Circular No. 40/2011/TT-NHNN on the issuance of Licenses and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions, and other foreign organizations engaged in banking activities in Vietnam.

CIRCULAR

Provisions on the issuance of Licenses and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit organizations, and other foreign organizations engaged in banking activities in Vietnam.

foreign bank branches,

representative offices of foreign credit organizations, other foreign organizations engaged in banking activities in Vietnam.

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

Pursuant to the Law on Credit Organizations No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Law on Enterprises No. 60/2005/QH11 dated November 29, 2005;

Pursuant to the Investment Law No. 59/2005/QH11 dated November 29, 2005;

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

The State Bank of Vietnam (hereinafter referred to as the State Bank) shall stipulate the issuance of Licenses and the organization and operation of commercial banks, foreign bank branches, and representative offices of foreign credit organizations, other foreign organizations engaged in banking activities in Vietnam as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

2. Applicability:

This Circular stipulates the issuance of Licenses and certain contents regarding the organization and operation of commercial banks, foreign bank branches, and representative offices of foreign credit organizations, other foreign organizations engaged in banking activities in Vietnam.

2. The scope of application includes:

a) Commercial banks;

b) Foreign bank branches;

c) Representative offices of foreign credit organizations, other foreign organizations engaged in banking activities in Vietnam (hereinafter referred to as Representative Offices);

d) Organizations and individuals related to the establishment, organization, and operation of commercial banks, foreign bank branches, and Representative Offices.

Article 2. Interpretation of Terms

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

1. License includes the License for establishment and operation of commercial banks, License for establishment of foreign bank branches, License for establishment of Representative Offices issued by the State Bank. Documents of the State Bank regarding amendments and supplements to the License are integral parts of the License.

2. Commercial bank is a type of bank that conducts all banking activities and other business operations as prescribed by the Law on Credit Institutions with the aim of profit-making.

3. Joint-stock commercial bank is a commercial bank established and organized in the form of a joint-stock company.

4. 100% foreign-owned bank is a commercial bank established in Vietnam with 100% charter capital owned by a foreign credit institution; it is a Vietnamese legal entity with its main office in Vietnam. A 100% foreign-owned bank is established and organized in the form of a limited liability company with one member whose owner is a foreign bank or a limited liability company with two or more members, of which at least one must be a foreign bank owning 50% of the charter capital.

5. Joint venture bank is a commercial bank established in Vietnam through joint venture agreements between Vietnamese parties (including one or more Vietnamese banks) and foreign parties (including one or more foreign banks); it is a Vietnamese legal entity with its main office in Vietnam. A joint venture bank is established and organized in the form of a limited liability company with two or more members but not exceeding five members, of which one member and their associates may not own more than 50% of the charter capital.

6. Foreign bank branch is a subsidiary unit of a foreign bank without legal personality, guaranteed by the foreign bank to be responsible for all obligations and commitments of the foreign bank branch in Vietnam.

7. Representative Office is a subsidiary unit of a foreign credit organization, other foreign organization engaged in banking activities. The Representative Office is not allowed to conduct business operations in Vietnam.

8. Foreign credit organization is a credit organization established abroad under the laws of that country.

9. Other foreign organization engaged in banking activities is an organization established abroad under the laws of that country and regularly engages in one or more of the following businesses:

a) Accepting deposits;

b) Providing credit;

c) Offering payment services through accounts.

10. Shareholder contributing capital to establish is an individual or organization holding at least one share of a joint-stock commercial bank at the time of establishment.

11. Founding Shareholder is a shareholder who contributes capital to establish and participates in drafting, approving, and signing the first charter of the organization and operation of the joint-stock commercial bank.

12. First Shareholders' Meeting is a meeting comprising founding shareholders and other contributing shareholders after obtaining approval from the State Bank, tasked with approving the charter of the organization and operation of the joint-stock commercial bank, electing members of the Board of Directors and Supervisory Board for the initial term, and deciding other issues related to the establishment of the joint-stock commercial bank.

13. Capital Contributing Members is a Vietnamese bank, a foreign bank contributing capital to a joint venture bank; it is a foreign credit organization contributing capital to a 100% foreign-owned bank.

14. Founding Member is a member who contributes capital to participate in drafting, approving, and signing the first charter of the organization and operation of the joint venture bank, 100% foreign-owned bank.

15. First Capital Contributing Members' Meeting is a meeting comprising founding members and other contributing members after obtaining approval from the State Bank, tasked with approving the charter of the organization and operation of the bank, electing members of the Board of Members and Supervisory Board for the initial term, and deciding other issues related to the establishment of the joint venture bank, 100% foreign-owned bank as a limited liability company with two or more members.

16. is a commercial bank of Vietnam or a foreign credit institution holding the entire charter capital of a limited liability non-bank credit institution. is an organization that owns the entire capital of a commercial bank in the form of a single-member limited liability company.

17. Parent bank is a foreign bank proposing to establish a branch or having a branch in Vietnam.

18. Preparatory Committee is a group of people selected by founding shareholders, contributing members, owners, parent banks to represent them in carrying out tasks related to the application for a License. The preparatory board must have at least two members, including one member as the Head.

19. Legal representative of an organization is the Chairman of the Board of Directors, Chairman of the Board of Members, or General Director (Director) as specified in the Charter.

20. Country of origin for a foreign credit organization, other foreign organization engaged in banking activities is the country where the foreign credit organization, other foreign organization engaged in banking activities is established and has its main office.

Chapter II

REGULATIONS ON GRANTING LICENSES

Section 1

GENERAL PROVISIONS

Article 3. Competence to Decide on Issuing and Revoking Licenses

1. The Governor of the State Bank shall decide on issuing licenses in accordance with the Law on Credit Institutions, this Circular, and relevant laws.

2. The Governor of the State Bank shall decide on revoking issued licenses in cases stipulated in Article 28 of the Law on Credit Institutions. The revocation of licenses shall be carried out in accordance with the regulations of the State Bank.

Article 4. License

1. The State Bank shall specify in detail the banking activities, other business activities of commercial banks, foreign bank branches, and the activities of representative offices in the licenses issued for each commercial bank, foreign bank branch, and representative office according to the model prescribed in Appendix 01 of this Circular.

2. In case the license is lost, torn, burned, or destroyed in another manner, the commercial bank, foreign bank branch, or representative office must submit a document clearly stating the reason and send it via postal service or directly hand it over to the State Bank requesting the State Bank to consider issuing a copy of the license from the original record in accordance with the law.

Within two days from the date of receiving the request document, the State Bank will issue a copy from the original for the commercial bank, foreign bank branch, or representative office.

3. The commercial bank, foreign bank branch, and representative office shall use the license in accordance with Article 27 of the Law on Credit Institutions.

Article 5. Procedures and Formalities for Issuing Licenses

1. The procedures and formalities for issuing licenses for establishing and operating commercial banks, and foreign bank branches are as follows:

a) The preparatory board shall prepare the application dossier for issuing the license in accordance with Articles 13 and 14, Clauses 1, 2, and 3 of Article 15, Clauses 1, 2, 3, 4, 5, and 6 of Article 16, Clauses 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12 of Article 17 of this Circular and send it via postal service or directly hand it over to the State Bank.

Within sixty days from the date of receipt of the application dossier for issuing the license, the State Bank shall send a confirmation letter to the preparatory board confirming the receipt of a complete and valid dossier for preliminary approval. In case the application dossier for issuing the license is incomplete, the State Bank shall send a letter to the preparatory board requesting additional information.

b) Within ninety days from the date of sending the confirmation letter of receipt of a complete and valid dossier, the State Bank shall send a letter approving the principle establishment of the commercial bank, foreign bank branch. In case of non-approval, the State Bank shall send a reply letter to the preparatory board, clearly stating the reasons for non-approval.

c) Within sixty days from the date of receipt of the letter approving the principle establishment of the commercial bank, foreign bank branch, the preparatory board shall prepare additional documents in accordance with Clause 4 of Article 15, Clause 7 of Article 16, and Clause 13 of Article 17 of this Circular and send them via postal service or directly hand them over to the State Bank. If the State Bank does not receive or receives incomplete documents beyond the specified period, the approval letter loses its validity.

Within two days from the date of receipt of all supplementary documents, the State Bank shall confirm in writing that it has received all documents. Within thirty days from the date of receipt of all supplementary documents, the State Bank shall issue the license in accordance with the regulations. In case of non-issue of the license, the State Bank shall send a reply letter to the preparatory board, clearly stating the reasons for non-issue.

2. The procedures and formalities for issuing licenses for establishing representative offices are as follows:

a) Foreign credit institutions and other foreign organizations engaged in banking activities shall prepare the application dossier for issuing the license in accordance with Articles 13 and 18 of this Circular and send it via postal service or directly hand it over to the State Bank.

Within thirty days from the date of receipt of the application dossier for issuing the license, the State Bank shall send a confirmation letter to the foreign credit institution and other foreign organizations engaged in banking activities confirming the receipt of a complete and valid dossier. In case the application dossier for issuing the license is incomplete or invalid according to the regulations, the State Bank shall send a letter requesting additional information to the foreign credit institution and other foreign organizations engaged in banking activities.

b) Within sixty days from the date of sending the confirmation letter of receipt of a complete and valid dossier, the State Bank shall issue the license in accordance with the regulations. In case of non-issue of the license, the State Bank shall send a reply letter to the foreign credit institution and other foreign organizations engaged in banking activities, clearly stating the reasons for non-issue.

Article 6. Payment of Fees for Issuing the License

1. Commercial banks, foreign bank branches, representative offices that are issued the License must pay the fee for issuing the License to the State Bank (Trading Department) within fifteen days from the date of issuance of the License.

2. The amount of the fee shall be as prescribed by the Ministry of Finance regarding fees and charges for licensing.

Article 7. Business Registration, Operation Registration

After being issued the License, commercial banks and foreign bank branches must register their business operations; representative offices must register their activities in accordance with the provisions of the law.

Article 8. Commencement of Operations

1. Commercial banks, foreign bank branches, and representative offices that are issued the License must commence operations from the date of commencement of operations.

2. To commence operations, commercial banks and foreign bank branches that are issued the License must meet all conditions stipulated in Clause 2, Article 26 of the Law on Credit Institutions.

3. To commence operations, representative offices must implement information disclosure in accordance with Article 25 of the Law on Credit Institutions.

4. Commercial banks and foreign bank branches that are issued the License must send via postal service or submit directly at the State Bank branch in the province or city where the commercial bank or foreign bank branch is headquartered a notification document about the conditions for commencing operations as stipulated in Clause 2 of this Article at least fifteen days before the planned date of commencing operations.

5. Commercial banks, foreign bank branches, and representative offices must commence operations within twelve months from the date of issuance of the License; if they fail to commence operations beyond this period, the State Bank will revoke the License.

Section 2

CONDITIONS FOR ISSUING THE LICENSE

Article 9. Conditions for Issuing the License for Establishing and Operating Joint Stock Commercial Banks

1. The conditions stipulated in Clause 1, Article 20 of the Law on Credit Institutions.

2. Conditions for founding shareholders:

a) Shall bear full responsibility for the legality of the contributed capital;

b) Commit to providing financial support to the joint stock commercial bank to address difficulties when the bank faces capital shortages or liquidity issues;

c) Shall not be founding shareholders, owners, founders, or strategic shareholders of other credit institutions;

d) Must have at least two founding shareholders as organizations;

đ) Within five years from the date of issuance of the License, founding shareholders must collectively own at least fifty percent of the charter capital when establishing the joint stock commercial bank, among which founding shareholders as organizations must collectively own at least fifty percent of the total shares of founding shareholders;

e) In addition to the conditions stipulated in points a, b, c, đ of this clause, individual founding shareholders must also meet the following conditions:

(i) Hold Vietnamese nationality, fully capable of civil acts according to the law;

(ii) Not belong to the prohibited categories as prescribed by the Enterprise Law;

(iii) Have financial capability to contribute capital to establish a joint stock commercial bank; may not use entrusted capital, borrowed capital from other organizations or individuals to contribute capital;

(iv) Be a manager of a profit-making enterprise for at least three consecutive years prior to submitting the application for issuance of the License, or hold a bachelor's degree or higher in economics or law.

g) In addition to the conditions stipulated in points a, b, c, đ of this clause, organizational founding shareholders must also meet the following conditions:

(i) Established under Vietnamese law;

(ii) Have financial capability to contribute capital to establish a joint stock commercial bank and commit not to use entrusted capital, raised capital, borrowed capital from other organizations or individuals to contribute capital;

(iii) Fully comply with tax and social insurance obligations as prescribed up to the time of submitting the application for issuance of the License;

(iv) Have minimum net worth of five hundred billion VND in five consecutive years prior to submitting the application for issuance of the License;

(v) Operate profitably in five consecutive years prior to submitting the application for issuance of the License.

(vi) If it is an enterprise operating in industries requiring statutory capital, it must ensure that its net worth minus statutory capital is equal to the committed contribution capital based on audited financial statements of the year immediately preceding the submission of the application for issuance of the License;

(vii) If it is a state-owned enterprise, it must obtain written approval from the competent authority allowing participation in contributing capital to establish a joint stock commercial bank in accordance with the law;

(viii) If it is an organization licensed to operate in the banking, securities, and insurance sectors, it must comply with capital contribution regulations as prescribed by relevant laws;

(ix) If it is a commercial bank:

- Have total assets of at least one hundred billion VND, fully comply with all regulations on risk management and adequate provisioning as prescribed at the time of submitting the application for issuance of the License and until the issuance of the License;

- Not violate the ratios for ensuring safety in banking operations as prescribed by the State Bank in the year immediately preceding the submission of the application for issuance of the License and until the issuance of the License;

- Comply with the conditions and limits on purchasing and holding shares of credit institutions as prescribed in Clause 6, Article 103 of the Law on Credit Institutions;

- Ensure the minimum capital adequacy ratio after contributing capital to establish a joint stock commercial bank.

Article 10. Conditions for Issuing a License to Establish and Operate a Joint Venture Bank or a 100% Foreign-Owned Bank

1. The conditions stipulated in Clause 2, Article 20 of the Law on Credit Institutions.

2. Conditions for founding members and foreign credit institution owners:

a) Not seriously violating banking operation regulations and other laws of the home country for five consecutive years immediately preceding the year of submitting the license application and up to the time of issuing the License;

b) Having international operational experience, rated at least stable by international credit rating organizations, with the ability to fulfill financial commitments and operate normally even under unfavorable economic conditions;

c) Being profitable for five consecutive years immediately preceding the year of submitting the license application and up to the time of issuing the License;

d) Having total assets of at least US$10 billion at the end of the year immediately preceding the year of submitting the license application;

đ) Being assessed by the competent authority of the home country to ensure capital adequacy ratios, other safety ratios, full compliance with risk management regulations, and adequate provisioning according to the home country's regulations in the year immediately preceding the year of submitting the license application and up to the time of issuing the License;

e) Not being the owner, founding member, or strategic shareholder of another Vietnamese credit institution.

3. Founding members of a joint venture bank that are Vietnamese commercial banks must meet the conditions stipulated in points a, b, c, and g of Clause 2, Article 10 of this Circular.

4. Within five years from the date of issuance of the License, founding members must jointly own 100% of the charter capital of the joint venture bank or the 100% foreign-owned bank.

Article 11. Conditions for Issuing a License to Establish a Branch of a Foreign Bank

1. The conditions stipulated in Clause 3, Article 20 of the Law on Credit Institutions.

2. Conditions for the parent bank:

a) Meeting the conditions stipulated in points a, b, c, and đ of Clause 2, Article 10 of this Circular;

b) The parent bank having total assets of at least US$20 billion in the year immediately preceding the year of submitting the license application and up to the time of issuing the License.

Article 12. Conditions for Issuing a License to Establish a Representative Office

1. The conditions stipulated in Clause 4, Article 20 of the Law on Credit Institutions.

2. The head of the representative office must have civil liability capacity as prescribed by Vietnamese law, not be prohibited from managing a business entity under the Law on Enterprises, and not concurrently serve as the General Director (Director) of a foreign bank branch in Vietnam.

Section 3

APPLICATION FOR LICENSE

Article 13. Principles for Preparing Application Documents

1. Documents in the application for a license to establish and operate a commercial bank, and the application for a license to establish a foreign bank branch must be signed by the Head of the Preparatory Board, except where otherwise provided in this Circular. Documents signed by the Head of the Preparatory Board must bear the title "Preparatory Board for Establishment and Name of Commercial Bank, Foreign Bank Branch".

The application for a license to establish a representative office must be signed by the legal representative of the foreign credit institution or foreign organization engaged in banking activities, except where otherwise provided in this Circular.

2. The application for a license to establish and operate a joint-stock commercial bank must be prepared in one original copy in Vietnamese.

3. The application for a license to establish and operate a joint venture bank or a 100% foreign-owned bank, the application for a license to establish a foreign bank branch, and the application for a license to establish a representative office must be prepared in two original copies, one in Vietnamese and one in English, including:

a) The English-language set of documents must be legalized according to the provisions of the law, except for the following documents:

(i) Official documents from the competent authority of the home country sent directly to the State Bank;

(ii) Financial reports prepared directly in English.

b) Translations from English to Vietnamese must be certified by the translator according to Vietnamese certification regulations;

c) Translations of financial reports must be confirmed by organizations or individuals permitted to practice translation according to the provisions of the law;

d) Vietnamese-language documents that are originals (or copies from original Vietnamese-language documents) prepared in Vietnam do not need to be translated into English.

4. Copies of documents and certificates must be certified by the competent authority as prescribed by law.

5. Each set of application documents must include a list of documents in the set.

Article 14. Documents for Application to Establish and Operate a Commercial Bank

1. An application form for the issuance of a license to establish and operate a commercial bank signed by the founding shareholders, owners, and founding members according to the model specified in Appendix 02a of this Circular.

2. Draft Charter.

3. A project to establish a commercial bank, including at least the following contents:

a) The necessity to establish a commercial bank;

b) The name of the commercial bank, the name of the centrally governed province/city where the main office is planned to be located, the period of operation, the charter capital upon establishment, and the scope of activities;

c) Financial capacity of the shareholders contributing capital to establish the bank and the members contributing capital;

d) Organizational structure and network operation plan of the bank for the first three years;

đ) A list of personnel with detailed descriptions of their professional qualifications, work experience in the financial and banking sectors, and risk management skills that meet the requirements of each position and title:

(i) Chairman, members, independent members of the Board of Directors, Board of Members; Heads of Committees under the Board of Directors, Board of Members;

(ii) Head of the Supervisory Board, members, and specialized members of the Supervisory Board;

(iii) General Director (Director), Deputy General Directors (Deputy Directors), Chief Accountant, and heads of subordinate units within the organizational structure;

e) Risk management policy: Identification, measurement, prevention, management, and control of credit risks, operational risks, market risks, liquidity risks, and other risks during the course of operations;

g) Information technology:

(i) Expected financial investment in information technology;

(ii) Information technology system must ensure compliance with the requirements for management and risk management of commercial banks and the regulations of the State Bank;

(iii) Ability to apply information technology, specifying: time frame for investment in technology; type of technology expected to be applied; anticipated staff and their ability to apply information technology; ensuring the information system can integrate and connect with the State Bank's management system to provide information as required by the State Bank;

(iv) Documentation on infrastructure for information technology serving the operations of the commercial bank;

(v) Measures to ensure safety and security corresponding to the type of service expected to be implemented;

(vi) Identification, measurement, and implementation of risk management plans for the technology expected to be applied in the bank's operations;

(vii) Anticipated allocation of responsibilities for reporting and controlling the information technology system operations.

h) The bank's ability to stand firm and develop in the market:

(i) Market analysis and evaluation of the banking sector, including current status, challenges, and prospects;

(ii) The bank's ability to participate and compete in the market, demonstrating the advantages of the bank when entering the market;

(iii) Development strategy, expansion of the network of operations, and content of banking activities, types of customers, and number of customers. In which, a detailed analysis of meeting the conditions for activities with conditional requirements.

i) Internal control and audit system:

(i) Principles of operation of the internal control system;

(ii) Draft of basic internal regulations regarding the organization and operation of the bank, at least including internal regulations stipulated in Clause 2 of Article 93 of the Law on Credit Institutions and the following regulations:

- Regulations on the organization and operation of the Board of Directors, Board of Members, Supervisory Board, and Executives;

- Regulations on the organization and operation of the main office, branches, and other subordinate units.

(iii) Content and procedures of internal audit operations.

k) Business plan for the first three years, including at least the following contents: Market analysis, strategy, objectives, and action plans, annual financial reports (balance sheet, income statement, cash flow statement, minimum capital adequacy ratio, performance indicators, and explanations of the ability to achieve financial targets each year).

4. Documents proving the capability of the proposed management, supervision, and executive bodies:

a) Curriculum vitae according to the model specified in Appendix 03 of this Circular, judicial record (or equivalent document) as prescribed by law;

b) Certified copies of certificates proving professional qualifications;

c) Other documents proving compliance with the conditions and standards stipulated in the Law on Credit Institutions and related laws;

d) In cases where individuals expected to be elected as members of the Board of Directors, Board of Members, members of the Supervisory Board, General Director (Director) do not have Vietnamese citizenship, in addition to the above documents, they must provide a commitment document confirming full compliance with the conditions for residence and work in Vietnam.

5. Minutes of the meeting of founding shareholders, founding members, or a document from the owner approving the preparatory board, the head of the preparatory board, adopting the draft Charter, the project to establish the bank, and the list of proposed management, supervisory, and executive positions.

Article 15. Documents for Application to Issue a License for the Establishment and Operation of Joint Stock Commercial Banks

1. The components of the application dossier as prescribed in Article 14 of this Circular;

2. List of founding shareholders and anticipated list of shareholders contributing capital for establishment according to the form prescribed in Appendix 04 of this Circular.

3. Documents of shareholders contributing capital for establishment:

a) For individuals:

(i) Share purchase application form for individuals according to the form prescribed in Appendix 05a of this Circular;

(ii) Declaration of related parties according to the form prescribed in Appendix 06 of this Circular;

(iii) In addition to the above-mentioned documents, founding shareholders must also provide the following documents:

- Curriculum vitae according to the form prescribed in Appendix 03 of this Circular, criminal record (or equivalent document) as prescribed by law;

- Financial statements of three consecutive years prior to the year of submitting the application for the license of the enterprise managed by the founding shareholder, or a copy of a bachelor's degree or higher in economics or law;

- Commitment letter from each founding shareholder regarding financial support for the bank in case of difficulties due to lack of capital or liquidity;

- Declaration of assets valued at VND 100 million or more, debts, and relevant supporting documents of individuals according to the form prescribed in Appendix 07 of this Circular;

b) For organizations:

(i) Share purchase application form according to the form prescribed in Appendix 05b of this Circular.

(ii) Declaration of related parties according to the form prescribed in Appendix 06 of this Circular.

(iii) Business registration certificate or equivalent document;

(iv) Power of attorney for the representative of the capital contribution at the bank as prescribed by law;

(v) Charter on organization and operation;

(vi) Identity card or passport of the legal representative and the representative of the organizational capital contribution at the bank;

(vii) Approval document from the competent authority allowing the organization to contribute capital to establish the bank;

(viii) Financial statement of the year immediately preceding the year of submitting the application for the license and the most recent financial statement up to the date of submission of the application for the license, audited independently by an auditing company listed in the list of auditing organizations announced by the Ministry of Finance as meeting the criteria for auditing enterprises, and these financial statements have no disclaimer from the auditing unit;

(ix) In addition to the above-mentioned application components, founding shareholders must also provide the following documents:

- Curriculum vitae of the capital contribution representative according to the form prescribed in Appendix 03 of this Circular, criminal record as prescribed by law;

- Commitment letter regarding financial support in case of difficulties due to lack of capital or liquidity;

- Financial statements of five consecutive years prior to the year of submitting the application for the license, audited independently by an auditing company listed in the list of auditing organizations announced by the Ministry of Finance as meeting the criteria for auditing enterprises, and these financial statements have no disclaimer from the auditing unit;

(x) Table determining the financial capacity to contribute capital to establish a joint stock commercial bank according to the form prescribed in Appendix 08 of this Circular;

(xi) Confirmation document from the tax authority and social insurance agency regarding the fulfillment of all tax and social insurance obligations of the organization;

4. After receiving the approval-in-principle document, the Preparatory Board must submit the following additional documents:

a) The charter on organization and operation of the joint stock commercial bank approved by the General Meeting of Shareholders;

b) Minutes of the first General Meeting of Shareholders;

c) Minutes of the Board of Directors' meeting approving the election of the Chairman of the Board of Directors; Minutes of the Supervisory Board meeting approving the election of the Head of the Supervisory Board and specialized members of the Supervisory Board;

d) Decision of the Board of Directors appointing the position of General Director (Director), Deputy General Director (Deputy Director), Chief Accountant;

đ) List of shareholders contributing capital for establishment according to the form prescribed in Appendix 04 of this Circular;

e) Confirmation document from a domestic commercial bank where the preparatory board opened the capital contribution account regarding the amount of capital contributed by the shareholders contributing capital for establishment;

g) Document proving the right of ownership or lawful use of the headquarters of the joint stock commercial bank;

h) Internal regulations on the organization and operation of the joint stock commercial bank as prescribed in point i, Clause 3, Article 14 of this Circular, approved by the General Meeting of Shareholders and the Board of Directors;

i) Report from the founding shareholder who is a domestic commercial bank regarding compliance with the conditions prescribed in point g, Clause 2, Article 9 of this Circular from the time of submitting the application for the license to the time of supplementing the document.

Article 16. Documents for Application to Issue a License for the Establishment and Operation of Joint Venture Banks and 100% Foreign-Owned Banks

1. The contents of the application file shall be as prescribed in Article 14 of this Circular.

2. Documents of the owner or founding member which is a foreign credit institution:

a) Audited financial statements for five consecutive years prior to the year of submitting the application for the issuance of the license without any disclaimer from the auditing unit;

b) A copy of the license for establishment and operation or equivalent document;

c) A document issued by the competent authority of the home country providing information on the foreign credit institution as follows:

(i) The scope of activities permitted in the home country at the time of submitting the application for the issuance of the license;

(ii) Compliance with banking laws and other relevant laws over the five consecutive years immediately preceding the year of submitting the application for the issuance of the license up to the time of submission of the application for the issuance of the license;

(iii) Capital adequacy ratios and other safety ratios as prescribed by the home country in the year immediately preceding the year of submitting the application for the issuance of the license up to the time of submission of the application for the issuance of the license;

(iv) Compliance with risk management regulations and provisions on reserve requirements in the year immediately preceding the year of submitting the application for the issuance of the license up to the time of submission of the application for the issuance of the license.

d) A document or material from an international credit rating organization ranking the credit rating of the foreign credit institution within six months prior to the date of submission of the application;

đ) Charter of the organizational structure and operations of the foreign credit institution;

e) Report on the process of establishment, operation, and development orientation of the foreign credit institution up to the time of submitting the application for the issuance of the license;

g) Decision appointing the representative of the foreign credit institution as a capital contributor to the joint venture bank or 100% foreign-owned bank, along with the passport of the capital contributor representative, as prescribed by law.

3. Documents of the founding member which is a Vietnamese commercial bank include the documents and materials prescribed in point b, Clause 3, Article 15 of this Circular, except for the share purchase application form.

4. The joint venture agreement must contain the main contents as prescribed by law; the agreement on capital contribution among the founding members for the 100% foreign-owned bank;

5. A document from the competent authority of the home country committing to ensure the ability to supervise all activities of the foreign bank (including the activities of the joint venture bank and 100% foreign-owned bank in Vietnam) based on consolidated practices internationally.

6. Commitment letters from the owner and founding members regarding:

a) Being ready to provide financial, technological, managerial, operational, and activity support to the joint venture bank and 100% foreign-owned bank;

b) Ensuring that the actual value of the charter capital of the joint venture bank and 100% foreign-owned bank does not fall below the statutory capital level and fully meets the regulations on operational safety as prescribed by the State Bank.

7. After receiving the principle approval letter, the preparatory board must submit the following additional documents:

a) The charter of the organizational structure and operations of the bank already approved by the Board of Members;

b) A document from a commercial bank where the preparatory board has opened a capital contribution account confirming the amount of capital contributed by the founding members;

c) A document proving the ownership or lawful right to use the headquarters of the commercial bank;

d) Internal regulations on the organizational structure and operations of the joint venture bank and 100% foreign-owned bank as prescribed in point i, Clause 3, Article 14 of this Circular, already approved by the Board of Members;

đ) Report from the founding member which is a domestic commercial bank on meeting the conditions prescribed in point g, Clause 2, Article 9 of this Circular from the time of submitting the application for the issuance of the license to the time of submitting the additional documents;

e) A document from the competent authority of the home country evaluating the owner and founding member which is a foreign credit institution on meeting the conditions prescribed in point a, point c, point đ, Clause 2, Article 10 of this Circular from the time of submitting the application for the issuance of the license to the time of submitting the additional documents;

g) In addition to the documents prescribed in points a, b, c, d, đ, e of this clause, the preparatory board establishing a 100% foreign-owned bank as a limited liability company with one member must submit the following additional documents:

(i) Decision of the owner appointing the Chairman of the Board of Members, members of the Board of Members, members of the Supervisory Board, General Director (Director), Deputy General Director (Deputy Director), Chief Accountant;

(ii) Minutes of the Supervisory Board meeting electing the position of Head of the Supervisory Board and specialized members of the Supervisory Board.

h) In addition to the documents prescribed in points a, b, c, d, đ, e of Clause 7 of this Article, the preparatory board establishing a joint venture bank or 100% foreign-owned bank as a limited liability company with two or more members must submit the following additional documents:

(i) Minutes of the first meeting of the capital contributors;

(ii) Minutes of the Board of Members meeting approving the election of the position of Chairman of the Board of Members; Minutes of the Supervisory Board meeting electing the position of Head of the Supervisory Board and specialized members of the Supervisory Board;

(iii) Decision of the Board of Members appointing the positions of General Director (Director), Deputy General Director (Deputy Director), Chief Accountant.

Article 17. Documents for Application to Obtain a License to Establish a Branch of a Foreign Bank

1. An application form for obtaining a license to establish a branch of a foreign bank signed by the legal representative of the foreign bank according to the model specified in Appendix 02b of this Circular.

2. The project for establishing a branch of a foreign bank shall include the following main contents:

a) The necessity of establishing a branch of a foreign bank;

b) The name of the branch of the foreign bank, the name of the centrally governed province/city where the branch is planned to be located, the content of activities, the duration of operation, the capital granted upon establishment;

c) The organizational chart, the list of personnel proposed for the branch of the foreign bank in accordance with the provisions of Article 89 of the Law on Credit Institutions; the proposed list of personnel must describe in detail their professional qualifications, work experience, risk management capabilities that meet the requirements of each position;

d) Risk management policy: Identification, measurement, prevention, management, and control of credit risks, operational risks, market risks, liquidity risks, and other risks during the course of operations;

đ) Information technology:

(i) Expected financial investment in information technology;

(ii) The information technology system must ensure compliance with the requirements for management and risk management of the branch of the foreign bank and the regulations of the State Bank;

(iii) Ability to apply information technology, specifying: time frame for investment in technology; type of technology expected to be applied; anticipated staff and their ability to apply information technology; ensuring the information system can integrate and connect with the State Bank's management system to provide information as required by the State Bank;

(iv) Documentation on infrastructure for information technology serving the operations of the branch of the foreign bank;

(v) Measures to ensure safety and security corresponding to the type of service expected to be implemented;

(vi) Identification, measurement, and implementation of risk management plans for the proposed technology to be applied in the field of operations of the branch of the foreign bank;

(vii) Anticipated allocation of responsibilities for reporting and controlling the information technology system operations.

e) The ability of the branch of the foreign bank to stand firm and develop in the market:

(i) Market analysis and evaluation of the banking sector, including current status, challenges, and prospects;

(ii) The ability of the branch of the foreign bank to participate and compete in the market, including proving the advantages of the branch of the foreign bank when entering the market;

(iii) Development strategy, expansion of the network of operations, and the content of banking activities, types of customers, and number of customers. In which, clearly analyze the fulfillment of conditions for those activities subject to conditions;

g) Internal control and audit system:

(i) Principles of operation of the internal control system;

(ii) Drafts of basic internal regulations regarding the organization and operation of the branch of the foreign bank, at least including the internal regulations stipulated in Clause 2 of Article 93 of the Law on Credit Institutions and regulations on the organization and operation of the branch of the foreign bank;

(iii) The operating procedures of internal audit.

h) A business plan for the first three years, which must at least include the following contents: Market analysis, strategy, objectives, and action plans to achieve these objectives, financial reports for each year (balance sheet, income statement, cash flow statement, minimum capital adequacy ratio, performance indicators, and explanations of the feasibility of financial targets for each year).

3. The charter of the parent bank.

4. A resume of the General Director (Director) of the proposed branch of the foreign bank according to the model specified in Appendix 03 of this Circular, confirmed by the parent bank, criminal record (or equivalent document) as prescribed by law; certificates and diplomas proving competence, professional qualifications, and documents proving compliance with the conditions and standards stipulated in the Law on Credit Institutions and related laws of the parent bank's General Director (Director).

5. A copy of the license for establishment and operation or equivalent documents issued by the competent authority of the home country to the parent bank.

6. A document from the competent authority of the home country providing information about the parent bank as follows:

a) The permitted scope of activities in the home country at the time of submitting the application for a license;

b) Compliance with banking laws and other relevant laws over the last five consecutive years prior to the submission of the application for a license and up to the time of submission of the application for a license;

c) Capital adequacy ratios and other safety ratios as prescribed by the home country in the year immediately preceding the submission of the application for a license and up to the time of submission of the application for a license;

d) Compliance with risk management regulations and reserve provisions in the year immediately preceding the submission of the application for a license and up to the time of submission of the application for a license.

7. A document from the competent authority of the home country committing to ensure the ability to monitor all activities of the parent bank (including the activities of the foreign bank's branch in Vietnam) based on consolidated practices internationally.

8. Audited financial statements of the parent bank for the five consecutive years prior to the submission of the application for a license.

9. A document or material from an international credit rating organization rating the parent bank within six months before the submission of the application.

10. A document from the parent bank guaranteeing full responsibility for all obligations and commitments of the branch in Vietnam; ensuring the actual value of the capital granted to the branch does not fall below the statutory capital level and fully complies with the regulations on safe operation as prescribed by the State Bank.

11. A report on the process of establishment, operation, and development orientation of the parent bank up to the time of submission of the application for a license.

12. A document from the parent bank signed by the legal representative regarding the appointment of the Preparatory Board and authorization for the Head of the Preparatory Board.

13. After receiving the principle approval document, the Preparatory Board must supplement the following documents:

a) A document appointing the General Director (Director) of the branch of the foreign bank signed by the legal representative of the parent bank;

b) A document proving the lawful right to use the headquarters of the branch of the foreign bank;

c) Internal regulations on the organization and operation of the branch of the foreign bank stipulated in point g clause 2 of this Article, approved by the parent bank.

d) A document from the competent authority of the home country assessing that the parent bank meets the conditions stipulated in points a, c, đ Clause 2 Article 10 and point b Clause 2 Article 11 of this Circular from the time of submitting the application for the License to the time of supplementing the document.

Article 18. Documents for Application for Issuance of License to Establish Representative Office

1. An application for issuance of License to establish a representative office signed by the legal representative of the foreign credit institution or other foreign organization engaged in banking activities according to the model prescribed in Appendix 02c of this Circular.

2. A copy of the Operating Permit or equivalent document issued by the competent authority of the home country to the foreign credit institution or other foreign organization engaged in banking activities.

3. A document from the competent authority of the home country providing information on the compliance with laws of the foreign credit institution or other foreign organization engaged in banking activities.

4. A document from the competent authority of the home country permitting the foreign credit institution or other foreign organization engaged in banking activities to establish a representative office in Vietnam; if the regulations of the home country do not require such a permit, evidence must be provided to prove this.

5. Report on the establishment process and operation of the foreign credit institution or other foreign organization engaged in banking activities up to the time of submitting the application for issuance of the License and the development orientation of the foreign credit institution or other foreign organization engaged in banking activities in Vietnam.

6. Financial report of the most recent year prior to the submission of the application for issuance of the License, audited by the foreign credit institution or other foreign organization engaged in banking activities.

7. Curriculum vitae of the proposed Head of the Representative Office according to the model prescribed in Appendix 03 of this Circular, confirmed by the foreign credit institution or other foreign organization engaged in banking activities, criminal record (or equivalent document) as prescribed by law; certificates and diplomas proving the qualifications and professional competence of the proposed Head of the Representative Office in Vietnam.

8. Document proving the lawful right to use the premises of the representative office.

Chapter III

PROVISIONS ON ORGANIZATION AND OPERATIONS

Section 1

GENERAL PROVISIONS

Article 19. Principles of Application

Commercial banks, foreign bank branches, and representative offices shall organize and operate in accordance with the provisions of the Law on Credit Institutions, this Circular, and related legal regulations.

Article 20. Language of Transactions

Official transaction documents of commercial banks, foreign bank branches, and representative offices must be in Vietnamese or simultaneously in Vietnamese and a commonly used foreign language.

Article 21. Content of Operations

1. Commercial banks and foreign bank branches may not engage in any business activities other than banking activities and other business activities specified in the License issued by the State Bank of Vietnam for each commercial bank and foreign bank branch.

2. Banking activities and other business activities of commercial banks and foreign bank branches as prescribed in the Law on Credit Institutions shall be carried out in accordance with the guidelines of the State Bank of Vietnam.

3. The content of operations of wholly foreign-owned banks must be activities that the owner or the foreign bank owning 50% of the charter capital of the wholly foreign-owned bank is permitted to carry out in the country where the owner or the foreign bank has its headquarters.

4. The content of operations of foreign bank branches must be activities that the parent bank is permitted to carry out in the country where the parent bank has its headquarters.

5. Representative offices may conduct activities as prescribed in Article 125 of the Law on Credit Institutions. The Head of the Representative Office may not sign business or investment contracts between the foreign credit institution or other foreign organization engaged in banking activities and individuals or organizations in Vietnam.

Article 22. Duration of Operation, Change in Duration of Operation

1. The duration of operation of commercial banks and foreign bank branches recorded in the License shall not exceed 99 years; the duration of operation of representative offices shall not exceed 5 years.

2. The procedures, formalities, and documents for requesting changes to the duration of operation shall be carried out in accordance with the guidelines of the State Bank.

Section 2

ORGANIZATIONAL STRUCTURE AND MANAGEMENT

Article 23. Name and Head Office of Commercial Banks, Foreign Bank Branches, Representative Offices

1. The name of commercial banks, foreign bank branches, and representative offices must ensure:

a) Compliance with the provisions of the Enterprise Law and related laws;

b) Being set according to the following models:

(i) Joint Stock Commercial Bank and Specific Name;

(ii) Joint Venture Bank and Specific Name;

(iii) Limited Liability Commercial Bank and Name of Foreign Bank and Vietnam;

(iv) Limited Liability Bank and Specific Name for foreign banks with two or more members having 100% foreign capital;

(v) Bank and Name of Foreign Bank – Branch Province/City under Central Government at the location of the branch. In case a foreign bank establishes two or more branches in one province/city, it must supplement the name to ensure differentiation from other branches;

(vi) Representative Office and name of foreign credit organization, foreign organization engaged in banking activities – name of province/city under central government at the location of the representative office.

2. The head office of commercial banks must meet the requirements regarding the main office of enterprises as stipulated in the Enterprise Law and the following conditions:

a) It is the workplace of the Board of Directors, Board of Members, Management Board, recorded in the License and business registration in accordance with the law;

b) It must be located within the territory of Vietnam at a specific address with room number (if applicable), floor number, building name (for rented office buildings), house number, street name (alley), or village, ward, town, district, city district, provincial city, province, centrally governed city. In cases where a commercial bank registers its main office at multiple houses or buildings with different addresses, these houses or buildings must be adjacent to each other;

c) Ensuring asset safety and suitability for banking operations;

d) Having an information management system that connects online between the main office and branches and business units of the bank, meeting the requirements for management and risk management of commercial banks and the management requirements of the State Bank.

3. The premises of foreign bank branches must meet the requirements regarding the main office of enterprises as stipulated in the Enterprise Law and the following conditions:

a) It is the workplace of the General Director (Director) and Management Board, the place for conducting transactions with customers, recorded in the License and business registration in accordance with the law;

b) It must be located within the territory of Vietnam at a specific address with room number (if applicable), floor number, building name (for rented office buildings), house number, street name (alley), or village, ward, town, district, city district, provincial city, province, centrally governed city;

c) Ensuring asset safety and suitability for banking operations;

d) Having an information management system that connects online with the main office of the foreign bank, meeting the requirements for management and risk management of the foreign bank and the management requirements of the State Bank.

4. The premises of representative offices must be located within the territory of Vietnam at a specific address with room number (if applicable), floor number, building name (for rented office buildings), house number, street name (alley), or village, ward, town, district, city district, provincial city, province, centrally governed city.

Article 24. Management organizational structure of commercial banks and foreign bank branches

1. Management organizational structure of commercial banks:

a) Commercial banks must have an organizational structure, management machinery, operational management, internal audit, risk management, and internal control system that are appropriate to their business model as stipulated by the Law on Credit Institutions and other relevant laws.

b) The management organizational structure of joint-stock commercial banks includes: Shareholders' Meeting, Board of Directors, Supervisory Board, General Director (Director).

c) The management organizational structure of state-owned commercial banks with 100% state capital, joint venture banks, and wholly foreign-owned banks includes: Board of Members, Supervisory Board, General Director (Director).

2. Management organizational structure of foreign bank branches:

The organizational structure, management, and operation of foreign bank branches in Vietnam shall be determined by the parent bank in accordance with the laws of the country where the foreign bank's headquarters is located and the provisions of the Law on Credit Institutions regarding organizational structure, management, operation, internal control, and internal audit, and such structure must be approved in writing by the State Bank before implementation.

Article 25. Organizational Structure of Risk Management Committee and Human Resources Committee

1. The Board of Directors, Board of Members must establish a Risk Management Committee, a Human Resources Committee, and define the decision-making mechanism for proposals from these two committees.

2. Each committee must have at least three members, including the Chair who is a member of the Board of Directors, Board of Members, and other members appointed, elected, and dismissed by the Board of Directors, Board of Members according to the Charter of the commercial bank. A member of the Board of Directors, Board of Members can only serve as the Chair of one committee. For joint-stock commercial banks, the Risk Management Committee must have at least one independent member of the Board of Directors.

Article 26. Rules of Operation of Risk Management Committee and Human Resources Committee

1. When establishing the committees, the Board of Directors, Board of Members must issue rules of operation and functions of the committees. Immediately upon issuance, the commercial bank must send these internal regulations to the State Bank (Bank Inspection and Supervision Authority) for reporting.

2. The rules of operation and functions of the committees must include the following minimum contents:

a) Rules of operation:

(i) Number of committee members and responsibilities of each member;

(ii) Regular meetings of the committee;

(iii) Extraordinary meetings of the committee;

(iv) Decision-making process of the committee;

b) Tasks and functions of the Committees:

(i) Risk Management Committee:

- Advising the Board of Directors, Board of Members on issuing procedures and policies within their authority related to risk management in banking operations as prescribed by law and the bank's charter.

- Analyzing and warning about the safety level of the bank against potential risks that may affect it and preventive measures for these risks in both short-term and long-term perspectives.

- Reviewing and assessing the appropriateness and effectiveness of current risk management procedures and policies of the bank to provide recommendations and proposals to the Board of Directors, Board of Members on necessary changes to current procedures and policies, and operational strategies.

- Advising the Board of Directors, Board of Members on approving investments, related transactions, management policies, and risk handling plans within the scope of functions and tasks assigned by the Board of Directors, Board of Members.

(ii) Human Resources Committee:

- Advising the Board of Directors, Board of Members on the size and composition of the Board of Directors, Board of Members, and Executives suitable for the scale of operations and development strategy of the bank.

- Advising the Board of Directors, Board of Members on handling personnel issues arising during the conduct of election, appointment, dismissal, and removal procedures for positions of Board of Directors, Board of Members, Supervisory Board members, and Bank Executives in accordance with the law and the bank's charter.

- Studying and advising the Board of Directors, Board of Members on issuing internal regulations within their authority concerning salary, remuneration, bonuses, recruitment rules, training, and other incentive policies for Executives, officers, and employees of the bank.

Article 27. Registration of Articles of Association and Content of Amendments and Supplements to the Articles of Association

1. The Articles of Association of commercial banks must include the main contents prescribed in Clause 1 of Article 31 of the Law on Credit Institutions and shall not contravene the provisions of the Law on Credit Institutions and other relevant laws. Commercial banks shall be fully responsible under the law for the content of their Articles of Association and the content of amendments and supplements to the Articles of Association.

2. The Articles of Association and the content of amendments and supplements to the Articles of Association of commercial banks shall take effect from the date they are approved by the Shareholders' Meeting and the Board of Members and signed into force.

3. When issuing the License, the State Bank shall confirm the registration of the Articles of Association of commercial banks. In cases of amending or supplementing the Articles of Association, commercial banks must register the content of amendments and supplements to the Articles of Association with the State Bank (the Inspection and Supervision Authority) within fifteen days from the date of approval.

4. Commercial banks shall submit one set of documents through postal service or directly to the State Bank (the Inspection and Supervision Authority) requesting confirmation of the registration of the content of amendments and supplements to the Articles of Association. The documents shall include:

a) A request letter from the commercial bank, clearly stating the reasons and necessity for changing the content of the Articles of Association (attached with detailed appendices of the current content in the Articles of Association, proposed amended and supplemented content, and legal basis for such amendments and supplements).

b) Resolutions of the Shareholders' Meeting and the Board of Members approving the amendments and supplements to the content of the Articles of Association. These resolutions must clearly state the amended and supplemented contents.

c) The Articles of Association including the amended and supplemented contents of the commercial bank.

d) Other documents required by the State Bank to clarify the issues proposed for supplementation (if any).

5. The State Bank (the Inspection and Supervision Authority) shall have the responsibility to confirm in writing the registration of the content of amendments and supplements to the Articles of Association of commercial banks within seven days from the date of receipt of complete and valid documents.

6. In case the content of the Articles of Association or the content of amendments and supplements to the Articles of Association is found to be inconsistent with legal provisions, the State Bank (the Inspection and Supervision Authority) shall issue a written request for commercial banks to amend and supplement them accordingly.

Article 28. Internal Regulations

1. Commercial banks must establish internal regulations in accordance with Article 93 of the Law on Credit Institutions. Such internal regulations and amendments and supplements to internal regulations must be issued by the Board of Directors or the Board of Members.

2. Branches of foreign banks must establish internal regulations in accordance with Article 93 of the Law on Credit Institutions or use internal regulations issued by the parent bank in accordance with the guidelines of the State Bank.

3. Immediately upon issuance or upon the date of implementation of internal regulations issued by the parent bank, commercial banks and branches of foreign banks must submit such internal regulations and amendments and supplements to internal regulations to the State Bank (the Inspection and Supervision Authority) for inspection and supervision purposes.

Section 3

CAPITAL OF ARTICLES OF ASSOCIATION, ISSUED CAPITAL

Article 29. Registered Capital, Contributed Capital

1. Registered capital of commercial banks:

a) The registered capital of commercial banks is the capital that has been actually contributed by the owner or by shareholders and contributing members and recorded in the Bank's Charter.

b) The registered capital of banks may be increased from the following sources:

(i) Supplementary reserve fund; Share premium surplus fund; retained earnings and other funds as prescribed by law;

(ii) Public share issuance; individual share issuance;

(iii) Conversion of convertible bonds into common shares;

(iv) Additional capital contributed by the owner or contributing members;

(v) Other sources as prescribed by law.

2. Contributed capital of foreign bank branches:

a) The contributed capital of foreign bank branches is the capital that has been actually provided by the parent bank to the foreign bank branch and recorded in the License.

b) The contributed capital of foreign bank branches may be increased from the following sources:

(i) Retained earnings;

(ii) Additional capital provided by the parent bank;

(iii) Other sources of capital as prescribed by law.

Article 30. Repurchasing Shares at the Request of Shareholders or Based on the Decision of Commercial Joint Stock Banks

1. The repurchase of shares of commercial joint stock bank shareholders must ensure compliance with legal regulations.

2. A commercial joint stock bank may only repurchase shares of shareholders if, after paying for all repurchased shares, it still ensures safety ratios in banking operations and the actual value of the registered capital does not fall below the statutory capital level; in cases where repurchasing shares leads to a reduction in the registered capital of the commercial joint stock bank, prior written approval from the State Bank is required.

3. The procedures, formalities, and documentation for requesting the repurchase of shares leading to a reduction in the registered capital of a commercial joint stock bank shall be carried out in accordance with the guidelines of the State Bank.

Article 31. Transfer of Contributed Capital, Repurchase of Contributed Capital of Joint Venture Banks, 100% Foreign-Owned Banks

1. The transfer of contributed capital, repurchase of contributed capital must ensure compliance with the provisions of the Enterprise Law.

2. Within five years from the date of issuance of the License, founding members may only transfer their contributed capital to other founding members. Within three years from the start of capital contribution to joint venture banks, 100% foreign-owned banks, contributing members may only transfer their contributed capital to other contributing members.

3. The transfer of contributed capital to organizations that are not contributing members of joint venture banks, 100% foreign-owned banks must ensure the capital contribution ratio as stipulated in Clause 4, Clause 5 Article 2 of this Circular and meet the following conditions:

a) For 100% foreign-owned banks:

(i) The new partner must meet the conditions prescribed in point b, c, d, đ, e Clause 2 Article 20 of the Law on Credit Institutions and Clause 2 Article 10 of this Circular;

(ii) In cases where the transfer leads to another foreign bank owning 50% of the registered capital of a 100% foreign-owned bank, the new foreign bank must meet all the conditions prescribed in Clause 3 Article 21 of this Circular.

b) For joint venture banks:

(i) The new partner who is a foreign bank must meet the conditions prescribed in point b, c, d, đ, e Clause 2 Article 20 of the Law on Credit Institutions and Clause 2 Article 10 of this Circular;

(ii) The new partner who is a Vietnamese commercial bank must meet the conditions prescribed in point a, b, c, g Clause 2 Article 9 of this Circular.

4. Conditions for repurchasing contributed capital:

a) The request for repurchasing contributed capital of contributing members, payment conditions, and handling of contributed capital shall be implemented according to the provisions on repurchasing contributed capital under the Enterprise Law;

b) After paying for all repurchased contributed capital, the bank must ensure sufficient payment for all debts and other property obligations, maintain safety ratios in banking operations, and the actual value of the registered capital must not be lower than the statutory capital level;

c) Fully comply with risk management regulations and fully establish reserves as prescribed at the time of requesting the State Bank's approval for the repurchase of contributed capital;

d) Continuously operate profitably for five consecutive years before the year of requesting the repurchase of contributed capital and have no cumulative losses;

đ) Not be subject to administrative penalties by the State Bank in the field of currency and banking activities in the five consecutive years before the year of requesting the repurchase of contributed capital and up to the time of requesting the State Bank's approval for the repurchase of contributed capital.

5. The transfer of contributed capital, repurchase of contributed capital must be approved in writing by the State Bank before implementation. The procedures, formalities, and documentation for requesting the transfer of contributed capital, repurchase of contributed capital shall be carried out in accordance with the guidelines of the State Bank.

Chapter IV

RESPONSIBILITIES OF ORGANIZATIONS AND INDIVIDUALS INVOLVED

Article 32. Responsibilities of the Preparatory Board

1. Establish and submit the dossier in accordance with the provisions of this Circular.

2. After receiving the principle approval document, the Preparatory Board shall be responsible for:

a) Organizing the first General Meeting of Shareholders and the first Meeting of Capital Contributors to approve the contents stipulated in Clauses 12 and 15, Article 2 of this Circular;

b) Notifying shareholders, owners, capital contributors, and the parent bank to deposit funds into the account opened by the Preparatory Board at a commercial bank in Vietnam.

3. Guide shareholders in the contribution process and review the dossiers of shareholders.

4. Be responsible for the completeness and accuracy of the content of the dossier submitted to the State Bank of Vietnam.

5. Notify shareholders, founding members, and the parent bank of the reasons for not being granted a License in case the State Bank of Vietnam does not approve.

6. Present before the Appraisal Council on meeting the conditions for obtaining a License as required by the State Bank of Vietnam.

7. Defend the contents of the project to establish a commercial bank, foreign bank branch, and representative office before the Appraisal Council.

Article 33. Responsibilities of the Head of the Preparatory Board

1. Summon the first General Meeting of Shareholders and the first Meeting of Founding Members in accordance with the law.

2. Sign documents within his authority to request the establishment of a bank until the State Bank of Vietnam grants a License.

Article 34. Responsibilities of organizations and individuals related to the establishment, organization, and operation of commercial banks, foreign bank branches, and representative offices

Organizations and individuals related to the establishment, organization, and operation of commercial banks, foreign bank branches, and representative offices must provide complete, accurate, and timely information as requested by the State Bank of Vietnam and the Preparatory Board in accordance with this Circular and bear legal responsibility for such information.

Article 35. Issuing License Coordination

1. The State Bank of Vietnam shall send a document seeking opinions from:

a) People's Committee of the province or centrally administered city where the headquarters of the commercial bank, the branch of the foreign bank, or the representative office is planned to be located regarding the location of the headquarters of the commercial bank, the branch of the foreign bank, or the representative office;

b) Ministry of Public Security (Financial, Monetary, Investment Security Bureau) regarding the list of personnel proposed to be elected or appointed as members of the Board of Directors, Board of Members, members of the Supervisory Board, and General Manager (Director) of the commercial bank, General Manager (Director) of the foreign bank branch, and Head of the Representative Office.

2. Within fifteen days from the date of receipt of the document from the State Bank of Vietnam, the relevant agencies mentioned above shall provide their opinions in writing to the State Bank of Vietnam. If the State Bank of Vietnam does not receive a written opinion from the relevant agencies beyond this period, it shall be deemed that the agency has no objection to the State Bank of Vietnam's request for issuing a License.

3. The State Bank of Vietnam shall issue a License based on the opinions of the relevant agencies.

Article 36. Responsibilities of the State Bank of Vietnam

1. The Appraisal Council for the issuance of licenses for the establishment and operation of commercial banks and foreign bank branches (referred to as the Appraisal Council):

a) The Appraisal Council shall be decided by the Governor of the State Bank of Vietnam, consisting of: the Governor or a Deputy Governor (authorized by the Governor) as Chairman, and members being heads of units specified in Clauses 2, 3, 4, 5, 6, 7, and 8 of this Article;

b) Tasks of the Appraisal Council:

(i) Appraising applications for licenses for the establishment and operation of commercial banks and foreign bank branches.

During the appraisal process, the Appraisal Council applies direct interviews to assess the professional qualifications, rationality, and feasibility of the project for establishing each content of the establishment project, and the understanding of the banking sector of those who are expected to be elected to management and operational positions in commercial banks, and the General Director (Director) expected of foreign bank branches;

(ii) Selecting lists of applications meeting conditions based on opinions of members to submit to the Governor of the State Bank of Vietnam for decision on issuing licenses.

2. Banking Inspection and Supervision Authority:

a) Serving as the focal point for receiving and appraising applications for licenses for the establishment and operation of commercial banks and foreign bank branches:

(i) For applications for licenses for the establishment and operation of commercial banks and foreign bank branches before principle approval:

- The Banking Inspection and Supervision Authority shall appraise the completeness and validity of the application and submit a document to the Preparatory Board to confirm the completeness and validity of the application or request additional information.

- Appraise the application and issue a document requesting appraisal with the application sent to members of the Appraisal Council for review. The document requesting appraisal clearly states the results of the appraisal and the viewpoint on issuing the license;

- Summarize the opinions of the Appraisal Council members and submit to the Chairman of the Appraisal Council to convene a meeting of the Appraisal Council members to review the application for issuing the license;

- Based on the Minutes of the Appraisal Council meeting, submit to the Governor of the State Bank of Vietnam a document sent to the Preparatory Board regarding the principle approval or non-approval (stating the reasons);

The content of the principle approval document includes: principle approval for the establishment and operation of commercial banks and foreign bank branches; approval of the list of proposed personnel for commercial banks and foreign bank branches; approval of organizational structure, management and operation, internal control, and internal audit of foreign bank branches.

(ii) For supplementary documents after principle approval:

- In case the deadline for submitting supplementary documents as stipulated in this Circular has expired without receipt or receipt of incomplete and invalid documents, the Banking Inspection and Supervision Authority shall submit to the Governor of the State Bank of Vietnam a document sent to the Preparatory Board notifying that the principle approval document is no longer valid.

- In case complete and valid supplementary documents are received, the Banking Inspection and Supervision Authority shall be responsible for appraising and submitting to the Governor of the State Bank of Vietnam for signing the Decision on issuing licenses for the establishment and operation of commercial banks and foreign bank branches and confirming the registration of the articles of association of commercial banks if they meet the conditions and ensure the required documents as stipulated in this Circular or issue a document not granting the license (stating the reasons).

b) Serving as the focal point for receiving, appraising, and submitting to the Governor of the State Bank of Vietnam applications for licenses for the establishment of representative offices.

c) Being responsible for managing and storing application files after issuing licenses;

d) Inspecting and supervising the implementation of commercial banks and foreign bank branches after commencing operations according to the establishment project of commercial banks and foreign bank branches.

đ) Inspecting and supervising the implementation of regulations on organization and operation of commercial banks, foreign bank branches, and representative offices as stipulated in this Circular.

e) Handling issues arising during the implementation of this Circular.

3. Legal Affairs Department:

a) Within thirty days from the date the Banking Inspection and Supervision Authority sends a document requesting it, the Legal Affairs Department shall appraise the application for a license and send a document to the Banking Inspection and Supervision Authority;

b) Serving as the focal point for handling legal issues during the issuance of licenses.

4. Monetary Policy Department:

a) Within thirty days from the date the Banking Inspection and Supervision Authority sends a document requesting it, the Monetary Policy Department shall appraise the application for a license and send a document to the Banking Inspection and Supervision Authority;

b) Evaluating the impact of establishing new banks on the monetary policy of the State Bank of Vietnam.

5. International Cooperation Department:

a) Within thirty days from the date the Banking Inspection and Supervision Authority sends a document requesting it, the International Cooperation Department shall appraise the application for a license and send a document to the Banking Inspection and Supervision Authority;

b) Evaluating issues arising related to Vietnam's commitments to the World Trade Organization and other bilateral and multilateral agreements.

6. Information Technology Bureau:

a) Within thirty days from the date the Banking Inspection and Supervision Authority sends a document requesting it, the Information Technology Bureau shall appraise the application for a license and send a document to the Banking Inspection and Supervision Authority;

b) Evaluating issues related to information technology of commercial banks and foreign bank branches.

7. Financial Accounting Department:

a) Within thirty days from the date the Banking Inspection and Supervision Authority sends a document requesting it, the Financial Accounting Department shall appraise the application for a license and send a document to the Banking Inspection and Supervision Authority;

b) Evaluating issues related to the financial capacity of shareholders as stipulated in this Circular and relevant current laws.

8. The State Bank of Vietnam branch in the province or city where the bank proposes to establish its main office:

a) Within thirty days from the date the Banking Inspection and Supervision Authority issues a written request, the State Bank of Vietnam branch in the province or city where the commercial bank or foreign bank branch proposes to establish its main office shall examine the application for the issuance of a License and send a written report to the Banking Inspection and Supervision Authority.

b) Serve as the point of contact with the local government authority in the area where the commercial bank or foreign bank branch plans to establish its main office regarding the establishment of the commercial bank or foreign bank branch in that area (if requested).

c) Directly inspect, instruct, and supervise the commercial bank or foreign bank branch to fulfill and ensure compliance with the conditions stipulated by law and the State Bank of Vietnam before commencing operations.

d) Suspend the commercial bank or foreign bank branch from commencing operations if it fails to meet the conditions for commencing operations.

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

9. Trading Department:

a) Guide commercial banks, foreign bank branches, and representative offices:

(i) To carry out the payment of licensing fees;

(ii) Procedures for opening accounts, transferring capital into frozen accounts, and releasing capital.

b) Send copies of documents confirming receipt of the full licensing fee, documents confirming the transfer of capital into frozen accounts, and the release of capital to the Banking Inspection and Supervision Authority.

Chapter V

IMPLEMENTING PROVISIONS

Article 37. Effective Date

1. This Circular takes effect from February 1, 2012.

2. From the date this Circular comes into force, the following provisions and documents shall cease to be effective:

a) Section III, V, VI Part I, Section I, V, VIII Part II, Section IV, Clause 56, Section VI Part III, Section I Part IV, Part V of Circular No. 03/2007/TT-NHNN dated June 5, 2007 issued by the Governor of the State Bank of Vietnam guiding the implementation 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.

b) Article 4, 5, 8, 9, 10, 24, 27, 32, 40, Clause 2 Article 38, contents related to approval of amendments and supplements to the Charter prescribed in Article 41, 42 of Circular No. 06/2010/TT-NHNN dated February 26, 2010 of the State Bank of Vietnam guiding the implementation of certain provisions of Decree No. 59/2009/NĐ-CP dated July 16, 2009 on the organization and operation of commercial banks.

c) Circular No. 09/2010/TT-NHNN dated March 26, 2010 of the State Bank of Vietnam on issuing licenses for the establishment and operation of joint stock commercial banks.

d) Article 1, Clause 1 Article 4 of Circular No. 24/2011/TT-NHNN dated August 31, 2011 on implementing plans to simplify administrative procedures in the field of establishment and operation of banks according to Government Resolutions on simplifying administrative procedures within the scope of functions of management of the State Bank of Vietnam.

Article 38. Organization of implementation

The Head of the Office, the Head of the Banking Inspection and Supervision Authority, the Heads of units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam branches in provinces and cities, Chairmen and members of the Board of Directors, Board of Members, Heads and members of the Supervisory Board, General Managers (Directors) of commercial banks, General Managers (Directors) of foreign bank branches, Heads of representative offices of foreign credit institutions, foreign organizations engaged in banking activities, and other relevant organizations and individuals are responsible for implementing this Circular./.