Circular No. 25/2019/TT-NHNN amending and supplementing certain articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011, issued by the Governor of the State Bank of Vietnam on the issuance of Licenses and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations engaged in banking activities in Vietnam.

CIRCULAR

Amending and supplementing some articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011 of the Governor of the State Bank of Vietnam on issuing Licenses and organizing and operating commercial banks, foreign bank branches, representative offices of foreign credit organizations, and other foreign organizations engaged in banking activities in Vietnam

Decree No. 26/2014/ND-CP dated April 7, 2014 of the Government on the organization and operation of the Inspection and Supervision of the Banking Industry; Decree No.

43/2019/ND-CP dated May 17, 2019 of the Government amending and supplementing some articles of Decree No. 26/2014/ND-CP dated April 7, 2014 of the Government on the organization and operation of the Inspection and Supervision of the Banking Industry;

The Governor of the State Bank of Vietnam promulgates this Circular to amend and supplement some articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011 of the Governor of the State Bank of Vietnam on issuing Licenses and organizing and operating commercial banks, foreign bank branches, representative offices of foreign credit organizations, and other foreign organizations engaged in banking activities in Vietnam.

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

Pursuant to the Law on Credit Institutions dated June 16, 2010; the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

Decree No. Article 1. Amending and supplementing some articles of Circular No. 40/2011/TT-NHNN dated December 15, 2011 of the Governor of the State Bank of Vietnam on issuing Licenses and organizing and operating commercial banks, foreign bank branches, representative offices of foreign credit organizations, and other foreign organizations engaged in banking activities in Vietnam (hereinafter referred to as Circular No. 40/2011/TT-NHNN)."Article 3. Authority to decide on issuing Licenses 1. The Governor of the State Bank of Vietnam has the authority to decide:

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;

a) Issuing Licenses for commercial banks and foreign bank branches;

b) Reissuing Licenses, adding new business activities to Licenses for commercial banks and foreign bank branches that are subjects of micro-prudential inspection and supervision by the Inspection and Supervision Agency.

1. Clause 3 shall be amended and supplemented as follows:

2. The Director of the State Bank of Vietnam branch in provinces and centrally governed cities has the authority to decide:

a) Reissuing Licenses, adding new business activities to Licenses for foreign bank branches located within their jurisdiction, except those specified in point b of Clause 1 of this Article;

b) Issuing Licenses, amending, and supplementing Licenses for representative offices."

"2. Procedures and formalities for issuing Licenses for establishing representative offices are as follows:

a) Foreign credit organizations and other foreign organizations engaged in banking shall prepare application documents according to Articles 13 and 18 of this Circular and submit them directly or send them via postal service to the State Bank of Vietnam branch in the province or centrally governed city where the representative office is planned to be established (hereinafter referred to as the State Bank of Vietnam branch).

Within thirty days from the date of receipt of the application documents, the State Bank of Vietnam branch shall issue a written confirmation to the foreign credit organization or other foreign organization engaged in banking that all necessary documents have been received. In case the application documents are incomplete or not in compliance with the regulations, the State Bank of Vietnam branch shall issue a written request for supplementary documents to the foreign credit organization or other foreign organization engaged in banking.

b) Within sixty days from the date of issuance of the written confirmation that all necessary documents have been received, the State Bank of Vietnam branch shall proceed to issue the License according to the regulations. In case the License is not issued, the State Bank of Vietnam branch shall issue a written response to the foreign credit organization or other foreign organization engaged in banking, specifying the reasons for not issuing the License."

2. Clause 2 of Article 5 shall be amended and supplemented as follows:

3. Clause 8 of Article 18 is amended and supplemented as follows:
"8. A document proving the lawful right to use or will have the lawful right to use the premises of the representative office."

4. Adding Section 5 to Chapter II as follows:

REGULATIONS ON AMENDING AND SUPPLEMENTING LICENSES FOR CHANGES IN REPRESENTATIVE OFFICES

3. Clause 8 of Article 18 shall be amended and supplemented as follows:

"8. Documents proving the right to use or will have the right to legally use the office of the representative office."

4. Add Section 5 to Chapter II as follows:

"Section 5

PROVISIONS ON AMENDMENTS AND SUPPLEMENTS TO THE LICENSE IN CASE OF CHANGES IN THE REPRESENTATIVE OFFICE

REGARDING CHANGES IN THE REPRESENTATIVE OFFICE

Article 18d. General provisions on changes to representative offices
1. The representative office shall prepare a file to request amendments and supplements to the License and submit it directly or send it via postal service to the State Bank branch in accordance with point a, Clause 2, Article 18d of this Circular for the following change contents:

a) Change of name;

b) Changing the location of the headquarters to a different province or city from where the representative office's headquarters is currently located;

c) Extending the operating period.

2. The representative office shall submit directly or send via postal service a notification document to the State Bank branch where its headquarters is located no later than seven working days from the date of the following changes:

a) Changing the head of the representative office;

b) Changing the location of the headquarters within the same province or city;

c) Changing the address of the headquarters without changing the location of the headquarters.

3. The representative office shall prepare a file to request amendments and supplements to the License as stipulated in Clause 1 of this Article according to the principle of preparing files prescribed in Article 13 of this Circular.

4. After the State Bank branch amends and supplements the License for the change contents specified in Clause 1 of this Article, the representative office shall implement the following contents:

a) Registering with the competent state authorities regarding the changed contents;

b) Commencing operations at the new location and ceasing operations at the old location within six months from the date the State Bank branch amends and supplements the License for the change content specified in point b, Clause 1 of this Article;

c) Announcing the changed contents on the State Bank’s information media and in a daily newspaper for three consecutive issues or on a Vietnamese online newspaper within seven working days from the date the State Bank branch amends and supplements the License.

Article 18d. File, procedure, and process for amending and supplementing the License for changes to representative offices

1. The file requesting amendments and supplements to the License for the changes specified in Clause 1 of Article 18d of this Circular includes:

a) A document proposing the change signed by the legal representative of the foreign credit institution or other foreign organization engaged in banking activities, which must minimally include the following contents:

(i) Current content;

(ii) Proposed change content. For proposed name changes, they must comply with the provisions of Clause 1, Article 23 of this Circular;

(iii) Reason for the change;
b) Documentation proving the reason for the change (for name changes); or documentation proving that the representative office has the right to use or will have the right to legally use the headquarters at the new location (for changes in the location of the headquarters);

c) An audited annual financial report of the foreign credit institution or other foreign organization engaged in banking activities for the year immediately preceding the submission of the application, and a general overview report on the operation of the representative office for the case of extending the operating period (detailing the operational situation over the past three years before submitting the application and the plan for the next year).

2. Procedure and process for amending and supplementing the License:

a) The representative office shall prepare and submit the file to the State Bank branch where its headquarters is located for name changes or extensions of the operating period, or to the State Bank branch where the new headquarters is expected to be located for changes in the location of the headquarters. In the case of extending the operating period, the file must be submitted at least 60 days before the License expires;

b) If the file is incomplete or invalid, the State Bank branch shall issue a document requesting the representative office to supplement and complete the file within five working days from the date of receipt of the file;

c) Within thirty days from the date of receiving a complete and valid file, the State Bank branch shall issue a decision to amend and supplement the License for the changes made by the representative office. If the request is denied, the State Bank branch shall issue a document stating the reasons.

5. Add points g and h to Clause 2, Article 36 as follows:

"g) Serve as the focal point for receiving, examining, and presenting to the Governor of the State Bank the application files for renewing the License and adding new business content to the License of commercial banks and foreign bank branches as stipulated in point b, Clause 1, Article 3 of this Circular;

h) Issue a document along with the file seeking opinions from relevant units within the State Bank regarding the application for adding new business content to the License for derivative interest rate activities, supply of derivative commodity price products, and securities custody services."

6. Clause 8, Article 36 is amended and supplemented as follows:

"8. The State Bank branch:

a) Within thirty days from the date the Banking Inspection and Supervision Authority sends a request, the State Bank branch where the proposed headquarters of the commercial bank or foreign bank branch is to be located shall examine the application file and send a document to the Banking Inspection and Supervision Authority;

b) Serve as the focal point for working with the local government in the area where the proposed headquarters of the commercial bank or foreign bank branch is to be located regarding the establishment of a commercial bank or foreign bank branch in that area (if applicable);

c) Directly inspect, instruct, and supervise the commercial bank or foreign bank branch to ensure compliance with legal requirements and State Bank regulations before commencing operations;

d) Suspend the commencement of operations of the commercial bank or foreign bank branch if it does not meet the conditions for commencing operations;

đ) Report to the Governor of the State Bank on the conditions and progress of the commencement of operations of the commercial bank or foreign bank branch;

e) Receive and examine the files prescribed in Articles 18, 18c, and Clause 18d of this Circular;

g) Send a document seeking opinions from the People's Committee of the province or centrally-administered municipality where the representative office is expected to be located regarding the following contents:

(i) The location for establishing the representative office when issuing the Representative Office Establishment License in accordance with Clause 2, Article 5 of this Circular;

(ii) Changing the location of the representative office to a different province or city from where the representative office is currently located in accordance with Article 18d of this Circular;

h) Being responsible for managing and storing the files after issuing the Representative Office Establishment License;

i) Receiving notifications from representative offices with headquarters located in the province or city regarding changes as stipulated in Clause 2, Article 18d of this Circular;

k) Notifying the Ministry of Public Security (Economic Security Department) about the personnel serving as the Head of the representative office after issuing the Representative Office Establishment License and any changes in such personnel upon receiving notifications from the representative office;

l) Inspecting representative offices with headquarters located in the province or city in accordance with the provisions of the law.

Article 2

1. Replace the phrase "sent through postal service or submitted directly to the State Bank (through the Banking Inspection and Supervision Agency)" with "submitted directly or sent through postal service to the State Bank of Vietnam or the State Bank branch as provided for in Point a, Clause 2, Article 3 of this Circular" in Clause 1, Article 18b of Circular No. 40/2011/TT-NHNN (supplemented by Clause 3, Article 1 of Circular No. 17/2017/TT-NHNN dated November 20, 2017 of the Governor of the State Bank of Vietnam amending and supplementing some articles of Circular No. 40/2011/TT-NHNN).

2. Remove the phrase "change the term of operation" from the name of Article 22 of Circular No. 40/2011/TT-NHNN.

3. Remove the phrase "representative office" at Point a, Clause 1, Article 35 and Point d, Clause 2, Article 36 of Circular No. 40/2011/TT-NHNN.

4. Repeal Clause 2, Article 22 and Point b, Clause 2, Article 36 of Circular No. 40/2011/TT-NHNN.

5. Remove the phrase "Head of the representative office" at Point b, Clause 1, Article 35 of Circular No. 40/2011/TT-NHNN (amended and supplemented by Clause 16, Article 1 of Circular No. 28/2018/TT-NHNN dated November 30, 2018 of the Governor of the State Bank of Vietnam amending and supplementing some articles of Circular No. 40/2011/TT-NHNN).

6. Replace Appendix 01 issued together with Circular No. 40/2011/TT-NHNN with Appendix 01 issued together with this Circular (including: Appendix 01a (Sample of the Representative Office Establishment and Operation License for commercial banks), Appendix 01b (including: Appendix 01b1 and Appendix 01b2 (Sample of the Branch Establishment License for foreign banks)), Appendix 01c (Sample of the Representative Office Establishment License)).

7. Replace Appendix 02c issued together with Circular No. 40/2011/TT-NHNN with Appendix 02c issued together with this Circular.

Article 3. Transitional Provisions

For applications for extension of the term of operation of representative offices that have been submitted but whose licenses have expired before this Circular takes effect, the State Bank branch shall amend and supplement the licenses according to the authority prescribed in this Circular.

The Head of the Ministry’s Office, Heads of Departments, Director of the Vietnam Registration Agency, Heads of agencies, units, and individuals related to this Circular shall be responsible for its enforcement.

The Director of the Office, the Director of Banking Inspection and Supervision, the Heads of units under the State Bank; the Chairman of the Board of Directors, the Chairman of the Board of Members, the General Director (Director) of commercial banks, the General Director (Director) of branches of foreign banks, the Head of representative offices of foreign credit institutions, and other organizations engaged in banking activities shall be responsible for organizing the implementation of this Circular.

Article 5. Implementation Provisions

1. This Circular takes effect from January 17, 2020.

2. This Circular abolishes:

a) Point b, Clause 4, Article 1 and Article 2 of Circular No. 17/2017/TT-NHNN dated November 20, 2017 of the Governor of the State Bank of Vietnam amending and supplementing some articles of Circular No. 40/2011/TT-NHNN;

b) Clause 1, Article 1 of Circular No. 28/2018/TT-NHNN dated November 30, 2018 of the Governor of the State Bank of Vietnam amending and supplementing some articles of Circular No. 40/2011/TT-NHNN./.