Circular No. 19/2019/TT-NHNN on the network of operations of microfinance organizations

      CIRCULAR

activities of calibration, verification, testing network of operations of the organization microfinance

 

 Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

||| Based on the Law on Credit Institutions dated June 16, 2010;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Enterprise Law dated November 26, 2014;

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 the Circular stipulating the network of operations of the organization microfinance.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates on:

1. Establishing, terminating operations, liquidating branches, transaction offices, representative offices, public service units within the country of microfinance organizations; opening, terminating operations at transaction points of microfinance organizations.

2. Changing names, locations of branch headquarters, transaction office headquarters, representative office headquarters, public service unit headquarters of microfinance organizations; changing managing branches of transaction offices of microfinance organizations.

3. Converting units under programs and projects of microfinance organizations into branches, transaction offices, public service units, representative offices of microfinance organizations.

Article 2. Applicability

1. Microfinance organization.

2. Organizations and individuals related to establishing, terminating operations, liquidating branches, transaction offices, representative offices, public service units; opening, terminating operations at transaction points; changing names, locations of branch headquarters, transaction office headquarters, representative office headquarters, public service unit headquarters; changing managing branches of transaction offices; converting units under programs and projects of microfinance organizations into branches, transaction offices, public service units, representative offices of microfinance organizations.

Article 3. Explanation of Terms

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

1. The network of operations of microfinance organizations includes branches, transaction offices, representative offices, public service units within the country.

2. A branch is a subsidiary of a microfinance organization, having a seal, with the task of performing one or more functions of the microfinance organization according to internal regulations and laws.

3. A transaction office is a type of branch, a subsidiary of a microfinance organization, managed by a branch of the microfinance organization, having a seal, located at a place within the operating area of the managing branch, with the task of performing one or more functions of the microfinance organization according to internal regulations and laws.

4. A representative office is a subsidiary of a microfinance organization, having a seal, performing the function of representation by proxy for the microfinance organization. A representative office shall not engage in business activities.

5. A public service unit is a subsidiary of a microfinance organization, having a seal, performing one or more support activities for the business operations of the microfinance organization as stipulated in Article 6 of this Circular.

6. The application date is the day, month, year recorded on the document requesting the establishment of a branch, transaction office, representative office, public service unit of a microfinance organization.

Article 4. Competence to Approve the Network of Microfinance Organizations

1. Competence of the Governor of the State Bank of Vietnam:

a) Approving the establishment of branches, transaction offices, representative offices, public service units of microfinance organizations;

b) Compelling termination of operations and liquidation of branches, transaction offices, representative offices, and public service units of microfinance organizations;

c) Approving the conversion of units under programs and projects of microfinance organizations into branches, transaction offices, public service units, representative offices of microfinance organizations.

2. Competence of the Director of the State Bank of Vietnam Branches in provinces and centrally-administered cities:

a) Approving changes in the location of branch headquarters, transaction office headquarters of microfinance organizations within their jurisdiction (including cases of changing locations before commencing operations);

b) Approving voluntary termination of operations and liquidation of branches, transaction offices of microfinance organizations.

Article 5. Provisions on transaction points

1. Microfinance organizations shall decide and be responsible for opening and terminating operations at transaction points managed by branches or service points within the scope of their respective branch or service point's operational area according to the Transaction Point Management Regulation and the provisions of this Circular. The opening and termination of operations at transaction points must be notified to the People's Committee of the commune, ward, or town where the transaction point operates within five working days from the date the microfinance organization decides to open or terminate operations at the transaction point.

2. Branches or service points of microfinance organizations may only carry out one or several of the following activities at transaction points:

a) Studying, understanding, and introducing customers;

b) Advising and guiding the formation of customer savings and loan groups;

c) Advising and guiding customers about products, services, loan applications; receiving loan application files; disbursing and collecting debts for credit contracts signed between the branch or service point and customers;

d) Accepting mandatory savings and voluntary savings from a single microfinance customer not exceeding VND 1,000,000 per day;

đ) Paying out mandatory savings and voluntary savings of microfinance customers.

3. Within the first five working days of the first month of each quarter, the microfinance organization or its branch shall send a notification letter listing the transaction points through postal services or directly to the head office of the State Bank of Vietnam branch in the province or centrally-administered city where the microfinance organization's branch is located. The notification letter listing the transaction points must include at least the following contents:

a) A list of transaction points operating in the province or centrally-administered city up to the last working day of the previous quarter, including information about the name of the branch or service point responsible for managing the transaction point and the location where the transaction point operates;

b) A list of transaction points that have been opened and terminated during the previous quarter.

Article 6. Content of Activities of Public Service Units

Public service units of microfinance organizations shall implement one or several supportive activities for the business operations of microfinance organizations, including:

1. Researching and proposing the application of technology for microfinance organizations.

2. Training and enhancing skills and techniques for managers and leaders of departments and staff of microfinance organizations.

3. Storing databases, collecting, and processing information to serve the business operations of microfinance organizations.

4. Other activities supporting the business operations of microfinance organizations in accordance with legal regulations.

Article 7. Operational Area and Names of Branches and Service Points

1. Branches of microfinance organizations operate within the scope of the province or centrally-administered city where the branch's headquarters is located.

2. Service points operate within the scope of the operational area of the managing branch.

3. The names of branches and service points of microfinance organizations must comply with relevant legal regulations and be named as follows:

a) Name of branch: Full name of the Microfinance Organization - Branch (branch name);

b) Name of service point: Full name of the Microfinance Organization - Branch (name of the managing branch of the service point) - Service Point (service point name).

4. In cases where administrative boundaries change leading to changes in the operational areas of branches or service points, or changes in the address of the branch or service point headquarters (without changing the location of the branch or service point headquarters), the microfinance organization does not need to adjust according to the provisions of Clause 1 and Clause 2 of this Article. The microfinance organization shall issue a notification letter to the State Bank of Vietnam branch in the province or centrally-administered city where the branch or service point of the microfinance organization is located (hereinafter referred to as the State Bank branch) regarding such changes within five working days from the date of the administrative boundary changes.

Article 8. Number of Branches

The number of branches of microfinance organizations shall include the number of established branches and the number of branches proposed for establishment and must ensure:

03 billion VND * N < C

Where:

- C is the actual value of the charter capital of the microfinance organization determined by adding (subtracting) undistributed cumulative profits (unresolved cumulative losses) reflected in the accounting books up to the time closest to the time of application to the charter capital.

- N is the number of established and proposed branches.

Article 9. Principles for Establishing and Submitting Documents, Notifications

1. Documents must be prepared in Vietnamese. Materials in the documents must be original copies or certified copies from the original ledger, notarized copies, or copies presented with the original for verification. In cases where the applicant submits copies along with the original for verification, the verifier must sign to confirm the copy and bear responsibility for its accuracy compared to the original. Each set of documents must include a list of materials.

2. Proposals and notifications of microfinance organizations must be signed by the legitimate representative of the microfinance organization. In cases of signing by proxy, the documents must include a power of attorney prepared in accordance with the provisions of the law.

3. Documents and notifications of microfinance organizations must be sent through postal services or directly at the headquarters of the State Bank of Vietnam (hereinafter referred to as the State Bank) or the State Bank branch.

Article 10. Management Regulations for Branches, Transaction Rooms, Service Points

1. Microfinance organizations must establish management regulations for branches and transaction rooms, and management regulations for activities at service points to ensure safe, effective operations of branches, transaction rooms, and service points in compliance with the law.

2. Management regulations for branches and transaction rooms must be issued by the Board of Members of the microfinance organization and must include at least the following contents:

a) Transaction limits for each level of management at branches and transaction rooms according to each product or group of products provided to customers;

b) Management, supervision mechanisms, and information and reporting systems between the headquarters and branches, and between transaction rooms and managing branches;

c) Standards and conditions for the positions of Branch Manager, Transaction Room Head, or equivalent positions in compliance with the law and ensuring sufficient professional competence and ethical standards required for the job;

d) Provisions on cash vaults, fire prevention and extinguishing, money transfers, and document storage to ensure asset security and safety, including specific end-of-day cash reserve levels for branches and transaction rooms based on practical operating conditions and security conditions. Excess end-of-day cash reserves beyond the specified limit must be deposited into the bank account of the microfinance organization.

3. Management regulations for activities at service points must be issued by the General Director (Director) of the microfinance organization and must include at least the following contents:

a) Criteria for selecting service points suitable for operational characteristics, ensuring risk control, safety, and efficiency during operations;

b) Procedures for opening and closing service points, including procedures, formalities, and decision-making authority for opening and closing service points, including delegation and authorization of decisions (if applicable);

c) Scope of activities at service points, including specific transaction limits at each service point according to each product provided to customers;

d) Procedures for implementing transactions such as receiving and paying out savings deposits, accepting applications, disbursing loans, collecting loan repayments, and the rights and responsibilities of microfinance organization staff at service points;

đ) Measures to ensure personnel safety and security and safety in the transfer of money, documents, and other assets during operations at service points.

4. Microfinance organizations must review the regulations stipulated in Clause 2 and Clause 3 of this Article at least once a year and amend and supplement them (if necessary) to ensure they are appropriate for operations in each period.

Chapter II

ESTABLISHMENT OF BRANCHES, TRANSACTION ROOMS, REPRESENTATIVE OFFICES, ENTERPRISE UNITS

Article Article 11. Conditions for Establishing Branches

1. Microfinance organizations that have been operating for 12 months or more (counted from the date of opening operations to the date of application for establishment) may establish no more than three branches in a fiscal year when meeting the following conditions:

a) The actual charter capital value at December 31 of the previous year before the year of application for establishment is not less than the statutory capital requirement;

b) Profitable business operations according to the audited financial statements of the previous year before the year of application and the most recent financial report up to the date of application;

c) At the time of application, no authority with jurisdiction has applied measures prohibiting expansion of the operational area;

d) Compliance with the provisions on safety ratios in the operation of microfinance organizations at the latest reporting date up to the date of application;

đ) The ratio of non-performing debt to total debt at December 31 of the previous year before the year of application and at the latest reporting date up to the date of application does not exceed 3% or another ratio as decided by the Governor of the State Bank in each period;

e) Compliance with the law's provisions on the number and structure of the Board of Members and Supervisory Board. The position of General Director (Director) of the microfinance organization is not vacant for more than six consecutive months prior to the application date;

g) A proposal for establishment ensuring the contents stipulated in Clause 3 of Article 14 of this Circular;

h) Ensuring the number of branches in accordance with Article 8 of this Circular.

2. Microfinance organizations that have been operating for less than 12 months (counted from the date of opening operations to the date of application for establishment) may establish no more than two branches in a fiscal year when meeting the following conditions:

a) The actual charter capital value at the latest reporting date up to the date of application is not less than the statutory capital requirement;

b) The ratio of non-performing debt to total outstanding debt at the time of the most recent report up to the time of the request does not exceed 3% or another ratio as decided by the Governor of the State Bank for each period;

c) The provisions set forth in points c, d, e, g, h of Clause 1 of this Article;

Article 12. Conditions for Establishing a Transaction Office

A microfinance organization may establish a transaction office when it meets the following conditions:

1. The conditions stipulated in points a, b, c, d, đ, e, g of Clause 1 of Article 11 of this Circular;

2. The branch expected to manage the transaction office must meet the following conditions:

a) Having a minimum operating period of 12 months from the date of opening operations to the time of the request;

b) The ratio of non-performing debt to total outstanding debt at the end of December of the year immediately preceding the year of the establishment request and at the time of the most recent report up to the time of the request does not exceed 3% or another ratio as decided by the Governor of the State Bank for each period;

c) One branch shall not manage more than five transaction offices.

Article 13Conditions for Establishing a Representative Office, Non-Profit Unit

A microfinance organization may establish a representative office, non-profit unit when it meets the following conditions:

1. Having an operating period of 12 months or more from the date of opening operations to the time of the request;

2. The conditions stipulated in points a, c, d, e of Clause 1 of Article 11 of this Circular;

3. Having a proposal for establishment that ensures the contents prescribed in Clause 4 of Article 14 of this Circular.

Article 14. Documents for Requesting Approval to Establish a Branch, Transaction Office, Representative Office, Non-Profit Unit of a Microfinance Organization

1. A document from the microfinance organization requesting the State Bank to approve the establishment of a branch, transaction office, representative office, non-profit unit according to the model attached and promulgated with this Circular;

2. A Resolution or Decision of the Board of Members regarding the establishment of a branch, transaction office, representative office, non-profit unit;

3. An establishment proposal for a branch, transaction office, which must include at least the following contents:

a) Full name in Vietnamese, abbreviated name in Vietnamese; address, scope of activities of the branch, transaction office of the microfinance organization;

b) Organizational structure of the branch, transaction office; proposed key personnel (Branch Manager, Transaction Office Director, accounting staff, and other key positions as prescribed internally by the microfinance organization);

c) Name, address of the headquarters of the branch expected to manage the transaction office (in the case of establishing a transaction office);

d) Business environment analysis (opportunities, challenges, strengths, weaknesses); target customers and products expected to be provided;

đ) Proposed business plan for the first three years of operation, including at least: projected balance sheet, income statement, basis for formulating the plan, and explanation of the feasibility of implementing the plan each year;

4. The proposal for establishing a representative office or a public service unit must include at least the following contents:

a) Full name in Vietnamese, abbreviated name in Vietnamese; address, scope of activities of the representative office, non-profit unit of the microfinance organization;

b) Reasons for establishment;

c) Proposed key personnel (Head of the representative office, non-profit unit, accounting staff, and other key personnel as prescribed internally by the microfinance organization);

d) Proposed activity plan for the first year of operation.

5. Documents proving compliance with the conditions for establishing a branch, transaction office, representative office, non-profit unit prescribed in Articles 11, 12, and 13, except for documents proving compliance with the conditions stipulated in point c of Clause 1 of Article 11 of this Circular.

Article 15. Procedure for Approving the Establishment of a Branch, Transaction Office, Representative Office, Non-Profit Unit of a Microfinance Organization

1. A microfinance organization prepares one set of documents corresponding to each type of network as prescribed in Article 14 of this Circular and sends it to the State Bank.

2. Within seven working days from the date of receipt of the documents as prescribed in Clause 1 of this Article, the State Bank sends a document to the microfinance organization confirming the completeness and validity of the documents; if the documents are incomplete or invalid, the State Bank sends a document requesting the microfinance organization to supplement and complete the documents.

The microfinance organization supplements and completes the documents within a maximum of 60 days from the date the State Bank requests supplementation and completion of the documents. If the documents are not supplemented and completed fully and validly within this period, the microfinance organization must resubmit the documents as prescribed in Clause 1 of this Article for the State Bank to review and approve.

3. For the request to establish a branch, within seven working days from the date of receipt of complete and valid documents:

a) The State Bank sends a document to solicit opinions from the People's Committee of the province or centrally-administered city where the microfinance organization plans to locate its branch headquarters on the request to establish a branch of the microfinance organization;

b) The Banking Inspection and Supervision Authority sends a document to solicit opinions from the State Bank branch where the microfinance organization plans to locate its branch headquarters on the request to establish a branch of the microfinance organization.

4. For the request to establish a transaction office, within seven working days from the date of receipt of complete and valid documents, the Banking Inspection and Supervision Authority sends a document to solicit opinions from the State Bank branch where the microfinance organization plans to locate its transaction office headquarters on whether the branch expected to manage the transaction office complies with the conditions prescribed in this Circular on the relevant territory.

5. Within ten working days from the date of receipt of the document from the State Bank, the units specified in Clauses 3 and 4 of this Article provide their comments in writing on the matters requested.

6. Within fifteen working days from the date of receipt of all comments from the units specified in Clause 5 of this Article or from the date of receipt of complete and valid documents for the request to establish a representative office, non-profit unit, the Banking Inspection and Supervision Authority submits to the Governor of the State Bank for consideration and approval of the microfinance organization's establishment of a branch, transaction office, representative office, non-profit unit.

7. Within sixty days (for the establishment of a branch or transaction office) or forty-five days (for the establishment of a representative office or public service unit), from the date of confirmation of complete and valid documentation, the State Bank shall issue a document approving the request of the microfinance organization; in case of rejection, the State Bank must respond in writing and specify the reasons.

8. Within twelve months from the date the State Bank issues the approval document for establishment as stipulated in Clause 7 of this Article, the microfinance organization must commence operations of its branch, transaction office, representative office, or public service unit; if it fails to commence operations within this period, the approval document of the State Bank shall automatically become invalid.

Article 16. Conversion of Subordinate Units of Microfinance Programs and Projects

1. The conversion of microfinance programs and projects into microfinance organizations includes the conversion of subordinate units of microfinance programs and projects into branches, transaction offices, public service units, and representative offices of microfinance organizations, without applying the conditions prescribed in Articles 11, 12, and 13 of this Circular.

2. When implementing the conversion of microfinance programs and projects into microfinance organizations, they must submit a document requesting approval for the conversion of subordinate units of microfinance programs and projects into branches, transaction offices, public service units, and representative offices of microfinance organizations. The request document must include at least the following contents:

a) Full name in Vietnamese and abbreviated name in Vietnamese of the branch, transaction office, public service unit, and representative office;

b) Address of the headquarters of the branch, transaction office, public service unit, and representative office.

Article 17Commencement of Operations

1. A microfinance organization may commence operations of its branch or transaction office (including branches or transaction offices of microfinance organizations licensed based on the conversion of subordinate units of microfinance programs and projects) when meeting the following requirements:

a) Having registered the operation of the branch or transaction office according to the provisions of the law and announced information as prescribed in Article 18 of this Circular;

b) Possessing lawful ownership or usage rights to the headquarters of the branch or transaction office; the headquarters must meet the safety conditions and be suitable for the operational requirements of the branch or transaction office;

c) Having a secure cash storage facility or safe according to the internal regulations of the microfinance organization;

d) Having an information technology system connecting the main headquarters with the branch or transaction office, and between the managing branch and the transaction office, ensuring security, confidentiality, and reporting requirements;

đ) Having sufficient key personnel, including: Branch Manager, Transaction Office Head, accounting staff, and a team of business officers according to the internal regulations of the microfinance organization;

e) The Branch Manager must meet the standards and conditions set by the State Bank and the internal regulations of the microfinance organization. The Transaction Office Head must meet the standards and conditions according to the internal regulations of the microfinance organization;

g) Having a Management Regulation for branches and transaction offices that meets the requirements stipulated in Clause 2 of Article 10 of this Circular.

2. A microfinance organization may commence operations of its representative office or public service unit (including representative offices or public service units of microfinance organizations licensed based on the conversion of subordinate units of microfinance programs and projects) when meeting the following requirements:

a) Having registered the operation according to the provisions of the law (in the case of commencing operations of a representative office);

b) Possessing lawful ownership or usage rights to the headquarters of the representative office or public service unit;

c) Having key personnel according to the internal regulations of the microfinance organization.

3. The microfinance organization must send the Management Regulation for branches and transaction offices; a notification document regarding the expected commencement date of operations and compliance with the commencement requirements stipulated in Clauses 1 and 2 of this Article to the State Bank branch at least fifteen days before the expected commencement date of operations.

4. Branches, transaction offices, representative offices, or public service units of microfinance organizations licensed based on the conversion of subordinate units of microfinance programs and projects shall commence operations simultaneously with the commencement of operations of the microfinance organization.

5. Subordinate units of microfinance programs and projects converted into branches, transaction offices, public service units, or representative offices of microfinance organizations must commence operations within twelve months from the date the State Bank issues the approval document concerning the network of operations; if they fail to commence operations within this period, the microfinance organization must develop a Resolution Plan to ensure the cessation of operations of non-commenced units within twenty-four months from the expiration date of the commencement period and submit it to the State Bank branch.

Article 18. Announcing information on the establishment of branches, transaction offices, representative offices, and public service units

Within seven working days before the expected opening date of the branch, transaction office, representative office, or public service unit (including cases where microfinance program or project units are converted into branches, transaction offices, public service units, or representative offices of microfinance organizations), the microfinance organization must announce information on the establishment of branches, transaction offices, representative offices, and public service units on the State Bank of Vietnam's electronic portal and the microfinance organization's website (if available), or in three consecutive issues of a daily newspaper or on a Vietnamese online news site.

Chapter III

CHANGE OF NAME, HEADQUARTER LOCATION OF BRANCHES, TRANSACTION OFFICES, REPRESENTATIVE OFFICES, PUBLIC SERVICE UNITS; CHANGE OF MANAGING BRANCH OF TRANSACTION OFFICE

 

Article 19. Change of name of branches, transaction offices

The microfinance organization decides to change the name of branches, transaction offices in accordance with the provisions of the law, this Circular, and notifies the State Bank branch within five working days from the date of the decision to change.

Article 20. Change of headquarters location of branches, transaction offices   

1. The microfinance organization may only change the headquarters location of branches, transaction offices within the scope defined in Clause 1 and Clause 2 of Article 7 of this Circular, and the proposed new location must meet the requirements stipulated in Points b, c, and d of Clause 1 of Article 17 of this Circular.

2. Documents for requesting a change in the headquarters location of branches, transaction offices:

a) A document from the microfinance organization requesting approval to change the headquarters location of branches, transaction offices, which must minimally include the following contents: current location, proposed new location, reasons for relocation, plans to ensure continuity in operations during the relocation process;

b) Resolution or Decision of the Board of Members regarding the change in the headquarters location of branches, change in the headquarters location of transaction offices.

3. Procedure for approving changes in the headquarters location of branches, transaction offices:

a) The microfinance organization prepares one set of documents in accordance with Clause 2 of this Article and submits it to the State Bank branch. If the documents are incomplete or invalid, the State Bank branch will notify the microfinance organization in writing to supplement and complete the documents within five working days from the date of receipt of the documents;

b) Within ten working days from the date of receiving valid documents in accordance with Clause 2 of this Article, the State Bank branch will issue a document approving the change in the headquarters location of branches, transaction offices; if rejected, the State Bank branch must respond in writing and specify the reasons.

4. The microfinance organization must report to the State Bank branch about the expected operation date at the approved location and compliance with the requirements stipulated in Clause 1 of this Article, at least fifteen working days before the expected operation date at the approved location.

5. Within twelve months from the date the State Bank branch issues the approval document, the branches and transaction offices of the microfinance organization must operate at the approved location; if they do not operate at the new location beyond this period, the approval document of the State Bank branch shall automatically become invalid.

Article 21. Change of name, headquarters location of representative offices, public service units

1. The microfinance organization decides to change the name and headquarters location of representative offices, public service units in accordance with the provisions of the law.

2. The microfinance organization must notify the State Bank in writing about the change in name and headquarters location within five working days from the date of the decision to change the name and headquarters location of representative offices, public service units.

Article 22. Changing the branch managing the transaction office

1. The microfinance organization decides on changing the branch managing the transaction office. The proposed branch to manage the transaction office must meet the conditions stipulated in Clause 2 of Article 12 of this Circular.

2. Within five working days from the date of the decision to change the branch managing the transaction office, the microfinance organization shall send a notification letter to the State Bank branch, reporting specifically on the fulfillment of the conditions for the branch managing the transaction office as prescribed in Clause 2 of Article 12 of this Circular.

Article 23. Announcing information about changes

Within seven working days from the date of changing the name of the branch, transaction office, representative office, or public service unit (including cases where sub-units under the microfinance program or project are converted into branches, transaction offices, public service units, or representative offices of the microfinance organization) or within seven working days before the planned operation at a new location, the microfinance organization shall announce such information on the electronic portal of the State Bank branch and the microfinance organization (if applicable), or in three consecutive issues of a daily newspaper or on a Vietnamese online news site.

Chapter IV

TERMINATION OF OPERATIONS AND LIQUIDATION OF BRANCHES, TRANSACTION OFFICES, REPRESENTATIVE OFFICES, AND PUBLIC SERVICE UNITS

Article 24. Termination of operations and liquidation of branches, transaction offices, representative offices, and public service units

1. Branches, transaction offices, representative offices, and public service units terminate operations and undergo liquidation in the following cases:

a) Automatic termination of operations and liquidation;

b) Voluntary termination of operations and liquidation;

c) Compulsory termination of operations and liquidation.

2. The microfinance organization is responsible for:

a) The document from the non-bank financial institution proposing to terminate operations or liquidate the branch, clearly stating: reasons for terminating operations or liquidation; name and address of the branch being terminated or liquidated, and commitment to resolve the branch's assets, rights, obligations, and related interests;

b) Storing documents, records, and files of the branches, transaction offices, representative offices, and public service units that have terminated operations and undergone liquidation, as well as related documents concerning the termination of operations and liquidation;

c) Implementing legal procedures to terminate operations and liquidate branches, transaction offices, representative offices, and public service units in accordance with the provisions of the law.

Article 25. Automatic termination of operations and liquidation of branches, transaction offices, representative offices, and public service units

1. Branches, transaction offices, representative offices, and public service units automatically terminate operations and undergo liquidation when the microfinance organization terminates operations and undergoes liquidation.

2. Procedures for automatic termination of operations and liquidation of branches, transaction offices, representative offices, and public service units shall be carried out in accordance with the provisions of the law.

Article 26. Voluntary termination of operations and liquidation of branches, transaction offices, representative offices, and public service units

1. Documents for voluntary termination of operations and liquidation of branches, transaction offices:

a) A document from the microfinance organization requesting the termination of operations and liquidation of the branch or transaction office, specifying the reasons for termination, the name and address of the branch or transaction office being terminated, and committing to resolve the assets, rights, obligations, and related interests of the branch or transaction office being terminated;

b) Resolution or Decision of the Board of Members of the microfinance organization regarding the termination of operations and liquidation of the branch or transaction office;

c) Plan for resolving the assets, rights, obligations, and related interests of the branch or transaction office being terminated.

2. Procedure for approving voluntary termination of operations and liquidation of branches, transaction offices:

a) The microfinance organization shall prepare one set of documents in accordance with the provisions of Clause 1 of this Article and submit it to the State Bank branch;

b) Within forty-five days from the date of receiving complete and valid documents as stipulated in Clause 1 of this Article, the State Bank branch shall issue a document approving the request of the microfinance organization; if it rejects the request, the State Bank branch must respond in writing and specify the reasons.

3. Within forty-five days from the date of the approval document from the State Bank branch regarding the termination of operations and liquidation of the branch or transaction office, the microfinance organization must carry out legal procedures in accordance with the law to terminate operations and liquidate the branch or transaction office and send a notification letter to the State Bank branch regarding the results of implementation and the date of termination of operations and liquidation.

4. The microfinance organization decides on the voluntary termination of operations and liquidation of the representative office or public service unit. Within five working days from the date of the decision to voluntarily terminate operations and liquidate the representative office or public service unit, the microfinance organization shall report in writing to the State Bank, specifying the reasons, the date of termination of operations and liquidation.

Article 27. Compulsory Termination of Operations and Dissolution of Branches, Transaction Rooms, Representative Offices, and Non-Business Units

1. Microfinance organizations' branches, transaction rooms, representative offices, and non-business units shall be compulsorily terminated and dissolved if there is evidence proving that the establishment application files contain false information leading to incorrect assessment regarding the fulfillment of conditions for establishment.

2. Upon discovering cases as stipulated in Clause 1 of this Article, the State Bank branch shall issue a document to the State Bank requesting the termination of operations and dissolution of microfinance organizations' branches, transaction rooms, representative offices, and non-business units, clearly stating the reasons for the request.

3. Within fifteen working days from the date of receipt of the State Bank branch's document requesting the termination of operations and dissolution of microfinance organizations' branches, transaction rooms, representative offices, and non-business units as prescribed in Clause 2 of this Article, or during the process of inspection and supervision where cases as stipulated in Clause 1 of this Article are discovered, the Banking Inspection and Supervision Authority shall submit a document to the Governor of the State Bank requiring the microfinance organization to terminate operations and dissolve branches, transaction rooms, representative offices, and non-business units.

4. Within ninety days from the date the State Bank issues a document requiring a microfinance organization to terminate operations and dissolve branches, transaction rooms, representative offices, and non-business units, the microfinance organization must complete the termination of operations and dissolution of these entities and issue a document notifying the State Bank of the specific date and results of the termination and dissolution.

5. Within twenty-four months from the date the State Bank issues a document requiring a microfinance organization to compulsorily terminate operations and dissolve branches, the microfinance organization must develop a plan to handle the transaction room managed by that branch to ensure compliance with the provisions of this Circular.

Article 28. Public Announcement of Information on Termination of Operations and Dissolution of Branches, Transaction Rooms, Representative Offices, and Non-Business Units

1. Within seven working days from the date of termination of operations and dissolution of branches, transaction rooms, representative offices, and non-business units, the microfinance organization must publicly post at its main office, the office of the unit being terminated and dissolved, and the branch managing the transaction room (in the case of terminating a transaction room), and announce the information on the termination of operations and dissolution on the State Bank’s electronic portal and the microfinance organization’s website (if available), and in three consecutive daily central or local newspapers or on a Vietnamese online news site.

2. The minimum content for public announcement and posting includes:

a) The name and address of the branch, transaction room, representative office, and non-business unit being terminated and dissolved;

b) The date of termination of operations and dissolution;

c) The microfinance organization's responsibilities regarding assets, rights, obligations, and related interests of the branch, transaction room, representative office, and non-business unit being terminated and dissolved.

 

Chapter V

IMPLEMENTING PROVISIONS

Article 29. Responsibilities of Microfinance Organizations

1. Shall be responsible under the law for the completeness and accuracy of the information and documents provided in the application file.

2. Shall promptly notify the State Bank of Vietnam of any changes related to the conditions and application files specified in this Circular that arise during the period when the State Bank of Vietnam is considering the microfinance organization's proposal.

Article 30. Responsibilities of Branches of the State Bank of Vietnam

1. Shall accept applications and approve the contents prescribed in Clause 2, Article 4 of this Circular.

2. Shall direct, supervise, and inspect microfinance organizations in implementing the Resolution Plan as prescribed in Clause 5, Article 17 of this Circular.

3. Shall accept reports and notifications from microfinance organizations as prescribed in this Circular.

4. Shall coordinate with Banking Inspection and Supervision Authorities to handle issues arising in relation to the establishment and operation of branches, transaction offices, representative offices, and affiliated units of microfinance organizations within their jurisdiction.

5. Within five working days from the date the branch of the State Bank of Vietnam issues an approval document according to its authority as prescribed in Clause 2, Article 4 of this Circular or from the date it receives a notification from the microfinance organization as prescribed in this Circular, the branch of the State Bank of Vietnam shall send a document to the State Bank of Vietnam informing about the following matters:

a) The opening of branches and transaction offices;

b) Changes in the name and location of the headquarters of branches and transaction offices;

c) Changes in the managing branch of transaction offices;

d) Voluntary termination of operations of branches and transaction offices.

Article 31. Responsibilities of Banking Inspection and Supervision Authorities

1. Shall be the point of contact for receiving, reviewing, and submitting to the Governor of the State Bank of Vietnam for approval the contents prescribed in Clause 1, Article 4 of this Circular.

2. Shall coordinate with branches of the State Bank of Vietnam to handle issues arising in relation to the establishment and operation of branches, transaction offices, representative offices, and affiliated units of microfinance organizations within their jurisdiction.

3. Shall accept reports and notifications from branches of the State Bank of Vietnam and microfinance organizations as prescribed in this Circular.

Article 32. Effective Date          

1. This Circular shall take effect from January 1, 2020.

2. Microfinance organizations are not required to adjust in accordance with the provisions of Article 8 and Point c, Clause 2, Article 12 of this Circular for branches and transaction offices established before the effective date of this Circular.

3. Circular No. 08/2009/TT-NHNN dated April 28, 2009, issued by the Governor of the State Bank of Vietnam guiding the network activities of small-scale financial organizations shall cease to be effective from the date this Circular becomes effective.

Article 33. Implementation Organization

The Director of the Office, the Director of Banking Inspection and Supervision, the Heads of Units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam branches in provinces and centrally-administered cities, the Chairmen and members of the Board of Directors and General Directors (Directors) of microfinance organizations are responsible for organizing the implementation of this Circular./.