Decree No. 91/1999/NĐ-CP On the organization and operation of the Banking Inspection

DECREE OF THE GOVERNMENT

On the organization and operation of Banking Inspection

 ______________________

THE GOVERNMENT

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

Pursuant to the Law on the State Bank of Vietnam and the Law on CreditOrganizations dated December 12, 1997;

Pursuant to the Inspection Ordinance dated April 1, 1990;

At the proposal of the Governor of the State Bank of Vietnam and theMinister, Head of the Organization and Cadre Affairs Council of the Government,

DECREE:

PART I

GENERAL PROVISIONS

Article 1.Banking Inspection is specialized state inspection in the banking sector, organizedinto a system under the organizational structure of the State Bank of Vietnam(hereinafter referred to as the State Bank) and has its own seal.

Article 2. The objects of Banking Inspection are:

1.The organization and operation of credit organizations;

2.Banking activities of organizations that are not credit organizations but havebeen permitted by the State Bank;

3.The implementation of legal provisions on currency and banking activities byagencies, organizations, and individuals.

Article 3. The purpose of the activities of Banking Inspection is to contribute to ensuringthe safety of the credit organization system, protecting the rights and legitimateinterests of depositors, and serving the implementation of national monetary policy.

Article 4. The content of the activities of Banking Inspection includes:

1.Supervising the compliance with laws on currency and banking activities, andimplementing regulations stipulated in the banking business license;

2.Detecting, preventing, and imposing administrative penalties within itsauthority; recommending competent authorities to handle violations of laws oncurrency and banking activities;

3.Recommending the Governor of the State Bank, the Director of the State Bank'sbranch in provinces and cities, and other competent agencies and organizations toimplement measures to ensure the enforcement of laws on currency and bankingactivities;

4.Verifying, concluding, and recommending the resolution of complaints andaccusations related to the organization and banking activities according to theComplaints and Accusations Law; advising and assisting the Governor of the StateBank in directing preventive work and combating corruption in the bankingsector.

Article 5. The activities of Banking Inspection shall only comply with the law, ensuringaccuracy, objectivity, transparency, democracy, and timeliness; no agency,organization, or individual may intervene illegally in the activities of BankingInspection.

Chapter II

DUTIES AND POWERS OF BANKING INSPECTION

Article 6. Banking Inspection has the following duties and powers:

1.Implementing regular supervision and conducting direct inspections on theorganization and operation of credit organizations, on banking activities of otherorganizations, and on foreign exchange and gold trading activities under theState Bank's management functions, aiming to detect and prevent violations;recommending measures to ensure the enforcement of laws on currency andbanking activities;

2.Recommending the Governor of the State Bank to apply the following measures:

a)Placing credit organizations in special control status;

b)Suspending certain banking activities of credit organizations and otherorganizations engaged in banking activities;

c)Revoking the establishment and operation licenses of credit organizations;revoking the banking operation licenses of other organizations.

3.Imposing administrative penalties and recommending administrative penalties inthe field of currency and banking activities according to the law;

4.Recommending the Governor of the State Bank to approve or disapprove auditorganizations from auditing credit organizations;

5.Having the right to retain opinions if the head of the same-level State Bankagency does not agree with the conclusions of Banking Inspection and bearsresponsibility for those opinions, while reporting to the competent state authorityaccording to the law on inspection;

6.Reviewing, verifying, concluding, and recommending the competent authority tohandle complaints and accusations related to the banking sector; advising theGovernor of the State Bank on directing and supervising preventive work andcombating corruption according to the law in the banking sector;

7.Providing training on inspection for officers and civil servants under the BankingInspection system;

8.Managing and directing the implementation of inspection programs, plans, andinspection operations in the banking sector;

9.Implementing tasks and powers as prescribed in Article 8 and Article 9 of theInspection Ordinance and other tasks assigned by the Governor of the State Bank.

Article 7. When conducting inspections, Banking Inspection has the following powers:

1.Requiring inspected entities and related parties to provide documents, evidences,and answer questions related to the content of the inspection;

2.Preparing inspection records and recommending solutions;

3.Applying preventive measures and handling administrative violations accordingto the law;

4.Exercising other rights as prescribed by the law on inspection.

Article 8.When conducting inspections, Banking Inspection has the followingresponsibilities:

1.Producing the inspection decision and presenting the Inspector's identificationcard;

2.Complying with the procedures and formalities of inspection without causinginconvenience, harassment, hindering normal banking activities, and damaging thelegitimate interests of credit organizations and other organizations engaged inbanking activities;

3.Reporting to the Governor of the State Bank on the results of the inspection andrecommending solutions;

4.Complying with the law, being responsible before the Governor of the State Bankand the law for inspection conclusions and all actions and decisions made.

Chapter III

ORGANIZATION OF THE STATE BANK INSPECTOR

Article 9. The system of Banking Inspection organizations includes:

1.State Bank Inspection;

2.Branch Inspection of the State Bank in provinces and centrally-administeredcities (hereinafter referred to as Branch Inspection of the State Bank);

3.The organizational structure of the Banking Inspection system is decided by theGovernor of the State Bank after reaching consensus with the Chief StateInspector.

Article 10.Banking Inspection is subject to the direction of the Governor of the State Bank inthe performance of banking inspection tasks nationwide.

Article 11. Positions managing the operation of Banking Inspection include:

1.State Bank Inspection has a Chief Inspector and Deputy Chief Inspectors;

2.Branch Inspection of the State Bank has a Chief Branch Inspector and DeputyChief Branch Inspectors.

Article 12. The Chief Inspector of State Bank Inspection is proposed by the Governor of theState Bank, submitted by the Chief State Inspector to the Prime Minister forappointment and removal.

The appointment and removal of other positions and ranks of Inspectors of the State Bank shall be carried out in accordance with current inspection laws.

Article 13. The Inspector of the State Bank has the following duties and powers:

1. Direct, organize, and implement the tasks and powers of bank inspection as prescribed in Article 6 of this Decree;

2. Decide to establish an Inspection Team or dispatch Inspectors to inspect or re-inspect credit organizations and other entities engaged in banking activities;

3. Temporarily suspend (for a limited period) the implementation of decisions made by credit organizations and other entities engaged in banking activities if such decisions contravene the Law on the State Bank of Vietnam, the Law on Credit Organizations, and inspection laws; simultaneously report to the Governor of the State Bank;

4. Temporarily suspend (for a limited period) the implementation of disciplinary decisions or job transfers made by heads of agencies or units directly under the management of the Governor of the State Bank for individuals collaborating with the bank inspection organization or being inspected, if it is deemed that the implementation of such decisions impedes the inspection process; if the decision is made by a head of an agency or unit not directly managed by the Governor of the State Bank, then recommend the competent authority to make the decision, while simultaneously reporting to the Governor of the State Bank;

5. Warn and temporarily suspend (for a limited period) the work of individuals from agencies or units directly under the management of the Governor of the State Bank who intentionally obstruct inspections or fail to comply with requests, recommendations, or decisions of the bank inspection organization; if the individual is a head of an agency or unit directly managed by the Governor of the State Bank or does not fall under the management of the Governor of the State Bank, then recommend the competent authority to make the decision, while simultaneously reporting to the Governor of the State Bank;

6. Temporarily suspend (for a limited period) the work of individuals from credit organizations and other entities engaged in banking activities if there is evidence that they have violated laws on currency and banking activities; simultaneously report to the Governor of the State Bank;

7. Temporarily suspend (for a limited period) illegal banking activities of credit organizations and other entities engaged in banking activities if there is evidence that such activities have violated laws on currency and banking activities; simultaneously report to the Governor of the State Bank.

8. Exercise other powers as stipulated in Articles 9 and 14 of the Inspection Ordinance.

Article 14. The Inspector of the State Bank branch has the following duties and powers:

1. Organize the implementation of the inspection program and plan of the State Bank's Inspectorate;

2. Issue a decision or propose the Governor of the State Bank branch in provinces and cities to issue a decision to inspect or examine credit organizations and other entities engaged in banking activities within the scope of responsibility of the State Bank branch;

3. Temporarily suspend (for a limited period) the implementation of decisions made by credit organizations and other entities engaged in banking activities if such decisions contravene the Law on the State Bank of Vietnam, the Law on Credit Organizations, and inspection laws; simultaneously report to the Governor of the State Bank branch and the Inspector of the State Bank;

4. Recommend the Governor of the State Bank branch to take the following measures:

a) Suspend certain banking activities of credit organizations and other entities engaged in banking activities within the authority of the Governor of the State Bank branch;

b) Revoke the establishment and operation license of credit organizations and revoke the operation license of other entities engaged in banking activities within the authority of the Governor of the State Bank branch.

5. Impose penalties within their authority and recommend the Governor of the State Bank branch to impose administrative penalties for violations in the field of currency and banking activities according to the provisions of the law, while simultaneously reporting to the Inspector of the State Bank;

6. Temporarily suspend (for a limited period) the implementation of disciplinary decisions or job transfers made by heads of agencies or units under the management of the Governor of the State Bank branch for individuals collaborating with the bank inspection organization or being inspected, if it is deemed that the implementation of such decisions impedes the inspection process; if the decision is made by a head of an agency or unit not directly managed by the Governor of the State Bank branch, then recommend the competent authority to make the decision; simultaneously report to the Governor of the State Bank branch and the Inspector of the State Bank;

7. Warn and temporarily suspend (for a limited period) the work of individuals who intentionally obstruct inspections or fail to comply with requests, recommendations, or decisions of the bank inspection organization; if the individual is a head of an agency or unit directly managed by the Governor of the State Bank branch or is an individual from an agency or unit not under the management of the Governor of the State Bank branch, then recommend the competent authority to make the decision; simultaneously report to the Governor of the State Bank branch and the Inspector of the State Bank;

8. During the inspection process, request the temporary suspension (for a limited period) of illegal banking activities, while simultaneously reporting to the Governor of the State Bank branch and the Inspector of the State Bank;

9. Perform the tasks and powers specified in Clauses 1, 6, and 9 of Article 6 of this Decree.

Chapter IV

BANK INSPECTORS

Article 15. Bank Inspectors must meet the standards of the ranks of civil servants in the State Inspection sector as prescribed by current laws.

Article 16. The appointment of Bank Inspectors (Level I) must be from civil servants who have at least three years of experience in banking operations, including one year in bank inspection work.

Article 17. When performing inspection tasks, Bank Inspectors have the duties and powers as prescribed in the Inspection Ordinance dated April 1, 1990, the Law on the State Bank of Vietnam, the Law on Credit Organizations dated December 12, 1997, and this Decree.

Article 18. Inspectors in the bank inspection system enjoy benefits, policies, and technical equipment provision as stipulated by current laws.

Chapter V

RELATIONSHIP BETWEEN BANK INSPECTION

AND RELATED AUTHORITIES

Article 19. The Banking Inspectorate shall be subject to the guidance and direction on organization and inspection procedures by the State Inspectorate and shall carry out other relationships with the State Inspectorate in accordance with the laws on inspection.

Article 20. During the inspection process of the organizational structure and activities of credit institutions and banking operations of other organizations, if the Banking Inspectorate identifies signs of violations under the jurisdiction of ministries, ministerial-level agencies, agencies under the Government, or local authorities, the Banking Inspectorate has the responsibility to notify the relevant Ministry Inspectorate, ministerial-level agency, agency under the Government, or local authority.

When conducting inspections and examinations of activities within their administrative supervision, the Ministry Inspectorates, ministerial-level agencies, agencies under the Government, and local State Inspectorates must notify the Banking Inspectorate if they discover signs of violations concerning currency and banking operations; if such violations constitute criminal offenses, they must transfer the case files to competent investigative bodies while simultaneously notifying the Banking Inspectorate.

Article 21. The Banking Inspectorate is responsible for coordinating with investigative agencies, People's Procuratorates, and People's Courts at all levels in combating crimes related to currency and banking operations in accordance with the law.

If during the inspection process, the Banking Inspectorate discovers signs that credit institutions or other entities engaged in banking operations have committed criminal offenses, it must transfer the case file to the competent investigative body.

Investigative agencies, when necessary, must coordinate with the Banking Inspectorate during the investigation process regarding issues related to the banking operations of credit institutions, other organizations, and individuals.

Article 22. The Banking Inspectorate may utilize cooperating inspectors in its inspection activities in accordance with current laws on inspection.

Chapter VI

REWARD AND DISCIPLINE

Article 23. Inspectors, civil servants, cooperating inspectors, and the Banking Inspectorate organization who achieve outstanding results in inspection activities shall be rewarded in accordance with the law.

Article 24. Banking inspectors who violate legal provisions, fail to fulfill their responsibilities while performing their duties, shield organizations or individuals from legal violations concerning currency and banking operations and this Decree, depending on the severity of the violation, will face disciplinary action or criminal liability pursuit; if damage is caused, they must compensate according to the law.

Chapter VII

IMPLEMENTING PROVISIONS

Article 25. This Decree takes effect fifteen days from the date of signature. Previous regulations conflicting with this Decree are hereby abolished.

Article 26. The Governor of the State Bank of Vietnam shall provide guidance for the implementation of this Decree.

Article 27. Ministers, heads of ministerial-level agencies, heads of government-affiliatedagencies, and Chairmen of People's Committees of provinces and centrally-administered cities are responsible for implementing this Decree./.