Decision No. 1130/2004/QD-NHNN on the issuance of the Regulation on the Organization and Operation of the Department of Banks and Non-Bank Financial Institutions

DECISION

Regarding the issuance of the Regulation on the Organization and Operation of the Department of Banks and Non-Bank Financial Institutions

and non-bank credit institutions

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QĐ10 dated December 12, 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam No. 10/2003/QH11 dated June 17, 2003;

Pursuant to Decree No. 86/2002/NĐ-CP dated November 5, 2002 of the Government stipulating functions, tasks, powers, and organizational structure of Ministries and Ministerial-Level Agencies;

Pursuant to Decree No. 52/2003/ND-CP dated May 19, 2003, issued by the Government, detailing the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Head of the Department of Banks and Non-Bank Financial Institutions and the Head of the Department of Organization and Cadres;

After reaching agreement with the Minister of Internal Affairs,

DECISION:

Article 1. Issued together with this Decision is the "Regulation on the Organization and Operation of the Department of Banks and Non-Bank Financial Institutions".

Article 2. This Decision shall take effect fifteen days from the date of publication in the Official Gazette and shall replace Decision No. 127/1999/QĐ-NHNN9 dated April 10, 1999 of the Governor of the State Bank of Vietnam on the issuance of the Regulation on the Organization and Operation of the Department of Banks and Non-Bank Financial Institutions.

Article 3. The Heads of the Office, the Department of Organization and Cadres, the Department of Banks and Non-Bank Financial Institutions, and the Heads of relevant units under the State Bank of Vietnam are responsible for implementing this Decision.

REGULATIONS

Organization and operation of the Department of Banks

and non-bank credit institutions

(Issued together with Decision No. 1130/2004/QĐ-NHNN dated September 9, 2004 of the Governor of the State Bank)

PART I
GENERAL PROVISIONS

Article 1. The Department of Banks and Non-Bank Financial Institutions (hereinafter referred to as the Department of Banks) is a unit within the organizational structure of the State Bank of Vietnam, having the function of advising the Governor in performing state management functions according to the following contents: Establishment, operation, and development of financial institutions (excluding cooperative financial institutions) and banking activities of other organizations to contribute to ensuring the safety of the system.

Article 2. The Department of Banks is directed by its Head, assisted by several Deputy Heads; the Head and Deputy Heads are appointed by the Governor. The organization and operation of the Department of Banks are carried out according to the principle of democratic centralism and the headship system.

Chapter II
TASKS AND POWERS OF THE DEPARTMENT OF BANKS

AND NON-BANK FINANCIAL INSTITUTIONS

Article 3. The Department of Banks has the following tasks and powers:

1. To take the lead in drafting and submitting to the Governor strategies and plans for the development and improvement of financial institutions in order to build a modern financial institution system; advise the Governor in directing and guiding the implementation of these strategies and plans.

2. To take the lead in drafting and submitting to the Governor proposals and plans for restructuring financial institutions and other organizations engaged in banking activities (for state-owned commercial banks, the unit in charge is decided by the Governor); advise the Governor in directing, guiding, and supervising the implementation of these proposals and plans approved by the Governor.

3. To take the lead in drafting and recommending to the Governor the issuance or submission to competent authorities for the issuance of regulatory documents related to the organization and operation of financial institutions and banking activities of other organizations, special loans, bankruptcy resolution, and asset liquidation of financial institutions; organize dissemination, guidance, implementation, and monitoring of these issues.

4. To advise the Governor on the application of international standards for safety in banking operations.

5. To advise the Governor to decide:

a - Granting and revoking licenses for establishment and operation of financial institutions and branches, representative offices of foreign financial institutions in Vietnam (except cases decided by the Prime Minister and cooperative financial institutions).

b - Deciding dissolution; approving mergers, acquisitions, consolidations, and spin-offs of financial institutions.

c - Approving charters of financial institutions.

d - Granting and revoking foreign exchange operation licenses for financial institutions; licenses for opening and using foreign currency accounts abroad for Vietnamese financial institutions.

đ - Permitting Vietnamese financial institutions to establish affiliated companies operating independently.

e - Approving the establishment of trading offices, branches, representative offices both domestically and internationally; establishing affiliated public service units of Vietnamese financial institutions.

g - Permitting Vietnamese financial institutions to invest in establishing joint venture financial institutions abroad.

h - Approving positions such as Chairman of the Board of Directors and other members of the Board of Directors, Head and other members of the Supervisory Board, General Director or Director of financial institutions (except those appointed by the Prime Minister).

i - Approving changes in the following matters for financial institutions:

- Name of the financial institution.

- Registered capital, authorized capital.

- Location of headquarters, trading offices, branches, representative offices.

- Content, scope, and duration of operations.

- Transfer of shares exceeding the ratio prescribed by the State Bank.

- Shareholding ratios of major shareholders.

- Members of the Board of Directors, General Director or Director, and members of the Supervisory Board.

k - Approving other changes as provided by law.

l - Granting and revoking licenses for banking operations of other organizations.

m - On the basis of recommendations from the Banking Inspection, propose to the Governor the application of measures to deal with financial institutions as follows:

- Placing financial institutions under special supervision and control; removing special supervision and control.

- Suspending certain banking activities.

Revoking licenses for establishment and operation.

6. Proposing and submitting to the Governor decisions on decentralization and delegation of tasks and powers within the scope of responsibility of the Department to provincial and centrally-administered city branches; guiding and supervising the implementation by these branches.

7. Advising the Governor to perform state management functions over the activities of associations and non-governmental organizations in the banking sector as prescribed by law.

8. Organizing the reception and exploitation of information to promptly grasp the situation of organization and operation of financial institutions and banking activities of other organizations to serve the requirements of the Department's tasks and thereby identify abnormal signs, proposing necessary solutions to contribute to ensuring the safety of the financial institution system.

9. Carry out periodic or ad hoc reports related to the organization and activities of credit institutions as required by the Governor.

10. Perform other tasks assigned by the Governor.

Chapter III
ORGANIZATIONAL STRUCTURE AND MANAGEMENT

Article 4. The organizational structure of the Credit Institutions Department includes:

2.1. Research and Synthesis Division and Banking Operations of Other Organizations;

3. Establishment, Development, and Bank Policy Division;

4. Bank Management Division;

Credit Institution Non-Bank Organization Division.

The duties of Divisions and independent specialists of the Credit Institutions Department shall be defined and assigned by the Director of the Credit Institutions Department in accordance with this Regulation.

The working system of the Credit Institutions Department operates under the mechanism of independent specialists combined with divisional organization.

Article 5. Duties and Authorities of the Department Director

1. Organize the implementation of the functions and tasks of the Department as stipulated in this Regulation, and bear personal responsibility before the Governor and the law for the tasks assigned.

2. Decide on the program and plan of work of the Department and apply measures within his authority to fulfill the assigned tasks.

3. Manage and utilize staff and civil servants according to the classification and delegation of the Governor.

4. Sign administrative documents on behalf of the Governor within his authority.

Article 6. Duties and Authorities of the Deputy Department Director

1. Assist the Department Director in directing and managing certain aspects of the Department's work as delegated by the Department Director, and bear responsibility before the Department Director for the tasks assigned.

2. Signing on behalf of the Department Head on administrative documents as delegated by the Department Head.

3. When the Department Director is absent, a Deputy Department Director may be authorized to manage and resolve the Department's affairs, bear responsibility for the matters resolved, and report back when the Department Director returns.

Chapter IV
IMPLEMENTING PROVISIONS

Article 7. Any amendments or supplements to this Regulation shall be decided by the Governor of the State Bank.