Decree No. 49/2000/NĐ-CP On the organization and operation of commercial banks

DECREE OF THE GOVERNMENT

Regarding the organization and operation of commercial banks

 

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to the Law on Credit Institutions No. 02/1997/QH10 dated December 12, 1997;

At the proposal of the Governor of the State Bank of Vietnam,

 

DECREE:

PART I

GENERAL PROVISIONS

Article 1.

1.This Decree specifies certain provisions of the Law on Credit Institutions concerningthe organization and operation of commercial banks.

2.A commercial bank is a bank that carries out all banking activities and other relatedbusiness operations for profit-making purposes, contributing to the implementationof national economic goals.

3.Under this Decree, commercial banks include state-owned commercial banks, state-owned joint-stock commercial banks, and people's commercial banks.

Article 2The issuance of licenses for establishment and operation; the organizational structureof commercial banks shall be implemented in accordance with the provisions of Section1, Section 2, Chapter II of the Law on Credit Institutions and the regulations of theState Bank.

 

Chapter II

OPERATIONS OF COMMERCIAL BANKS

Section 1

CAPITAL RAISING

Article 3.

Commercial banks may raise capital through the following forms:

1.Receiving deposits from organizations, individuals, and other credit institutions inthe form of demand deposits, time deposits, and other types of deposits.

2.Issuing deposit certificates, bonds, and other securities to raise capital fromorganizations, individuals within and outside Vietnam upon approval by the Governorof the State Bank.

3.Borrowing from other credit institutions operating in Vietnam and from foreigncredit institutions.

4.Short-term borrowing from the State Bank in accordance with Clause 1, Article 30 ofthe Law on the State Bank of Vietnam.

5.Other forms of capital raising as prescribed by the State Bank.

Section 2

CREDIT ACTIVITIES

Article 4Commercial banks may provide credit to organizations and individuals in the formsof loans, discounting of trade bills and other negotiable instruments, guarantees,financial leasing, and other forms as prescribed by the State Bank.

Article 5.

Commercial banks may lend to organizations and individuals in the following forms:

1.Short-term loans to meet production, business, service, and living needs.

2.Medium- and long-term loans to implement investment projects for production, business, services, and living needs.

Article 6.

1.Commercial banks shall proactively seek feasible and effective production andbusiness projects with the ability to repay debts for lending.

2.State-owned commercial banks shall lend according to the Prime Minister’s decisionin cases of necessity.

3.Loans must be established in a credit contract and in accordance with lawsregarding loan collateral and lending limits.

Article 7.

1.Commercial banks shall organize the review of loans based on the principle ofdelineating responsibilities between the appraisal and loan approval stages; monitorthe loan process, use of loan funds, and repayment by customers.

2.Commercial banks have the right to request customers to provide documentationproving viable business plans, their financial capacity, and that of guarantors beforeloan approval; they have the right to terminate loans and recover debts prematurelyif customers provide false information or violate credit contracts.

3.Commercial banks have the right to dispose of customer loan collateral and theassets of guarantors to recover debts in accordance with the Government’s Decreeon loan collateral for credit institutions; initiate lawsuits against customers violatingcredit contracts and guarantors failing to fulfill or improperly fulfilling theirguarantee obligations under the law.

4.Commercial banks may waive or reduce interest rates on loans, bank fees; extenddebts; buy and sell debts in accordance with the State Bank’s regulations.

Article 8.

1.Commercial banks may guarantee loans, payment, contract performance, bidding, andother forms of bank guarantees using their reputation and financial capacity for thebenefit of the guarantor, in accordance with the State Bank’s regulations.

2.The level of guarantee for a single customer and the total guarantee amount of acommercial bank shall not exceed the ratio specified by the State Bank relative tothe commercial bank’s own capital.

3.Commercial banks conducting guarantees shall have rights and obligations asprescribed in Article 59 of the Law on Credit Institutions and other relevant laws.

Article 9. Only commercial banks permitted to conduct international settlements may carry outloan guarantees, payment guarantees, and other forms of bank guarantees where theguaranteed party is a foreign organization or individual.

Article 10.

Commercial banks may:

1.Discount trade bills and other short-term negotiable instruments for organizationsand individuals.

2.Re-discount trade bills and other short-term negotiable instruments for other creditinstitutions.

Article 11. Commercial banks may engage in financial leasing but must establish a financialleasing company. The establishment, organization, and operation of such companiesshall comply with the Government’s Decree on the organization and operation offinancial leasing companies.

Section 3

PAYMENT SERVICES AND FUNDS

Article 12.

1.Commercial banks must open deposit accounts at the State Bank (branch or provincialcentral branch of the State Bank) where the main office of the commercial bank islocated and maintain the required reserve deposit balance there; they may opendeposit accounts at other domestic banks as prescribed by the State Bank.

2.Branch offices of commercial banks may open deposit accounts at provincial centralbranches of the State Bank where the branch is located.

3.Commercial banks may open accounts for domestic and foreign customers.

Article 13.

Commercial banks may:

1.Providing payment instruments.

2.Conducting domestic payment services for customers.

3.Conducting collection and disbursement services.

4.Conducting other payment services as prescribed by the State Bank.

5.Conducting international payment services upon permission from the State Bank.

6.Conducting cash collection and distribution services for customers.

7.Organizing internal payment systems and participating in inter-bank payment systemswithin the country. Participation in international payment systems must be approvedby the State Bank.

Section 4

OTHER ACTIVITIES

Article 14.

1. A commercial bank may use its charter capital and reserve fund to contribute capital, purchase shares of enterprises and other credit institutions within the country in accordance with the provisions of the law. The level of contribution and share purchase by a commercial bank in one enterprise, and the total level of contribution and share purchase by a commercial bank in all enterprises shall not exceed the maximum limit prescribed by the State Bank.

2. The contribution of capital by a commercial bank to foreign credit institutions to establish joint venture credit institutions in Vietnam shall be carried out in accordance with the Government's regulations on the organization and operation of foreign credit institutions in Vietnam.

3. The contribution of capital, purchase of shares, and joint ventures by a commercial bank with foreign investors must be approved in writing by the State Bank and implemented in accordance with the provisions of the law.

Article 15. 4. A commercial bank may participate in the money market in accordance with the provisions of the State Bank.

Article 16. When permitted by the State Bank, a commercial bank may directly engage in business or establish a subsidiary company with legal personality, independent accounting using its own capital (hereinafter referred to as a subsidiary company) to engage in foreign exchange and gold trading on domestic and international markets.

Article 17. 5. A commercial bank has the right to delegate, accept delegation, act as an agent in areas related to banking activities, including the management of assets and investments of organizations and individuals both domestically and internationally under delegation and agency contracts.

Article 18. 6. A commercial bank may provide insurance services; establish a subsidiary company or joint venture to engage in insurance business in accordance with the provisions of the law.

Article 19. 7. A commercial bank may provide the following services:

1. Financial and monetary advisory services for customers in the form of direct customer advice or establishment of a subsidiary company in accordance with the law.

2. Safekeeping of valuable items, securities, rental of safe deposit boxes, pawnbroking, and other services in accordance with the law.

Article 20. 8. A commercial bank shall not directly engage in real estate business.

Article 21. 9. A commercial bank may directly engage in business or establish a subsidiary company to carry out other businesses related to banking activities in accordance with the provisions of the law.

Article 2210. During the course of operations, commercial banks must comply with the provisions on limitations to ensure safety in operations as stipulated in Section 5, Chapter III of the Law on Credit Institutions and according to the regulations of the State Bank.

 

Chapter III

MANAGEMENT, OPERATIONS AND CONTROL

Section 1

OF STATE COMMERCIAL BANKS

Article 23. A state commercial bank is a commercial bank established and managed by the State with capital investment, contributing to achieving the State's economic goals.

Article 24.The management of a state commercial bank is the Board of Directors. The positions of the Board of Directors are appointed and relieved by the Governor of the State Bank after consultation with the Government's Organizational and Cadre Affairs Committee.

Article 25THE BOARD OF DIRECTORS AND BOARD MEMBERS

1. The Board of Directors consists of five or seven members, including full-time members and part-time members; part-time members cannot hold leadership positions in the State apparatus; the number of Board of Directors members, full-time members, and part-time members of each commercial bank is specified in the Articles of the bank.

2. The Chairman of the Board of Directors, the Board member兼任总经理的成员，以及担任审计长的董事会成员是专职成员。

3. Board members are people with prestige, professional ethics, and knowledge of banking activities, who do not belong to the categories specified in Article 40 of the Law on Credit Institutions.

4. The Chairman and other members of the Board of Directors shall not delegate tasks and powers to non-board members. The Chairman of the Board of Directors shall not participate in the Board of Directors or manage other credit institutions, except when such organizations are subsidiaries.

5. The term of office of Board members is five years. Board members may be reappointed.

6. The Chairman of the Board of Directors shall not concurrently serve as General Manager or Deputy General Manager, except where otherwise provided by law.

Article 26DUTIES AND POWERS OF THE BOARD OF DIRECTORS

1. Manage the bank in accordance with the law and this Decree.

2. Accept capital and other resources assigned by the State.

3. Submit to the Governor of the State Bank:

a) Approval of amendments and supplements to the Articles of the bank;

b) Establishment of subsidiary companies;

c) Approval of the opening of transaction offices, branches, representative offices (hereinafter referred to as representative offices) in domestic and foreign territories, and establishment of non-profit units of the bank;

d) Approval of contributions, purchases of shares, and joint ventures with foreign investors;

đ) Approval of mergers, acquisitions, spin-offs, consolidations, takeovers, dissolutions of the bank and its transaction offices, branches, representative offices, subsidiary companies, and non-profit units;

e) Approval of changes as stipulated in Clause 1, Article 31 of the Law on Credit Institutions;

g) Appointment and dismissal of the Chairman and other Board members, General Manager, Deputy General Manager, and Chief Accountant of the bank;

h) Approval of the appointment and dismissal of the Head and other members of the Audit Board;

i) Approval of the organization of independent audits to audit the bank's activities.

4. Approve the capital allocation plan and other resource allocation plans for subsidiary companies.

5. Decide on contributions and purchases of shares of enterprises and other credit institutions, except for contributions, purchases of shares, and joint ventures with foreign investors.

6. Approve the business operation plan and post-tax profit utilization plan proposed by the General Manager.

7. Decide on the appointment and dismissal of branch managers, transaction office directors, representative office directors, and non-profit unit directors.

8. Decide on the organizational structure of the management and operational headquarters; the organizational structure of the management of transaction offices, branches, representative offices, and non-profit units; staff regulations, salary payment systems, reward and punishment systems applicable in the bank.

9. Provisions on interest rates, exchange rates, commission ratios, fees, and penaltyamounts for customers as prescribed by law.

10. Issue regulations on the operation of trading offices, branches, representativeoffices, public service units, and affiliated companies.

11. Issue regulations on the operation of the Board of Directors and the SupervisoryBoard.

12. Issue regulations on the organization and internal audit activities in accordancewith the provisions of the law.

13. Approve the annual consolidated financial report and final accounts of the bank.

14. Issue specific guiding documents to implement the regulations of the State and theState Bank regarding banking operations.

15. Perform other rights and duties as prescribed by law and the Charter of the bank.

Article 27. Duties of members of the Board of Directors

1. Chairman of the Board of Directors:

a) Is responsible for all work of the Board of Directors, organizing the assignmentof tasks to members to fulfill the duties and powers of the Board of Directors asprescribed in Article 26 of this Decree;

b) On behalf of the Board of Directors and the General Director, sign to acceptcapital and other resources assigned by the State to the bank;

c) Sign documents within the authority of the Board of Directors to submit to theGovernor of the State Bank, relevant agencies;

d) Sign resolutions, decisions, and documents or approve documents within theauthority of the Board of Directors to be implemented in the bank;

đ) Convene, chair, and assign Board of Directors members to prepare the content ofBoard of Directors meetings;

e) Monitor and urge members of the Board of Directors to perform their dutiesbetween two Board of Directors meetings.

2. The duties of other members of the Board of Directors shall be assigned by theChairman of the Board of Directors in accordance with the bank's operations and theworking conditions of each member.

Article 28. Supporting machinery of the Board of Directors

1. The Board of Directors uses the management machinery and seal of the bank toperform its duties.

2. The Board of Directors establishes a support unit with no more than five full-time staff. The Chairman of the Board of Directors selects and replaces the Board ofDirectors' support staff.

3. The Board of Directors establishes a Supervisory Board in accordance withArticles 30 and 31 of this Decree.

Article 29. Working regime of the Board of Directors

1. The Board of Directors operates collectively; convenes regularly once a month toreview and decide on matters within its authority and responsibility. When necessary,the Board of Directors may convene extraordinary meetings to address urgent issuesof the bank proposed by the Chairman of the Board of Directors, the Head of theSupervisory Board, the General Director, or more than 50% of the Board ofDirector's members.

2. The Chairman of the Board of Directors convenes and chairs all Board ofDirector's meetings; in case of absence, the Chairman delegates another member ofthe Board of Directors to convene and chair the meeting.

3. Board of Directors meetings are considered valid when at least two-thirds of themembers are present. Meeting documents must be sent to Board of Directors membersand invited representatives five days before the meeting date.

All Board of Directors meetings must be recorded in minutes and signed by allparticipating members.

Resolutions and decisions of the Board of Directors must be approved by more than50% of the total number of Board of Directors members. In case of equal votes, thefinal decision belongs to the side with the opinion of the Chairman of the Board ofDirectors.

A Board of Directors member who disagrees with the resolution or decision of theBoard of Directors has the right to reserve their opinion and report it to thecompetent state agencies; during the time awaiting a decision from the competentagency, they must still comply with the resolution or decision of the Board ofDirectors. The reserved opinion must be documented in writing with the signatureof the person reserving it and stored together with the related resolution anddecision of the session.

4. The Board of Directors convenes to discuss matters related to the State managementfunctions of Ministries, sectors, and provinces/cities, then must invite authorizedrepresentatives of these Ministries, sectors, and local authorities to attend; wherethe matter concerns the rights and obligations of bank employees, the authorizedrepresentative of the industry trade union must be invited to attend. Representativesof invited agencies and organizations have the right to speak but not to vote.

5. Resolutions and decisions of the Board of Directors are binding on the entirebank.

6. The bank's General Director, Trading Office Director, Branch Director, PublicService Unit Director, and Affiliated Company Director are responsible forproviding timely and complete information related to the bank's operations asrequired by the Board of Directors.

7. Board of Directors members are responsible for protecting confidential informationprovided.

8. Operating costs of the Board of Directors and the Supervisory Board, includingwages and allowances for Board of Directors and Supervisory Board members andsupport staff, are included in the bank's management expenses. The GeneralDirector ensures necessary working conditions and means for the Board of Directorsand the Supervisory Board.

Article 30.Appointment, dismissal, and approval of positions in the Supervisory Board

1. The Head of the Supervisory Board is a member of the Board of Directors assignedby the Board of Directors.

2. Other members of the Supervisory Board are appointed and dismissed by the Boardof Directors.

3. The assignment of the Head of the Supervisory Board and the appointment anddismissal of other members of the Supervisory Board must be approved by theGovernor of the State Bank.

Article 31Members of the Supervisory Board

1. Members of the Supervisory Board must be individuals with professional expertiseand ethical standards as prescribed by the State Bank, not belonging to thecategories specified in Article 40 of the Law on Credit Organizations.

2. The Supervisory Board shall have a minimum of five members, with at least half ofthem being full-time; the number of part-time members must include one memberintroduced by the Minister of Finance and one member introduced by the Governorof the State Bank of Vietnam. The number of members of the Supervisory Board isdetermined by the Board of Directors.

Article 32. Duties and powers of the Supervisory Board

1. To inspect the financial activities of the bank; to monitor compliance withaccounting systems, and the operation of the internal audit and inspection systemof the bank.

2. To review the annual financial reports of the bank; to examine specific issuesrelated to the bank's financial activities when deemed necessary or as decidedby the Board of Directors.

3. To regularly report to the Board of Directors on the results of financialactivities.

4. To report to the Board of Directors on the accuracy, truthfulness, andlegality of record-keeping, retention of vouchers, and preparation of accountingrecords and financial reports of the bank; the operation of the internal auditand inspection system of the bank.

5. To recommend additional, modified, or improved measures for the bank'sfinancial activities in accordance with the law.

6. To be able to use the bank's internal audit and inspection system to performtheir duties.

7. Other duties and powers as prescribed by law and the Charter of the bank.

Article 33. Appointment and removal of General Director, Deputy General Director, andChief Accountant

The Governor of the State Bank of Vietnam appoints and removes the GeneralDirector and Deputy General Directors upon the recommendation of the Board ofDirectors; appoints and removes the Chief Accountant upon the recommendation ofthe Board of Directors and after agreement with the Ministry of Finance.

Article 34. The General Director and Deputy General Directors must not belong to thecategories specified in Article 40 of the Law on Credit Organizations, must havethe professional qualifications and management capabilities required by the StateBank to lead a credit organization, and must reside in Vietnam during theirtenure.

Article 35.

1. The General Director manages the bank's operations, assisted by severalDeputy General Directors, the Chief Accountant, and a specialized staff.

2. The General Director is responsible before the Board of Directors and thelaw for managing daily operations according to the duties and powers definedin Article 36 of this Decree.

3. The Deputy General Director assists the General Director in managing oneor more areas of the bank's operations as assigned by the General Director andis responsible to the General Director and the law for the tasks assigned.

4. The Chief Accountant assists the General Director in directing accountingand statistical work of the bank, having rights and duties as prescribed by law.

5. The specialized staff has the function of advising and assisting the Boardof Directors and the General Director in management and operational matters.

Article 36. Duties and powers of the General Director

1. Together with the Chairman of the Board of Directors, to accept capitaland other resources allocated by the State for management and use in accordancewith the bank's Charter. To allocate capital and other resources to subsidiaries.

2. To submit to the Board of Directors:

a) Amendments and supplements to the bank's Charter;

b) Establishment of subsidiary companies;

c) Opening of trading offices, branches, representative offices, and non-profitunits;

d) Organizational structure of the management and operational system atheadquarters; organizational structure of the operational system of tradingoffices, branches, representative offices, and non-profit units;

đ) Appointments and removals of Deputy General Directors and ChiefAccountants; Managers of trading offices, branches, representative offices, andnon-profit units as stipulated in the bank's Charter;

e) Operating regulations of trading offices, branches, representativeoffices, non-profit units, and subsidiaries;

g) Business plans and profit utilization plans after tax;

h) Decisions on interest rates, exchange rates, commission ratios, fees, andpenalty amounts for customers as prescribed by law;

i) Capital contributions and purchases of shares in enterprises and othercredit organizations;

k) Dividing, splitting, merging, acquiring, liquidating the bank and its tradingoffices, branches, representative offices, subsidiaries, and non-profit units;

l) Changes as provided in Clause 1 of Article 31 of the Law on CreditOrganizations;

m) Organization of independent audits to audit the bank's activities;

n) Annual consolidated financial statements and settlement reports of thebank;

o) Detailed guidance on implementing state regulations and State Bankregulations on banking activities.

3. To appoint and remove Heads and Deputy Heads of specialized departments;Deputy Directors, Heads of Accounting Departments, and Team Leaders of InternalAudit Teams of trading offices, branches, representative offices, non-profitunits, and other positions as prescribed in the bank's Charter.

4. To organize the implementation of business plans and post-tax profitutilization plans approved by the Board of Directors.

5. To manage and decide on matters related to the bank's business activitiesin accordance with the law, the bank's Charter, and decisions of the Board ofDirectors; to be responsible for the results of the bank's business activities.

6. To represent the bank in international relations, litigation, disputes,liquidation, and bankruptcy proceedings.

7. To be authorized to apply measures exceeding their authority in emergencies(natural disasters, enemy attacks, fires, accidents), and to be responsible forsuch decisions, subsequently reporting immediately to the Board of Directors, theState Bank, and other competent state agencies for further resolution.

8. To be subject to inspection and supervision by the Board of Directors, theSupervisory Board, the State Bank, and other competent state agencies regardingthe performance of their management duties.

9. To report to the Board of Directors, the State Bank, and other competentstate agencies as prescribed by law on the results of the bank's businessactivities.

10. Other rights and duties as prescribed by law, the bank's Charter, anddecisions of the Board of Directors.

Section 2

JOINT STOCK COMMERCIAL BANK

Article 37.

1. A joint stock commercial bank of the State and people (referred to as ajoint stock commercial bank) is a commercial bank established in the form of ajoint stock company, where state-owned enterprises, state credit organizations,and other organizations and individuals contribute capital as prescribed by theState Bank.

2. The limit on share ownership for an organization or individual and the transferof shares shall be carried out in accordance with the regulations of the State Bank.

3. The contribution of capital and purchase of shares by state-owned enterprisesand state credit institutions in joint-stock commercial banks shall be implementedin accordance with the regulations of the State Bank.

Article 38Types of Shares

1. A joint-stock commercial bank must have ordinary shares. The holder of ordinaryshares is called an ordinary shareholder.

2. A joint-stock commercial bank may have preferential voting shares. The holder ofpreferential voting shares is called a preferential voting shareholder.

3. Only founding shareholders have the right to hold preferential voting shares. Theseeffects of preferential voting rights of founding shareholders only take effect for 3(three) years from the date the bank receives its business registration certificate.After this period, the preferential voting shares of founding shareholders willconvert to ordinary shares.

4. Ordinary shares cannot be converted into preferential voting shares.

Article 39. Preferential Voting Shares and Rights of Preferential Voting Shareholders

1. Preferential voting shares are shares that have more voting rights than ordinaryshares. The number of voting rights for each preferential voting share is stipulatedby the bank's charter.

2. Shareholders holding preferential voting shares have the following rights:

a) To vote on matters within the authority of the General Meeting of Shareholderswith the number of votes as prescribed in Clause 1 of this Article;

b) Other rights like ordinary shareholders, except as provided in Clause 3 of thisArticle.

3. Shareholders holding preferential voting shares may not transfer those shares toother persons.

Article 40

Rights of Ordinary Shareholders

a) To attend and vote on all matters within the authority of the General Meeting ofShareholders; to nominate and elect members of the Board of Directors and theSupervisory Board. Each ordinary share has one voting right;

b) To receive dividends at the level decided by the General Meeting of Shareholders;

c) To have priority in purchasing new shares according to the bank's charter;

d) To transfer shares according to the provisions of the bank's charter;

đ) To receive information about the bank's operations as stipulated by the bank'scharter;

e) To authorize another person in writing to directly attend the General Meeting ofShareholders according to the provisions of the bank's charter; the authorizedperson may not run for election in their own right;

g) When the bank is dissolved or declared bankrupt, to receive a portion of theremaining assets corresponding to the number of shares contributed to the bankaccording to the law on dissolution and bankruptcy;

h) Other rights as stipulated by the bank's charter.

2. Large shareholders who have held shares continuously for at least six months havethe right to:

a) Nominate people to the Board of Directors and the Supervisory Board;

b) View and receive copies or extracts of the list of shareholders entitled toattend the General Meeting of Shareholders;

c) Request the convening of a General Meeting of Shareholders;

d) Other rights as stipulated by the bank's charter.

Article 41. Obligations of Ordinary Shareholders

1. To purchase the committed number of shares.

2. To comply with the bank's charter and internal management mechanisms.

3. To comply with decisions of the General Meeting of Shareholders and the Board ofDirectors.

4. To bear responsibility for the bank's debts and other property obligations withinthe scope of the capital contributed to the bank.

5. To perform other obligations as stipulated by the bank's charter.

Article 42 |||Founding Shareholders

1. Within three years from the date the bank receives its business registrationcertificate, founding shareholders must collectively hold at least 20% of theordinary shares available for sale; ordinary shares of founding shareholders can betransferred to others who are not shareholders if approved by the General Meetingof Shareholders. The shareholder planning to transfer shares does not have theright to vote on the transfer of those shares.

2. After the three-year period, all restrictions stipulated in Clause 1 of this Articleon the ordinary shares of founding shareholders are lifted.

Article 43.Shares

1. Shares are certificates issued by joint-stock commercial banks confirmingownership of one or several shares of that bank. Shares can be issued with thename registered or without name registration. The main content of the shares isregulated by Article 59 of the Enterprise Law.

2. The issuance of shares shall be carried out in accordance with the regulations ofthe State Bank.

3. Issuing shares to the public through the securities market must comply with thelaws on securities and the securities market.

4. Selling shares to foreign organizations and individuals shall be carried out inaccordance with the law.

Article 44. General Meeting of Shareholders

1. The General Meeting of Shareholders is the highest decision-making body of ajoint-stock commercial bank.

2. The General Meeting of Shareholders has powers and responsibilities as stipulatedby the law regarding:

a) Amendments and supplements to the bank's Charter;

b) Discussing and approving reports on the activities of the Board of Directors,financial results, financial settlement, profit distribution plans, dividend paymentsto shareholders, and the establishment and use of funds as proposed by theBoard of Directors; directions and tasks for the new fiscal year;

c) Discussing and approving reports on the activities of the Supervisory Board;

d) Establishing subsidiary companies;

đ) Dividing, splitting, merging, consolidating, acquiring, dissolving the bank andits subsidiaries;

e) Deciding on the organizational structure and management system of the bank;regulations on staff, staffing, salary fund, remuneration for Board of Directorsmembers and Bank supervisors;

g) Approving foreign activity programs;

h) Approving plans for building physical facilities and equipping technology;

i) Approving plans for capital contributions and purchases of shares from otherenterprises and credit institutions;

k) Issuing new shares;

l) Transferring ordinary shares of founding shareholders within the first threeyears from the date the bank receives its business registration certificate;

m) Changes as specified in Clause 1 of Article 31 of the Law on CreditOrganizations, except changes in the location of trading offices, branches,representative offices, transfers of named shares exceeding the ratio prescribed bythe State Bank, and the Chief Executive Officer (General Manager) of the bank;

n) Deciding on measures to address significant financial fluctuations in the bank;

o) Electing, appointing, and dismissing members of the Board of Directors and theSupervisory Board;

p) Review violations and decide on disciplinary measures against members of the Board of Directors who cause damage to the bank and shareholders;

q) Other rights and duties as prescribed by law and the Bank's Charter.

3. Regarding the authority to convene the Shareholders' General Meeting; the list of shareholders entitled to attend the meeting; inviting to attend the meeting; the right to attend the meeting; the program and content of the meeting; conditions and procedures for conducting the meeting; adopting decisions; minutes of the meeting; requesting to revoke decisions of the Shareholders' General Meeting, shall be carried out in accordance with the regulations of the State Bank and must be stipulated in the Bank's Charter.

Article 45 |||DUTIES AND POWERS OF THE BOARD OF DIRECTORS

1. Manage the bank in accordance with the law and this Decree.

2. Decide on issues related to the purpose and interests of the bank except those matters within the authority of the Shareholders' General Meeting.

3. The Board of Directors is responsible to the Shareholders' General Meeting for the results of operations as well as any violations in management, breaches of the charter, and breaches of law causing damage to the bank.

4. Submit to the Shareholders' General Meeting for decision on the contents specified in points a, b, d, đ, e, g, h, i, k, l, m, n, o, p, q of Clause 2 Article 44 of this Decree.

5. Submit to the Governor of the State Bank:

a) Approval of amendments and supplements to the Articles of the bank;

b) Establishment of subsidiary companies;

c) Approve the establishment of trading offices, branches, representative offices, and non-profit units of the bank;

d) Approval of contributions, purchases of shares, and joint ventures with foreign investors;

đ) Approval of mergers, acquisitions, spin-offs, consolidations, takeovers, dissolutions of the bank and its transaction offices, branches, representative offices, subsidiary companies, and non-profit units;

e) Approval of changes as stipulated in Clause 1, Article 31 of the Law on Credit Institutions;

g) Issue new shares;

h) Ratify the election, appointment, removal, and dismissal of the Chairman and other members of the Board of Directors; the Head and other members of the Audit Committee, General Director (Director);

i) Approval of the organization of independent audits to audit the bank's activities.

6. Decide on the organizational structure of the trading office, branch, representative office, non-profit unit, and subsidiary company's management machinery of the bank.

7. Approve the business operation plan proposed by the General Director (Director).

8. Specify interest rates, exchange rates, commission ratios, fees, and penalty amounts for customers in accordance with the law.

9. Set up and use various funds, distribute dividends according to the resolution of the Shareholders' General Meeting.

10. Appoint, remove, and dismiss the General Director (Director), Deputy General Director (Deputy Director), Chief Accountant of the bank; Branch Manager, Representative Office Manager, Non-Profit Unit Manager.

11. Specify the appointment, removal, and dismissal of managerial positions outside those specified in Clause 10 of this Article and record them in the Bank's Charter.

12. Enact the Rules of Operation of the Board of Directors, the Audit Committee.

13. Enact regulations on the organization and internal audit activities in accordance with the law.

14. Enact the Rules of Operation of the trading office, branch, representative office, non-profit unit, and subsidiary company.

15. Enact specific guidelines for implementing the regulations of the State and the State Bank regarding banking operations.

16. Decide on salaries and bonuses for the General Director (Director), Deputy General Director (Deputy Director).

17. Review violations by the General Director (Director), Deputy General Director (Deputy Director) that cause damage to their own bank and take necessary measures to rectify them.

18. Other rights and duties as prescribed by law and the Bank's Charter.

Article 46 |||.Board of Directors Members

1. Board of Directors members are individuals with reputation, professional ethics, and knowledge of banking activities, not belonging to the categories prescribed in Article 40 of the Law on Credit Organizations.

2. The Chairman and other members of the Board of Directors may not delegate their duties and powers to persons who are not members of the Board of Directors. The Chairman of the Board of Directors may not participate in the Board of Directors or manage another credit organization, except if such organization is a subsidiary company.

3. The Board of Directors has a minimum of 3 members and does not exceed 11 members. The number of Board of Directors members is decided by the Shareholders' General Meeting.

4. The term of office of Board of Directors members is from 2 to 5 years, decided by the Shareholders' General Meeting. Board of Directors members can be re-elected.

5. The Chairman of the Board of Directors may concurrently hold the position of General Director (Director) as stipulated in the Bank's Charter.

6. The duties and powers of Board of Directors members are prescribed by the State Bank.

Article 47 |||.Support Staff for the Board of Directors

1. The Board of Directors uses the management machinery and seal of the bank to perform its duties.

2. The Board of Directors has dedicated support staff. The Board of Directors specifies the number and duties of each support staff member.

Article 48. Election, Removal, Dismissal, and Ratification of Board of Directors Positions

1. The Shareholders' General Meeting elects, removes, and dismisses Board of Directors members with at least 51% of all attending shareholders' votes approving. Specific ratios and voting forms are prescribed in the Bank's Charter.

2. The Board of Directors elects, removes, and dismisses the Chairman of the Board of Directors. Voting form; ratio of approved votes to total votes is prescribed in the Bank's Charter.

3. The election, removal, and dismissal of the Chairman and other members of the Board of Directors must be ratified by the Governor of the State Bank.

Article 49.Election, Removal, Dismissal, and Ratification of Audit Committee Positions

1. The Shareholders' General Meeting elects, removes, and dismisses Audit Committee members with at least 51% of all attending shareholders' votes approving. Specific ratios and voting forms are prescribed in the Bank's Charter.

2. The Audit Committee elects, removes, and dismisses the Head of the Audit Committee. Voting form; ratio of approved votes to total votes is prescribed in the Bank's Charter.

3. The election, removal, and dismissal of the Head and other members of the Audit Committee must be ratified by the Governor of the State Bank.

Article 50Members of the Supervisory Board

1. Members of the Supervisory Board must be individuals with professional expertiseand ethical standards as prescribed by the State Bank, not belonging to thecategories specified in Article 40 of the Law on Credit Organizations.

2. The Audit Committee has a minimum of 3 members and at least half of the members are dedicated. The Head of the Audit Committee must be a shareholder. The number of Audit Committee members is decided by the Shareholders' General Meeting.

Article 51. Duties and powers of the Supervisory Board

1. To inspect the financial activities of the bank; to monitor compliance withaccounting systems, and the operation of the internal audit and inspection systemof the bank.

2. Review the annual financial report of the bank; inspect specific issues related to the bank's financial activities when deemed necessary or as decided by the Shareholders' General Meeting or upon request of major shareholders.

3. Regularly report to the Board of Directors on the results of operations; seek theBoard of Directors' opinions before submitting reports, conclusions, andrecommendations to the Shareholders' Meeting.

4. Report to the Shareholders' Meeting on the accuracy, truthfulness, andlegality of record-keeping, retention of documents, and accounting books andfinancial statements; the activities of the internal audit and internal auditingsystem of the bank.

5. To recommend additional, modified, or improved measures for the bank'sfinancial activities in accordance with the law.

6. To be able to use the bank's internal audit and inspection system to performtheir duties.

7. Other duties and powers as prescribed by law and the Charter of the bank.

Article 52. Appoint, dismiss, and remove the General Director (Director).

1. The Board of Directors appoints, dismisses, and removes the General Director(Director), Deputy General Director (Deputy Director), Chief Accountant.

2. The appointment, dismissal, and removal of the General Director (Director) mustbe approved by the Governor of the State Bank of Vietnam.

Article 53. The General Director (Director) and Deputy General Director (Deputy Director)must not belong to the categories specified in Article 40 of the Law on CreditOrganizations, have the necessary expertise and management capacity for acredit organization as prescribed by the State Bank of Vietnam, and must residein Vietnam during their tenure.

Article 54.

1. The General Director (Director) manages the bank's operations, assisted byone or more Deputy General Directors (Deputy Directors), Chief Accountant, andspecialized staff.

2. The General Director (Director) is responsible to the Board of Directors andthe law for managing the bank's daily operations.

3. The Deputy General Director (Deputy Director) assists the General Director(Director) in managing one or more areas of the bank's operations as assignedby the General Director (Director) and is responsible to the General Director(Director) and the law for the tasks assigned.

4. The Chief Accountant assists the General Director (Director) in directingaccounting and statistical work at the bank, with rights and duties as prescribedby law.

5. Specialized staff advise and assist the Board of Directors and the GeneralDirector (Director) in managing and operating the business.

Article 55. Duties and powers of the General Director (Director)

1. Submit to the Board of Directors:

a) Amendments and supplements to the bank's Charter;

b) Establishment of subsidiary companies;

c) Opening of trading offices, branches, representative offices, and non-profitunits;

d) Organizational structure of the management and operational system atheadquarters; organizational structure of the operational system of tradingoffices, branches, representative offices, and non-profit units;

d) Appointment, dismissal, and removal of Deputy General Directors (DeputyDirectors), Chief Accountants; Branch Managers, Sub-branch Managers,Representative Office Managers, and Non-profit Unit Managers according to theBank Charter;

e) Operating regulations of trading offices, branches, representativeoffices, non-profit units, and subsidiaries;

g) Decisions on interest rates, exchange rates, commission rates, fees, andpenalties for customers as prescribed by law;

h) Issuing new shares;

i) Business operation plans;

k) Capital contributions and purchases of shares in enterprises and other creditorganizations;

l) Dividing, splitting, merging, consolidating, purchasing, dissolving, andliquidating the bank and its branches, sub-branches, representative offices,subsidiaries, and non-profit units;

m) Changes as provided in Clause 1 of Article 31 of the Law on Credit Organizations;

n) Organizing independent audits to audit the bank's activities;

o) Detailed guidance on implementing state regulations and State Bankregulations on banking activities.

2. Appoint, dismiss, and remove positions within the scope of authority asprescribed in the Bank Charter. Hire, discipline, and terminate employees;decide salaries and allowances for workers, including managerial staff under theGeneral Director's authority, in accordance with the law and regulations issuedby the Board of Directors.

3. Implement business operation plans approved by the Board of Directors.

4. Manage and decide on issues related to the bank's business activities inaccordance with the law, Bank Charter, and Board of Directors' decisions; beaccountable for the bank's business results.

5. Represent the bank in international relations, litigation, disputes,dissolution, and bankruptcy proceedings.

6. Be authorized to apply measures exceeding their authority in emergencies(natural disasters, enemy threats, fires, accidents) and be accountable for suchdecisions, subsequently reporting immediately to the Board of Directors, theState Bank of Vietnam, and other competent state agencies for furtherresolution.

7. Be subject to inspection and supervision by the Board of Directors, theAudit Committee, the State Bank of Vietnam, and other competent state agenciesregarding the performance of their management duties.

8. Report to the Board of Directors, the State Bank of Vietnam, and othercompetent state agencies as prescribed by law on the results of the bank'sbusiness operations.

9. Other rights and duties as prescribed by law, the Bank Charter, and theBoard of Directors' decisions.

 

Chapter IV

INTERNAL AUDIT SYSTEM;

AUDIT FOR COMMERCIAL BANKS

Section 1

INTERNAL AUDIT SYSTEM

Article 56. Internal audit system

1. Commercial banks must establish a dedicated internal audit system (referredto collectively as the internal audit system) under the General Director's(Director's) management structure. The internal audit system extends from theheadquarters to branches, sub-branches, representative offices, subsidiaries toassist the General Director (Director) in smooth, safe, and lawful management ofall business activities of the bank. Personnel in the internal audit system shallnot concurrently perform other banking tasks.

2. The dedicated internal audit system and its staff (internal auditors) areindependent in their operations relative to business departments, branches,sub-branches, representative offices, subsidiaries, and are independentlyevaluated, concluded, and recommended in their auditing activities.

Article 57. Internal auditor personnel

Inaddition to the general standards for bank employees, internal auditor personnelmust meet the following criteria:

1. Knowledge of laws and proficiency in the business they handle.

2. Must hold a bachelor's degree in banking, economics, or financial accounting.

3. Have at least three years of experience in banking.

Article 58. Tasks of the internal audit organization

1. Regularly inspect compliance with laws, regulations of the State Bank ofVietnam, and internal regulations; directly inspect business activities in allfields at branches, sub-branches, representative offices, and subsidiaries.

2. Audit business activities periodically and by sector to assess the accuracyof business results and the current financial status of the bank.

3. Report promptly to the General Director (Director), the Board of Directors, and the Audit Committee on the results of internal audits and inspections, and propose measures to address deficiencies and issues identified.

4. Other tasks as stipulated in the Bank Charter and by the General Director (Director).

Article 59Duties of the Internal Inspection Organization

1. Require business units and employees directly involved in business operations to explain their work performed and ongoing, present directives, vouchers, accounting records, and other relevant documents (if necessary) for inspection or audit purposes.

2. Propose to the General Director (Director) the establishment of inspection teams to carry out periodic or ad hoc inspection and audit tasks.

3. The Head of the Main Office Inspection Department or the Team Leader of Inspection Teams at branches, subsidiaries, representative offices, and affiliated companies may attend meetings convened by the General Director or Director.

4. Recommend to the General Director (Director) to handle, within their authority, units and individuals who violate laws and regulations of the State Bank and the bank.

5. Other rights as stipulated in the Bank Charter and by the General Director (Director).

Section 2

            Internal Audit for Commercial Banks

Article 60. At least thirty days before the end of the fiscal year, commercial banks must select an independent auditing organization, not an internal auditor, to audit their activities. Such an auditing organization must be approved by the State Bank.

Article 61. The audit of commercial bank activities shall be conducted in accordance with the Law on Credit Organizations, the law on independent auditing, and guidelines issued by the Governor of the State Bank.

 

Chapter V

SPECIAL SUPERVISION"

Article 62. Reporting Difficulties in Payment Capacity

When there is a risk of losing the ability to pay customers, commercial banks must immediately report to the State Bank about their financial status, causes, and measures taken or planned to address the issue.

1. The subjects eligible for the award of the title "People's Doctor" and "Outstanding Doctor" include doctors, pharmacists, medical technicians, traditional medicine practitioners engaged in medical treatment, pharmaceutical production, medical research, disease prevention, epidemic control, and health management officials..ASpecial Supervision Application

1. The State Bank places a commercial bank under special supervision when it has a risk of losing its payment capacity or solvency.

2. The State Bank specifies cases where a commercial bank is placed under special supervision according to the Law on Credit Organizations and related legal provisions.

3. In cases where a commercial bank is placed under special supervision due to a risk of insolvency, the State Bank must develop a special supervision plan to be reviewed and approved by the Prime Minister and implement the plan approved by the Prime Minister.

Article 64.

1. The Governor of the State Bank decides to place a commercial bank under special supervision and terminate such supervision according to the Law on Credit Organizations and the special supervision plan approved by the Prime Minister for commercial banks at risk of insolvency.

2. The duties, powers, and responsibilities of the Special Supervision Board; the responsibilities of the supervised bank, shall be carried out in accordance with the Law on Credit Organizations and guidelines issued by the Governor of the State Bank.

3. In urgent situations, to ensure the ability to repay customer deposits, commercial banks may be granted special loans from other credit organizations or the State Bank; these special loans will be prioritized for repayment ahead of all other debts of the commercial bank. Loan granting and debt collection shall be conducted in accordance with the regulations of the State Bank.

 

Chapter VI

IMPLEMENTING PROVISIONS

Article 65. This Decree takes effect fifteen days after the date of signature. Previous regulations contrary to this Decree are abolished.

The Governor of the State Bank is responsible for guiding the implementation of this Decree.

Article 66The Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairmen of provincial and centrally-administered city People's Committees are responsible for implementing this Decree./.