Decision No. 1390/2001/QD-NHNN Issuing the Model Charter on the Organization and Operation of Debt Management and Asset Exploitation Companies Subordinate to Commercial Banks

DECISION

Issuing Model Regulations on the Organization and Operation of Debt Management Companies

and Asset Exploitation under Commercial Banks

 GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 and the Law on Credit Organizations No. 02/1997/QH10 dated December 12, 1997;

Pursuant to the Government Decree No. 15/CP dated March 2, 1993 on the tasks, powers, and responsibilities of state management of ministries and ministerial-level agencies;

Pursuant to Decision No. 149/2001/QĐ-TTg dated October 5, 2001 of the Prime Minister approving the Project to handle overdue debts of commercial banks;

Pursuant to Decision No. 150/2001/QĐ-TTg dated October 5, 2001 of the Prime Minister establishing debt management companies and asset exploitation under commercial banks;

Issued herewith are the Regulations on Loan Classification, Provisioning, and Utilization for Credit Risk Management in Banking Activities of Credit Institutions.

Pursuant to …;

Article 1.

These Model Regulations on the organization and operation of debt management companies and asset exploitation under commercial banks are hereby issued together with this Decision.

Article 2.

This Decision shall take effect fifteen days from the date of signature and replace Decision No. 306/2000/QĐ-NHNN5 dated September 15, 2000 of the Governor of the State Bank of Vietnam promulgating temporary model regulations on the charter of debt management companies and collateral asset exploitation of commercial banks.

Article 3.

The Heads of the Office, Department Heads of the Department of Commercial Banks and Non-Bank Credit Institutions, Heads of Units under the State Bank of Vietnam, Governors of Provincial Branches of the State Bank of Vietnam under central cities, Chairmen of the Board of Directors, General Managers (Directors) of commercial banks are responsible for implementing this Decision.

 

MODEL REGULATIONS

ON THE ORGANIZATION AND OPERATION OF DEBT MANAGEMENT COMPANIES AND ASSET EXPLOITATION UNDER COMMERCIAL BANKS
(Issued together with Decision No. 1390/2001/QĐ-NHNN dated November 7, 2001 of the Governor of the State Bank of Vietnam)

Chapter 1
GENERAL PROVISIONS

Article 1. Nature of ownership, purpose, and scope of activities

A debt management company and asset exploitation under a commercial bank (hereinafter referred to as the Company) is a company with legal personality, independently accounting for its own capital, established pursuant to Decision No. [date] of the Chairman of the Board of Directors of the commercial bank. The Company operates in the field of managing debts and exploiting assets securing loans.

Article 2. Name and address of the Company

1. Full name in Vietnamese

Abbreviated name in Vietnamese (if any)

2. International trading name in a commonly used foreign language (if any)

Abbreviated name in a commonly used foreign language (if any)

3. Head office

4. Telephone number:

Telex:

Fax:

Article 3. Legal personality and financial autonomy

Seal and emblem;

1. Legal personality under Vietnamese law

2. Official seal; accounts opened at domestic commercial banks.

3. Capital and assets, including registered capital of... (in figures and in words) provided by the commercial bank; liable within the scope of the capital and assets owned by the Company.

4. Summary of assets, funds according to the provisions of the law.

Article 4. The term of operation of the Company begins from the date of issuance of the Business Registration Certificate.

The term of operation of the Company shall not exceed the remaining period of operation of the commercial bank.

Article 5. Principles of organization and management

1. The Company is managed by the Director of the Company.

2. The Company is subject to management and inspection by the commercial bank regarding organizational structure and personnel, content and scope of operations; subject to management, supervision, and inspection by the State Bank of Vietnam and other competent state agencies as prescribed by law.

Chapter 2
ORGANIZATION, MANAGEMENT, AND OPERATIONAL CONTROL

Article 6. Appointment and removal of the Director, Deputy Directors, Head of Accounting Department, and Internal Audit Team Leader.

1. The Chairman of the Board of Directors of the commercial bank appoints and removes the Director and Head of Accounting Department of the Company upon the proposal of the General Manager of the commercial bank.

2. The General Manager of the commercial bank appoints and removes Deputy Directors, Internal Audit Team Leaders, Branch Directors, Heads of Representative Offices of the Company, and other equivalent positions of the Company as stipulated in the Charter of the commercial bank.

Article 7. Director and supporting staff

1. The Director is responsible before the commercial bank and the law for managing the operations of the Company.

2. Supporting the Director are several Deputy Directors, Head of Accounting Department, and specialized and professional staff.

3. Deputy Directors assist the Director in managing one or more areas of the Company's operations as assigned by the Director and are responsible before the Director and the law for the tasks assigned by the Director.

4. The Head of Accounting Department assists the Director in directing accounting and statistical work of the Company, having rights and obligations as prescribed by law.

5. The Internal Audit Team Leader checks compliance with laws and internal regulations, and business activities of the Company.

6. Specialized and professional staff are defined by the Board of Directors of the commercial bank upon the proposal of the General Manager of the commercial bank, having functions to advise and support the Director in managing the operations of the Company.

Article 8. Duties and powers of the Director

1. Accepting capital and other resources assigned by the commercial bank for the Company to manage and utilize.

2. Submitting to the General Manager of the commercial bank:

- Amendments and supplements to the Charter of the Company;

- Establishment of branches and representative offices;

- Organizational structure of the management team at the head office of the Company, organizational structure of the management team at branches and representative offices of the Company;

- Appointments and dismissals of Deputy Directors, Head of Accounting Department, Internal Audit Team Leader of the Company; Branch Directors, Heads of Representative Offices of the Company, and other equivalent positions of the Company as stipulated in the Charter of the commercial bank;

- Operating regulations of the Company;

- Business plans and profit distribution plans after tax;

- Approving operating regulations of branches and representative offices of the Company for the Director to issue;

- Dissolution of the Company; division, merger, cessation of branch operations;

- Arranging independent audits to audit the Company;

- Annual consolidated financial statements and settlement of the Company;

- Detailed guidance on the implementation of state regulations and regulations of competent state agencies.

3. Appointing and dismissing Heads and Deputy Heads of specialized and professional departments of the Company (except positions specified in Article 6 of these Regulations); Deputy Directors of branches, Deputy Heads of Representative Offices, Heads and Deputy Heads of specialized and professional departments of branches.

4. Hiring, rewarding, disciplining, and terminating employees of the Company in accordance with the law.

5. Implement the business operation plan and the profit utilization plan after tax that have been approved.

6. Manage and decide on issues related to the company's business activities in accordance with the law, the company's charter, and the decisions of the commercial bank's board of directors; bear responsibility for the results of the company's business operations.

7. Represent the company in civil relations, litigation, disputes, and liquidation.

8. Apply measures beyond their authority in emergency situations (natural disasters, enemy threats, fires...) and be responsible for those decisions, subsequently reporting immediately to the board of directors and the general director of the commercial bank.

9. Be subject to inspection and supervision by the commercial bank's board of directors, supervisory board, the State Bank, and other state agencies authorized by law regarding the implementation of management tasks.

10. Report to the commercial bank's board of directors, the State Bank, and other state agencies as prescribed by law on the results of the company's business operations.

11. Other rights and duties as prescribed by law, the commercial bank's charter, and the decisions of the commercial bank's board of directors.

Chapter 3
RIGHTS, OBLIGATIONS, AND CONTENT OF ACTIVITIES OF THE COMPANY

Article 9. Rights and obligations of the company in business operations

1. Use effectively the capital and other resources assigned by the commercial bank.

2. Carry out the contents of activities stipulated in this Charter.

3. Select, hire, arrange, use, train labor, choose forms of salary and bonuses according to the Labor Code and other relevant laws.

4. Fulfill obligations towards employees as prescribed by the Labor Code, ensuring employees' right to participate in management.

5. Bear responsibility before the commercial bank and the law for all activities of the company.

6. Perform rights and obligations as prescribed by the commercial bank.

Article 10. Content of activities of the company

1. Receive and manage overdue debts (including secured debts and unsecured debts) and collateral assets for loans (mortgaged, pledged assets; debt-settlement assets; assets transferred by the court to the bank) related to debts for handling and recovering funds as quickly as possible;

2. Complete files related to debts as prescribed by law to submit to the Government's Steering Committee for Financial Restructuring of Commercial Banks for consideration, and to the Prime Minister for permission to write off debts for customers (for unsecured debts without recovery targets);

3. Proactively sell collateral assets for loans under the bank's disposal at market prices (the selling price may be higher or lower than the outstanding debt) through the following methods:

- Publicly sell on the market;

- Sell through the Asset Auction Service Center;

- Sell to the State-owned Debt Purchase Company (when established);

4. Restructure overdue debts using measures such as extending payment terms, reducing interest rates, additional investment, converting debt into equity contributions;

5. Dispose of collateral assets for loans using appropriate measures: renovate, repair, upgrade assets for sale, leasing, operating, contributing, joint ventures with assets to recover debts;

6. Carry out other activities as authorized by the commercial bank in accordance with the law.

7. Buy and sell overdue debts from other financial organizations, other commercial banks' asset management companies, in accordance with the law.

Chapter 4
FINANCE, ACCOUNTING, BOOKKEEPING

Article 11. The company's operating capital includes:

1. Registered capital: provided by the commercial bank.

2. Loans from domestic and foreign financial institutions and credit organizations.

3. Funds as prescribed by law.

Article 12. Financial System

The company implements financial regulations as prescribed by the Ministry of Finance.

Article 13. Accounting, bookkeeping, reporting

The company implements accounting, bookkeeping, financial report, and statistical report systems as prescribed by the Ministry of Finance and the State Bank.

Article 14. Audit

The company must select an independent auditing organization to audit financial reports as prescribed by the State Bank.

Chapter 5
RELATIONSHIP BETWEEN COMMERCIAL BANK AND COMPANY

Article 15.

The relationship between the commercial bank and the company is based on a contract on the principles of cooperation, voluntariness, equality, mutual benefit, consistent with the common goals and interests of the entire commercial banking system.

Chapter 6
DISPUTES, LIQUIDATION, DISSOLUTION

Article 16. Disputes

All disputes between the company and legal entities, individuals related to the company's activities shall be resolved according to current laws.

Article 17. Dissolution, liquidation

1. The company shall dissolve in the following cases:

- After completing the management of debts and exploitation of collateral assets for loans of the commercial bank and there is no need to continue operations;

- Upon request by a competent state agency;

- With a desire to dissolve and approval by the State Bank;

- At the end of the term of operation without an extension decision by the commercial bank.

2. When dissolving, the company must proceed with liquidation in accordance with the law.

Chapter 7
IMPLEMENTING PROVISIONS

Article 18.

For the asset management company established under Decision No. 305/2000/QĐ-NHNN5 dated September 15, 2000, issued by the Governor of the State Bank on the establishment of the asset management company for commercial banks, the Chairman of the commercial bank's board of directors decides to change the company's name, amend, and supplement the company's charter of organization and operation according to the provisions of this model charter.

Article 19.

Commercial banks base on this model charter and other relevant laws to establish the charter of organization and operation of the asset management company directly under their own bank.