Circular No. 13/2019/TT-NHNN Amending and supplementing certain provisions of related Circulars concerning the issuance of licenses, organization, and operation of credit institutions, foreign bank branches

CIRCULAR

Amending and supplementing certain Articles of Circulars related to

the issuance of licenses, organization and operation of credit institutions,

foreign bank branches

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 Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Law on Cooperatives dated November 20, 2012;

Pursuant to Decree No. 26/2014/NĐ-CP dated April 7, 2014 of the Government on the organization and operation of vinspection, supervision of the banking industry, Tinspection, supervision sector N |||near correctionB. LEVELS OF APPROVAL/RECORDING OF REPORTS ON OIL AND GAS RESOURCES AND RESERVES

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

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 this Circular to amend and supplement certain Articles of Circulars related to the issuance of licenses, organization and operation of credit institutions, foreign bank branches.

Article 1. Amending and supplementing certain Articles of Circular No. 03/2018/TT-NHNN dated February 23, 2018 of the Governor of the State Bank of Vietnam on the issuance of licenses, organization and operation of microfinance organizations

1. Clause 2 of Article 36 shall be amended and supplemented as follows:

“2. Inspection, supervision, and handling of violations by microfinance organizations in implementing the provisions of this Circular and relevant laws.”

2. Clause 1 of Article 37 shall be amended and supplemented as follows:

“1. Inspection, supervision, and handling of violations by units under microfinance organizations within their jurisdiction according to the law.”

Article 2. Amending and supplementing certain Articles of Circular No. 22/2018/TT-NHNN dated September 5, 2018 of the Governor of the State Bank of Vietnam guiding procedures and documents for approving lists of proposed personnel of commercial banks, non-bank credit institutions, and foreign bank branches (hereinafter referred to as Circular No. 22/2018/TT-NHNN)

The title "People's Artist" shall be awarded to individuals specified in Clause 2 of Article 2 of this Decree who meet the following criteria:

“3. Documents attached to the list of documents submitted by credit institutions, foreign bank branches via postal service or directly at the State Bank or its branch in provinces and centrally-run cities (hereinafter referred to as State Bank branch) according to the authority stipulated in Article 4 of this Circular.”

2. Clause 4 shall be amended and supplemented as follows:

“Article 4. Authority to approve lists of proposed personnel of credit institutions, foreign bank branches

1. The Governor of the State Bank shall examine and approve lists of proposed personnel of credit institutions, foreign bank branches, except in cases provided for in Clause 2 of this Article.

2. The Director of the State Bank branch shall examine and approve lists of proposed personnel of foreign bank branches with headquarters in their jurisdiction, subject to the micro-prudential supervision of the State Bank branch.”

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

“b) List of proposed personnel, specifying: full name, position, current workplace; proposed position to be elected or appointed at the credit institution; name of individual or organization nominating; shareholding ratio or capital contribution that the proposed personnel will represent as proxy for the nominating organization (if applicable);”

4. Supplementing point d of Clause 1 of Article 6 as follows:

“d) Commitment to bear legal responsibility for the proposed personnel not being in the prohibited positions as stipulated in the Law on Credit Institutions.”

5. Clause 4 Article 6 shall be amended and supplemented as follows:

“4. Criminal record certificate of the proposed personnel to be elected or appointed:

a) For proposed personnel with Vietnamese nationality: Criminal record certificate issued by the criminal record management agency, which must include complete information about criminal records (including expunged and unexpunged records) and information about prohibition from holding positions, establishing, managing enterprises, cooperatives;

b) For proposed personnel without Vietnamese nationality: Criminal record certificate or equivalent document (containing complete information about criminal records; information about prohibition from holding positions, establishing, managing enterprises, cooperatives) must be issued by competent authorities in Vietnam or abroad according to regulations. In case the criminal record certificate or equivalent document issued by foreign authorities does not contain information about prohibition from holding positions, establishing, managing enterprises, cooperatives, then the owner (for credit institutions, it is a limited liability company with one member), shareholder (for credit institutions, it is a limited liability company with two or more members), shareholder, group of shareholders, Board of Directors, Supervisory Board (for credit institutions, it is a joint stock company) nominating the proposed personnel must provide a statement explaining the absence of such information from the issuing authority and commit to bear legal responsibility for the proposed personnel not being in the prohibited positions as stipulated in the Law on Credit Institutions;

c) The criminal record certificate or equivalent document stipulated in points a and b of this clause must be issued by the competent authority before the credit institution submits the application for approval of the list of proposed personnel, not exceeding six months.”

6. Supplementing Clause 2a after Clause 2 of Article 7 as follows:

“2a. Criminal record certificate of the proposed personnel to be appointed:

a) For proposed personnel with Vietnamese nationality: Criminal record certificate issued by the criminal record management agency, which must include complete information about criminal records (including expunged and unexpunged records) and information about prohibition from holding positions, establishing, managing enterprises, cooperatives;

b) For proposed personnel without Vietnamese nationality: Criminal record certificate or equivalent document (containing complete information about criminal records; information about prohibition from holding positions, establishing, managing enterprises, cooperatives) must be issued by competent authorities in Vietnam or abroad according to regulations. In case the criminal record certificate or equivalent document issued by foreign authorities does not contain information about prohibition from holding positions, establishing, managing enterprises, cooperatives, then the foreign bank must provide a statement explaining the absence of such information from the issuing authority and commit to bear legal responsibility for the proposed personnel not being in the prohibited positions as stipulated in the Law on Credit Institutions;

c) The criminal record certificate or equivalent document prescribed in points a and b of this clause must be issued by the competent authority before the foreign bank branch submits its application for approval of the proposed personnel list, not more than six months prior to such submission.”

7. Clause 3 of Article 7 shall be amended and supplemented as follows:

“3. The files and documents prescribed in Clauses 3, 5, 6, and 8 of Article 6 of this Circular.”

8. Article 8 shall be amended and supplemented as follows:

“Article 8. Procedures for approving the list of proposed personnel of credit institutions and foreign bank branches

1. Credit institutions and foreign bank branches shall prepare one set of documents in accordance with Articles 6 and 7 of this Circular and submit them to the State Bank of Vietnam for the subjects specified in Clause 1 of Article 4 of this Circular, or to the State Bank of Vietnam branch for the subjects specified in Clause 2 of Article 4 of this Circular. In case the submitted documents are incomplete or invalid, within seven working days from the date of receipt of the documents, the State Bank of Vietnam (the Banking Inspection and Supervision Department) or the State Bank of Vietnam branch shall issue a written request to the credit institution or foreign bank branch to supplement the documents.

2. Credit institutions and foreign bank branches shall complete the supplementary documents according to the requirements of the State Bank of Vietnam (the Banking Inspection and Supervision Department) or the State Bank of Vietnam branch within a maximum period of forty-five working days from the date the State Bank of Vietnam (the Banking Inspection and Supervision Department) or the State Bank of Vietnam branch issues the written request for supplementary documents. Beyond this deadline, the credit institution or foreign bank branch must resubmit the set of documents in accordance with this Circular for the State Bank of Vietnam or the State Bank of Vietnam branch to review and approve.

3. Within thirty working days from the date of receiving all documents as stipulated in Articles 6 and 7 of this Circular, the State Bank of Vietnam or the State Bank of Vietnam branch shall issue a written approval or disapproval of the proposed personnel of the credit institution or foreign bank branch. In case of disapproval, the written response from the State Bank of Vietnam or the State Bank of Vietnam branch to the credit institution or foreign bank branch must clearly state the reasons.”

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

“Article 11. Implementation of notification and reporting systems

1. Credit institutions and foreign bank branches shall promptly notify the State Bank of Vietnam in writing about any changes related to the compliance with the standards and conditions of the proposed personnel during the period when the State Bank of Vietnam reviews the application for approval of the proposed personnel list, or from the date the State Bank of Vietnam issues the approval of the proposed personnel list until the personnel are elected or appointed, as follows:

a) For credit institutions and foreign bank branches specified in Clause 1 of Article 4 of this Circular: send to the Banking Inspection and Supervision Department;

b) For foreign bank branches specified in Clause 2 of Article 4 of this Circular: send to the State Bank of Vietnam branch where the foreign bank branch is located.

2. Within ten working days from the date of electing or appointing the positions of Chairman and members of the Board of Directors, Chairman and members of the Board of Members, Head and members of the Audit Committee, General Director (Director), credit institutions and foreign bank branches must issue a written notification to the State Bank of Vietnam in accordance with point a and b of Clause 1 of this Article regarding the list of persons elected or appointed in accordance with the attached Model Appendix No. 03 of this Circular.”

10. Clause 1 of Article 12 shall be amended and supplemented as follows:

“1. The Banking Inspection and Supervision Department shall be responsible for being the focal point for evaluating the compliance of the documents, standards, and conditions of the proposed personnel of credit institutions and foreign bank branches under the subjects specified in Clause 1 of Article 4 of this Circular, in accordance with the Law on Credit Institutions and this Circular; seek opinions from relevant units; compile and submit to the Governor of the State Bank of Vietnam for consideration, and issue a written approval or disapproval of the proposed personnel of the credit institution or foreign bank branch.”

11. Clause 3 of Article 12 shall be amended and supplemented as follows:

“3. Receive and review notifications from credit institutions and foreign bank branches as prescribed in Clause 2 of Article 11 of this Circular. In case of discovering errors, the Banking Inspection and Supervision Department shall require the credit institution or foreign bank branch to rectify the situation or propose measures for handling to the Governor of the State Bank of Vietnam.”

12. Article 13 shall be amended and supplemented as follows:

“Article 13. Responsibilities of the State Bank Branch

1. Within thirty working days from the date of receiving complete files of foreign bank branches as specified in Clause 2, Article 4 of this Circular, the State Bank Branch shall be responsible for evaluating the compliance of the proposed personnel of the foreign bank branch with the requirements set forth in the Law on Credit Institutions and this Circular; seeking opinions from relevant units; issuing a document to approve or disapprove the proposed personnel of the foreign bank branch.

2. The State Bank Branch shall provide written comments upon request of the Banking Inspection and Supervision Authority within five working days from the date of receipt of the request.

3. Receive notifications from foreign bank branches as stipulated in Clause 1 of Article 11 of this Circular; review the compliance of the proposed personnel with the requirements or measures to address non-compliance.

4. Receiving and reviewing notifications of foreign bank branches as stipulated in Clause 2, Article 11 of this Circular. In case of discovering errors, the State Bank Branch shall require the foreign bank branch to rectify them or propose measures to the Governor of the State Bank of Vietnam for handling if it exceeds its authority.

13. Supplementing Point 4a following Point 4 of Appendix No. 01 as follows:

“4a. Information about prohibition from holding positions, establishing, and managing enterprises and cooperatives (in cases where the criminal record certificate or equivalent document issued by the competent authority of the foreign country does not contain such information).”.

Article 3. Amending and supplementing some articles of Circular No. 23/2018/TT-NHNN dated September 14, 2018 of the Governor of the State Bank of Vietnam on restructuring, revoking licenses, and liquidating assets of people's credit funds

1. Abolishing Point c (iii) Clause 1, Article 13.

2. Point d Clause 1, Article 13 shall be amended and supplemented as follows:

“d) Within fifteen days from the date of receipt of the document requesting comments, the People's Committee of the commune shall issue a document providing comments on the contents requested;”

3. Points c and d Clause 1, Article 17 shall be amended and supplemented as follows:

“c) Within fifteen days from the date of receipt of complete valid files, the State Bank Branch shall issue a document soliciting opinions from:

(i) The People's Committee of the commune where the people's credit fund has its main office regarding dissolution, revocation of the License; impact of dissolution, revocation of the License on political stability, socio-economic conditions in the locality;

(ii) The Vietnam Cooperative Bank regarding the impact of dissolution, revocation of the License;

d) Within fifteen days from the date of receipt of the document from the State Bank Branch, the units solicited for opinions as specified in Point c of this Clause shall issue a document providing comments on the contents requested;”

4. Clause 2, Article 27 shall be amended and supplemented as follows:

“2. The liquidation supervisory team shall consist of at least three members including representatives of the State Bank Branch, the Vietnam Cooperative Bank, and the Vietnam Deposit Insurance Corporation (in cases where the Vietnam Deposit Insurance Corporation provides special loans to the people's credit fund).”

5. Point d Clause 1, Article 31 shall be amended and supplemented as follows:

“d) Inspecting people's credit funds in the locality in the implementation of restructuring in accordance with the provisions of this Circular and related laws.”

6. Article 32 shall be amended and supplemented as follows:

“Article 32. Responsibilities of the Banking Inspection and Supervision Agency

1. The point of contact for receiving reports from State Bank branches on the situation regarding the restructuring, revocation of Licenses, and liquidation of assets of people's credit funds as stipulated in Clause 3, Article 31 of this Circular.

2. The point of contact for advising and submitting to the Governor decisions to amend and supplement relevant provisions concerning the restructuring, revocation of Licenses, and liquidation of assets of people's credit funds.

3. The point of contact for advising and submitting to the Governor matters related to considering and submitting to the Government decisions on the dissolution of people's credit funds under special control as provided for in Clause 1, Article 18 of this Circular.”

Article 4. Repeal certain Articles of Circular No. 36/2014/TT-NHNN dated November 20, 2014 of the Governor of the State Bank of Vietnam on limits and ratios ensuring safety in the operations of credit institutions and foreign bank branches

Repeal Point c, Clause 1, and Clause 5, Article 29.

Article 5. Transitional Provisions

For applications for approval of proposed personnel lists of foreign bank branches that have been received by the Banking Inspection and Supervision Agency before August 26, 2019, the Banking Inspection and Supervision Agency shall continue to process and submit to the Governor of the State Bank of Vietnam for consideration and approval in accordance with Circular No. 22/2018/TT-NHNN amended and supplemented by Article 2 of this Circular.

Article 6. Responsibility for Organizing Implementation

The Director of the Office, the Head of Banking Inspection and Supervision, Heads of units under the State Bank, Governors of State Bank branches in provinces and centrally-administered cities, Chairmen and members of Management Councils, Members of Boards of Directors, Heads and members of Supervisory Boards, General Managers (Directors) of credit institutions, and General Managers (Directors) of foreign bank branches are responsible for implementing this Circular.

Article 7. Implementation Provisions

1. This Circular takes effect from October 5, 2019, except for the provision in Clause 2 of this Article.

2. Article 2 of this Circular takes effect from August 26, 2019./.