MONTHLY LEGAL UPDATE – 08/2019: LEGAL UPDATE RELATING TO FINANCE AND CREDIT

 

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/08/2019

1.1. Circular No. 08/2019/TT-NHNN amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN dated March 20th, 2015 of the Governor of the State Bank of Vietnam guiding the implementation of a number of articles of Decree No. 26/2014/ND-CP on April 7th, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities

v  Name of legal document: Circular No. 08/2019/TT-NHNN issued on 04/07/2019 by the State Bank of Vietnam amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN dated March 20th, 2015 of the Governor of the State Bank of Vietnam guiding the implementation of a number of articles of Decree No. 26/2014/ND-CP on April 7th, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities (hereinafter referred to as the “Circular No. 08/2019/TT-NHNN”)

v  Effective date: 19/08/2019.

Some contents should be noted:

· Firstly, amending and supplementing regulations on assignment of inspection responsibilities to the inspected entities.

Specifically, Clause 1 Article 1 of Circular No. 08/2019/TT-NHNN stipulates: “Article 1. Amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN

1. Article 4 is amended and supplemented as follows:

“Article 4. Assignment of inspection responsibilities to inspected entities

1. The Central Banking Inspection and Supervision Authorities shall have to inspect according to provisions of law on the following inspected entities:

a) Agencies, organizations and individuals under the management of the State Bank, except those managed by the State Bank branch under the assignment of the State Bank Governor;

b) Commercial banks with 100% charter capital owned by the State;

c) Policy bank;

d) Cooperative bank;

dd) Joint venture bank;

e) Banks with 100% foreign capital;

g) A number of branches of foreign banks as assigned by the Governor of the State Bank;

h) Joint stock commercial bank;

i) Non-bank credit institutions;

k) Microfinance institutions;

l) A number of microfinance programs and projects as assigned by the Governor of the State Bank;

m) Organizing of credit information activities;

n) Vietnam Asset Management Company;

o) Deposit Insurance of Vietnam;

p) National Banknote Printing Plant;

q) National Payment Corporation of Viet Nam;

r) Subsidiaries of credit institutions stipulated in Points b, d, dd, e and h of this Clause where this subsidiary is not a credit institution but under the inspection responsibility of the State Bank, except for entities under the inspection responsibility of the State Bank branch's inspection and supervision;

s) The entities of inspection under the inspection responsibility of the State Bank branch's inspection and supervision in case of re-inspection or when necessary and under the direction of the Governor of the State Bank;

t) Other entities assigned by the Governor of the State Bank.

2. Inspection and supervision of the branch of the State Bank shall be responsible for inspection in accordance with the law for the following banking inspected entities:

a) Agencies, organizations and individuals under the management of the State Bank branch;

b) Branches of foreign banks which are headquartered in provinces and cities where branches of the State Bank are located (hereinafter referred to as provinces and cities), except for statues prescribed at Point g, Clause 1 of this Article;

c) The attached units of the inspected entities are under the inspection responsibility of the Banking Inspection and Supervision Agency as prescribed in Clause 1 of this Article (except for subjects specified at Points p and q, Clause 1 of this Article) of the Inspection and Supervision of other branches of State Bank in which this subsidiaries are headquartered in the province and city;

d) People's credit funds which are headquartered in the provinces or cities;

dd) Microfinance programs and projects in the province or city, except for subjects specified at Point 1, Clause 1 of this Article;

e) Representative offices of foreign credit institutions and other foreign organizations with banking activities based in the province or city;

g) Organizations with foreign exchange activities and gold business activities; non-banking intermediary service providers based in the province or city, except for subjects specified at Point q, Clause 1 of this Article;

h) Other agencies, organizations and individuals in the province or city are obliged to abide by law provisions in the domains under the State management scope of the State Bank;

i) Reporting subjects fall under the State management responsibility of the State Bank in their provinces and cities according to the provisions of law on the prevention of money laundering outside the subjects prescribed at Points b and c, d, dd, e, g, h This clause;

k) Other entities assigned by the Governor of the State Bank.

3. Inspection and supervision of the State Bank branch shall conduct inspections of inspected entities under the inspection responsibility of the State Bank's inspection and supervision of other branches under the direction of the Governor of the State Bank."".

·  Secondly, amending and supplementing regulations on assignment of supervisory responsibilities to the supervised entities.

Specifically, Clause 2 Article 1 of Circular No. 08/2019/TT-NHNN stipulates: “Article 1. Amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN

…

2. Article 5 is amended and supplemented as follows:

“Article 5. Assignment of supervisory responsibilities to supervised entities

1. The Central Banking Inspection and Supervision Authority shall be responsible for supervising micro-security according to the provisions of law for the following supervised entities:

a) Commercial banks with 100% charter capital owned by the State;

b) Cooperative bank;

c) Joint venture bank;

d) Banks with 100% foreign capital;

dd) Branches of foreign banks as stipulated at Point g Clause 1 Article 4 of this Circular;

e) Joint stock commercial bank;

g) Non-bank credit institutions;

h) Microfinance institutions;

i) Other entities assigned by the Governor of the State Bank;

2. Inspection and supervision of the branch of the State Bank shall be responsible for supervising micro-security in accordance with the law for the following banking supervised entities:

a) Branches of foreign banks which are headquartered in provinces and cities, except for statues prescribed at Point dd, Clause 1 of this Article;

b) The attached units of the supervised entities are under the supervision responsibility of the Banking Inspection and Supervision Authorities as prescribed in Clause 1 of this of the Inspection and Supervision of other branches of State Bank in which this subsidiaries are headquartered in the province and city;

c) People's credit funds which are headquartered in the provinces or cities;

d) Other entities assigned by the Governor of the State Bank.

3. The Central Banking Inspection and Supervision Authority shall perform macro safety supervising for the whole system of credit institutions and branches of foreign banks.

4. The Central Banking Inspection and Supervision Authority shall supervise according to the provisions of law for the following entities:

a) Policy bank;

b) Vietnam Asset Management Company;

c) Deposit Insurance of Vietnam;

d) Organizing of credit information activities;

dd) Subsidiaries of credit institutions stipulated in Points a, b, c, d, e, g of Clause 1 of this Article where this subsidiary is not a credit institution but under the inspection responsibility of the State Bank, except for entities under the inspection responsibility of the State Bank branch's inspection and supervision;

e) Other entities assigned by the Governor of the State Bank.

5. Inspection and supervision of the branch of the State Bank shall supervise the following entities according to law provisions:

a) The attached units of the supervised entities fall under the supervisory responsibility of the Central Banking Inspection and Supervision Authority prescribed in Clause 4 of this Article, which have their head offices located in the provinces or cities.

b) Other entities assigned by the Governor of the State Bank.””.

·     Thirdly, annulling the regulations on the relationship between the Banking Inspection and Supervision Department with the branch of State Bank in the locality stipulated in Article 12 of Circular No. 03/2015/TT-NHNN.

Specifically, Article 2 of Circular No. 08/2019/TT-NHNN stipulates: “Article 2. Annulling Article 12 of Circular No. 03/2015/TT-NHNN.”

1.2. Consolidated document No. 17/VBHN-NHNN in 2019 consolidated Circulars guidance for Decree 26/2014/ND-CP on organizational structure and operation of banking inspection and supervision authorities

v  Name of legal document: Consolidated document No. 17/VBHN-NHNN in 2019 consolidated Circulars guidance for Decree 26/2014/ND-CP on organizational structure and operation of banking inspection and supervision authorities

v  Consolidated date: 12/07/2019.

The content should be noted:

Consolidating the provisions stipulated at Circular No. 03/2015/TT-NHNN dated March 20, 2015 of the Governor of the State Bank of Vietnam guiding the implementation a number of articles of Decree No. 26/20143/ND-CP dated 07/04/2014 on organizational structure and operation of banking inspection and supervision authorities, effective from May 7, 2015, amended and supplemented by Circular No. 08/2019/TT-NHNN dated July 4, 2019 of the Governor of the State Bank of Vietnam amending and supplementing a number of articles of Circular No. 03/2015/TT-NHNN dated March 20, 2015 of the Governor of the State Bank of Vietnam guides the implementation of a number of articles of Decree No. 26/2014/ND-CP dated April 7, 2014 of the Government on organizational structure and operation of banking inspection and supervision authorities, effective from August 19, 2019.