CIRCULAR

Regulations on the restructuring of credit organizations

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

No. 06/2013/UBTVQH13 dated March 18, 2013;

Pursuant to the Enterprise Law No. 68/2014/QH13 dated November 26, 2014;

Based on the Competition Law No. 27/2004/QH11 dated December 3, 2004;

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;

At the proposal of the Director of Banking Inspection and Supervision;

The Governor of the State Bank of Vietnam issues this Circular to regulate the restructuring of credit organizations.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Circular regulates the restructuring of credit organizations through mergers, consolidations, and changes in the legal form of credit organizations.

2. The restructuring of a credit organization that is a limited liability company wholly owned by the State with 100% of its charter capital into a joint-stock company shall be carried out in accordance with the provisions of the law on the transformation of state-owned companies into joint-stock companies.

3. The participation of commercial banks in contributing capital or purchasing shares of credit organizations leading to a change in the legal form of credit organizations shall be implemented in accordance with the regulations of the State Bank of Vietnam (hereinafter referred to as the State Bank) regarding conditions, documents, procedures, and formalities for contributing capital or purchasing shares of credit organizations.

4. The contribution of capital or purchase of shares of credit organizations under special control by the State Bank leading to a change in the legal form of credit organizations shall be carried out in accordance with the regulations of the Prime Minister on mandatory capital contribution or share purchase of credit organizations under special control.

5. The restructuring of credit organizations according to the Government's policy on restructuring the system of credit organizations shall be implemented in accordance with the approved project by the Government, the Prime Minister, or the competent authority, and in accordance with the procedures and formalities stipulated in this Circular.

6. The restructuring of people's credit funds and microfinance organizations shall be carried out in accordance with the specific regulations of the State Bank.

Article 2. Applicability

1. Credit organizations include:

a) Commercial banks;

b) Financial companies.

2. Organizations and individuals related to the restructuring of credit organizations.

Article 3. Explanation of Terms

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

1. Merger of credit organizations is the transfer of all assets, rights, obligations, and legitimate interests of one or more credit organizations (hereinafter referred to as merged credit organizations) to another credit organization (hereinafter referred to as the receiving credit organization), while ceasing the existence of the merged credit organizations.

2. Consolidation of credit organizations is the transfer of all assets, rights, obligations, and legitimate interests of two or more credit organizations (hereinafter referred to as consolidated credit organizations) to form a new credit organization (hereinafter referred to as the consolidated credit organization), while ceasing the existence of the consolidated credit organizations.

3. Credit organization after merger is the receiving credit organization after being approved by the State Bank for the merger.

4. Participating credit organization in merger is the merged credit organization, the receiving credit organization.

5. Participating credit organization in merger and consolidation are the participating credit organizations in merger, the consolidated credit organizations.

6. Representing credit organization is the consolidated credit organization authorized by the remaining consolidated credit organizations to handle matters related to the consolidation of credit organizations.

7. Credit organization after restructuring is the credit organization after merger, consolidated credit organization, credit organization that has changed its legal form.

8. Competent authority of the credit organization is the authority responsible for deciding on the merger, consolidation, and change in the legal form of credit organizations in accordance with the law and the Charter of the credit organization.

Article 4. Cases of restructuring credit organizations

1. Cases of merging credit organizations:

a) Commercial banks, finance companies merging into a commercial bank;

b) Finance companies merging into a finance company.

2. Cases of consolidating credit organizations:

a) Commercial banks consolidating commercial banks into a commercial bank;

b) Commercial banks consolidating finance companies into a commercial bank;

c) Finance companies consolidating finance companies into a finance company.

3. Cases of changing the legal form of credit organizations:

a) Commercial banks, finance companies changing from a limited liability company to a joint-stock company and vice versa;

b) Commercial banks, finance companies changing from a single-member limited liability company to a limited liability company with two or more members and vice versa.

Article 5. Principles for Record Keeping

1. The application file for approval of restructuring of credit organizations shall be established in one original copy in Vietnamese. Foreign language documents must be legalized and translated into Vietnamese, except where the legalization is exempted under Vietnamese law.

2. Copies of documents and certificates are copies issued from the original book or certified copies or copies accompanied by presentation of the original for comparison. In cases where the applicant submits copies accompanied by presentation of the original for comparison, the person responsible for comparison shall confirm the accuracy of the copies compared to the originals.

3. A list of documents must be included in the file.

Article 6. Scope of operations of credit organizations after restructuring

1. The scope of operations of credit organizations after restructuring must comply with the scope of operations of each type of credit organization as prescribed by law.

2. The scope of operations of credit organizations after merger includes the activities of the credit organization receiving the merger. The credit organization after merger may supplement the activities of the credit organization being merged if it meets all conditions for operation as prescribed by law.

3. The scope of operations of consolidated credit organizations is the activities of the credit organizations being consolidated if the consolidated credit organization meets all conditions for operation as prescribed by law.

4. The scope of operations of credit organizations changing their legal form is the activities of the credit organization undergoing the change in legal form.

Article 7. Advisory services for restructuring credit organizations

1. Credit organizations participating in mergers, consolidations, and credit organizations changing their legal form may use advisory services to implement restructuring.

2. Advisory organizations for restructuring must meet the following conditions:

a) They must be organizations permitted to provide advisory services in the financial and banking sectors;

b) The advisory organization, its managers, executives, major shareholders, owners, and capital contributors must not be related parties, unsecured borrowers, or borrowers with preferential terms from the credit organizations participating in mergers, consolidations, or those changing their legal form;

c) They must not have provided financial or banking advisory services to the credit organizations participating in mergers, consolidations, or those changing their legal form in the three consecutive years immediately preceding the year of submission of the application for approval of restructuring.

Article 8. Disclosure of Information on Restructuring of Credit Institutions

1. After the State Bank of Vietnam approves the principle of merger, consolidation, or change in legal form, credit institutions participating in mergers or consolidations, and credit institutions whose legal form has been changed must publish such information on the State Bank of Vietnam's communication channels, in a national daily newspaper for three consecutive issues or on the Vietnam electronic news website within seven working days, and must post at their main offices, branches, transaction offices, and subordinate units the following information:

a) The number and date of the State Bank of Vietnam’s document approving the principle of merger, consolidation, or change in legal form of credit institutions;

b) The name and address of the main office of credit institutions participating in mergers or consolidations, and credit institutions whose legal form has been changed;

c) The charter capital of credit institutions participating in mergers or consolidations, and credit institutions whose legal form has been changed at the time of submitting the application for approval of the principle of merger, consolidation, or change in legal form;

d) The legal representative of credit institutions participating in mergers or consolidations, and credit institutions whose legal form has been changed;

đ) Anticipated information about the credit institution after restructuring, including: name, address of the main office; charter capital; legal representative; organizational form; type of operation.

2. After the State Bank of Vietnam approves the merger, consolidation, or change in legal form, the credit institution after restructuring must publish such information on the State Bank of Vietnam's communication channels, in a national daily newspaper for three consecutive issues or on the Vietnam electronic news website within seven working days, and must post at their main offices, branches, transaction offices, and subordinate units the following information:

a) The number and date of the State Bank of Vietnam’s document approving the merger, consolidation, or change in legal form of credit institutions;

b) The number and date of the License for Establishment and Operation, Business Registration Certificate, or equivalent document of the credit institution after restructuring;

c) The name and address of the main office of the credit institution after restructuring;

d) The charter capital of the credit institution after restructuring;

đ) The legal representative of the credit institution after restructuring;

e) The organizational form of the credit institution after restructuring;

g) List and contribution ratio of founding shareholders, major shareholders, strategic shareholders, capital contributors, and owners of the credit institution after restructuring;

h) The expected opening date for operations for consolidated credit institutions and credit institutions that have changed their legal form;

i) Official information on the cessation of operations of credit institutions being merged, consolidated, or whose legal form has been changed, including:

(i) Name, address of the main office;

(ii) The number and date of the License for Establishment and Operation, Business Registration Certificate, or equivalent document;

(iii) Charter capital;

(iv) Legal representative;

(v) Date of cessation of operations.

3. Credit institutions participating in mergers or consolidations may agree and jointly disclose the information stipulated in Clause 1 of this Article.

Chapter II

MERGER AND CONSOLIDATION OF CREDIT INSTITUTIONS

Article 9. Principles of Merger and Consolidation

1. To be carried out according to agreement; ensuring the normal operation of credit organizations; guaranteeing the rights and legitimate interests of customers during the merger and consolidation process.

2. To comply with the provisions of this Circular and relevant laws.

3. To maintain confidentiality of information to ensure the stable operation of credit organizations participating in the merger and consolidation prior to the merger and consolidation project being approved by the competent authority of the credit organization. Documents and materials related to the merger and consolidation of credit organizations must ensure prudence, honesty, accuracy, and avoid misunderstanding.

4. Strictly prohibit the disposal of assets in any form. The transfer and sale of assets during the merger and consolidation process must ensure transparency, compliance with legal regulations and agreements between parties, ensuring asset safety and not affecting the interests of credit organizations participating in the merger and consolidation, and individuals and organizations related to the merger and consolidation.

5. The business license of the credit organization being consolidated becomes invalid when the consolidated credit organization commences operations. The business license of the credit organization being merged becomes invalid when the post-merger credit organization registers the enterprise.

Article 10. Conditions for Merger and Consolidation

1. Credit organizations participating in the merger and consolidation must meet the following conditions:

a) Not falling under the cases of prohibited economic concentration, except where exempted from such prohibition under competition law;

b) Having a merger and consolidation project in accordance with Article 13 of this Circular approved by the competent authority of the participating credit organizations.

2. After the merger and consolidation, the post-merger credit organization must ensure compliance with legal regulations on limits, safety ratios, shareholding ratios, ownership of shares, and banking operating conditions.

Article 11. Documents for Requesting Approval of Merger

1. Documents for requesting approval of the principle of merger:

a) A request for merger approval signed by the authorized representatives of the participating credit organizations in accordance with the model specified in Appendix No. 01 issued together with this Circular;

b) An authorization document from the credit organization being merged to the receiving credit organization to carry out tasks related to the merger in accordance with this Circular;

c) Copies of the business license and related approval documents for amendments and supplements to the business license; Enterprise registration certificate or equivalent documents of the participating credit organizations;

d) Reports from the participating credit organizations regarding non-violation of economic concentration regulations; or responses from the competition management agency in cases requiring notification of economic concentration; or decisions granting exemption from the competent authority in cases of economic concentration eligible for exemption under competition law;

đ) The merger project in accordance with Article 13 of this Circular;

e) Minutes, resolutions, and decisions of the competent authority of the participating credit organizations approving the merger project, the merger contract, the charter of the post-merger credit organization, and other issues related to the merger of credit organizations;

g) The merger contract approved by the competent authority of the participating credit organizations and signed by the authorized representatives of the participating credit organizations, which must include the main contents as stipulated in point a, Clause 2, Article 195 of the Enterprise Law;

h) Financial statements of the participating credit organizations for the three consecutive years preceding the submission of the merger approval request, audited by an independent auditing organization without any disclaimer. In case there is no audited financial statement of the most recent year at the time of submitting the merger approval request, submit the unaudited financial statement and provide the audited financial statement immediately upon issuance by the auditing organization. The participating credit organizations are responsible for the content of the submitted financial statements.

2. Documents for requesting approval of the merger:

a) A document from the authorized representative of the receiving credit organization requesting:

(i) Approval of the merger and changes in the registered capital; confirmation of the charter of the post-merger credit organization;

(ii) Approval of other contents (if any);

b) Documents for requesting the State Bank's approval of the contents in point a(ii) of this clause in accordance with the State Bank's regulations and relevant laws;

c) Minutes, resolutions, and decisions of the competent authority of the participating credit organizations approving changes in the merger project and other issues related to the merger (if any);

d) A document from the authorized representative of the receiving credit organization detailing the changes compared to the previously submitted merger project for the State Bank's principle approval (if any);

đ) A commitment letter from the authorized representative of the receiving credit organization stating that the post-merger credit organization will comply with the provisions of Clause 2, Article 10 of this Circular.

Article 12. Documents for requesting approval of merger

1. Documents for requesting approval of the principle of merger:

a) A request for approval of merger signed by the legal representative of the credit organizations to be merged according to the model prescribed in Appendix No. 01 issued together with this Circular;

b) Authorization documents from the credit organizations to be merged granting a credit organization to represent them in performing tasks related to the merger as stipulated in this Circular;

c) Copies of the License for Establishment and Operation accompanied by copies of relevant approval documents concerning amendments and supplements to the License; Business Registration Certificate or equivalent documents of the credit organizations to be merged;

d) Reports from the credit organizations to be merged on non-violation of economic concentration regulations; or responses from competition management agencies in cases where economic concentration must be notified; or decisions on exemption granted by competent authorities in cases where economic concentration is entitled to exemption under competition laws;

đ) The merger project as prescribed in Article 13 of this Circular;

e) Minutes, resolutions, and decisions of the competent authority of the credit organizations to be merged approving the merger project; Merger Contract; draft Charter of the merged credit organization; list of personnel expected to be elected or appointed to positions on the Board of Directors, Board of Members, Supervisory Board of the merged credit organization, and other issues related to the merger;

g) The Merger Contract approved by the competent authority of the credit organizations to be merged and signed by the legal representatives of the credit organizations to be merged, which must include the main contents as prescribed in point a, Clause 2, Article 194 of the Enterprise Law;

h) Financial statements of the three consecutive years prior to the year of submitting the application for approval of the principle of merger of the credit organizations to be merged, audited by an independent auditing organization without any disclaimer. In case there is no financial statement of the most recent year at the time of submitting the application for approval of the principle of merger, the un-audited financial statement shall be submitted and the audited financial statement shall be submitted immediately upon issuance of the audit report by the auditing organization. The credit organization to be merged shall be responsible for the content of the submitted financial statements;

i) Draft Charter of the merged credit organization approved by the competent authority of the credit organizations to be merged;

k) Draft internal regulations on the organization and operation of the merged credit organization, at least including the internal regulations prescribed in Clause 2, Article 93 of the Law on Credit Institutions and the following provisions:

(i) Regulations on the organization and operation of the Board of Directors, Board of Members, Supervisory Board, and managers;

(ii) Regulations on the organization and operation of the headquarters, branches, and other affiliated units;

l) List of personnel expected to be elected or appointed to positions on the Board of Directors, Board of Members, Supervisory Board, and General Director (Director) of the merged credit organization;

m) Documentation proving that the personnel meet the qualifications and conditions for positions on the Board of Directors, Board of Members, Supervisory Board, and General Director (Director) of the merged credit organization.

2. Documents for requesting approval of merger:

a) A document from the legal representative of the representing credit organization requesting:

(i) Approval of merger, change in charter capital; confirmation of registration of the Charter;

(ii) Approval of other contents (if any);

b) Documents for requesting the State Bank's approval of the contents in point a(ii) of this clause in accordance with the State Bank's regulations and relevant laws;

c) Charter of the merged credit organization approved by the competent authority of the merged credit organization;

d) Minutes, resolutions, and decisions of the competent authority of the credit organizations to be merged approving changes in the merger project and other issues related to the merger (if any);

đ) A document from the legal representative of the representing credit organization detailing changes compared to the merger project previously submitted to the Governor of the State Bank for approval of the principle of merger (if any);

e) Minutes and resolutions of the competent authority of the merged credit organization approving the Charter; electing and appointing positions on the Board of Directors, Board of Members, Supervisory Board; regulations on the organization and operation of the Board of Directors, Board of Members, Supervisory Board of the merged credit organization and other issues related to the merged credit organization;

g) Minutes of meetings of the Board of Directors and Board of Members of the merged credit organization regarding the election of the Chairman of the Board of Directors, Chairman of the Board of Members; Minutes of meetings of the Supervisory Board of the merged credit organization regarding the election of the Head of the Supervisory Board;

h) Decisions of the Board of Directors and Board of Members of the merged credit organization regarding the appointment of positions of General Director (Director), Deputy General Director (Deputy Director), Chief Accountant;

i) Internal regulations on the organization and operation of the merged credit organization as prescribed in point k, Clause 1 of this Article, approved by the competent authority, Board of Directors, and Board of Members of the merged credit organization;

k) A commitment document from the legal representative of the representing credit organization regarding the merged credit organization's compliance with the provisions of Clause 2, Article 10 of this Circular.

Article 13. Merger Project

1. The merger project must be approved by the competent authority of the participating credit organizations and signed and stamped by the legal representatives of the participating credit organizations, who will bear responsibility for it.

2. The merger project must at least include the following contents:

a) Name, address, and website (if any) of the participating credit organizations;

b) Name, address, and contact phone number of the owner, Chairman, and members of the Board of Directors, Chairman, and members of the Board of Members, Head and members of the Supervisory Board, General Director (Director) of the participating credit organizations;

c) Reasons for merger or consolidation;

d) Summary of financial status and operating results of credit institutions participating in the merger or consolidation for the three consecutive years prior to the year of submitting the application for approval of the principle of merger or consolidation;

đ) Actual value of charter capital, non-performing debt, limits, safety ratios in operations, and compliance with these limits and ratios of credit institutions participating in the merger or consolidation before the merger or consolidation; charter capital of the credit institution after the merger, consolidated credit institution;

e) Merger or consolidation roadmap;

g) Method and time for converting contributed capital, share capital; forms of conversion of contributed capital, share capital and corresponding conversion ratios;

h) Arrangement of meetings of the competent authority deciding of credit institutions participating in the merger or consolidation, credit institution after the merger, consolidated credit institution under conditions, composition, meeting format, voting method according to the provisions of the law and the Charter of the credit institution to approve the merger or consolidation; authorization for the credit institution receiving the merger to organize this meeting;

i) Rights and obligations of credit institutions participating in the merger or consolidation, organizations and individuals related (if any);

k) Plan for handling employees working at credit institutions participating in the merger or consolidation;

l) List and contribution ratio of founding shareholders, major shareholders, members contributing capital of the credit institution after the merger, consolidated credit institution;

m) Forecast regarding organizational structure, personnel, network of activities and other issues related to organization and operation of the credit institution after the merger, consolidated credit institution;

n) Measures for transitioning and integrating management information systems, internal control systems, internal audit systems, data transmission systems to ensure smooth operation during and after the merger or consolidation;

o) Business plan forecast for the first three years of the credit institution after the merger, consolidated credit institution, which must include at least the following contents: Market analysis, strategy, objectives and business plans; projected financial reports for each year (balance sheet, income statement, cash flow statement, operational safety limits and ratios, performance indicators and explanations on the feasibility of financial targets for each year);

p) Impact assessment and handling plan (if any) of the merger or consolidation to ensure normal operation of participating credit institutions and stability of the credit institution system;

q) Compliance with the conditions stipulated in Clause 2 Article 10 of this Circular;

Article 14. Procedure and formalities for approving mergers;

1. Approval of the principle of merger:

a) The credit institution receiving the merger prepares and submits an application for approval of the principle of merger in accordance with Clause 1 Article 11 of this Circular via postal service or direct submission to the State Bank;

Within twenty days from the date of receipt of the aforementioned application, the State Bank sends a letter to the credit institution confirming receipt of a complete and valid application or requesting additional or improved documentation;

b) Within thirty days from the date of receipt of a complete and valid application, the State Bank sends letters seeking opinions:

(i) People's Committee of the province or centrally-administered city where the participating credit institutions have their headquarters on the impact of the credit institution merger on economic and social stability in the region and their views on the merger;

(ii) State Bank branch in the province or centrally-administered city where the participating credit institutions have their headquarters evaluates the current organizational and operational status of the participating credit institutions and their views on the merger;

c) Within sixty days from the date of receipt of a complete and valid application, the State Bank sends a letter approving the principle of credit institution merger. In case of disapproval, the State Bank sends a letter specifying the reasons;

2. Within a maximum of five working days from the date the State Bank approves the principle of merger, the participating credit institutions shall publish information in accordance with Clause 1 and 3 Article 8 of this Circular;

3. Approval of merger:

a) Within sixty days from the date the State Bank approves the principle of merger, the credit institution receiving the merger sends via postal service or direct submission to the State Bank one set of application for approval of the merger as stipulated in Clause 2 Article 11 of this Circular. If the State Bank does not receive all the required applications within this period, the approval of the principle will lose its validity;

Within ten working days from the date of receipt of the aforementioned applications, the State Bank sends a letter to the credit institution confirming receipt of a complete and valid application or requesting additional or improved documentation;

b) Within thirty days from the date of receipt of a complete and valid application, the State Bank sends a letter approving the merger, amending the License for Establishment and Operation of the credit institution receiving the merger, confirming registration of the Charter and approving other contents (if any). In case of disapproval, the State Bank sends a letter specifying the reasons;

4. Within forty-five days from the date the approval of the merger takes effect, the credit institution receiving the merger shall complete enterprise registration procedures in accordance with the law; publish information in accordance with Clause 2 Article 8 of this Circular and submit a report on completion of the merger to the State Bank;

5. Within five working days from the date the License for Establishment and Operation of the merged credit institution expires, the merged credit institution is responsible for returning the expired License for Establishment and Operation to the State Bank.

Article 15. Procedures and formalities for approving mergers

1. Approval of merger principles:

a) The credit organization representing the merger shall prepare and submit the application for approval of the merger principles in accordance with Clause 1 of Article 12 of this Circular via postal service or direct submission to the State Bank.

Within twenty days from the date of receipt of the aforementioned application, the State Bank sends a letter to the credit institution confirming receipt of a complete and valid application or requesting additional or improved documentation;

b) Within thirty days from the date of receipt of a complete and valid application, the State Bank sends letters seeking opinions:

(i) The People's Committee of the province or centrally governed city where the merging credit organizations have their main offices, and the proposed main office of the merged credit organization, shall provide information on the impact of the credit organization merger on economic and social stability in the area and their views on the merger;

(ii) The branch of the State Bank in the province or centrally governed city where the merging credit organization has its main office shall assess the current organizational structure and operations of the merging credit organization and their views on the merger;

c) Within sixty days from the date of receipt of complete and valid files, the State Bank shall issue a document approving the merger principles and the list of proposed personnel. In case of non-approval, the State Bank shall issue a document specifying the reasons.

2. Within a maximum period of five working days from the date the State Bank approves the merger principles, the merging credit organization shall publish information in accordance with Clause 1 and 3 of Article 8 of this Circular.

3. Approval of the merger:

a) Within sixty days from the date the State Bank approves the merger principles, the representative credit organization shall send via postal service or direct submission to the State Bank one set of files requesting approval of the merger as stipulated in Clause 2 of Article 12 of this Circular. If the State Bank does not receive all the required files within this period, the principle approval document will lose its validity.

Within ten working days from the date of receiving the aforementioned files, the State Bank shall issue a document confirming receipt of complete and valid files or requesting supplementation and completion of the files.

b) Within thirty days from the date of receipt of complete and valid files, the State Bank shall issue a document approving the merger, issuing the License for Establishment and Operation of the merged credit organization, confirming registration of the Articles of Association, and approving other contents (if any). In case of non-approval, the State Bank shall issue a document specifying the reasons.

4. Within forty-five days from the date the merger approval document becomes effective, the representative credit organization shall carry out business registration procedures in accordance with the law; the merged credit organization shall publish information in accordance with Clause 2 of Article 8 of this Circular, commence operations in accordance with the law, and submit a report on the completion of the merger to the State Bank.

5. Within five working days from the date the License for Establishment and Operation of the merging credit organization expires, the merging credit organization shall be responsible for returning the expired License for Establishment and Operation to the State Bank.

PART III

TRANSFORMATION OF THE LEGAL FORM OF CREDIT ORGANIZATIONS

Article 16. Principles of transformation of the legal form

1. The transfer of contributed capital shares, shares, and the issuance of new shares must comply with the regulations of the State Bank, securities laws, and related laws.

2. Credit organizations may only transform their legal form in accordance with the organizational forms prescribed in Article 6 of the Law on Credit Organizations and the regulations of the State Bank.

3. Confidentiality of information must be maintained to ensure the stable operation of credit organizations before the Transformation Plan is approved by the competent authority of the credit organization. All documents and materials related to the transformation of the legal form of credit organizations must adhere to the principles of prudence, honesty, accuracy, and clarity to avoid misunderstandings.

4. Any form of asset embezzlement is strictly prohibited. The transfer and sale of assets during the transformation process must be transparent, comply with the law and agreements between parties, ensure asset safety, and not affect the interests of credit organizations and individuals involved in the transformation process.

5. The License for Establishment and Operation of credit organizations undergoing legal form transformation shall expire when the transformed credit organization commences operations.

Article 17. Conditions for Changing Legal Form

1. A credit organization that changes its legal form must have a Plan for Changing Legal Form as prescribed in Article 19 of this Circular and such plan must be approved by the competent authority of the credit organization.

2. In the case where a credit organization changes from a limited liability company to a joint-stock company, it must satisfy the following conditions:

a) The conditions stipulated in Clause 1 of this Article;

b) The credit organization changing its legal form must meet the conditions for issuing shares as prescribed by securities laws and related laws;

c) Founding shareholders (if any), major shareholders, strategic shareholders of the credit organization changing its legal form must meet the conditions prescribed by law for founding shareholders when establishing a new credit organization;

d) Foreign investors who are shareholders or strategic shareholders of the credit organization changing its legal form must meet the conditions prescribed by law for foreign investors purchasing shares of Vietnamese credit organizations;

đ) Shareholders or individuals purchasing shares must ensure compliance with the legal provisions on shareholding ratios.

3. In the case where a credit organization changes from a single-member limited liability company to a multi-member limited liability company or vice versa, or from a joint-stock company to a limited liability company, it must satisfy the following conditions:

a) The conditions stipulated in Clause 1 of this Article;

b) The owner, transferee shareholder, and new shareholder of the credit organization changing its legal form must meet the conditions prescribed by law for owners and founding members when establishing a new credit organization;

c) The owner, transferee shareholder, and new shareholder of the credit organization changing its legal form must comply with the legal provisions on capital contribution ratios.

Article 18. Documents for Requesting Approval to Change Legal Form

1. Documents for requesting approval of the principle to change legal form:

a) A request for approval to change legal form signed by the authorized representative of the credit organization according to the model prescribed in Appendix No. 02 issued together with this Circular;

b) A copy of the License for Establishment and Operation along with copies of relevant approvals for amending and supplementing the License; Business Registration Certificate or equivalent document of the credit organization;

c) The Plan for Changing Legal Form as prescribed in Article 19 of this Circular;

d) Minutes, resolutions, decisions of the competent authority of the credit organization approving the Plan for Changing Legal Form, draft Charter, list of personnel expected to be elected or appointed to positions on the Board of Directors, Board of Members, Supervisory Board, and General Director (Director) of the credit organization changing its legal form, and other issues related to changing legal form;

đ) Financial statements for the three consecutive years prior to the year of submitting the application for approval of the principle to change legal form, audited by an independent auditing organization and without any disclaimer. If at the time of submitting the application for approval of the principle to change legal form, there is no audited financial statement for the most recent year, then submit the unaudited financial statement and provide the audited financial statement immediately upon issuance by the auditing organization. The credit organization shall be responsible for the contents of the submitted financial statements;

e) Draft Charter of the credit organization changing its legal form approved by the competent authority of the credit organization;

g) Draft internal regulations concerning the organization and operation of the credit organization changing its legal form, including at least the internal regulations prescribed in Clause 2 of Article 93 of the Law on Credit Organizations and the following regulations:

(i) Regulations on the organization and operation of the Board of Directors, Board of Members, Supervisory Board, and managers;

(ii) Regulations on the organization and operation of the headquarters, branches, and other affiliated units;

h) List of personnel expected to be elected or appointed to positions on the Board of Directors, Board of Members, Supervisory Board, and General Director (Director) of the credit organization changing its legal form;

i) Documentation proving that the personnel meet the qualifications and conditions for positions on the Board of Directors, Board of Members, Supervisory Board, and General Director (Director) of the credit organization changing its legal form;

k) Documentation and information provided to investors, which must include at least the following: conditions for founding shareholders, major shareholders, strategic shareholders, shareholders who are foreign investors, owners, transferee shareholders, and new shareholders of the credit organization changing its legal form;

l) In addition to the documents specified in points a, b, c, d, đ, e, g, h, i, k of this clause, a credit organization changing from a limited liability company to a joint-stock company through private placement of shares must also submit the following additional documents:

(i) Registration for Private Placement of Shares according to the model prescribed in Appendix No. 03 issued together with this Circular;

(ii) Decision of the owner, Board of Members of the credit organization approving the plan for private placement and the plan for using the proceeds from the placement;

(iii) Decision of the owner, Board of Members of the credit organization approving criteria for selecting recipients of private placement, proposed list of investors for private placement, and the number of shares proposed to be offered to each investor.

2. Documents for requesting approval to change legal form:

a) A document from the authorized representative of the credit organization requesting:

(i) Approval to change legal form; confirmation of registration of the Charter;

(ii) Approval of other contents (if any);

b) Documents for requesting the State Bank's approval of the contents in point a(ii) of this clause in accordance with the State Bank's regulations and relevant laws;

c) Charter of the credit organization changing its legal form approved by the competent authority of the credit organization changing its legal form;

d) Minutes, resolutions, decisions of the competent authority of the credit organization changing its legal form approving changes in the Plan for Changing Legal Form and other issues related to changing legal form (if any);

đ) Documentation from the legal representative of the credit institution undergoing legal form conversion clearly stating the changes compared to the Legal Form Conversion Plan submitted for the Governor of the State Bank's principle approval of the legal form conversion (if applicable);

e) Minutes, resolutions, decisions of the competent authority deciding on the credit institution undergoing legal form conversion regarding the adoption of the Charter; electing/appointing positions of Board of Directors members, Board of Members, Supervisory Board; regulations on the organization and operation of the Board of Directors, Board of Members, Supervisory Board of the credit institution undergoing legal form conversion and other issues related to the credit institution undergoing legal form conversion;

g) Minutes of the Board of Directors, Board of Members meeting of the credit institution undergoing legal form conversion on the election of the Chairman of the Board of Directors, Chairman of the Board of Members; Minutes of the Supervisory Board meeting of the credit institution undergoing legal form conversion on the election of the Head of the Supervisory Board; decision of the owner of the credit institution undergoing legal form conversion on the appointment of the Chairman, Board of Members members, Supervisory Board members;

h) Decision of the Board of Directors, Board of Members, owner of the credit institution undergoing legal form conversion on the appointment of the position of General Director (Director), Deputy General Director (Deputy Director), Chief Accountant;

i) List, amount, and ratio of contributions of contributing members, founding shareholders, major shareholders, strategic shareholders, foreign investor shareholders of the credit institution undergoing legal form conversion;

k) Internal regulations on the organization and operation of the credit institution undergoing legal form conversion as stipulated in point g Clause 1 of this Article, which have been approved by the competent authority deciding, Board of Directors, Board of Members of the credit institution undergoing legal form conversion;

l) In addition to the documents specified in points a, b, c, d, đ, e, g, h, i, k of this clause, credit institutions converting from a limited liability company to a joint-stock company shall submit the following additional documents:

(i) Report on the results of the share issuance and confirmation from the commercial bank where the escrow account is opened regarding the amount received from the issuance round;

(ii) Documents of the founding shareholder (if any), major shareholder, strategic shareholder of the credit institution undergoing legal form conversion as the documents for founding shareholders establishing credit institutions according to the State Bank's regulations on issuing licenses, organization and operation of credit institutions;

(iii) Documents of shareholders, strategic shareholders who are foreign investors of the credit institution undergoing legal form conversion according to the State Bank's regulations on documents, procedures, and formalities for approving foreign investors purchasing shares of Vietnamese credit institutions;

m) In addition to the documents specified in points a, b, c, d, đ, e, g, h, i, k of this clause, credit institutions converting from a single-member limited liability company to a multi-member limited liability company and vice versa, and those converting from a joint-stock company to a limited liability company shall submit the following additional documents:

(i) Share transfer contract or investment contribution agreement or documentation confirming the completion of the share transfer;

(ii) Documentation from the legal representative of the credit institution undergoing legal form conversion confirming the status of contributing member of the credit institution undergoing legal form conversion;

(iii) Documents of the owner, transferee contributing member, new contributing member of the credit institution undergoing legal form conversion as the documents for owners, founding contributing members establishing credit institutions according to the State Bank's regulations on issuing licenses, organization and operation of credit institutions.

Article 19. Legal Form Conversion Plan

1. The legal form conversion plan must be adopted by the competent authority deciding of the credit institution and signed, stamped, and held responsible by the legal representative of the credit institution.

2. The minimum contents of the legal form conversion plan include the following:

a) Name, address, and website (if available) of the credit institution;

b) Name, address, and contact phone number of the owner, Chairman, and Board of Members members, Chairman, and Board of Directors members, Head, and Supervisory Board members, General Director (Director) of the credit institution;

c) Reasons for legal form conversion;

d) Summary of financial situation and operating results of the credit institution being converted in the three consecutive years prior to the year requesting approval for legal form conversion;

đ) The actual value of the charter capital before and after the legal form conversion of the credit institution; non-performing loans, limits, safety ratios in operations, and compliance with these limits and ratios of the credit institution before legal form conversion;

e) Rights and obligations of the credit institution and related organizations and individuals (if applicable);

g) Expected organizational structure, network activities, and other issues related to the organization and operation of the credit institution undergoing legal form conversion;

h) Projected business plan for the first three years of the credit institution undergoing legal form conversion, including at least the following contents: Market analysis, strategy, objectives, and business plans; projected financial reports for each year (balance sheet; income statement, cash flow statement; operational safety limits and ratios; performance indicators and explanations of the ability to achieve financial targets each year);

i) Contribution ratio, shareholding ratio; conditions for founding shareholders, major shareholders, strategic shareholders, foreign investor shareholders, owners, transferee contributing members, new contributing members of the credit institution undergoing legal form conversion; conversion ratio of contributions, shares; method and time of conversion.

Article 20. Procedures and formalities for approving the conversion of legal form

1. Approval of the principle to convert the legal form:

a) Credit organizations shall prepare one set of application documents for approval of the principle to convert the legal form in accordance with Clause 1, Article 18 of this Circular and submit them via postal service or directly at the State Bank.

Within twenty days from the date of receipt of the aforementioned application, the State Bank sends a letter to the credit institution confirming receipt of a complete and valid application or requesting additional or improved documentation;

b) Within thirty days from the date of receiving complete and valid documents, the State Bank shall send a document seeking opinions from the State Bank branch in the province or centrally governed city where the credit organization's main office is located regarding the current organizational structure and operations of the credit organization.

c) Within sixty days from the date of receiving complete and valid documents, the State Bank shall issue a document approving the principle to convert the legal form of the credit organization and approve the list of proposed personnel. In case of disapproval, the State Bank shall issue a document clearly stating the reasons.

2. Within a maximum period of five working days from the date the State Bank approves the principle to convert the legal form, the credit organization undergoing the conversion of legal form shall publish information in accordance with Clause 1, Article 8 of this Circular.

3. Approval of the conversion of legal form:

a) Within one hundred twenty days from the date the State Bank approves the principle to convert the legal form, the credit organization shall submit one set of application documents for approval of the conversion of legal form as stipulated in Clause 2, Article 18 of this Circular via postal service or directly at the State Bank. If the State Bank does not receive all the required documents within this time frame, the approval document will lose its validity.

Within ten working days from the date of receipt of the aforementioned applications, the State Bank sends a letter to the credit institution confirming receipt of a complete and valid application or requesting additional or improved documentation;

b) Within thirty days from the date of receiving complete and valid documents, the State Bank shall issue a document approving the conversion of the legal form of the credit organization, issuing a License for Establishment and Operation of the credit organization, confirming the registration of the Articles of Association, and approving other contents (if applicable). In case of disapproval, the State Bank shall issue a document clearly stating the reasons.

4. Within forty-five days from the date the approval document for the conversion of legal form becomes effective, the credit organization shall complete business registration procedures in accordance with the law; publish information in accordance with Clause 2, Article 8 of this Circular; organize the opening of operations in accordance with the law, and submit a report on the completion of the conversion of legal form to the State Bank.

5. Within five working days from the date the License for Establishment and Operation of the credit organization undergoing the conversion of legal form expires, the credit organization undergoing the conversion of legal form shall be responsible for returning the expired License for Establishment and Operation to the State Bank.

Chapter IV

RESPONSIBILITIES OF THE RELATED UNITS

Article 21. Responsibilities of credit institutions

1. The Board of Directors, Board of Members, General Director (Director), and related organizations and individuals of credit organizations participating in mergers and consolidations, and credit organizations undergoing the conversion of legal form must bear responsibility for all activities and ensure absolute safety of assets of the credit organization until the merger, consolidation, and conversion of legal form process is completed according to the Merger Plan, Consolidation Plan, and Legal Form Conversion Scheme that have been approved.

2. The Chairman and members of the Board of Directors, the Chairman and members of the Board of Members, and the legal representatives of credit organizations participating in mergers and consolidations, and credit organizations undergoing the conversion of legal form must bear responsibility for the completeness, accuracy, legality, and compliance of the application documents for mergers, consolidations, and legal form conversions.

3. The merger and consolidation contracts must be submitted to creditors and notified to employees by credit organizations participating in mergers and consolidations within fifteen days from the date the State Bank approves the principle of merging and consolidating credit organizations.

4. After receiving the approval document, credit organizations participating in mergers and consolidations, and credit organizations undergoing the conversion of legal form must proactively prepare for the handover process and immediately transfer all rights, obligations, and organizational and operational issues upon receipt of the approval decision from the State Bank.

5. If any issues outside the books or not handed over are discovered after reorganization, the Chairman and members of the Board of Directors, the Chairman and members of the Board of Members, the General Director (Director), and related organizations and individuals of credit organizations participating in mergers and consolidations, and credit organizations undergoing the conversion of legal form must bear responsibility in accordance with the law.

6. Information confidentiality in accordance with Clause 3, Article 9, and Clause 3, Article 16 of this Circular.

7. The competent authority of credit organizations participating in mergers and consolidations, credit organizations after mergers, and consolidated credit organizations must hold meetings in accordance with legal conditions, formats, and voting methods stipulated by law and the credit organization's Articles of Association.

Article 22. Responsibilities of units under the State Bank of Vietnam

1. The Banking Inspection and Supervision Authority:

a) To take the lead and coordinate with relevant Departments and Bureaus of the State Bank, State Bank branches in provinces and centrally governed cities to submit the application documents for mergers, consolidations, and legal form conversions of credit organizations to the Governor of the State Bank for review.

b) To act on behalf of the Governor of the State Bank to sign documents sent to credit organizations confirming receipt of complete documents or requesting supplementation and perfection of documents in accordance with this Circular.

c) Submitting to the Governor of the State Bank:

(i) Documents sent to credit organizations regarding approval or non-approval of the principle (stating the reasons) for reorganizing credit organizations;

(ii) Documents approving the reorganization of credit organizations; amending and supplementing the License for Establishment and Operation of credit organizations after mergers; issuing the License for Establishment and Operation of consolidated credit organizations; issuing the License for Establishment and Operation of credit organizations undergoing the conversion of legal form; confirming the registration of the Articles of Association and amendments and supplements to the Articles of Association of credit organizations after reorganization;

(iii) Decisions approving changes in accordance with the law.

d) Inspect, supervise, and handle violations by credit institutions in complying with the provisions of this Circular according to their authority.

2. Department of Finance and Accounting:

Provide specific guidance on financial and accounting issues related to the restructuring process of credit institutions.

3. The Legal Department:

Coordinate with the Banking Supervisory Authority to address legal issues related to the restructuring process of credit institutions.

4. State Bank branch in provinces and centrally-administered cities:

a) Provide written comments on the restructuring of credit institutions sent to the State Bank of Vietnam as stipulated in this Circular;

b) Inspect, supervise, and handle violations by credit institutions within its jurisdiction in implementing the restructuring process according to the functions, tasks, powers, and organizational structure of the State Bank of Vietnam branch in provinces and centrally-administered cities.

5. Relevant Departments and Bureaus of the State Bank of Vietnam, based on their assigned functions and tasks, provide written comments upon the request of the Banking Supervisory Authority as stipulated in this Circular.

Chapter V

IMPLEMENTING PROVISIONS

Article 23. Transitional Provisions

For activities that do not meet the operating conditions specified in Clause 2, 3 of Article 6 of this Circular, the merged credit institution and the consolidated credit institution shall proceed as follows:

1. From the date the merged credit institution is issued a Business Registration Certificate, the consolidated credit institution commences operations, the merged credit institution and the consolidated credit institution shall not enter into new contracts or agreements to carry out activities that do not satisfy the conditions set forth in Clause 2, 3 of Article 6 of this Circular.

2. For contracts and agreements signed before the issuance of the Business Registration Certificate for the merged credit institution and the commencement of operations by the consolidated credit institution, and which comply with the laws at the time of signing, the merged credit institution, the consolidated credit institution, and the customers may continue to implement the agreements until the expiration of the contract or agreement period.

Article 24. Effective Date

1. This Circular takes effect from March 1, 2016.

2. From the date this Circular takes effect, the following provisions cease to be effective:

a) Clause 1, 2, 4, 5, 7 of Article 4; Clause 1, 2 of Article 6; Chapter II; Chapter III; provisions on the merger and consolidation of credit institutions stipulated in Article 1, Article 3, Clause 8 of Article 4, Article 5, Article 7, Article 8, Article 21, Article 22, Article 23, Article 24 of Circular No. 04/2010/TT-NHNN dated February 11, 2010 of the Governor of the State Bank of Vietnam on the merger, consolidation, and acquisition of credit institutions;

b) Clause 17, 18, 19 of Section VIII Part I of Circular No. 03/2007/TT-NHNN dated June 5, 2007 of the Governor of the State Bank of Vietnam guiding the implementation of certain articles of Decree No. 22/2006/NĐ-CP dated February 28, 2006 of the Government on the organization and operation of foreign bank branches, joint venture banks, wholly foreign-owned banks, and representative offices of foreign credit institutions in Vietnam;

c) Clause 4 of Article 4 of Circular No. 24/2011/TT-NHNN dated August 31, 2011 of the Governor of the State Bank of Vietnam on the implementation of plans to simplify administrative procedures in the banking establishment and operation sector according to Government Resolutions on simplifying administrative procedures within the scope of the State Bank of Vietnam's management functions.

The Director of the Office, the Director of the Banking Supervisory Authority, 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 of the Board of Directors, the Chairmen of the Board of Members, and the General Managers (Directors) of credit institutions are responsible for organizing the implementation of this Circular.

Article 25. Implementation organization

The Head of the Office, the Head of the Inspectorate, the banking supervision head, the heads of units under the State Bank, the Governors of the State Bank branches in provinces and centrally governed cities, the Chairmen of the Management Boards, the Chairmen of the Board of Members, and the General Directors (Directors) of credit organizations shall be responsible for organizing the implementation of this Circular.