Circular No. 39/2024/TT-NHNN on special supervision of credit institutions

CIRCULAR

Special Supervision of Credit Institutions

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

Pursuant to the Law on Credit Institutions dated January 18, 2024;

Pursuant to Decree No. 102/2022/NĐ-CP dated December 12, 2022 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 special supervision of credit institutions.

PART I
GENERAL PROVISIONS

This Circular stipulates on: authority to decide in special supervision of credit institutions; forms of special supervision; Decision on special supervision; notification and publication of information on special supervision; duration of special supervision, extension of the duration of special supervision, termination of special supervision; composition, number of members, structure, operational mechanism, tasks, and powers of the Special Supervisory Board; responsibilities of relevant agencies, organizations, and individuals.

Article 2. Applicability

1. Credit institutions include commercial banks, cooperative banks, non-bank financial institutions, microfinance organizations, and people's credit funds.

Agencies, organizations, and individuals related to special supervision of credit institutions.

Article 3. Authority to Decide in Special Supervision of Credit Institutions

1. The Governor of the State Bank of Vietnam shall examine and decide on the following matters for credit institutions, except for people's credit funds:

a) Placing credit institutions under the circumstances specified in Clause 1, Article 162 of the Law on Credit Institutions under special supervision;

b) Forms of special supervision;

c) Establishing the Special Supervisory Board;

d) Duration of special supervision;

đ) Notification of special supervision;

e) Publication of information on special supervision;

g) Extension of the duration of special supervision;

h) Termination of special supervision;

i) Other matters within the authority of the State Bank of Vietnam (hereinafter referred to as the State Bank) as prescribed in the Law on Credit Institutions and this Circular.

a) Matters prescribed in Points a, b, c, d, đ, e, g, and h of Clause 1 of this Article;

b) Matters prescribed in Clause 2, Article 163, Clauses 4 and 5, Article 166, Clause 9, Article 167, Clauses 3 and 5, Article 169, Clause 3, Article 172, Clauses 2, 5, and 6, Article 174, Clause 2, Article 176, Clauses 3 and 4, Article 178, Clauses 2 and 3, Article 187 (except for the matter prescribed in Point c, Clause 3, Article 3 of this Circular), Clause 3, Article 188 (except for the matter prescribed in Point b, Clause 3, Article 3 of this Circular), Clauses 3 and 4, Article 190 of the Law on Credit Institutions;

c) Other matters within the authority of the State Bank branch as prescribed in this Circular and relevant laws.

a) Submitting to the Government for decision on applying special measures prescribed in Clause 4, Article 162 of the Law on Credit Institutions;

b) Submitting to the Prime Minister for decision on the limit of deposit insurance payments to depositors prescribed in Clause 3, Article 188 of the Law on Credit Institutions;

c) Approving support measures exceeding the authority prescribed in Point i, Clause 1, Article 171, Clause 11, Article 174, and Clause 3, Article 187 of the Law on Credit Institutions;

d) Other matters exceeding the authority of the State Bank branch as prescribed in this Circular and relevant laws.

Article 4. Special Control Forms

1. Based on the actual situation and risk level in the operation of credit organizations, the Governor of the State Bank of Vietnam or the Director of the State Bank of Vietnam branch shall consider and decide:

a) Placing the credit organization under special control in the form of special supervision or comprehensive control;

b) The contents, scope, measures, and tasks of controlling operations as stipulated in the Decision on Special Control, which are appropriate to the special control form and the provisions set out in Clause 1, Article 11 of this Circular.

2. Special supervision is the act of placing credit organizations under direct control by the State Bank through remote directive and direct supervisory activities, and on-site inspections conducted by the Special Control Board for credit organizations subject to special control.

3. Comprehensive control is the act of placing credit organizations under direct control by the State Bank through on-site directive and direct supervisory activities carried out by the Special Control Board for daily operations of credit organizations subject to special control.

4. Changing the form of special control shall be implemented as follows:

c) Within twenty days from the date of receipt of the recommendation of the Special Control Board as specified in points a and b of this clause, the Governor of the State Bank or the Director of the State Bank branch shall consider and decide to change the form of special control for credit organizations subject to special control according to the authority stipulated in Article 3 of this Circular.

Article 5. Decision on Special Control

The special supervision decision includes the following contents:

1. Name of the credit organization subject to special control.

2. Reason for placing the credit organization under special control.

3. Duration of special control.

4. Form of special control, contents, scope, measures, and tasks of controlling operations for credit organizations subject to special control.

5. Names, positions of each member of the Special Control Board, duties, and powers of the Special Control Board, the Head of the Special Control Board, and other members of the Special Control Board.

6. Use of the seal of the State Bank, including the seal of the State Bank branch.

7. Conversion of refinancing loans into special loans; conversion of loans from people's credit funds at cooperative banks into special loans.

8. Other contents.

Article 6. Notification on Special Supervision

1. The notification on special supervision includes one or more of the following contents:

a) Decision on special supervision;

b) Change in form of special supervision;

c) Extension, termination of special supervision;

d) Documents of the competent authority approving the restructuring plan;

đ) Other contents.

2. The State Bank sends a written notification on special supervision of credit institutions subject to special supervision as stipulated in Clause 1, Article 3 of this Circular to one or more of the following entities:

a) Board of Directors or Board of Members, Audit Board, General Director (Director) of credit institutions subject to special supervision;

b) Branches of the State Bank where the head office of credit institutions subject to special supervision is located, branches of the State Bank where dependent units of credit institutions subject to special supervision are operating;

c) Vietnam Deposit Insurance Corporation;

d) People's Committee of the province where the head office of credit institutions subject to special supervision is located;

đ) Ministry of Finance (in case credit institutions subject to special supervision are listed companies, registered trading companies, state-owned enterprises, subsidiaries, associated companies of insurance enterprises, financial insurance groups; credit institutions subject to special supervision have subsidiaries, associated companies operating in the securities, insurance sectors);

e) Other relevant agencies and organizations.

3. Branches of the State Bank send a written notification on special supervision of credit institutions subject to special supervision as stipulated in Clause 2, Article 3 of this Circular to one or more of the following entities:

a) Board of Directors, Audit Board, General Director (Director) of credit institutions subject to special supervision;

b) Governor of the State Bank;

c) Vietnam Deposit Insurance Corporation;

d) Vietnam Rural Credit Bank;

e) Other relevant agencies and organizations.

4. The Governor of the State Bank decides specifically on the scope, content, recipients of notifications on special supervision as stipulated in Clause 1 and Clause 2 of this Article and the time of notification on special supervision for credit institutions subject to special supervision as stipulated in Clause 1, Article 3 of this Circular.

5. The Director of the State Bank branch decides specifically on the scope, content, recipients of notifications on special supervision as stipulated in Clause 1 and Clause 3 of this Article and the time of notification on special supervision for credit institutions subject to special supervision as stipulated in Clause 2, Article 3 of this Circular.

1. Information on special supervision of credit institutions disclosed includes one or more of the following information:

a) Name of credit institution subject to special supervision;

b) Form of special supervision, duration of special supervision, termination of special supervision;

c) Other information.

2. The State Bank discloses information on special supervision of credit institutions through one or more of the following forms:

a) Publishing on the electronic information website of the State Bank;

b) Publishing on the electronic information website of credit institutions subject to special supervision (if available);

c) Publishing in central or local newspapers where the head office of credit institutions subject to special supervision is located for at least three consecutive issues;

d) Press conference;

đ) Announcing at the meeting of the Shareholders' General Meeting or Board of Members or Members' General Meeting of credit institutions subject to special supervision.

3. The Governor of the State Bank decides specifically on the scope, content, form of disclosure of information on special supervision as stipulated in Clause 1 and Clause 2 of this Article and the time of disclosure of information on special supervision for credit institutions subject to special supervision as stipulated in Clause 1, Article 3 of this Circular in accordance with the goal of ensuring the safety of the credit institution system.

4. The Director of the State Bank branch decides specifically on the scope, content, form of disclosure of information on special supervision as stipulated in Clause 1 and Clause 2 of this Article and the time of disclosure of information on special supervision for credit institutions subject to special supervision as stipulated in Clause 2, Article 3 of this Circular in accordance with the goal of ensuring the safety of the credit institution system.

Article 8. Extension of Special Supervision

2. Within 20 days from the date of receipt of the proposal of the Special Supervision Board as stipulated in Clause 1 of this Article, the Governor of the State Bank or the Branch Director of the State Bank shall consider and decide on extending the special supervision period for credit institutions under special supervision according to the authority prescribed in Article 3 of this Circular.

Article 9. Termination of Special Supervision

2. Within 20 days from the date of receipt of the proposal of the Special Supervision Board as stipulated in Clause 1 of this Article, the Governor of the State Bank or the Branch Director of the State Bank shall consider and decide on terminating the special supervision for credit institutions under special supervision according to the authority prescribed in Article 3 of this Circular.

3. Credit institutions under special supervision shall be terminated from special supervision from the effective date of the Decision terminating special supervision.

Chapter III
COMPOSITION, NUMBER OF MEMBERS, STRUCTURE, OPERATING MECHANISM, DUTIES, POWERS OF THE SPECIAL SUPERVISION BOARD

Article 10. Composition, Number of Members, Structure, Operating Mechanism of the Special Supervision Board

1. The composition and structure of the Special Supervision Board shall be organized according to one of the two models below:

a) Head of the Special Supervision Board and other members;

b) Head of the Special Supervision Board, Deputy Head of the Special Supervision Board and other members.

2. Members of the Special Supervision Board belong to the following categories:

a) Officers, civil servants, employees, workers of the State Bank, Vietnam Deposit Insurance Corporation, Vietnam Cooperative Bank (in case of special supervision of credit institutions as stipulated in Clause 2, Article 3 of this Circular), the mandatory transferee (in case of special supervision of commercial banks with approved mandatory transfer plans), other credit institutions different from the credit institution under special supervision, agencies, organizations related to the special supervision of credit institutions appointed by the State Bank; or appointed by relevant agencies, organizations related to the special supervision of credit institutions upon the request of the State Bank;

b) Experts in finance, banking, accounting, auditing, information technology invited or appointed by the State Bank.

3. The Head of the Special Supervision Board of credit institutions as stipulated in Clause 1, Article 3 of this Circular shall be one of the following:

a) Leaders at the Department level or equivalent positions of units under the State Bank;

c) Directors, Deputy Directors of the State Bank branches where the credit institution under special supervision is headquartered;

4. The Head of the Special Supervision Board of credit institutions as stipulated in Clause 2, Article 3 of this Circular shall be one of the following:

a) Directors, Deputy Directors of the State Bank branches where the credit institution under special supervision is headquartered;

5. Members of the Special Supervision Board shall not be persons related as prescribed in Point d, Clause 24, Article 4 of the Law on Credit Institutions of members of the Board of Management, members of the Board of Members, members of the Supervisory Board, General Manager (Director), individuals who are major shareholders, contributors of the credit institution under special supervision, or individuals who are legal representatives of major shareholders, owners, contributors of the credit institution under special supervision.

6. The operating mechanism of the Special Supervision Board:

a) The Special Supervision Board operates under a collective responsibility system combined with individual accountability, appropriate to the content and nature of each task handled;

b) The frequency of meetings, information exchange mechanisms, decision-making, and consolidation of opinions of members shall be decided by the Head of the Special Supervision Board, suitable to the form of special supervision and the actual situation of the credit institution under special supervision.

7. The Governor of the State Bank of Vietnam (for credit institutions subject to special supervision as provided for in Clause 1, Article 3 of this Circular) and the Director of the State Bank of Vietnam branch (for credit institutions subject to special supervision as provided for in Clause 2, Article 3 of this Circular) shall decide on the specific composition, number of members, and structure of the Special Supervisory Board in accordance with the form of special supervision and the actual situation of the credit institution subject to special supervision.

Article 11. Duties and powers of the Special Supervisory Board

1. The Special Supervisory Board performs the duties and powers prescribed in Article 164 of the Law on Credit Institutions. The Special Supervisory Board exercises its duties and powers through one or more of the following supervisory activities:

a) Requesting the credit institution subject to special supervision to provide complete, accurate, and timely information, documents, and files related to the operations of the credit institution subject to special supervision, including the following information, documents, and files:

(i) The current status regarding organization, personnel, management, operation, information technology system, and internal control system;

(ii) The current status of banking activities, other business activities, including cumulative profits and losses of the credit institution; the ability to repay debts when due;

(iii) The current status of assets, collateral, including detailed reports on non-performing loans, difficult-to-collect receivables, potential bad debts, sold-off bad debts to the Vietnam Asset Management Company Limited (VAMC) that have not been resolved, interest receivable but not yet recovered according to the provisions of the law;

(iv) A list of customers (excluding credit institutions and foreign bank branches) receiving credit; a list of organizations and individuals depositing money; a list of other creditors;

(v) Other information necessary for the performance of the duties of the Special Supervisory Board.

b) Requesting the credit institution subject to special supervision to inventory all cash and cash equivalents currently held throughout the system in accordance with the principle of cross-checking and reporting the results within five days from the completion of the inventory;

c) Organizing the monitoring process of the inventory as stipulated in point b of this clause in accordance with the actual situation and scale of operations of the credit institution subject to special supervision;

đ) Approving in advance the implementation of certain transactions and activities by the credit institution subject to special supervision as prescribed in the Special Supervision Decision or other documents of the State Bank of Vietnam;

e) Requesting the credit institution subject to special supervision to report on the results of operations in accordance with the content and frequency suitable to the actual situation of the credit institution subject to special supervision;

g) Deciding to attend meetings of the Board of Directors, Board of Members, and Supervisory Board of the credit institution subject to special supervision and expressing opinions on matters at the meeting related to the duties and powers of the Special Supervisory Board;

h) Directing, inspecting, supervising, and controlling the activities of the credit institution subject to special supervision to prevent, stop the concealment, transfer, pledge, mortgage, transfer of assets, and other actions that may cause damage to the credit institution subject to special supervision;

l) Promptly informing the credit institution subject to special supervision of relevant information and directives from the competent authority concerning its operations and restructuring plans;

m) Other tasks as prescribed in the Law on Credit Institutions or assigned by the Governor of the State Bank of Vietnam or the Director of the State Bank of Vietnam branch.

a) Submitting to the Government for decision on applying special measures prescribed in Clause 4, Article 162 of the Law on Credit Institutions;

b) Implement the provisions at point b, c and d Clause 2 Article 163, Clause 4 and Clause 5 Article 166 of the Law on Credit Institutions.

3. The Special Control Board of the People's Credit Fund subject to special control shall advise and propose to the Governor of the State Bank branch regarding the contents prescribed in Clause 2 and Clause 3 Article 3 of this Circular, except for point a, c and d Clause 1 Article 3 of this Circular and excluding advising and proposing the form of special control to issue a decision placing the People's Credit Fund under special control.

Article 12. Rights and Obligations of the Head of the Special Control Board

1. Lead and organize the implementation of the tasks, powers, and work of the Special Control Board as prescribed in the Law on Credit Institutions, this Circular, and the Decision on Special Control.

2. Convene and chair meetings of the Special Control Board.

3. Represent the Special Control Board to sign documents within the Board’s authority.

4. Assign tasks to members of the Special Control Board.

5. Decide on the contents prescribed in Clause 6 Article 10 of this Circular.

6. Direct and supervise the implementation of assigned tasks by members of the Special Control Board, including the management, storage of documents, and confidentiality of information related to the activities of the credit institution subject to special control in accordance with the law, directives of the Governor of the State Bank (for credit institutions subject to special control as stipulated in Clause 1 Article 3 of this Circular) or the Governor of the State Bank branch (for credit institutions subject to special control as stipulated in Clause 2 Article 3 of this Circular).

8. Other rights and duties assigned in the Decision on Special Control.

9. Delegate to the Deputy Head of the Special Control Board or another member of the Special Control Board to perform the rights prescribed in Clause 2, 3, 6, and 8 of this Article during their absence.

10. Be responsible before the Governor of the State Bank or the Governor of the State Bank branch and before the law for the execution of assigned tasks.

Article 13. Rights and Obligations of Members of the Special Control Board

1. Perform tasks according to the assignment and delegation of the Head of the Special Control Board.

2. Report promptly and propose measures to the Head of the Special Control Board regarding unusual developments, potential risks, threats to operational safety, and violations of the law by the credit institution subject to special control.

3. Be responsible before the Head of the Special Control Board and before the law for the execution of assigned tasks.

Chapter IV
RESPONSIBILITIES OF THE AUTHORITIES, ORGANIZATIONS, INDIVIDUALS INVOLVED

1. Promptly report to the Governor of the State Bank when the credit institution as stipulated in Clause 1 Article 3 of this Circular falls into one of the cases prescribed in Clause 1 Article 162 of the Law on Credit Institutions.

2. Advise and propose to the Governor of the State Bank to decide on the contents prescribed in Clause 1 Article 3 of this Circular, except for the content on special loans.

3. Advise the Governor of the State Bank to direct and implement special control over the credit institution as stipulated in Clause 1 Article 3 of this Circular.

4. Advise and propose to the Governor of the State Bank to decide on the contents prescribed in Clause 3 Article 3 of this Circular within their functions and duties, except for the content on special loans.

5. Serve as the focal point for receiving reports, advising, proposing, and recommending related to special control over the credit institution as stipulated in Clause 1 Article 3 of this Circular, including the content prescribed in Clause 2 Article 11 of this Circular.

6. Handle within their authority or advise and propose to the Governor of the State Bank to handle the reports, advising, proposals, and recommendations prescribed in Clause 5 of this Article within their functions and duties.

7. Advise and propose to the Governor of the State Bank to implement the provisions at point b, c and d Clause 2 Article 163, Clause 4 and Clause 5 Article 166 of the Law on Credit Institutions for the credit institution as stipulated in Clause 1 Article 3 of this Circular.

8. Provide information about conditions for credit institutions supporting, credit institutions accepting all debt obligations according to the functions and duties assigned upon request of the State Bank branch as stipulated in point đ Clause 2 Article 16 of this Circular.

9. Receive, manage, store documents, files, and protect confidential information related to the special control of the credit institution as stipulated in Clause 1 Article 3 of this Circular in accordance with the law and directives of the Governor of the State Bank, including the documents and files prescribed in Clause 7 Article 12 of this Circular.

10. Advise the Governor of the State Bank to assign relevant units in the State Bank to advise and handle proposals, recommendations, and contents related to the special control of credit institutions within the functions and duties of these units.

Article 15. Responsibilities of other units under the State Bank

1. Appoint persons to participate in the Special Supervisory Board.

2. Provide information on conditions for credit organizations supporting, credit organizations taking over all debt obligations as assigned by the State Bank branch as stipulated in Point d Clause 2 Article 16 of this Circular upon request.

3. Advise and handle proposals, recommendations, and related contents concerning special supervision of credit institutions within their functions and tasks or as delegated by the Governor of the State Bank.

Article 16. Responsibilities of the State Bank Branch

1. For credit institutions subject to special supervision as specified in Clause 1 Article 3 of this Circular:

a) Appoint persons to participate in the Special Supervisory Board;

c) Handle issues related to dependent units of credit institutions subject to special supervision within its jurisdiction according to its authority;

đ) Perform other tasks assigned by the Governor of the State Bank;

2. For credit institutions subject to special supervision as specified in Clause 2 Article 3 of this Circular:

a) Implement the contents prescribed in this Circular;

b) Report promptly to the Governor of the State Bank when the credit institution falls into any of the cases stipulated in Clause 1 Article 162 of the Law on Credit Organizations;

c) Receive and handle issues related to the special supervision of credit institutions according to its authority;

d) Serve as the main point of contact to coordinate with local state management agencies to address issues arising during the special supervision of credit institutions;

đ) Propose credit organizations supporting, credit organizations taking over all debt obligations, and relevant units under the State Bank provide information on conditions for credit organizations supporting, credit organizations taking over all debt obligations as prescribed in Article 173, Clause 4 Article 187 of the Law on Credit Organizations;

e) Receive, manage, store documents, files, and keep confidential information related to the special supervision of credit institutions according to the law and directives from the Governor of the State Bank, including documents and files as stipulated in Clause 7 Article 12 of this Circular;

g) Provide information related to supervised credit unions to the Vietnam Cooperative Bank and the Vietnam Deposit Insurance Corporation to perform tasks as prescribed in the Law on Credit Organizations and this Circular;

h) Perform other tasks according to its authority.

Article 17. Responsibilities of the Vietnam Cooperative Bank

1. Appoint persons to participate in the Special Supervisory Board of credit institutions as specified in Clause 2 Article 3 of this Circular.

2. Appoint persons to be designated by the State Bank Branch as Chairperson, other members of the Board of Directors; Head, other members of the Supervisory Board; Director, Deputy Director, and equivalent positions as stipulated in the Charter of credit unions subject to special supervision upon the proposal of the State Bank Branch.

3. Participate in evaluating the feasibility of recovery plans, merger, consolidation, transfer of all equity contributions, and provide opinions on asset liquidation plans of credit unions subject to special supervision based on proposals from the Special Supervisory Board.

4. Decide whether to be a supporting credit organization to implement the recovery plan of credit unions subject to special supervision.

5. Coordinate with the Special Supervisory Board in developing and perfecting bankruptcy plans for credit unions subject to special supervision and propose to the State Bank to submit to the Prime Minister for decision on the maximum deposit insurance payout limit, equal to the amount of insured individual deposits at credit unions.

7. Monitor developments and activities of credit institutions subject to special supervision as specified in Clause 2 Article 3 of this Circular, report and propose to the Governor of the State Bank or the Director of the State Bank Branch where the credit institution is headquartered measures for handling (if necessary).

Article 18. Responsibilities of the Vietnam Deposit Insurance Corporation

1. Appoint representatives to join the Special Supervisory Board of credit institutions subject to special supervision that participate in deposit insurance.

3. Appoint individuals to be designated by the State Bank of Vietnam branch as the Chairman and other members of the Management Board; the Head and other members of the Supervisory Board; the Director, Deputy Directors, and equivalent positions according to the Charter of the people's credit fund under special supervision upon the proposal of the State Bank of Vietnam branch.

4. Participate in evaluating the feasibility of recovery plans, merger plans, consolidation plans, and the transfer of the entire share capital of the people's credit fund under special supervision based on proposals from the Special Supervisory Board.

5. Coordinate with the Special Supervisory Board in developing the bankruptcy plan for credit institutions under special supervision, except in cases stipulated in Clause 6 of this Article.

6. Coordinate with the Special Supervisory Board in developing and perfecting the bankruptcy plan for the people's credit fund under special supervision and propose to the State Bank to submit to the Prime Minister for decision on the maximum limit of deposit insurance payments to depositors, equal to the amount of insured deposits of individuals at the people's credit fund.

7. Coordinate with credit institutions under special supervision to pay deposit insurance to depositors according to the approved bankruptcy plan.

Article 19. Responsibilities of credit institutions under special supervision, owners, shareholders, members contributing capital, shareholders, Management Board, Board of Members, Supervisory Board, General Director (Director) of credit institutions under special supervision

1. Implement the provisions of Article 165 of the Law on Credit Institutions and this Circular.

2. Bear legal responsibility before the State Bank for the accuracy, timeliness, and completeness of information, documents, and files provided to the Special Supervisory Board.

3. Report to the Special Supervisory Board any difficulties, obstacles, and risks arising during the special supervision process.

Chapter V
IMPLEMENTING PROVISIONS

Article 20. Effective Date

This Circular takes effect from July 1, 2024, and replaces Circular No. 11/2019/TT-NHNN dated August 2, 2019, issued by the Governor of the State Bank of Vietnam on special supervision of credit institutions, except for cases stipulated in Clause 2 of Article 21 of this Circular.

Article 21. Transitional Provisions

1. Decisions on special supervision issued before the effective date of this Circular shall continue to be implemented until they are amended, supplemented, or replaced. Any amendment, supplementation, or replacement of decisions on special supervision issued before the effective date of this Circular must comply with the provisions of this Circular, except for the contents stipulated in Clause 2 of this Article.

2. For credit institutions under special supervision as specified in Clause 9 of Article 210 of the Law on Credit Institutions, the special supervision contents related to adjusting policies, developing, and approving restructuring plans shall continue to be implemented according to Circular No. 11/2019/TT-NHNN dated August 2, 2019, issued by the Governor of the State Bank of Vietnam on special supervision of credit institutions.

The Chief of the Office, the Chief of Banking Inspection and Supervision, the Heads of units under the State Bank of Vietnam, the Vietnam Deposit Insurance Corporation, the Vietnam Cooperative Bank, credit institutions under special supervision, and the Special Supervisory Board of credit institutions under special supervision are responsible for organizing the implementation of this Circular./.