c) Other information.

2. The State Bank discloses information on special supervision of credit institutions through one or more of the following forms:

a) Posting on the electronic information website of the State Bank;

b) Posting on the electronic information website of credit institutions subject to special supervision (if available);

c) Publishing in central or local newspapers where credit institutions subject to special supervision have their main offices at least three consecutive issues;

d) Press conference;

đ) Announcing at the Annual General Meeting of Shareholders or Board of Members or Members' Assembly of credit institutions subject to special supervision.

3. The Governor of the State Bank of Vietnam shall decide on the scope, content, and form of disclosure of special supervision information as stipulated in Clause 1 and 2 of this Article and the time for disclosing such information for credit institutions subject to special supervision as specified in Clause 1 of Article 6 of this Circular, in accordance with the goal of ensuring the safety of the credit institution system.

4. The Director of the State Bank of Vietnam branch shall decide on the scope, content, and form of disclosure of special supervision information as stipulated in Clause 1 and 2 of this Article and the time for disclosing such information for credit institutions subject to special supervision as specified in Clause 2 of Article 6 of this Circular, in accordance with the goal of ensuring the safety of the credit institution system.

Article 11. Actual Value of Charter Capital and Reserves, Reduction of Charter Capital of Commercial Banks Subject to Special Supervision Whose Transfer Plan has been Approved by the Government

1. Within ten days from the date the Government approves the mandatory transfer plan, the commercial bank subject to special supervision must complete the determination and submit to the Special Control Board the consolidated business operation results for the accounting period starting from the date of determining the actual value of charter capital and reserves conducted by an independent auditing organization as stipulated in Clause 1 of Article 151a of the Law on Credit Organizations (amended and supplemented in 2017) up to the last day of the month immediately preceding the date the Government approves the mandatory transfer plan, in accordance with Vietnamese Accounting Standards, Accounting Regulations, and relevant laws.

2. Within twenty days from the date the Government approves the mandatory transfer plan, the Special Control Board must complete the determination and report to the State Bank of Vietnam (through the Banking Inspection and Supervision Agency) the consolidated business operation results of the commercial bank subject to special supervision for the accounting period as stipulated in Clause 1 of this Article (even if the commercial bank subject to special supervision fails to complete the determination of the consolidated business operation results as stipulated in Clause 1 of this Article) and request the State Bank of Vietnam (through the Banking Inspection and Supervision Agency) to decide on the actual value of charter capital and reserves, reduction of charter capital of the commercial bank subject to special supervision.

3. Based on the determination results of the independent auditing organization regarding the actual value of charter capital and reserves as stipulated in Clause 1 of Article 151a of the Law on Credit Organizations (amended and supplemented in 2017) and the reports and requests of the Special Control Board as stipulated in Clause 2 of this Article, the State Bank of Vietnam shall decide on the actual value of charter capital and reserves of the commercial bank subject to special supervision.

In the case where the sum of the actual value of charter capital and reserves according to the determination results of the independent auditing organization as stipulated in Clause 1 of Article 151a of the Law on Credit Organizations (amended and supplemented in 2017) and the consolidated business operation results of the commercial bank subject to special supervision determined and reported by the Special Control Board as stipulated in Clause 2 of this Article is negative, the State Bank of Vietnam shall decide to reduce the charter capital of the commercial bank subject to special supervision to zero at the Mandatory Transfer Decision to reduce accumulated losses. This amount replaces the charter capital level stated in the Business License issued by the State Bank of Vietnam to the commercial bank subject to special supervision.

Article 12. Extension of Special Supervision

1. Based on the actual operation of credit institutions under special supervision, at least 30 days before the expiration of the special supervision period, the Special Supervisory Board shall recommend to the Governor of the State Bank (through the Banking Inspection and Supervision Agency) to consider and decide on extending the special supervision period for credit institutions under special supervision as stipulated in Clause 1, Article 6 of this Circular, or recommend to the Director of the State Bank branch to consider and decide on extending the special supervision period for credit institutions under special supervision as stipulated in Clause 2, Article 6 of this Circular.

2. Within 20 days from the date of receiving the recommendation of the Special Supervisory Board as stipulated in Clause 1 of this Article, the Governor of the State Bank or the Director of the State Bank branch shall consider and decide on extending the special supervision period for credit institutions under special supervision according to the authority prescribed in Article 6 of this Circular.

Article 13. Termination of Special Supervision

1. When a credit institution under special supervision falls into one of the cases prescribed in Article 145b of the Law on Credit Institutions (amended and supplemented in 2017), the Special Supervisory Board shall recommend to the Governor of the State Bank (through the Banking Inspection and Supervision Agency) to consider and decide on terminating the special supervision for credit institutions under special supervision as stipulated in Clause 1, Article 6 of this Circular, or recommend to the Director of the State Bank branch to consider and decide on terminating the special supervision for credit institutions under special supervision as stipulated in Clause 2, Article 6 of this Circular.

2. A credit institution under special supervision shall be terminated from special supervision from the effective date of the Decision terminating special supervision.

Chapter III

COMPOSITION, STRUCTURE, MECHANISM OF OPERATION,

DUTIES AND POWERS OF THE SPECIAL SUPERVISORY BOARD

Article 14. Composition, Structure, Mechanism of Operation of the Special Supervisory Board

a) Head of the Special Supervisory Board and other members;

b) Head of the Special Supervisory Board, Deputy Head of the Special Supervisory Board, and other members.

2. Members of the Special Supervisory Board belong to the following categories:

a) Officials, civil servants, employees, workers of the State Bank of Vietnam, the Deposit Insurance Corporation of Vietnam, the Vietnam Cooperative Bank (in the case of special supervision over credit institutions as specified in Clause 2 of Article 3 of this Circular), the mandatory transferee (in the case of special supervision over commercial banks that have been approved by competent authorities with mandatory transfer plans), other credit institutions than the credit institution subject to special supervision, agencies, organizations related to the special supervision of the credit institution appointed, summoned, or nominated by relevant agencies, organizations related to the special supervision of the credit institution upon the request of the State Bank of Vietnam;

a) Officers, civil servants, employees of the State Bank, Vietnam Deposit Insurance Corporation, Vietnam Rural Credit Cooperative Bank (in the case of special supervision of credit institutions as stipulated in Clause 2, Article 6 of this Circular), other credit institutions, organizations related to the special supervision of credit institutions under the State Bank's appointment, summons, or request relevant agencies and organizations to appoint.

3. The Head of the Special Supervisory Board of the credit institution as specified in Clause 1 of Article 3 of this Circular shall be one of the following categories:

3. The Head of the Special Supervisory Board of credit institutions as stipulated in Clause 1, Article 6 of this Circular shall be one of the following:

a) Leaders of Departments or equivalent positions in units under the State Bank;

b) Leaders of Departments or equivalent positions in the Banking Inspection and Supervision Agency;

c) Directors, Deputy Directors of State Bank branches where the credit institutions under special supervision have their main offices;

d) Heads of Inspection and Supervision, Deputy Heads of Inspection and Supervision or equivalent positions in State Bank branches where the credit institutions under special supervision have their main offices.

4. The Head of the Special Supervisory Board of credit institutions as stipulated in Clause 2, Article 6 of this Circular shall be one of the following:

a) Directors, Deputy Directors of State Bank branches where the credit institutions under special supervision have their main offices;

b) Heads of Inspection and Supervision, Deputy Heads of Inspection and Supervision or equivalent positions in State Bank branches where the credit institutions under special supervision have their main offices.

5. Members of the Special Supervisory Board shall not be spouses, biological or adopted parents, biological or adopted children, full brothers, full sisters, full brothers-in-law, full sisters-in-law, full sisters-in-law, full brothers-in-law, biological or adopted children of members of the Management Board, members of the Board of Members, members of the Supervisory Board, General Managers (Directors), individuals who are major shareholders, contributors of credit institutions under special supervision, or individuals who are legal representatives of major shareholders, owners, contributors of credit institutions under special supervision.

a) The Special Supervisory Board operates under a collective responsibility system combined with individual accountability, appropriate to the content and nature of each task handled;

b) The frequency of meetings, information exchange mechanisms, decision-making processes, and consolidation of opinions of members shall be decided by the Head of the Special Supervisory Board, appropriate to the form of special supervision and the actual situation of the credit institution subject to special supervision.

b) Frequency of meetings, information exchange mechanism, decision-making process, and consolidation of opinions of members shall be decided by the Head of the Special Supervisory Board in accordance with the form of special supervision and the actual situation of credit institutions under special supervision.

7. The Governor of the State Bank shall specifically determine the composition, number, and structure of the Special Supervisory Board for credit institutions under special supervision as stipulated in Clause 1, Article 6 of this Circular. The Director of the State Bank branch shall specifically determine the composition, number, and structure of the Special Supervisory Board for credit institutions under special supervision as stipulated in Clause 2, Article 6 of this Circular.

Article 15. Duties and Powers of the Special Supervisory Board

1. The Special Supervisory Board shall perform the duties and powers prescribed in Article 146b of the Law on Credit Institutions (as amended and supplemented in 2017). The Special Supervisory Board shall exercise its duties and powers through one or more of the following supervisory activities:

a) Requesting the credit institution under special supervision to provide complete, accurate, and timely information, documents, and files related to the operations of the credit institution under special supervision, including the following information, documents, and files:

(i) Financial situation, actual value of charter capital and reserve funds;

(ii) Current status regarding organization, personnel, management, operation, information technology system, and internal control system;

(iii) Current status regarding activities, business, investment; ability to pay off debts when due;

(iv) Current status regarding assets, collateral, including a detailed report on non-performing loans, difficult-to-collect receivables, potential hidden non-performing loans, non-performing loans sold to Asset Management Company but not yet resolved, interest receivable that must be written off according to the law but have not been written off;

(v) List of customers (excluding credit institutions and foreign bank branches) receiving credit; list of organizations and individuals depositing money; other creditors;

(vi) Other information serving the performance of the Special Supervisory Board's duties.

b) Requesting the credit institution under special supervision to inventory cash and cash equivalents currently held throughout the system according to the principle of cross-checking and reporting the results within five days from the completion of the inventory;

c) Organizing the monitoring of the inventory process specified in point b of this clause in accordance with the actual situation and scale of operations of the credit institution subject to special supervision;

d) During the period without a restructuring plan or a restructuring plan for the credit institution under special supervision has not been approved by the competent authority, based on the information, documents, and files provided by the credit institution under special supervision as stipulated in point a and b of this clause or information from independent audit reports, inspection conclusions, and other sources, the Special Supervisory Board shall assess the current operational status of the credit institution under special supervision to proactively implement measures or report to the Governor of the State Bank of Vietnam (through the Banking Inspection and Supervision Authority) or the Branch Director of the State Bank of Vietnam to apply appropriate measures in accordance with the status of the credit institution under special supervision;

đ) Approving before the credit institution under special supervision carries out certain transactions or activities;

e) Requesting credit institutions subject to special supervision to report on their operational results in accordance with the content and frequency suitable to the status of the credit institution subject to special supervision;

g) Deciding to attend meetings of the Board of Directors, Board of Members, and Supervisory Board of the credit institution under special supervision and providing opinions on matters at the meeting related to the powers and duties of the Special Supervisory Board;

h) Directing, inspecting, supervising, and controlling the activities of the credit institution under special supervision to prevent, stop the concealment, transfer, pledge, mortgage, transfer of assets, and other actions that may cause damage to the credit institution under special supervision;

i) Reporting periodically as prescribed in the Special Supervision Decision or when necessary or upon request of the Governor of the State Bank of Vietnam, Branch Director of the State Bank of Vietnam, to the Governor of the State Bank of Vietnam (through the Banking Inspection and Supervision Authority, for the Special Supervisory Board of credit institutions under special supervision prescribed in Clause 1, Article 6 of this Circular) or the Branch Director of the State Bank of Vietnam (for the Special Supervisory Board of credit institutions under special supervision prescribed in Clause 2, Article 6 of this Circular) on the management, operation, activities, business, investment, finance, liquidity, and other issues (if any) of the credit institution under special supervision and recommending, proposing measures to handle (if any); results, difficulties, and obstacles encountered during the implementation of the Restructuring Plan already approved by the competent authority and recommending, proposing measures to handle (if any);

k) Promptly reporting to the Governor of the State Bank of Vietnam (through the Banking Inspection and Supervision Authority, for the Special Supervisory Board of credit institutions under special supervision prescribed in Clause 1, Article 6 of this Circular) or the Branch Director of the State Bank of Vietnam (for the Special Supervisory Board of credit institutions under special supervision prescribed in Clause 2, Article 6 of this Circular) on unusual developments in operations, potential risks, safety threats, and violations of laws by the credit institution under special supervision; difficulties and obstacles arising during the special supervision of the credit institution and recommending, proposing measures to handle;

l) Promptly informing credit institutions subject to special supervision of relevant information and directives from the competent authority concerning their operations and restructuring plans;

m) Other tasks assigned by the Governor of the State Bank of Vietnam or the Branch Director of the State Bank of Vietnam.

2. Advising and proposing to the Governor of the State Bank of Vietnam (through the Banking Inspection and Supervision Authority, for the Special Supervisory Board of credit institutions under special supervision prescribed in Clause 1, Article 6 of this Circular) or the Branch Director of the State Bank of Vietnam (for the Special Supervisory Board of credit institutions under special supervision prescribed in Clause 2, Article 6 of this Circular) on the following contents:

a) Recommending the Government to implement the provisions stipulated in point c, Clause 1, Article 146 of the Law on Credit Institutions (as amended and supplemented in 2017);

b) Implementing the provisions stipulated in Clause 2, 3, 4, 7, Article 146a and Clause 2, 5, 6, Article 146d of the Law on Credit Institutions (as amended and supplemented in 2017).

3. Recommending the Branch Director of the State Bank of Vietnam (for the Special Supervisory Board of credit institutions under special supervision prescribed in Clause 2, Article 6 of this Circular) on the following contents:

a) Deciding on the contents stipulated in point a, b, Clause 3, Article 146 of the Law on Credit Institutions (as amended and supplemented in 2017);

b) Submitting to the Governor of the State Bank of Vietnam recommendations to the Government to implement the provisions stipulated in point a, b, Clause 1, Article 146 of the Law on Credit Institutions (as amended and supplemented in 2017).

Article 16. Rights and Obligations of the Head of the Special Supervisory Board

1. Lead and organize the implementation of the tasks, powers, and work of the Special Supervisory Board as prescribed in the Law on Credit Institutions (amended and supplemented in 2017), this Circular, and the Decision on special supervision.

2. Convene and preside over meetings of the Special Control Board.

3. Represent the Special Control Board to sign documents within the Board's authority.

4. Assign tasks to members of the Special Control Board.

5. Decide on the contents stipulated in Clause 6, Article 14 of this Circular.

6. Direct and supervise the performance of assigned tasks by members of the Special Supervisory Board, including the management, storage of documents and files, and information security related to the activities of credit institutions under special supervision in accordance with the law and directives from the Governor of the State Bank of Vietnam (for credit institutions under special supervision as prescribed in Clause 1, Article 6 of this Circular) or the Director of the State Bank of Vietnam branch (for credit institutions under special supervision as prescribed in Clause 2, Article 6 of this Circular).

7. Within thirty days from the date the Decision terminating special supervision of credit institutions under special supervision becomes effective, represent the Special Supervisory Board to hand over all relevant documents and files concerning the special supervision of credit institutions under special supervision to the Banking Inspection and Supervision Authority (for the Head of the Special Supervisory Board of credit institutions under special supervision as prescribed in Clause 1, Article 6 of this Circular), the State Bank of Vietnam branch where the main office of the credit institution under special supervision is located (for the Head of the Special Supervisory Board of credit institutions under special supervision as prescribed in Clause 2, Article 6 of this Circular).

Be responsible before

9. Delegate to the Deputy Head of the Special Supervisory Board or other members of the Special Supervisory Board to exercise the rights stipulated in Clauses 2, 3, 6, and 8 of this Article during their absence.

10. Be responsible before the Governor of the State Bank of Vietnam or the Director of the State Bank of Vietnam branch and before the law for the execution of assigned tasks.

Article 17. Rights and obligations of members of the Special Supervisory Board

1. Perform tasks according to the division of labor and delegation of the Head of the Special Supervisory Board.

2. Report promptly and propose measures to the Head of the Special Supervisory Board regarding unusual developments, potential risks, threats to operational safety, and violations of the law by credit institutions under special supervision.

3. Be responsible before the Head of the Special Supervisory Board and before the law for the execution of assigned tasks.

Chapter IV

RESPONSIBILITIES OF RELATED UNITS

Article 18. Responsibilities of the Banking Inspection and Supervision Authority

1. Report promptly to the Governor of the State Bank of Vietnam when credit institutions as prescribed in Clause 1, Article 6 of this Circular fall into one of the situations prescribed in Clause 1, Article 145 of the Law on Credit Institutions (amended and supplemented in 2017), Articles 4 and 5 of this Circular.

2. Advise and propose to the Governor of the State Bank of Vietnam to decide on the contents stipulated in Clause 1, Article 6 of this Circular.

3. Advise the Governor of the State Bank of Vietnam to direct and implement special supervision of credit institutions as prescribed in Clause 1, Article 6 of this Circular.

4. Advise and propose to the Governor of the State Bank of Vietnam to decide on the contents stipulated in Clauses 2 and 3 of Article 6 of this Circular within its functions and duties.

5. Serve as the point of contact for receiving reports, advising, proposing, and recommending matters related to special supervision of credit institutions as prescribed in Clause 1, Article 6 of this Circular, including the contents stipulated in Clause 2, Article 15 of this Circular.

6. Advise and propose to the Governor of the State Bank of Vietnam to handle the reports, advising, proposing, and recommending matters stipulated in Clause 5 of this Article within its functions and duties.

7. Advise and propose to the Governor of the State Bank of Vietnam to implement the provisions stipulated in Clauses 2, 3, 4, 5, and 7 of Article 146a (excluding the content on special lending; exemption and reduction of interest on refinance loans) and Clauses 2, 5, and 6 of Article 146d of the Law on Credit Institutions (amended and supplemented in 2017) for credit institutions as prescribed in Clause 1, Article 6 of this Circular.

8. Receive, manage, store documents and files, and ensure information security related to the special supervision of credit institutions as prescribed in Clause 1, Article 6 of this Circular in accordance with the law and directives from the Governor of the State Bank of Vietnam, including the documents and files stipulated in Clause 7 of Article 16 of this Circular.

9. Recommend the Director of the State Bank of Vietnam branch to consider placing credit institutions as prescribed in Clause 2, Article 6 of this Circular under special supervision.

10. Advise the Governor of the State Bank of Vietnam to assign relevant units within the State Bank of Vietnam to advise and handle proposals, recommendations, and matters related to the special supervision of credit institutions within the functions and duties of these units.

Article 19. Responsibilities of the State Bank Branch

1. For credit institutions subject to special control as stipulated in Clause 1, Article 6 of this Circular:

a) Appoint persons to participate in the Special Control Board;

b) Carry out special control tasks for dependent units of credit institutions subject to special control within the branch's jurisdiction, as assigned by the Governor of the State Bank, and advise and propose to the Governor of the State Bank (through the Banking Inspection and Supervision Authority) to apply measures within their authority and assigned tasks;

c) Handle within their authority issues related to dependent units of credit institutions subject to special supervision in its jurisdiction;

d) Coordinate with the Banking Inspection and Supervision Authority, the Special Control Board, and local state management agencies during the special control process of credit institutions;

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

2. For credit institutions subject to special control as stipulated in Clause 2, Article 6 of this Circular:

a) Implement the contents prescribed in Clauses 2 and 3, Article 6 of this Circular;

b) Report promptly to the Governor of the State Bank when the credit institution falls into one of the situations prescribed in Clause 1, Article 145 of the Law on Credit Institutions (as amended and supplemented in 2017), Articles 4 and 5 of this Circular;

c) Receive and handle within their authority issues related to special supervision of credit institutions;

d) Serve as the focal point to coordinate with local state management agencies to address issues arising during the special supervision of credit institutions;

đ) Regularly report before the 15th day of the following month or when necessary or upon request from the Governor of the State Bank, through the Banking Inspection and Supervision Authority, on the results of operations, business activities, difficulties, obstacles, unusual developments in operations, potential risks, safety threats, and legal violations of credit institutions subject to special control within the branch's jurisdiction, the impact of such credit institutions on the safety of banking operations within the branch's jurisdiction, and proposed measures to address these issues;

e) Receive, manage, store documents and files related to the special control of credit institutions in accordance with the law and directives from the Governor of the State Bank, including those specified in Clause 7, Article 16 of this Circular;

g) Perform other tasks within their authority.

Article 20. Responsibilities of the Vietnam Rural Credit Bank

1. Appoint persons to participate in the Special Control Board of credit institutions as stipulated in Clause 2, Article 6 of this Circular.

2. Coordinate with the Banking Inspection and Supervision Authority, the State Bank Branch where the credit institution subject to special control as stipulated in Clause 2, Article 6 of this Circular has its headquarters, and the Special Control Board during the special control process of credit institutions.

3. Monitor the developments and activities of credit institutions subject to special control as stipulated in Clause 2, Article 6 of this Circular, report and propose measures to the Governor of the State Bank or the Director of the State Bank Branch where the credit institution has its headquarters (if applicable).

Article 21. Responsibilities of the Deposit Insurance Corporation

1. Appoint persons to participate in the Special Supervisory Board of credit organizations under special supervision that are participating in deposit insurance.

2. Coordinate with the Banking Inspection and Supervision Authority, the State Bank Branch where the credit institution subject to special control that participates in deposit insurance has its headquarters, and the Special Control Board during the special control process of credit institutions.

Article 22. Responsibilities of credit institutions subject to special control, owners, capital contributors, shareholders, Board of Directors, Board of Members, Control Board, General Manager (Director) of credit institutions subject to special control

1. Implement the provisions of Article 146c of the Law on Credit Institutions (as amended and supplemented in 2017) and this Circular.

2. Manage and control the operations of credit institutions subject to special control in accordance with the principle of ensuring asset safety.

3. Bear responsibility under the law and the State Bank for the accuracy, timeliness, and completeness of information, documents, and files provided to the Special Control Board.

4. Report to the Special Control Board any difficulties, obstacles, and risks arising during the special control process.

Chapter V

IMPLEMENTING PROVISIONS

Article 23. Transitional Provisions

Special Control Boards established before the effective date of this Circular shall continue to operate according to the Special Control Decisions already issued until such decisions are revised or supplemented.

Article 24. Effective Date

This Circular takes effect from October 1, 2019, and replaces Circular No. 07/2013/TT-NHNN dated March 14, 2013, issued by the Governor of the State Bank regarding special control of credit institutions.

Article 25. Implementation organization

The Chief of the Office, the Chief Inspector and Supervisor of Banks, Heads of Units under the State Bank, Directors of State Bank Branches, Chairmen of the Board of Directors, General Managers of the Deposit Insurance Corporation, Chairmen of the Board of Directors, General Managers of the Vietnam Rural Credit Bank, Chairmen of the Board of Directors, Chairmen of the Board of Members, Heads of the Control Board, General Managers (Directors) of credit institutions subject to special control are responsible for organizing the implementation of this Circular./.