Circular No. 15/2016/TT-NHNN amends and supplements certain Articles of Circular No. 30/2015/TT-NHNN dated December 25, 2015, issued by the Governor of the State Bank of Vietnam on the issuance of Licenses, organization, and operation of non-bank financial institutions.

CIRCULAR

Amending and supplementing some articles of Circular No. 30/2015/TT-NHNN

dated December 25, 2015 of the Governor of the State Bank of Vietnam

regarding the issuance of licenses, organization, and operation of

for non-bank credit institutions

__________________

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated November 16,June 2024;art. 6 year 2010;

Pursuant to Decree No. 39/2014/NĐ-CP dated May 7, 2014 of the Government on the activities of finance companies and leasing companies;"b) In addition to the lists of public services issued according to the provisions of Clause 2, Article 4 of this Decree, specialized agencies under provincial People's Committees shall report to the provincial People's Committee for decision-making on amending, supplementing, or issuing the list of public services funded by the state budget within their jurisdiction and consistent with the local budget capacity within the approved budget by the Provincial People's Assembly, and send it to the Ministry of Finance and relevant ministries and sectors for supervision during implementation."Government for activities of finance companies and leasing companies;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to the proposal of the Director of the Department of Ethnic Affairs and Religion Propaganda;on decision of the Inspector General,June 2024;banking supervision;

The Governor of the State Bank of Vietnam issues this Circular amending and supplementing certain provisions of Circular No.No. 30/2015/TT-NHNN dated December 25,June 2024;2015 of the Governor of the State Bank of Vietnam stipulating the issuance of licenses, organization, and operation of non-bank credit institutions.No.Article 1. Amending and supplementing certain provisions of Circular No. 30/2015/TT-NHNN dated December 25, 2015 of the Governor of the State Bank of Vietnam stipulating the issuance of licenses, organization, and operation of non-bank credit institutions (Circular No. 30/2015/TT-NHNN):

1. Amend the title of Section 2 Chapter II to read:

"PROVISIONS ON FOUNDING SHAREHOLDERS, OWNERS, AND FOUNDING MEMBERS""Article 11. Provisions for founding shareholders

2. Amend Article 11 as follows:

1. There must be at least two founding shareholders who are organizations.
2. Shall be responsible for the legality of the contributed capital.
3. Commit to provide financial support to resolve difficulties when the non-bank credit institution faces capital shortages or liquidity problems.
4. Shall not be a strategic shareholder, founding shareholder, owner, or founding member of another credit institution established and operating in Vietnam.
5. Shall have the financial capacity to contribute capital to establish a non-bank credit institution; shall not use entrusted funds, raised funds, borrowed funds from other credit institutions, foreign bank branches, or other organizations and individuals to contribute capital.
6. In addition to the provisions of Clause 2, 3, 4, and 5 of this Article, individual founding shareholders must comply with the following provisions:
a) Hold Vietnamese nationality, having full civil capacity according to the law;
7. In addition to the provisions of Clause 2, 3, 4, and 5 of this Article, organizational founding shareholders must comply with the following provisions:
b) Not be among those prohibited from establishing enterprises under the Enterprise Law and the Civil Servants Law.
(i) Have a minimum charter capital of 500 billion VND and total assets of at least 1,000 billion VND in the three consecutive fiscal years prior to the year of submitting the application for license issuance. In case the enterprise operates in industries requiring statutory capital, it must ensure the charter capital according to the audited financial statements of the year immediately preceding the submission of the application for license issuance minus the statutory capital equivalent to the committed contribution;
a) Established in accordance with Vietnamese law;
b) Have been profitable for three consecutive fiscal years before the year of submitting the application for License issuance and up to the time of submitting supplementary documents for consideration of License issuance;
c) Fully fulfill tax and social insurance obligations as prescribed by law up to the time of submitting the application for License issuance;
d) For Vietnamese enterprises (excluding Vietnamese commercial banks):

(i) Have a minimum total asset of 100,000 billion VND, fully complying with all regulations on risk management and adequate provisioning as prescribed at the time of submitting the application for license issuance and until the time of submitting supplementary applications for consideration of license issuance;

(ii) If the enterprise has been granted a License to operate in the securities or insurance sectors, it must comply with the capital contribution requirements as stipulated by relevant laws;
d) For Vietnamese commercial banks:

(ii) Not violate the limits and ratios ensuring safety in operations as prescribed by the State Bank of Vietnam in the year immediately preceding the year of submitting the application for license issuance and until the time of submitting supplementary applications for consideration of license issuance;"

(iv) Not be subject to administrative penalties in the field of currency and banking activities in the two consecutive years prior to the year of submitting the application for license issuance and until the time of submitting the application for license issuance."

(iii) Ensure a minimum capital adequacy ratio after contributing capital to establish a non-bank credit institution;

3. Amend Article 12 as follows:

"Article 12. Provisions for owners and founding members

a) The provisions of Clause 2, 3, 4, and 5 and points a, b, c of Clause 7 of Article 11 of this Circular;
1. Founding members that are Vietnamese enterprises (excluding Vietnamese commercial banks) must comply with the following provisions:
b) Have a minimum charter capital of 1,000 billion VND and total assets of at least 2,000 billion VND in the three consecutive fiscal years prior to the year of submitting the application for license issuance. In case the enterprise operates in industries requiring statutory capital, it must ensure the charter capital according to the audited financial statements of the year immediately preceding the submission of the application for license issuance minus the statutory capital equivalent to the committed contribution;
2. Owners and founding members who are commercial banks in Vietnam must comply with the provisions of Clause 2, 3, 4, 5, and points b, c, d of Clause 7 of Article 11 of this Circular.
c) In cases where the enterprise is granted a License to establish and operate in the securities and insurance sectors, it must comply with the capital contribution regulations stipulated by relevant laws.
a) The provisions of point b of Clause 7 of Article 11 of this Circular;
3. Owners and founding members that are foreign credit organizations must comply with the following provisions:
c) Not seriously violate the regulations on banking activities and other laws of the home country in the five consecutive years prior to the year of submitting the application for license issuance and until the time of submitting supplementary applications for consideration of license issuance;
b) Having total assets exceeding US$10 billion at the end of the year immediately preceding the year of submitting the application for the License;
d) Have international experience, rated at least stable by international credit rating agencies, indicating the ability to fulfill financial commitments and operate normally even under unfavorable economic conditions;
đ) Be evaluated by the competent authority of the home country as meeting the capital adequacy ratio, other safety ratios, fully complying with regulations on risk management and adequate provisioning as prescribed by the home country in the year immediately preceding the year of submitting the application for license issuance and until the time of submitting supplementary applications for consideration of license issuance;
g) For foreign credit institutions that are leasing companies, the balance of financial leasing and loans must account for at least 70% of the company's total assets.4. Within five years from the date of license issuance, owners and founding members must jointly own 100% of the charter capital of the limited liability non-bank credit institution."
e) Not being a strategic shareholder, owner, or founding member of another credit institution established and operating in Vietnam;
4. Amend point b of Clause 3 of Article 14 as follows:

"b) The name of the proposed non-bank credit institution, type, name of the province/city where the main office is planned to be located, duration of operation, charter capital at establishment, content of activities, and the ability to meet the conditions for banking activities prescribed for the type of proposed non-bank credit institution according to Decree No. 39/2014/NĐ-CP dated May 7, 2014 of the Government on the activities of finance companies and leasing companies (hereinafter referred to as Decree No. 39/2014/NĐ-CP);"

5. Amend point h of Clause 4 of Article 15 as follows:

"h) Report of founding shareholders who are Vietnamese commercial banks and Vietnamese enterprises on compliance with the provisions of Clause 7 of Article 11 of this Circular from the time of submitting the application for license issuance to the time of submitting supplementary applications for consideration of license issuance."

6. Amend points đ and e of Clause 7 of Article 16 as follows:

6. Amend Point d and Point e of Clause 7 of Article 16 as follows:

"d) Report from Vietnamese commercial banks and Vietnamese enterprises on their compliance with the provisions of Clause 7, Article 11 of this Circular from the time of submitting the application for the License to the time of submitting the supplementary application for consideration of the License;"

"e) Document from the competent authority of the home country assessing the foreign credit institution's compliance with the provisions of Point a, c, and d, Clause 3, Article 12 of this Circular from the time of submitting the application for the License to the time of submitting the supplementary application for consideration of the License;"

7. Amend Clause 3, Article 17 as follows:

"3. For the supplementation of other lending activities (after being approved by the State Bank), non-bank credit institutions shall implement after obtaining the approval of the State Bank; the procedures, formalities, and additional content in the License shall be carried out according to the specific regulations of the State Bank and relevant laws."

8. Amend Point c(ii), Clause 2, Article 19 as follows:

"(ii) Report on the status of the staff team and physical facilities, technology, means, and equipment, accompanied by a commitment that they have met the conditions to conduct the proposed additional banking activities as stipulated in Decree No. 39/2014/ND-CP and related laws;"

9. Amend and supplement Point d(i), Clause 2, Article 19 as follows:

"(i) Plan for factoring operations, which must include at least the following contents: The necessity of factoring operations; measures to manage and control risks associated with factoring operations; implementation plan, effectiveness of factoring operations, and measures to ensure compliance with safety regulations in banking activities after adding factoring operations;"

10. Amend and supplement Point đ(i), Clause 2, Article 19 as follows:

"(i) Plan for credit card issuance and leasing operations, which must include at least the following contents: The necessity of credit card issuance and leasing operations; measures to manage and control risks associated with credit card issuance and leasing operations; implementation plan, effectiveness of credit card issuance and leasing operations, and measures to ensure compliance with safety regulations in banking activities after adding credit card issuance and leasing operations;"

"1a. Non-bank credit institutions conducting leasing operations must establish internal regulations governing leasing operations to be implemented across the entire system and must ensure mechanisms for internal control, internal auditing, and risk management in leasing operations of the lessor. Such regulations must include at least the following contents:"

"1a. Non-bank credit institutions conducting leasing operations must issue internal regulations on leasing operations to be implemented throughout the system and must ensure an internal control and audit mechanism, risk management in leasing operations of the lessor. These regulations must include at least the following contents:"
"a) Criteria for identifying a customer, a customer and related parties according to leasing policies for a customer, a customer and related parties, procedures for appraisal, approval, and decision-making on leasing, principles of分级翻译如下，以符合规则要求：
"a) Criteria for identifying a customer, a customer and related parties according to leasing policies for a single customer, a single customer and related parties, procedures for appraising, approving, and deciding on leasing, principles of delegation, authorization, and responsibilities of each individual and department in the appraisal, decision-making, and approval of leasing, restructuring of payment terms for lease payments by the lessee;"
"b) Conditions for leasing, cases where leasing is not allowed, restrictions on leasing according to the law, types of assets that cannot be leased; interest rates for leasing and methods of calculating lease interest; leasing documentation and materials submitted by the lessee to the lessor in accordance with the characteristics of the leased asset and the type of customer; debt collection; conditions for restructuring of payment terms for lease payments, transferring overdue debts;"
"c) Provisions on risk diversification in leasing operations; methods of monitoring, managing, and approving leasing decisions for a single customer, a single customer and related parties at a level of 1% of the lessor's own capital, ensuring transparency between the appraisal, leasing, and restructuring of payment terms for lease payments, preventing conflicts of interest between the appraiser, the decision-maker for leasing, and customers who are related parties;"
"d) Principles, criteria for evaluating and determining the level of risk in leasing operations for target customers and sectors prioritized or restricted for credit provision, serving as the basis for annual business plans and strategies, and risk management measures for leasing operations of the lessee;"
"đ) Procedures for monitoring and supervising the leasing process, use of leased assets, and payment of lease payments by the lessee, including pre-, during-, and post-leasing controls; delegation, authorization, and responsibilities of each individual and department in monitoring and supervising the leasing process, use of leased assets, and payment of lease payments by the lessee;"
"e) Approval of leasing and restructuring of payment terms for lease payments (including extension of debt and adjustment of payment periods) must be based on the principle that the person responsible for restructuring the payment terms for lease payments is not the person who decided on leasing, except in cases where leasing is approved by the Board of Directors or Management Board;"

"g) Termination and handling of prematurely terminated leasing contracts; waiver or reduction of interest and fees; h) Identification of potential risks that may arise during the leasing process; procedures for monitoring, evaluating, and controlling risks; risk management plans."

12. Amend Clause 4, Article 27 as follows:
"4. The transfer of equity contributions must comply with the minimum capital contribution ratio specified in Clause 3, Article 6 of this Circular and the following requirements:"
b) The new transferee partner that is a Vietnamese commercial bank must comply with the provisions set forth in Clause 2, Article 12 of this Circular; c) The new transferee partner that is a foreign credit organization must comply with the provisions set forth in Clause 3, Article 12 of this Circular."

13. Amend Clause 5, Article 27 as follows:

"5. Repurchasing equity contribution: The repurchasing of equity contributions of non-bank credit organizations limited liability companies must comply with the following regulations:
a) The requirements for repurchasing equity contributions from capital contributors, payment conditions, and handling of repurchased equity contributions shall be carried out in accordance with the provisions on repurchasing equity contributions under the Enterprise Law;
b) After fully paying off the repurchased equity contributions, the non-bank credit organization must still ensure sufficient funds to pay all debts and other financial obligations, maintain safety ratios in banking operations, and the actual value of the registered capital must not be lower than the statutory capital requirement;
c) Fully comply with the risk management regulations and adequately establish reserves as required at the time of requesting the State Bank's approval for the repurchase of contributed capital;
d) Continuously generating profit for five consecutive years prior to the year in which the request for repurchasing equity contributions is made, and having no accumulated losses; d) Not being penalized by the State Bank of Vietnam for administrative violations in the monetary and banking sectors during the five consecutive years prior to the year in which the request for repurchasing equity contributions is made, and up until the time the State Bank of Vietnam approves the repurchasing of equity contributions."

14. Amend and supplement Article 28 as follows:

"Article 28. Activities of finance companies
1. Finance companies may carry out activities specified from Article 108 to Article 111 of the Law on Credit Institutions when they meet the conditions stipulated in Decree No. 39/2014/ND-CP, Articles 5, 6, 7, 8, 9, 10, 11, 12, 13, and 15.
2. Finance companies established and operating before the effective date of Decree No. 39/2014/ND-CP may supplement factoring, issuing credit cards, and leasing activities when the non-performing loan ratio remains below 3% continuously throughout all quarters of the preceding year at the time of requesting to supplement these activities. 3. Finance companies conducting leasing activities shall follow the provisions set forth in Article 35 of this Circular."

15. Amend Clause 7, Article 35 as follows:

"7. Principles for leasing in foreign currency:
a) The lessor pays the import price of the leased asset to the supplier in foreign currency; the lessee acknowledges the debt and pays the lease rental in foreign currency;
b) The lessee uses the leased asset for production and business purposes; c) The lessee has sufficient foreign currency from production and business revenues to repay the lease rental debt."

16. Add Point d to Clause 1, Article 36 as follows:

"d) The buyer and re-leaser shall conduct the purchase and re-leasing in Vietnamese dong or foreign currency. The purchase and re-leasing shall be conducted in foreign currency when:

(i) The purchased and re-leased asset is a leasing asset as defined in Clause 1, Article 3 of this Circular, legally imported and owned by the seller and re-lessee, currently operational, and without disputes;

(ii) The seller and re-lessee have outstanding foreign currency loans at banks for importing assets, or have unpaid foreign currency debts to overseas suppliers;

(iii) The seller and re-lessee use the purchased and re-leased asset for production and business purposes and have sufficient foreign currency from production and business revenues to repay the lease rental debt;

(iv) Payment for purchasing the purchased and re-leased asset in foreign currency:

- The buyer and re-lessee will proceed with the purchase and re-leasing once the seller and re-lessee present complete legal documentation for the asset. In cases where the bank or overseas supplier manages and holds related documents for the asset, the buyer and re-lessee will make the purchase payment after reaching an agreement with the bank or overseas supplier to retrieve the asset documents upon acquisition;

- The buyer and re-lessee directly pay the purchase price for the purchased and re-leased asset to the bank or overseas supplier in foreign currency equivalent to the asset's value. If the purchase price exceeds the outstanding loan balance at the bank or unpaid debt to the overseas supplier, the buyer and re-lessee will pay the seller and re-lessee the difference in Vietnamese dong based on the transaction exchange rate of a commercial bank chosen by both parties on the payment date;

(v) After the buyer and re-lessee have paid for the purchased and re-leased asset, the seller and re-lessee acknowledge the debt and pay the lease rental in foreign currency according to current leasing regulations."

Article 2. Repeal Article 29, Article 30, Article 31, Article 32, Article 33, Clause 2, Article 34, Clauses 5 and 6, Article 36 of Circular No. 30/2015/TT-NHNN.

Article 3. Implementation Provisions

This Circular takes effect from July 1, 2016.

Article 4. Organization of Implementation

The Director of the Office, the Inspector General of Banking Supervision, Heads of Units under the State Bank of Vietnam, Governors of the State Bank of Vietnam Branches in provinces and centrally-administered cities, Chairmen of the Board of Directors, Chairmen of the Board of Members, and General Managers (Directors) of non-bank credit organizations are responsible for organizing the implementation of this Circular./.