Decision No. 13/2008/QD-NHNN Issuing Regulations on the Network of Operations of Commercial Banks

Pursuant to …;

Issuing Regulations on the Network of Operations of Commercial Banks

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GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam 1997, and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam 2003;

Pursuant to the Law on Credit Organizations 1997, and the Law Amending and Supplementing Certain Provisions of the Law on Credit Organizations 2004;

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;

Pursuant to Decree No. 49/2000/NĐ-CP dated September 12, 2000 of the Government on the Organization and Operation of Commercial Banks;

Pursuant to Decree No. 22/2006/NĐ-CP dated February 28, 2006 of the Government on the Organization and Operation of Branches of Foreign Banks, Joint Venture Banks, 100% Foreign-Owned Banks, and Representative Offices of Foreign Credit Organizations in Vietnam;

At the proposal of the Director of the Department of Commercial Banks and Non-Bank Credit Institutions,

Pursuant to …;:

Article 1. These Regulations are hereby promulgated together with this Decision.

Article 2. This Decision shall take effect fifteen days from the date of publication in the Official Gazette.

Decision No. 888/2005/QĐ-NHNN dated June 16, 2005 of the Governor of the State Bank of Vietnam promulgating Regulations on the Establishment, Opening, and Termination of Operations of Trading Departments, Branches, Representative Offices, and Service Units of Commercial Banks, Decision No. 1090/2003/QĐ-NHNN dated September 17, 2003 of the Governor of the State Bank of Vietnam promulgating Regulations on the Establishment and Termination of Operations of Trading Departments, Branches, and Transaction Rooms of Joint Venture Banks in Vietnam, and Article 32 of the Regulation on the Issuance of Licenses for the Establishment and Operation of Joint Stock Commercial Banks issued together with Decision No. 24/2007/QĐ-NHNN dated June 7, 2007 of the Governor of the State Bank of Vietnam shall be repealed.

Article 3. The Heads of the Office, the Directors of the Department of Commercial Banks and Non-Bank Credit Institutions, the Heads of relevant units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam branches in provinces and centrally-administered cities, and the Chairmen of Management Boards, General Managers (Directors) of commercial banks are responsible for implementing this Decision.

REGULATIONS

ON THE NETWORK OF OPERATIONS OF COMMERCIAL BANKS
(Issued together with Decision No. 13/2008/QĐ-NHNN dated April 29, 2008 of the Governor of the State Bank of Vietnam)

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Chapter I.

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

These Regulations stipulate the network of operations of state-owned commercial banks, joint stock commercial banks, joint venture banks, and 100% foreign-owned banks operating in Vietnam (hereinafter referred to collectively as commercial banks).

Article 2. Interpretation of Terms

In these Regulations, the following terms have the meanings given below:

1. 1. Ministry-level scientific and technological tasks: means the State Bank of Vietnam.

2. State Bank of Vietnam branch in province, city means the State Bank of Vietnam branch in province, centrally-administered city.

3. Network of operations of commercial banks includes trading departments, branches, representative offices, service units, transaction rooms, savings funds, automatic teller machines, and transaction points.

4. Trading department is a subsidiary of the headquarters of a commercial bank, dependent accounting, having its own seal, conducting business activities pursuant to the authorization of the commercial bank.

Each commercial bank may only establish one trading department. The location of the trading department must be within the territory of the province or centrally-administered city where the commercial bank's headquarters is located.

5. Branch is a subsidiary of a commercial bank, having its own seal, conducting business activities pursuant to the authorization of the commercial bank.

6. Representative office is a subsidiary of a commercial bank, having its own seal, performing the function of representation pursuant to the authorization of the commercial bank. A representative office shall not conduct business activities.

7. Service unit is a subsidiary of a commercial bank, having its own seal, conducting one or more support activities for business operations pursuant to the authorization of the commercial bank including:

a) Researching and applying banking technology for commercial banks;

b) Training and upgrading skills for staff of commercial banks;

c) Storing database, processing information to serve the business operations of the commercial bank;

d) Centralizing certain banking transactions, providing customers with certain services related to banking transactions of the commercial bank;

đ) Other support activities for business operations in accordance with the provisions of the law.

8. Transaction room is a subordinate unit of a trading department or branch of a commercial bank, reportable accounting, having its own seal, conducting certain transactions with customers.

A transaction room shall not conduct the following activities:

a) Granting credit to a customer exceeding two billion Vietnamese dong or equivalent foreign currency, except when the credit is fully guaranteed by: cash, gold, savings certificates, securities issued by the commercial bank itself, government bonds, treasury bills;

b) International payment services, except for remittance agency services.

9. Savings fund is a subordinate unit of a trading department or branch of a commercial bank, reportable accounting, having its own seal, conducting one or more of the following transactions with customers:

a) Mobilizing savings deposits;

b) Issuing and discounting securities issued by the commercial bank itself;

c) Remittance agency services; domestic money transfer services.

10. Automatic Teller Machine (ATM) is equipment used by the commercial bank to provide customers with certain banking services including: depositing, withdrawing cash, and transferring funds; checking transaction information and using other services as prescribed by law.

11. Transaction point is a subordinate unit of a trading department or branch of a commercial bank, without its own seal.

A transaction point conducts research, customer identification, introduction, acceptance of loan application files, disbursement, and debt collection for credit contracts signed by the trading department or branch with customers.

Article 3. Operating Time of Branches, Representative Offices, and Business Units

The operating time of branches, representative offices, and business units shall be determined by commercial banks, with a maximum duration not exceeding the remaining operating time of the commercial bank from the date of opening the branches, representative offices, business units.

Article 4. Autonomy Rights of Commercial Banks

1. Commercial banks decide and are responsible for establishing, suspending operations of branches, representative offices, business units, transaction offices, savings funds, ATMs, and transaction points in accordance with this Regulation and relevant laws.

2. Commercial banks decide:

a) Delegation, investment in physical infrastructure, appointment, and dismissal of staff for branches, representative offices, business units, transaction offices, savings funds, ATMs, and transaction points.

b) Authority of heads of units: branches, representative offices, business units, transaction offices, savings funds, and transaction points.

c) Main branches open accounts at the State Bank branch in the province or city where the commercial bank has its branches.

Article 5. Establishment of Documents

Applications to establish, change names and/or locations, and terminate operations of branches, representative offices, and business units of commercial banks must be prepared in Vietnamese.

In case they are prepared in a foreign language, the documents must be translated into Vietnamese and certified according to regulations.

Chapter II.

SPECIFIC PROVISIONS

Section 1. ESTABLISHMENT, NAME CHANGE, LOCATION CHANGE, AND TERMINATION OF OPERATIONS OF BRANCHES, REPRESENTATIVE OFFICES, AND BUSINESS UNITS WITHIN THE COUNTRY

Article 6. Conditions for Establishing Domestic Branches

1. Within one year from the date of operation commencement, based on the plan for establishing branches stated in the application for establishment and operation license, commercial banks may establish branches and up to two additional branches when meeting the following conditions:

a) Business plans for the first three years ensure safety ratios in banking operations as prescribed by the State Bank;

b) Have an information system that meets the online management requirements of the commercial bank; have internal regulations to manage branches ensuring safe, effective, and lawful operations.

2. After one year from the date of operation commencement, commercial banks may establish branches when meeting the following conditions:

a) Profitable operations in the preceding year immediately before the request to establish branches; ensuring safety ratios in banking operations; classifying debts, setting aside adequate risk provisions as prescribed; non-performing debt ratio below 3% of total loans at the time of requesting to establish branches;

b) Having an effective management, operation, and internal audit system;

c) Having an internal inspection and control system as prescribed by the State Bank;

d) Having an information system that meets the online management requirements of the commercial bank; complying with statistical reporting systems as prescribed by the State Bank;

đ) Having written internal regulations to manage branches ensuring safe, effective, and lawful operations;

e) Not being subject to administrative penalties totaling thirty million dong or more by the Banking Inspection within one year prior to the request to establish branches;

g) The number of branches established by commercial banks must meet the following condition:

100 billion x N1 + 50 billion x N2 < C

Where:

- C where C is the charter capital of the commercial bank (in billion Vietnamese dong).

- N1 is the number of branches already established and proposed to be established in Hanoi and Ho Chi Minh City.

- N2 is the number of branches already established and proposed to be established outside Hanoi and Ho Chi Minh City.

Article 7. Conditions for opening representative offices and non-business units within the country

Commercial banks may open representative offices and non-business units when meeting the following conditions:

1. Having at least one year of operation;

2. Possessing an effective management, operational, and internal audit system;

3. Having an internal inspection and control system in accordance with the regulations of the State Bank;

4. Having information systems that meet the management requirements of commercial banks for representative offices and non-business units; complying with the statistical reporting regime as prescribed by the State Bank;

5. Having internal regulations in writing to manage representative offices and non-business units to ensure safe, efficient, and lawful operations.

Article 8. Documents and Procedures for Opening Trading Offices, Branches, Representative Offices, and Non-Business Units Within the Country

1. The application documents for opening trading offices, branches, representative offices, and non-business units of commercial banks sent to the State Bank branch in the province or city where the commercial bank's headquarters is located include:

a) A written request from the Chairman of the Board of Directors of the commercial bank to open trading offices, branches, representative offices, and non-business units according to Appendix 01 attached to this Regulation;

b) The resolution of the Board of Directors of the commercial bank on the establishment of trading offices, branches, representative offices, and non-business units;

c) A proposal for opening trading offices, branches, representative offices, and non-business units, including the necessity, content of activities, location, key personnel, and business plans;

d) Internal management regulations for trading offices, branches, representative offices, and non-business units;

đ) Approval opinions of the People's Committee of the province or centrally governed city where the trading offices, branches, representative offices, and non-business units will be established;

e) Approval opinions of the State Bank branch in the province or city where the trading offices, branches, representative offices, and non-business units will be established.

2. Within ten working days from the date of receiving complete documents as stipulated in Clause 1 of this Article, the State Bank branch in the province or city where the commercial bank's headquarters is located shall submit the documents and report to the State Bank on whether the commercial bank meets the conditions for opening trading offices, branches, representative offices, and non-business units, and provide an opinion clearly stating agreement or disagreement with the establishment of trading offices, branches, representative offices, and non-business units of the commercial bank; if disagreeing, specify the reasons.

3. Within thirty working days from the date of receiving the documents and reports from the State Bank branch in the province or city where the commercial bank's headquarters is located as stipulated in Clause 2 of this Article, the State Bank shall issue a document approving the application for opening trading offices, branches, representative offices, and non-business units according to Appendix 02 attached to this Regulation; if not approving, issue a document specifying the reasons or any requirements (if any) to obtain approval.

4. Within fifteen working days from the date of receiving the State Bank's approval document, the Chairman of the Board of Directors of the commercial bank must issue a decision to open trading offices, branches, representative offices, and non-business units.

Article 9. Commencement of operations of trading offices, branches, representative offices, and affiliated units within the country

1. Within six months from the date of receiving the approval document from the State Bank, commercial banks must commence operations of trading offices, branches, representative offices, and affiliated units.

Trading offices, branches, representative offices, and affiliated units commence operations when meeting the following conditions:

a) Having business registration in accordance with the provisions of the law;

b) Having sufficient material infrastructure to meet operational requirements: having headquarters, vaults, information management systems, and money transfer facilities as prescribed by the State Bank;

c) Having sufficient personnel to meet minimum managerial requirements including: Director, Deputy Director, Heads of specialized departments for trading offices, branches, and affiliated units; Head of representative office for representative offices.

2. Fifteen working days before the commencement of operations of trading offices, branches, representative offices, and affiliated units, commercial banks must publish in newspapers in accordance with the provisions of the law; send a document to the State Bank and the State Bank branch in the province or city where the trading office, branch, representative office, or affiliated unit is opened, reporting on the fulfillment of the conditions stipulated in Clause 1 of this Article, accompanied by a copy of the business registration (certified) and a photograph of the published content.

3. In case there is a need to extend the commencement operation period prescribed in Clause 1 of this Article, twenty working days before the expiration of the commencement operation period, commercial banks must submit a document requesting an extension of the commencement operation period of trading offices, branches, representative offices, and affiliated units to the State Bank, clearly stating the reasons.

Within fifteen working days from the date of receipt of the request for extension of the commencement operation period from commercial banks, the State Bank must issue a document approving the extension of the commencement operation period of trading offices, branches, representative offices, and affiliated units; if not approved, it must issue a document clearly stating the reasons.

The maximum time for extending the commencement operation period of trading offices, branches, representative offices, and affiliated units shall not exceed six months.

4. At the end of the commencement operation period or the extended commencement operation period, if trading offices, branches, representative offices, and affiliated units do not commence operations, the approval document of the State Bank will lose its validity.

Article 10. Change of name and location of trading offices, branches, representative offices, and affiliated units within the country

1. The Governor of the State Bank authorizes the Director of the State Bank branch in the province or city to examine and approve requests for changing the name and location of trading offices, branches, representative offices, and affiliated units of commercial banks in their jurisdiction.

Trading offices, branches, representative offices, and affiliated units of commercial banks can only change their location within the administrative boundaries of the province or centrally-administered city where they are located.

2. The documents submitted by commercial banks to the State Bank branch in the province or city requesting a change of name and location of trading offices, branches, representative offices, and affiliated units include:

a) A document from the Chairman of the Board of Directors of the commercial bank requesting approval to change the name and location of trading offices, branches, representative offices, and affiliated units according to Appendix 03 attached to this Regulation;

b) A resolution of the Board of Directors of the commercial bank approving the change of name and location of trading offices, branches, representative offices, and affiliated units.

3. Within twenty working days from the date of receiving complete documents as stipulated in Clause 2 of this Article, the Director of the State Bank branch in the province or city must issue a document approving the request for a change of name and location of trading offices, branches, representative offices, and affiliated units of commercial banks according to Appendix 04 attached to this Regulation; if not approved, a document must be issued clearly stating the reasons or any requirements (if any) to obtain approval.

4. Within three months from the date of receipt of the approval document from the Director of the State Bank branch in the province or city, commercial banks must register changes in business, publish in newspapers in accordance with the law, and operate under the approved name and location.

Trading offices, branches, representative offices, and affiliated units can only operate at the new location when meeting the conditions stipulated in Point b Clause 1 of Article 9 of this Regulation.

5. At the end of the period stipulated in Clause 4 of this Article, if trading offices, branches, representative offices, and affiliated units do not operate under the approved name and location, the approval document of the State Bank branch in the province or city will lose its validity.

6. Ten working days before trading offices, branches, representative offices, and affiliated units operate under the new name and address, commercial banks must submit to the State Bank branch in the province or city a certified copy of the business registration and a photograph of the published content.

Article 11. Opening, changing name and/or location, and terminating operations of transaction offices, savings funds, and ATMs

1. The Governor of the State Bank of Vietnam authorizes the Director of the State Bank of Vietnam branch in provinces and cities to confirm registration for opening, changing name and/or location, and terminating operations of transaction offices, savings funds, and ATMs of commercial banks within their jurisdiction.

2. Commercial banks may open transaction offices, savings funds, and ATMs within the province or centrally governed city where their transaction centers or branches are located if they meet the following conditions:

a) Having sufficient staff with the necessary qualifications and professional experience to meet the operational requirements of transaction offices and savings funds;

b) Having adequate physical facilities to ensure safety in transactions, vaults (if applicable), money transfers, fire prevention, and firefighting according to the regulations of the State Bank of Vietnam and relevant laws;

c) Having internal regulations in writing to manage transaction offices, savings funds, and ATMs to ensure safe, effective operations, and compliance with legal provisions.

3. Commercial banks must submit a written registration for opening, changing name and/or location, and terminating operations of transaction offices, savings funds, and ATMs to the State Bank of Vietnam branch in the province or city according to Appendix 05 attached to this Regulation.

4. Within five working days from the date of receipt of the registration document from the commercial bank, the State Bank of Vietnam branch in the province or city shall issue a confirmation document for the registration of opening, changing name and/or location, and terminating operations of transaction offices, savings funds, and ATMs according to Appendix 06 attached to this Regulation.

5. The Chairman of the Board of Management of commercial banks may authorize the Director of the transaction center or branch to sign the registration document and send it to the State Bank of Vietnam branch in the province or city where the transaction center or branch is located.

6. Commercial banks must register business operations according to the law and commence operations of transaction offices, savings funds, and ATMs after receiving the confirmation document from the State Bank of Vietnam branch in the province or city.

Article 12. Terminating Operations of Transaction Centers, Branches, Representative Offices, and Domestic Non-Profit Units

1. Transaction centers, branches, representative offices, and domestic non-profit units of commercial banks shall terminate operations in any of the following cases:

a) Voluntary termination of operations.

b) Compulsory termination of operations.

c) Automatic termination of operations.

2. Commercial banks are responsible for the rights and obligations of transaction centers, branches, representative offices, and domestic non-profit units that have terminated operations.

Article 13. Voluntary Termination of Operations of Transaction Centers, Branches, Representative Offices, and Domestic Non-Profit Units

1. The voluntary termination operation dossier of commercial banks' transaction centers, branches, representative offices, and domestic non-profit units submitted to the State Bank of Vietnam includes:

a) A document from the Chairman of the Board of Management of the commercial bank requesting the termination of operations of transaction centers, branches, representative offices, and domestic non-profit units according to Appendix 07 attached to this Regulation;

b) A resolution of the Board of Management of the commercial bank regarding the termination of operations of transaction centers, branches, representative offices, and domestic non-profit units;

c) A plan for resolving the rights and obligations towards customers of transaction centers, branches, representative offices, and domestic non-profit units that have terminated operations.

2. Within thirty working days from the date of receipt of the complete dossier as stipulated in Clause 1 of this Article, the State Bank of Vietnam shall issue a document approving the request for the termination of operations of transaction centers, branches, representative offices, and domestic non-profit units of commercial banks according to Appendix 08 attached to this Regulation; in case of disapproval, a document stating the reasons or any requirements (if any) for termination of operations shall be issued.

3. Within fifteen working days from the date of receipt of the approval document from the State Bank of Vietnam, the Chairman of the Board of Management of the commercial bank must issue a decision to terminate operations of transaction centers, branches, representative offices, and domestic non-profit units and implement the legal procedures according to the law.

The decision to terminate operations of transaction centers, branches, representative offices, and domestic non-profit units by the Chairman of the Board of Management of the commercial bank must include the following contents:

a) The name and address of the transaction center, branch, representative office, or domestic non-profit unit that has terminated operations;

b) The reason for the termination of operations of the transaction center, branch, representative office, or domestic non-profit unit;

c) The date of termination of operations of the transaction center, branch, representative office, or domestic non-profit unit;

d) The responsibility of the commercial bank for the rights and obligations towards customers of the transaction center, branch, representative office, or domestic non-profit unit that has terminated operations;

đ) Other related contents.

Article 14. Compulsory Termination of Domestic Branches, Representative Offices, and Service Units Operations

1. A commercial bank's branch, representative office, or service unit shall be compulsorily terminated when any of the following circumstances occur:

a) There is evidence that the application documents for establishing a branch, representative office, or service unit contain false information.

b) It does not meet the conditions for commencing operations as stipulated in Clause 1, Article 9 of this Regulation.

c) At the request of the competent state agency.

d) It operates contrary to its purpose or beyond the scope of activities permitted by law.

2. Based on the circumstances specified in Clause 1 of this Article, the State Bank shall issue a document requesting a commercial bank to terminate the operations of its branches, representative offices, or service units according to Appendix 08 attached to this Regulation.

3. In case a commercial bank appeals against the document issued by the State Bank as stipulated in Clause 2 of this Article, within five working days from the date of receipt of the State Bank's request document, the Chairman of the Commercial Bank's Board of Directors must send a document to the State Bank for resolution in accordance with the law.

4. Within fifteen working days from the date of the State Bank's document requesting termination of the operations of branches, representative offices, or service units, the Chairman of the Commercial Bank's Board of Directors must:

a) Submit to the State Bank a plan to resolve the rights and obligations towards customers of the branch, representative office, or service unit;

b) Issue a decision to terminate the operations of the branch, representative office, or service unit;

c) Carry out the legal procedures to terminate the operations of the branch, representative office, or service unit in accordance with the law.

The decision to terminate the operations of the branch, representative office, or service unit by the Chairman of the Commercial Bank's Board of Directors must include the contents as prescribed in Clause 3, Article 13 of this Regulation.

Article 15. Automatic Termination of Domestic Branches, Representative Offices, and Service Units Operations

1. A commercial bank's branch, representative office, or service unit shall automatically terminate its operations if the commercial bank ceases operations.

2. The documentation, procedure, and process for the automatic termination of the operations of a commercial bank's branch, representative office, or service unit shall be carried out in accordance with the law on the cessation of commercial bank operations.

Article 16. Announcement of Termination of Domestic Branches, Representative Offices, and Service Units Operations

1. The decision to terminate the operations of a commercial bank's branch, representative office, or service unit must be:

a) Sent to the State Bank;

b) Sent to the State Bank branch in the province or city where the branch, representative office, or service unit terminates its operations;

c) Publicly posted at the location of the branch, representative office, or service unit terminating its operations.

2. The commercial bank must publish in the press the termination of the operations of its branch, representative office, or service unit in accordance with the law.

Section 2. ESTABLISHING AND TERMINATING FOREIGN BRANCHES AND REPRESENTATIVE OFFICES

Article 17. Conditions for Establishing Foreign Branches and Representative Offices

A commercial bank may establish foreign branches and representative offices when it meets the following conditions:

1. Having at least five years of operation;

2. Achieving profitability for three consecutive years prior to the year of application for establishing foreign branches and representative offices; ensuring safety ratios; classifying debts and setting aside sufficient risk provisions as prescribed; the non-performing loan ratio relative to total outstanding loans being below 3% at the time of application for establishing foreign branches and representative offices;

3. Possessing an effective management, operational, and internal audit system;

4. Having an internal inspection and control system in accordance with the regulations of the State Bank;

5. Having an information system that meets the requirements for online management of commercial banks; complying with the statistical reporting regime as prescribed by the State Bank;

6. Having internal documents managing foreign branches and representative offices that ensure safe, efficient operations, and compliance with the laws of the host country;

7. Not having been administratively penalized by the Banking Inspection Authority with a total amount of thirty million dong or more within one year up to the date of application for establishing foreign branches and representative offices;

8. The supervisory authority of the host country where the branch or representative office is established must have a cooperation agreement on inspection and supervision with the Vietnamese banking supervisory authority.

Article 18. Documents and Procedures for Establishing Foreign Branches and Representative Offices

1. The application documents for establishing foreign branches and representative offices submitted to the State Bank at the location of the headquarters of the commercial bank include:

a) A document from the Chairman of the Board of Directors of the commercial bank requesting the State Bank's approval to establish foreign branches and representative offices according to Appendix 09 attached to this Regulation;

b) The Board of Directors' resolution on establishing foreign branches and representative offices;

c) A proposal for establishing foreign branches and representative offices, detailing the necessity, organizational structure and personnel, scope and content of activities, and a three-year activity plan;

d) Internal regulations governing foreign branches and representative offices.

2. A commercial bank may establish foreign branches and representative offices after receiving the State Bank's approval document and complying with the laws regarding overseas investment.

3. The establishment of foreign branches and representative offices by a commercial bank must comply with the laws of the host country where the branches and representative offices are established.

4. Within ten working days from the date of receipt of all required documents as stipulated in Clause 1 of this Article, the State Bank branch at the province or city where the commercial bank's headquarters is located shall submit the documents and report to the State Bank on whether the commercial bank meets the conditions for establishing foreign branches and representative offices, and provide an opinion clearly stating agreement or disagreement; if disagreeing, the reasons must be specified.

5. Within thirty working days from the date of receipt of the documents and report from the State Bank branch at the province or city where the commercial bank's headquarters is located as stipulated in Clause 4 of this Article, the State Bank shall issue an approval document for the application to establish foreign branches and representative offices according to Appendix 10 attached to this Regulation; if not approving, it shall issue a document specifying the reasons or any requirements (if any) for approval.

6. Within eighteen months from the date of the State Bank's approval document, the commercial bank must complete legal procedures, prepare physical facilities and personnel in accordance with the regulations of the host country where the branches and representative offices are established to obtain permission from the competent authority of the host country to establish branches and representative offices.

7. Upon expiration of the period specified in Clause 6 of this Article, if the commercial bank has not obtained permission from the competent authority of the host country to establish branches and representative offices, the State Bank's approval document will become invalid.

Article 19. Termination of Branches and Representative Offices Abroad

1. The termination of branches and representative offices abroad of commercial banks must comply with the laws of the host country where such branches and representative offices are established.

2. Commercial banks must submit a written report to the State Bank of Vietnam regarding the termination of their branches and representative offices abroad thirty working days before the date of termination.

Chapter III.

IMPLEMENTATION

Section 1. RESPONSIBILITIES OF COMMERCIAL BANKS

Article 20. Adjustment of the Network of Operations of Commercial Banks

1. Within one year from the effective date of this Regulation, commercial banks must adjust:

a) Existing trading offices of commercial banks according to this Regulation;

b) Trading rooms, savings funds, ATMs outside the province or city where the trading office or branch is located, according to this Regulation;

c) Existing trading points, credit groups according to this Regulation.

2. Commercial banks are not required to adjust the number of branches currently operating that exceed the number of branches specified in Clause 2, Article 6 of this Regulation.

Article 21. Reporting

1. Trading offices, branches, representative offices, and affiliated units of commercial banks must implement statistical reporting systems as prescribed by the State Bank of Vietnam.

2. Trading offices, branches, representative offices, and affiliated units of commercial banks have the responsibility to submit special reports upon request of the State Bank of Vietnam, the State Bank of Vietnam branch in the province or city where the trading office, branch, representative office, or affiliated unit is located.

Article 22. Handling of Violations

Commercial banks that violate this Regulation will be subject to legal sanctions.

Section 2. RESPONSIBILITIES OF UNITS UNDER THE STATE BANK OF VIETNAM

Article 23. Responsibilities of the Department of Banks and Non-Bank Credit Institutions

The Department of Banks and Non-Bank Credit Institutions has the responsibility to:

1. After receiving the file and report from the State Bank of Vietnam branch in the province or city where the commercial bank's headquarters is located regarding the establishment of trading offices, branches, representative offices, and affiliated units of commercial banks as stipulated in Articles 8 and 18 of this Regulation, the Department of Banks and Non-Bank Credit Institutions shall send a document seeking opinions from the Inspectorate of the State Bank of Vietnam and the Monetary Policy Department; compile and present to the Governor of the State Bank of Vietnam for consideration and approval or disapproval of the proposal to establish trading offices, branches, representative offices, and affiliated units.

2. After receiving complete files requesting the termination of trading offices, branches, representative offices, and affiliated units of commercial banks as stipulated in Clause 1, Article 13 or based on the cases specified in Clause 1, Article 14 of this Regulation, the Department of Banks and Non-Bank Credit Institutions shall send a document seeking opinions from the Inspectorate of the State Bank of Vietnam and the State Bank of Vietnam branch in the province or city where the trading office, branch, representative office, or affiliated unit of the commercial bank is located; compile and present to the Governor of the State Bank of Vietnam for consideration and approval or disapproval of the proposal to terminate trading offices, branches, representative offices, and affiliated units or issue a document requiring the commercial bank to terminate trading offices, branches, representative offices, and affiliated units.

3. Compile and monitor the establishment and termination of trading offices, branches, representative offices, and affiliated units of commercial banks.

4. Serve as the main unit to receive reports from the State Bank of Vietnam branch in the province or city regarding:

a) Changes in name and location of trading offices, branches, representative offices, and affiliated units of commercial banks.

b) Establishment, change in name and/or location, and termination of trading rooms, savings funds, and ATMs of commercial banks.

Article 24. Responsibilities of the State Bank of Vietnam Inspectorate

Within ten working days from the date of receipt of the document from the Department of Banks and Non-Bank Credit Institutions regarding the establishment, termination of operations of trading offices, branches, representative offices, and affiliated units, the State Bank of Vietnam Inspectorate shall issue a document evaluating the fulfillment of conditions for establishing trading offices, branches, representative offices, and affiliated units by commercial banks, and provide opinions on the termination of operations of trading offices, branches, representative offices, and affiliated units of commercial banks.

Article 25. Responsibilities of the Monetary Policy Department

Within ten working days from the date of receipt of the document from the Department of Banks and Non-Bank Credit Institutions regarding the establishment of trading offices, branches, representative offices, and affiliated units, the Monetary Policy Department shall issue a document evaluating the compliance with the State Bank of Vietnam's regulations on statistical reporting systems for commercial banks.

Article 26. Responsibilities of the State Bank of Vietnam Branches in Provinces/Cities where Commercial Banks have their Head Office

1. After receiving the complete files as stipulated in Clause 1 of Article 8 or Clause 1 of Article 18 of this Regulation, the State Bank of Vietnam Branches in Provinces/Cities where Commercial Banks have their Head Office shall be responsible for evaluating whether commercial banks meet the conditions for establishing trading offices, branches, representative offices, and affiliated units, and providing an opinion of agreement or disagreement; in case of disagreement, clearly stating the reasons.

2. The Director of the State Bank of Vietnam Branches in Provinces/Cities shall be responsible to the Governor of the State Bank of Vietnam for the opinions stated in Clause 1 of this Article.

Article 27. Responsibilities of the State Bank of Vietnam Branches in Provinces/Cities where Commercial Banks have Trading Offices, Branches, Representative Offices, and Affiliated Units

1. The State Bank of Vietnam Branches in Provinces/Cities where Commercial Banks have Trading Offices, Branches, Representative Offices, and Affiliated Units shall be responsible for:

a) Within ten working days from the date of receipt of the document requesting the establishment of trading offices, branches, representative offices, and affiliated units by commercial banks, the State Bank of Vietnam Branches in Provinces/Cities shall issue a document responding to commercial banks, clearly stating the opinion of agreement or disagreement; in case of disagreement, clearly stating the reasons.

b) Within ten working days from the date of receipt of the document from the Department of Banks and Non-Bank Credit Institutions regarding the termination of operations of trading offices, branches, representative offices, and affiliated units by commercial banks, the State Bank of Vietnam Branches in Provinces/Cities shall issue a document sent to the State Bank of Vietnam, clearly stating the opinion of agreement or disagreement; in case of disagreement, clearly stating the reasons.

c) Inspecting and supervising the opening and termination of operations of trading offices, branches, representative offices, and affiliated units of commercial banks within the area; handling violations according to regulations and reporting to the State Bank of Vietnam.

d) Considering and approving, then reporting to the State Bank of Vietnam changes in the name and/or location of trading offices, branches, representative offices, and affiliated units of commercial banks within the area.

đ) Confirming registration for the establishment, change of name and/or location, and termination of operations of trading rooms, savings funds, and ATMs of commercial banks within the area.

e) Inspecting and supervising the operations of trading rooms, savings funds, and ATMs of commercial banks within the area.

Upon discovering that trading rooms, savings funds, and ATMs within the area do not meet the conditions stipulated in Clause 2 of Article 11 of this Regulation, the State Bank of Vietnam Branches in Provinces/Cities must require commercial banks to temporarily suspend the operation of trading rooms, savings funds, and ATMs, and take measures to rectify or terminate the operations of trading rooms, savings funds, and ATMs; handle violations according to the law.

g) Reporting to the State Bank of Vietnam quarterly or at any time upon request, the situation regarding the establishment, change of name and/or location, and termination of operations of trading rooms, savings funds, and ATMs of commercial banks within the area.

2. The Director of the State Bank of Vietnam Branches in Provinces/Cities shall be responsible to the Governor of the State Bank of Vietnam for the opinions and decisions stated in Clause 1 of this Article.