MONTHLY LEGAL UPDATE – 03/2019: LEGAL UPDATE RELATING TO FINANCE AND CREDIT
1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/03/2019
1.1. Circular No. 30/2018/TT-NHNN guidance for determination of state capital of equitized enterprises being credit organization
v Name of legal document: Circular No. 30/2018/TT-NHNN issued on 12/12/2018 by the State Bank of Viet Nam guidance for determination of state capital of equitized enterprises being credit organization (hereinafter referred to as the “Circular No. 30/2018/TT-NHNN”).
v Effective date: 01/03/2019.
The contents should be noted: Clause 2 Article 2 of Circular No. 30/2018/TT-NHNN stipulates on regulated entities of the Circular as follows: “2. Regulated entities:
a) Equitized enterprises are credit institutions, including:
(i) State-owned one-member limited liability companies with 100% of the charter capital prescribed in Clause 2, Article 2[1] of Decree No. 126/2017/ND-CP are credit institutions;
(ii) One-member limited liability companies invested by state enterprises with 100% charter capital prescribed in Clause 3[2], Article 2 of Decree No. 126/2017/ND-CP are credit institutions;
b) The agency representing the owner and agencies, organizations and individuals involved in the determination of the state capital of equitized enterprises is the credit institution specified at Point a of this Clause.”
1.2. Circular No. 51/2018/TT-NHNN regulating conditions, records, order and procedures for approving the capital contribution, share purchase of credit institutions
v Name of legal document: Circular No. 51/2018/TT-NHNN issued on 31/12/2018 by the State Bank of Viet Nam regulating conditions, records, order and procedures for approving the capital contribution, share purchase of credit institutions (hereinafter referred to as the “Circular No. 51/2018/TT-NHNN”).
v Effective date: 01/03/2019.
Some contents should be noted:
·
Firstly, regulating conditions of
capital contribution, purchase of shares of credit institutions.
Specifically, Article 4 of
Circular No. 51/2018/TT-NHNN stipulates as follows: “Article 4. Conditions of capital contribution, purchase of shares of
credit institutions
1. Conditions for making capital contribution and share purchase to
establish and buy subsidiary companies specified at Points a and c, Clause 1,
Article 1 of this Circular (except for subsidiary companies operating in the
field of management debt and asset exploitation):
a) License for establishment and operation of credit institutions with
contents of capital contribution and share purchase;
b) Ensuring the minimum capital adequacy ratio as prescribed in Point
b, Clause 1, Article 130 of the Law on Credit Institutions in the 24 months
preceding the proposed month and at the time of completing the capital
contribution and buying shares according to approval of the State Bank;
c) Ensuring the ratio of capital contribution and share purchase in
accordance with Article 129 of the Law on Credit Institutions in the 24 months
preceding the proposed month and at the time of completion of capital
contribution and share purchase as approved by the State Bank;
d) The real value of charter capital at the time of completion of
capital contribution or share purchase is not lower than the legal capital;
dd) The results of profitable business activities according to the
financial statements of the year preceding the year of request for audit have
been audited by an independent auditing organization;
e) Not be sanctioned for administrative violations in debt
classification, appropriation and use of reserves to handle risks, contribute
capital, buy shares in 12 consecutive months preceding the proposed month;
g) Having a bad debt ratio compared to the total outstanding debt of
less than 3% in the 12 months preceding the proposed month;
h) There is an organizational structure, the Board of Directors, the
Members' Council, the Control Board, the General Director (Director) in
accordance with the Law on Credit Institutions and the regulations of the State
Bank.
2. Conditions for making capital contribution and share purchase for
establishment and acquisition of associated companies specified at Points a and
c, Clause 1, Article 1 of this Circular (except for affiliate companies
operating in the field of debt management and asset exploitation):
a) Conditions specified at Points a, d, dd, e, g and h, Clause 1 of
this Article;
b) Ensuring the minimum capital adequacy ratio as prescribed in Point
b, Clause 1, Article 130 of the Law on Credit Institutions in the 12 months
preceding the proposed month and at the time of completing the capital
contribution and buying shares according to approval of the State Bank;
c) Ensuring the ratio of capital contribution and share purchase in
accordance with Article 129 of the Law on Credit Institutions in the 12 months
preceding the proposed month and at the time of completion of capital
contribution and share purchase as approved by the State Bank.
3. Conditions for capital contribution and share purchase to establish
and acquire subsidiaries and associated companies operating in the field of
debt management and asset exploitation:
a) Conditions specified at Point a, Clause 1 of this Article;
b) Ensuring the ratio of capital contribution and share purchase in
accordance with Article 129 of the Law on Credit Institutions at the time of
completion of capital contribution and share purchase as approved by the State
Bank;
c) Having a bad debt ratio compared to the total outstanding debt of
over 3% in the 12 months preceding the proposed month.
4. Conditions for making capital contribution or share purchase for
other enterprises operating in the fields specified at Point b, Clause 1,
Article 1 of this Circular:
a) The conditions specified in Clause 1 of this Article;
b) Ensuring the maximum ratio of short-term capital sources used for
medium- and long-term loans under the provisions of Point c, Clause 1, Article
130 of the Law on Credit Institutions and the regulations of the State Bank in
24 Next month before the proposed month.
5. Conditions for converting debts into contributed capital specified
at Point d, Clause 1, Article 1 of this Circular:
a) Conditions specified at Points a, b, c, d, dd, e and h, Clause 1 of
this Article;
b) Debts converted into contributed capital must be bad debts and the
transfer of debts into contributed capital is to handle bad debts. Bad debts
are debts determined by the State Bank's regulations on classification of
assets, deduction levels, methods of setting up risk provisions and the use of
risk provisions in the operation of credit institutions, branches of foreign
bank.”
·
Secondly, prescribing the order and
procedures for approving capital contribution and purchase of shares of credit
institutions.
Specifically, Article 6 Circular
No. 51/2018/TT-NHNN stipulates: “Article 6.
Order and procedures for approving capital contribution and purchase of shares
of credit institutions
1. Credit institutions shall make 02 sets of dossiers as prescribed in
Article 5 of this Circular and send them to the State Bank (via the Banking
Inspection and Supervision Agency). In case the dossier is incomplete or
invalid, within 7 days after receiving the dossier, the Banking Inspection and
Supervision Agency shall send a written request to the credit institution to
supplement the dossier.
2. Within 07 days from the date of receipt of a complete and valid
dossier, the Banking Inspection and Supervision Agency shall send a written
document enclosed with the dossier for sending comments:
a) State Bank branches in provinces, cities where the credit
institutions are headquartered on meeting the conditions prescribed in this
Circular;
b) Units of the State Bank on capital contribution, share purchase,
debt transfer into contributed capital of credit institutions (if necessary).
3. Within 10 days from the date of receiving the written opinions of
the Banking Inspection and Supervision Agency, the consulted units specified in
Clause 2 of this Article shall have their written opinions sent to Banking
Inspection and Supervision on the contents to be consulted.
4. Within 14 days from the date of receiving the comments of the
relevant units, the Banking Inspection and Supervision Agency shall appraise
the dossier and submit it to the State Bank Governor for consideration,
approval or disapproval of the capital contribution, share purchase, debt
transfer into contributed capital at the request of the credit institution.
5. Within 45 days from the date of receipt of a complete and valid
dossier, the State Bank shall issue a written approval or disapproval of the
capital contribution, share purchase and debt transformation into contributed
capital of a credit institution; In case of disapproval, the State Bank shall
issue a document clearly stating the reason.
6. Within 12 months after the State Bank issues a written approval, the credit institution must complete the capital contribution, share purchase, and debt transfer into contributed capital. Beyond this time limit, the State Bank's written approval shall automatically expire.”
2. Quarterly (by the 03rd of the first month of the reporting quarter), the converting bank must submit reports to the SBV (the Foreign Exchange Management Department, the Financial Policy Department and the Operations Center) on the estimated amounts of foreign currency to be converted by project enterprises/ investors in the next quarter and the foreign currency balancing plan to meet such amounts.”
1.3. Circular No. 53/2018/TT-NHNN regulations on the network of non-bank credit institutionsv Name of legal document: Circular No. 53/2018/TT-NHNN issued on 31/12/2018 by the State Bank of Viet Nam regulations on the network of non-bank credit institutions (hereinafter referred to as the “Circular No. 53/2018/TT-NHNN”).
v Effective date: 01/03/2019.
Some contents should be noted:
·
Firstly, regulations on conditions
for establishing branches of non-bank credit institutions
Specifically, Article 7 of Circular No. 53/2018/TT-NHNN
stipulates: “Article 7. Conditions for
establishing branches
1. A non-bank
credit institution with a period of operation of 12 months or more (calculated
from the date of opening operation to the time of request) is allowed to
establish no more than 3 branches in a fiscal year when meeting the following
conditions:
a) The actual
value of charter capital as at December 31 of the preceding year is not lower
than the legal capital level;
b)
Interest-bearing business activities according to the consolidated financial
statements and audited separate financial statements of the preceding year
preceding the year of proposal. This condition does not apply to non-bank
credit institutions submitting their application for the second year from the
date of opening;
c) At the time of
the proposal, the competent agency does not apply measures not to expand the
area of operation;
d) At the time of
the proposal, it does not violate the regulations on safety ratio in the
operation of non-bank credit institutions;
dd) The ratio of
bad debt to total outstanding debt as of December 31 of the preceding year
preceding the year of proposal and at the time of the proposal does not exceed
4% or another rate decided by the Governor fin each period;
e) At the time of
proposal the Board of Directors, the Members' Council, and the Control Board to
have the quantity and structure strictly according to the provisions of law, no
vacancies to the General Director (Director) title;
g) At the time of
the proposal does not violate the regulations on internal control system and
internal audit; asset classification and risk provisioning;
h) There is a
Regulation on network management in accordance with Article 6 of this Circular;
i) Has a scheme to
establish a network unit.
2. Non-bank credit
institutions with operating duration of less than 12 months (from the date of
opening operation to the time of proposal) are allowed to establish no more
than 2 branches when meeting the following conditions:
a) The real value
of charter capital at the time of proposal is not lower than the legal capital;
b) The ratio of
bad debt to the total outstanding debt at the latest time of the proposal does
not exceed 4% or another rate as decided by the Governor in each period;
c) The provisions
at Points c, d, e, g, h and i, Clause 1 of this Article.”
·
Secondly, annulling Decision No.
01/2008/QD-NHNN dated January 9, 2008 of the Governor of the State Bank of Vietnam
promulgating regulations on opening and terminating operations of branches and
representative offices of groups non-bank credit institutions.
Specifically, Clause 2 Article 25 of Circular No.
53/2018/TT-NHNN stipulates: “Article 25.
Implementation effect
…
2. To annul
Decision No. 01/2008 / QD-NHNN dated January 9, 2008 of the Governor of the
State Bank of Vietnam promulgating regulations on opening and terminating
operations of branches and representative offices of groups non-bank credit
institutions.”
v Name of legal document: Circular No. 01/2019/TT-NHNN issued on 01/02/2019 by the State Bank of Viet Nam on amendments to the Circular No. 30/2015/TT-NHNN dated December 25, 2015 by the Governor of the State bank of Vietnam on licensing, organization and operation of non-bank credit institutions (hereinafter referred to as the “Circular No. 01/2019/TT-NHNN”).
v Effective date: 20/03/2019.
Some contents should be noted:
·
Firstly, modify, supplement the
explanation of the phrase “Lessee”.
Specifically, Clause 1 Article 1
of Circular No. 01/2019/TT-NHNN stipulates:
Article 1. Amendments to the Circular No. 30/2015/TT-NHNN dated
December 25, 2015 by the Governor of the State Bank of Vietnam (“SBV”)
1. Clause 14 Article 3[3]
is amended as follows:
“14. Lessee (including the seller of an asset that then leases
that asset under a finance lease contract) refers to a legal entity or
individual that operates in Vietnam and directly uses the leased asset to serve
their operations.
When a household, artel or organization without a legal status wishes to
enter into a finance lease contract, such finance lease contract must be
concluded by its member or authorized representative.”.”
·
Secondly, the phrase “Cục Thanh tra,
giám sát ngân hàng” (“Bank Supervision and Inspection Office”) is changed into
“Cơ quan Thanh tra, giám sát ngân hàng (đối với địa bàn có Cục Thanh tra, giám
sát ngân hàng)” (“Bank Supervision and Inspection Authority (for province where
the Bank Supervision and Inspection Office is established)”)
Specifically, Clause 3 Article 2
of Circular No. 01/2019/TT-NHNN stipulates: “Artilce
2.
…
3. The phrase “Cục Thanh tra, giám sát ngân hàng” (“Bank
Supervision and Inspection Office”) is changed into “Cơ quan Thanh tra, giám
sát ngân hàng (đối với địa bàn có Cục Thanh tra, giám sát ngân hàng)” (“Bank
Supervision and Inspection Authority (for province where the Bank Supervision
and Inspection Office is established)”) at Point a Clause 3 Article 10, Point d
Clause 1 Article 41, Article 7 Appendix No. 09A, Article 7 Appendix No. 09B,
Article 7 Appendix No. 09C, Article 7 Appendix No. 09D of the Circular No.
30/2015/TT-NHNN.”
v Name of legal document: Decree No. 16/2019/ND-CP issued on 01/02/2019 by the Government of Viet Nam amending and supplementing decrees on business conditions under the state management of the State Bank of Viet Nam (hereinafter referred to as the “Decree No. 16/2019/TT-NHNN”).v Effective date: 20/03/2019.The content should be noted: amending and supplementing conditions for a credit information company to obtain a certificate of eligibility for credit information-related activities.
Specifically, Article 4 of
Decree No. 16/2019/ND-CP stipulates: “Article
4. Amending and supplementing certain articles of the Government’s Decree
No. 10/2010/ND-CP dated February 12, 2010 on credit
information-related activities
Clause 5 Article 7[4]
(as amended and supplemented in Article 1 of the Government’s Decree
No. 57/2016/ND-CP dated July 01, 2016 providing amendments to Article
7 of the Government’s Decree No. 10/2010/ND-CP dated February 12,
2010) is amended and supplemented as follows:
“5. There are at least 15 credit institutions, branches of foreign
banks (except banks for social policies, cooperative banks, people’s credit
funds and microfinance institutions) that commit to provide credit information;
these credit institutions and branches of foreign banks do not give similar
commitments to any other credit information provider.””
v Name of legal document: Circular No. 02/2019/TT-NHNN issued on 28/02/2019 by the State Bank of Viet Nam amending and supplementing a number of articles of the circular no. 23/2014/TT-NHNN dated august 19, 2014 of the State Bank of Vietnam guiding the opening and use of payment accounts at payment service suppliers (hereinafter referred to as the “Circular No. 02/2019/TT-NHNN”).v Effective date: 01/03/2019.Some contents should be noted:
·
Firstly, amending and supplementing regulations
on authorization in using payment accounts.
Specifically,
Clause 2, Article 1 of Circular No. 02/2019/TT-NHNN stipulates: “Article 1.
Amending and supplementing a number of articles of Circular No. 23/2014/TT-NHNN
of August 19, 2014 of The State Bank of Vietnam guides the opening and use of
payment accounts at payment service suppliers
...
2. Clause 1 and
Clause 2 of Article 4[5]
are amended and supplemented as follows:
“1. The account
holder has the right to authorize another person to use his or her payment
account.
2. The
authorization in the use of payment accounts must be in writing and comply with
the law on authorization.””
·
Secondly, supplementing regulations
on handling checks and complaints in using payment accounts.
Specifically, Clause 11 Article 1 of Circular No.
02/2018/TT-NHNN stipulates: “Article 1.
Amending and supplementing a number of articles of Circular No. 23/2014/TT-NHNN
of August 19, 2014 of The State Bank of Vietnam guides the opening and use of
payment accounts at payment service suppliers
...
11. “Article 15a.
Handling checks and complaints in using payment accounts
1. Banks and
branches of foreign banks are responsible for receiving customers' inquiries
and complaints during the process of using payment accounts to ensure
compliance with the following principles:
a) Applying at
least two forms of receiving information of inspection and complaint including
via telephone switchboards (with sound recording) and through transaction
points of banks and branches of foreign banks; ensure the verification of basic
information that customers have provided to banks and foreign bank branches;
b) Developing a
form of request for investigation and complaint for customers to use when
requesting investigation and complaint. In case of receiving information via
telephone switchboards, banks and branches of foreign banks require customers
to supplement inspection requests and complaints according to forms within the
prescribed time of banks and branches of foreign banks to act as the official
basis for handling investigation and complaints. In case of authorizing other
people to request examination, complaint, customers shall comply with the
provisions of law on authorization;
c) Banks and
branches of foreign banks are allowed to agree on and specify the time limit
for customers to be entitled to request for investigation and complaint but not
less than 60 days from the date of the transaction for requesting
investigation, complaint.
2. Time limit for
handling investigation and complaints:
a) Within 30
working days after receiving customers' requests for first-time inspection and
complaint according to one of the receiving forms prescribed at Point a, Clause
1 of this Article, the banks or branches of foreign banks shall be responsible
for handling customers' requests for investigation and complaints;
b) Within 5
working days from the date of notification of inspection results, complaints to
customers, banks and branches of foreign banks shall be refunded to customers
according to the agreement and current law for losses arising out of the
customer's fault and/or not subject to force majeure circumstances as agreed
upon terms and conditions for opening and using payment accounts;
c) In case of
expiry of the time limit for handling the control and complaint specified at
Point a of this Clause, but the cause or error of any party has not been
determined yet, within the next 15 working days, the bank or branches of
foreign banks shall agree with customers on the plan of handling investigation
and complaints.
3. If the case shows signs of a crime, the bank or branches of foreign banks shall notify the competent state agency in accordance with the law on criminal procedures and report to the State Bank (Payment Department, Banking Inspection and Supervision Agency, State Bank of provinces and cities in the area); at the same time, notify customers in writing about the status of handling requests for investigation and complaints. The handling of results of inspection and complaints falls under the handling responsibility of competent state agencies. In cases where competent state agencies announce the settlement results without criminal elements, within 15 working days from the date of conclusion of competent state agencies, banks or branches of foreign banks agreed with customers on the plan of handling results of investigation and complaint.\
4. In case the banks, branches of foreign banks, customers and related parties cannot reach an agreement and/or disagree with the process of requesting a investigation or complaint, the dispute resolution shall be made according to regulations of laws.""
[1] “Article 2. Regulated entities
…
2. State-owned enterprises including:
a) Wholly state-owned single-member
limited liability companies (LLCs) that are parent companies of state-owned
economic groups, parent companies of state corporations (including state-owned
commercial banks) or parent companies in groups of parent companies and
subsidiaries (hereinafter referred to as “parent companies”).
b) Wholly state-owned single-member
LLCs.
c) Wholly state-owned enterprises that
have not been converted into single-member LLCs.”
[2] “Article 2. Regulated entities
…
3. Single-member LLCs with 100% of charter capital
invested by state-owned enterprises (hereinafter referred to as “level II
enterprises”).”
[3] “Article 3. Interpretation of terms
In this Circular, some terms are
construed as follows:
…
14. The lessee (including
sub-lessee) includes organizations and individuals operating in Vietnam
including legal and natural persons and other civil subjects according to civil
laws who have the use of the leased assets for their own purposes.”
[4] “Article 7. Conditions for a credit information company to obtain a
certificate of eligibility for credit information-related activities
…
5. Having at least 20 commercial banks
that commit to provide credit information exclusively to the company”
[5] “Article 4. Authorization in using payment account1. In the process of
using the payment account, the account holder, the chief accountant or the
person in charge of accounting (if any) may authorize another person.”
This amount is amended by Clause 2
Article 1 of Circular 32/2016/TT-NHNN
“Article 1. Amending and supplementing
a number of articles and appendices of Circular No. 23/2014/TT-NHNN dated
August 19, 2014 of the State Bank of Vietnam guiding the opening and use of
payment accounts at payment service suppliers”
...
2. Clause 1... Article 4 is amended
and supplemented as follows:
“1. The account holder has the right
to authorize another person to use his or her payment account.”
“2. Authorization in the use of
payment accounts must be in writing and comply with the law on authorization.
Authorization in using the organization's payment account must be approved in
writing by the account opening organization.”
This clause is amended by Clause 2
Article 1 of Circular 32/2016/ TT-NHNNĐ
“Article 1. Amending and supplementing
a number of articles and appendices of Circular No. 23/2014/TT-NHNN of August
19, 2014 of The State Bank of Vietnam guides the opening and use of payment
accounts at payment service suppliers
...
2. ... Clause 2 of Article 4 is
amended and supplemented as follows:
... 2. Authorization in the use of
payment accounts must be in writing and comply with the law on authorization.
"”
