Circular No. 16/2010/TT-NHNN guiding the implementation of Decree No. 10/2010/NĐ-CP dated February 12, 2010 of the Government on credit information activities

CIRCULAR

Guidelines for implementing Decree No. 10/2010/NĐ-CP of February 12, 2010 of the Government on credit information activities

 of the Government on credit information activities

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Pursuant to the Law on the State Bank of Vietnam 1997; the Law amending and supplementing certain articles of the Law on the State Bank of Vietnam 2003;

Pursuant to the Law on Credit Organizations 1997; the Law amending and supplementing certain articles of the Law on Credit Organizations 2004;

Pursuant to the Enterprise Law 2005;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Decree No. 10/2010/NĐ-CP of February 12, 2010 of the Government on credit information activities;

The State Bank of Vietnam guides the implementation of some provisions of Decree No. 10/2010/NĐ-CP of February 12, 2010 of the Government on credit information activities (hereinafter referred to as Decree No. 10) as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

2. Business operations of Credit Information Companies;

3. State management of credit information activities.

Article 2. Applicability

1. Credit Information Company;

2. Credit institutions;

3. Borrower;

4. Related organizations and individuals.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. Infrastructure for information technology is a system of hardware, software, databases, and network systems serving the production, transmission, collection, processing, storage, and exchange of digital information.

CONDITIONS AND PROCEDURES FOR ISSUANCE OF THE CERTIFICATE

1. Infrastructure for information technology

The Credit Information Company must establish and maintain an information technology infrastructure system meeting the following minimum requirements:

a) Having at least two leased lines to ensure continuous transmission of digital information;

b) Having advanced information technology equipment suitable for the current technological level of the credit institution system, capable of integrating and connecting with credit institutions;

c) Having a sufficiently large server system, software solutions, and technical measures to update, process, and store credit information for at least five million borrowers;

d) Having security and information protection plans;

d) Having a disaster recovery plan ensuring that core business operations will not be interrupted for more than four hours of work.

2. Minimum charter capital of 30 billion VND

a) For enterprises established from April 15, 2010 (the effective date of Decree No. 10):

(i) In the case of contributing capital in Vietnamese dong, gold, or freely convertible foreign currency, the enterprise must deposit all such assets into an account opened at a commercial bank operating in Vietnam. This account may not be used until the Certificate or a document refusing issuance of the Certificate from the State Bank is received;

(ii) In the case of contributing capital in other assets, there must be a valuation document issued by a professional valuation organization operating in Vietnam.

b) For enterprises established before April 15, 2010, there must be confirmation from an auditing organization operating in Vietnam regarding the actual charter capital of the enterprise.

a) For members of the Board of Directors, Board of Members, or General Partners

(i) Holding a bachelor's degree or higher, with at least 50% of the members holding a degree in finance, banking, or information technology;

(ii) Having at least three years of direct work experience in the fields of finance, banking, or information technology.

b) For the General Director (Director)

Holding a bachelor's degree or higher in finance, banking, or information technology and having at least three years of experience in managing or leading a business in the fields of finance, banking, or information technology.

c) For Deputy General Director (Deputy Director)

Holding a bachelor's degree or higher in finance, banking, or information technology and having at least two years of experience in managing or leading a business in the fields of finance, banking, or information technology.

d) For members of the Supervisory Board

Holding a bachelor's degree or higher in finance or banking and having at least two years of direct work experience in the fields of finance or banking.

e) In addition to the criteria and conditions stipulated in Points a, b, c, and d of Clause 3 of this Article, individuals appointed to managerial positions must also meet other criteria and conditions as prescribed by current laws.

4. Having a feasible business plan and not engaging in any other business activities outside the scope of credit information activities as defined in Decree No. 10.

6. Having an agreement on procedures for collecting, processing, storing, and providing credit information between the Credit Information Company and the credit institutions that have committed, which must include the following minimum contents:

a) Content and scope of credit information provided;

b) Time, location, method of providing, transmitting, processing, and storing credit information and products;

c) Principles, scope, and purpose of using credit information products;

d) Obligation to notify borrowers about the use of their credit information;

đ) Responsibilities of the parties in correcting errors during the updating, transmitting, processing, storing, and utilizing of information;

e) Responsibilities of all parties in reviewing, reconciling, inspecting, and maintaining the quality of credit information;

g) Responsibilities and cooperation of the parties in resolving borrower complaints;

h) Handling violations and resolving disputes;

i) The validity of the agreement and unilateral termination of its implementation.

k) Other rights and obligations of all parties during the collection, processing, storage, and provision of credit information.

1. Documents for application for issuance of the Registration Certificate include:

a) Application for issuance of the Certificate according to Form No. 01/TTTD issued together with this Circular;

b) Business registration certificate;

i) The charter of the enterprise;

ii) Contract with service providers for network services;

iii) List and description of information technology equipment and software serving the collection, processing, storage, and provision of credit information products;

iv) Confirmation from commercial banks regarding the balance of domestic currency, gold, and foreign currency deposit accounts; confirmation from professional valuation organizations regarding other contributed assets; or confirmation from auditing organizations regarding the minimum charter capital of 30 billion VND as prescribed in Clause 2, Article 4 of this Circular;

v) List of management positions within the enterprise;

vi) Summary curriculum vitae of the management team according to Form No. 02/TTTD issued together with this Circular; accompanied by relevant academic certificates, certifications, and confirmation of work experience in the specialized field as prescribed in Clause 3, Article 4 of this Circular;

vii) Business plan according to Form No. 03/TTTD issued together with this Circular;

viii) Letters of commitment from commercial banks to provide credit information to the enterprise according to Form No. 04/TTTD issued together with this Circular;

ix) Agreement on procedures for collecting, processing, storing, and providing credit information between the enterprise and credit institutions that have committed to comply with the provisions of Clause 6, Article 4 of this Circular.

a) At least two (2) sets of original documents, or copies certified by competent authorities from the original records, or copies certified by authorized agencies in accordance with the law;

b) The remaining sets of documents shall be photocopied by the Credit Information Company from the documents specified in Point a, Clause 2 of this Article, and stamped across each copied document.

Article 6. Time limit for issuing the Certificate

Within thirty working days from the date of receipt of complete and valid application files, the State Bank shall issue the Certificate to the enterprise. In case the Certificate is not issued, the State Bank must reply in writing to the enterprise and specify the reasons.

1. The Credit Information Center acts as the focal point, coordinating with the Banking Inspection and Supervision Authority, the Directorate of Information Technology, and the Legal Department to receive and process applications for the issuance of the Certificate.

2. Review procedure

a) The Credit Information Center receives and checks the completeness and validity of documents in the application file for the issuance of the Certificate. Within ten working days from the date of receipt of the application file for the issuance of the Certificate from the enterprise, the Credit Information Center processes as follows:

i) A request for the enterprise to supplement documents and materials as required in cases where the application documents are incomplete or invalid;

ii) A request for related units to cooperate in reviewing and notifying the enterprise of the receipt of the application documents in cases where the application documents are complete and valid.

b) Within a maximum of ten working days from the date of receipt of the request document from the Credit Information Center, participating units in the review of the application file for the issuance of the Certificate must provide their review opinions in writing.

i) The Banking Inspection and Supervision Authority shall review the conditions concerning the charter capital, management team, and risk management capability of the enterprise applying for the Certificate;

ii) The Directorate of Information Technology shall review the conditions concerning the IT infrastructure; technology processes, software for processing, storing, and providing products and services that meet the requirements of security and information safety of the enterprise applying for the Certificate;

iii) The Legal Department shall review the legality of the application documents and procedures; handle legal issues arising during the review of the enterprise's application documents for the Certificate.

c) Within ten working days from the date of receipt of all review documents from the units, the Credit Information Center compiles the opinions and drafts a document for submission to the Governor of the State Bank (the Governor) for decision:

i) Issue a decision to issue the Certificate if the Credit Information Company meets all the requirements as prescribed in Decree No. 10 and this Circular; or

ii) Issue a document refusing to issue the Certificate if the enterprise does not meet all the conditions as prescribed in Decree No. 10 and this Circular.

Article 8. Authority to issue and reissue the Certificate

1. The Certificate is issued by the Governor according to Form No. 05/TTTD issued together with this Circular.

a) In case the Certificate is lost or completely burned, the dossier includes:

i) A document requesting reissuance of the Certificate, detailing the reason for loss or burning;

ii) A confirmation document from the competent police authority regarding the Credit Information Company's declaration of loss or complete burning of the Certificate.

b) In case the Certificate is torn or damaged in other ways, the dossier includes:

i) A document requesting reissuance of the Certificate, detailing the reason for tearing or damage;

ii) The torn or damaged Certificate.

c) Within fifteen working days from the date of receipt of the complete application file of the Credit Information Company, the Credit Information Center submits to the Governor for consideration and reissuance of the Certificate.

Article 9. Amendment of Content of the Certificate

1. The amendment of the content recorded in the Certificate must be approved in writing by the Governor.

2. The decision to amend or supplement the content in the Certificate is an integral part of the Certificate.

1. The dossier for requesting the amendment of the content of the Certificate includes:

a) A report from the legal representative of the Credit Information Company sent to the State Bank (through the Credit Information Center), clearly stating the reasons and necessity for amending the content of the Certificate;

b) The resolution of the Shareholders' Meeting or Board of Members regarding the amendment of the content of the Certificate.

2. The documents specified in Clause 1 of this Article must be originals.

3. Within ten working days from the date of receiving a complete and valid dossier, the Credit Information Center shall submit to the Governor for consideration and decision on the amendment of the content of the Certificate. In cases where the request for amending the content of the Certificate does not comply with the provisions of Decree No. 10 or this Circular, the State Bank shall issue a document requesting the Credit Information Company to reconsider the amendment request.

1. Enterprises engaged in credit information services operating before April 15, 2010 must complete the operational conditions as stipulated in Article 7 of Decree No. 10 and Article 4 of this Circular, prepare the application documents, and submit them to the State Bank for consideration to issue the Certificate in accordance with Article 8 of Decree No. 10 and Article 5 of this Circular.

2. From April 15, 2011, enterprises that fail to meet the operational conditions and are not granted the Certificate by the State Bank must cease credit information activities and process the removal of credit information service content from their business registration certificate in accordance with the law.

Chapter III

OPERATIONS OF THE CREDIT INFORMATION COMPANY

Article 12. Sources of Information Collection

1. Credit information companies may collect information from the following sources:

a) Credit institutions;

b) Borrowers of credit institutions who have committed to provide information;

c) Other credit information companies;

đ) Other state agencies;

e) Public sources of information from news agencies;

g) Other lawful sources of information;

2. Credit information companies must implement measures to verify the accuracy and reasonableness of credit information collected from the sources specified in Clause 1 of this Article before using it.

Article 13. Scope of Information Collection

1. Credit information companies are only allowed to collect credit information and related information as prescribed in Clause 1 of Article 11 of Decree No. 10 regarding borrowers as defined in Clause 2 of Article 3 of Decree No. 10.

Currently, small and medium enterprises as defined in Clause 2 of Article 3 of Decree No. 10 are subject to the provisions of Article 3 of Decree No. 56/2009/NĐ-CP dated June 30, 2009 of the Government on assistance for the development of small and medium enterprises.

2. Credit institutions can only provide information as stipulated in Clause 1 of Article 11 of Decree No. 10 to credit information companies after reaching an agreement with the borrower.

Article 14. Creation of Credit Information Products

Except for identifying information, credit information companies are only permitted to use the customer's credit history information within the last five years to create credit information products.

Example: If the date of providing the credit information product about Customer A is March 20, 2010, the credit information company is only permitted to use the information about Customer A's credit history during the period from March 20, 2005 to March 20, 2010.

Article 15. Principles and Scope of Use of Credit Information Products

1. Credit information products are used as reference materials to supplement information for users. Users bear responsibility for their decisions when using credit information products. Credit information companies have the responsibility to advise users about the principles and scope of use of credit information products.

2. Organizations and individuals are not allowed to modify or copy credit information products to provide them to third parties, except in cases provided for in Clauses 2, 3, and 4 of Article 14 of Decree No. 10.

3. The copying, exploitation, and use of credit information products within the organization of the user shall be carried out according to contracts signed with credit information companies.

Chapter IV

STATE MANAGEMENT OF CREDIT INFORMATION ACTIVITIES

Article 16. Inspection of Credit Information Activities

1. The Banking Supervision Agency is the lead unit responsible for inspecting the activities of credit information companies annually. In necessary cases, the Banking Supervision Agency may conduct surprise inspections of credit information companies in accordance with the law.

1. The credit information company shall be responsible for submitting to the State Bank the following reports:

a) Quarterly and annual financial statements as prescribed by law;

b) Report on the operation status including: product catalog and structure; detailed list of information collection sources; list of credit institutions that have committed to provide information; number of borrowers by each group (small and medium enterprises, households, individuals); number of products supplied to each group of users.

c) Operation status of technological equipment, ensuring data security, and troubleshooting.

d) Report when there is a change in any of the following: registered capital, management team; agreements on the process of collecting, processing, storing, and providing credit information between credit information companies and credit institutions that have committed; information technology infrastructure;

đ) Report when a major IT incident occurs;

e) Other reports as required by the State Bank.

2. Reports as prescribed in points b and c of Clause 1 of this Article shall be submitted periodically every quarter and year. Quarterly reports must be sent to the State Bank before the 20th day of the month following the reporting quarter; annual reports must be sent to the State Bank before February 15 of the following year.

3. Credit information companies submit periodic and emergency reports to the State Bank in electronic file format. In case of necessity as requested by the State Bank, credit information companies shall submit reports in paper form.

4. The Credit Information Center is responsible for receiving periodic and emergency reports on the activities of credit information companies and has the responsibility to forward these reports to relevant units of the State Bank to serve the state management of credit information activities.

Chapter V

IMPLEMENTING PROVISIONS

Article 18. Effective Date

This Circular takes effect forty-five days from the date of signature.

The Head of the Office, Director of the Credit Information Center, Heads of Units under the State Bank of Vietnam, Directors of State Bank Branches in provinces and centrally-administered cities, Chairmen of Management Boards and General Directors of credit institutions, credit information companies, and other related organizations and individuals are responsible for implementing this Circular./.