MONTHLY LEGAL UPDATE – 10/2019: LEGAL UPDATE RELATING TO FINANCE AND CREDIT
1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/10/2019
1.1. Circular No. 11/2019/TT-NHNN regulations on special control for credit institutions
v Name of legal document: Circular No. 11/2019/TT-NHNN issued on 02/08/2019 by the Governor of the State Bank of Viet Nam NHNN regulations on special control for credit institutions (referred to as the “Circular No. 11/2019/TT-NHNN”).
v Effective date: 01/10/2019.
The content should be noted: providing the form of special control.
Specifically, Article 7 of
Circular No. 11/2019/TT-NHNN stipulates: “Article
7. Special forms of control
1. Based on the actual situation and level of risks in operations of
the credit institution, the Governor of the State Bank or the Director of the
branch of State Bank shall consider and decide:
a) Put credit institutions under special control in the form of special
supervision or comprehensive control;
b) The content, scope, measures and tasks of control of activities are
specified in the Decision of special control, in accordance with the form of
special control and content specified in Clause 1, Article 15[1]
of this Circular.
2. Special supervision means the placement of a credit institution
under the direct control of the State Bank through direct, remote direct
control and on-spot inspection by the special control committee for the
operation of the credit institution is under special control.
3. Comprehensive control means the placing of a credit institution
under the direct control of the State Bank through the direct control and
on-spot control of the Special Control Board for daily activities of Credit
institutions are under special control.
4. The form of special control is changed as follows:
a) Based on the actual situation and level of risks in operations of the credit institution under special control, the Special Control Board shall propose the Governor of the State Bank (via The Central Banking Inspection and Supervision Authority) change the form of special control to the credit institution under special control specified in Clause 1, Article 6[2] of this Circular or propose the Director of the branch of State Bank to change the form of special control for with credit institutions under special control specified in Clause 2, Article 6 of this Circular;
b) Within 20 days after receiving the recommendations of the Special Control Board specified at Point a of this Clause, the Governor of the State Bank or the Directors of the branches of State Bank shall consider and decide to change the forms of special control for credit institutions are under special control according to their competence prescribed in Article 6 of this Circular.”
1.2. Circular No. 13/2019/TT-NHNN amending and supplementing a number of articles of Circular related to licensing, organization and operation of credit institutions and branches of foreign banks.v Name of legal document: Circular No. 13/2019/TT-NHNN issued on 21/08/2019 by the Governor of the State Bank of Viet Nam NHNN amending and supplementing a number of articles of Circular related to licensing, organization and operation of credit institutions and branches of foreign banks (referred to as the “Circular No. 13/2019/TT-NHNN”).
v Effective date: 05/10/2019.
Some content should be noted:
·
Firstly, amending
and supplementing regulations on procedures for approval for
provisional lists of personnel of credit institutions and branches of foreign
banks.
Specifically, Clause 8 Article 2
Circular No. 13/2019/TT-NHNN stipulates: “Article
2. Amending and supplementing a number of articles of Circular No.
22/2018/TT-NHNN dated September 5, 2018 of the Governor of the State Bank of
Vietnam guidelines for procedures and application for approval for provisional
lists of personnel of commercial banks, non-bank credit institutions and
foreign banks’ branches (hereinafter referred to as Circular No. 22/2018/TT-NHNN)
…
8. Article 8 is amended and supplemented as follows:
“Article 8. Procedures for approval for provisional lists of personnel
of credit institutions and foreign banks’ branches
1. The credit institution or foreign bank’s branch shall prepare an
application as prescribed in Articles 6 and 7 of this Circular and submit it to
the State Bank for the subjects specified in Clause 1, Article 4 of this
Circular or the branches of State Bank for the subjects defined in Clause 2,
Article 4 of this Circular. If the application is unsatisfactory, within 07
working days from the receipt of the application, the State Bank (Central
Banking Inspection and Supervision Authority) shall request the credit
institution or foreign bank’s branch in writing to complete it.
2. The credit institution or foreign bank’s branch shall complete the
application at the request of the State Bank (Central Banking Inspection and
Supervision Authority) or the branches of State Bank within up to 45 working
days from the date on which additional documents are requested in writing by
the State Bank (Central Banking Inspection and Supervision Authority). After
the aforementioned time limit, the credit institution or foreign bank’s branch
shall re-submit an application as prescribed in this Circular to the State Bank
or the branches of State Bank for consideration and approval.
3. Within 30 working days from the receipt of satisfactory application
prescribed in Articles 6 and 7 of this Circular, the State Bank shall send a
written approval or written rejection of the provisional list of the credit
institutions or foreign bank’s branch. In case of rejection, a written
explanation of the State Bank or the branches of State Bank shall be provided.””
· Secondly, amending and supplementing regulations on complying with
reporting regulations
Specifically, Clause 9 Article 2 of Circular No.
13/2019/TT-NHNN stipulates: “Article
2. Amending and supplementing a number of articles of Circular No.
22/2018/TT-NHNN dated September 5, 2018 of the Governor of the State Bank of
Vietnam guidelines for procedures and application for approval for provisional
lists of personnel of commercial banks, non-bank credit institutions and
foreign banks’ branches (hereinafter referred to as Circular No. 22/2018/TT-NHNN)
…
9. Article 11 is amended and
supplemented as follows:
“Article 11. Complying with
reporting regulations
1. Credit institutions and branches
of foreign banks shall promptly notify in writing to the State Bank of changes
related to the satisfaction of criteria and conditions of the personnel to be
elected or appointed arising in the course of the State Bank's consideration of
dossiers of application for approval of the list of personnel plans or from the
date the State Bank issues written approval of the lists of expected personnel
until the personnel are elected, appointed in accordance with the following
provisions:
a) For credit institutions and
branches of foreign banks defined in Clause 1, Article 4 of this Circular: send
to the Central Banking Inspection and Supervision Authority;
b) For branches of foreign banks
prescribed in Clause 2, Article 4 of this Circular: send to the branch of State
Bank where the branch of foreign bank is located.
2. Within 10 working days after the
election, appointment of titles of Chairman and members of the Board of
Directors, Chairman and members of the Board of members, Head and members of
the Control Board, General Director Directors (directors), credit institutions
and branches of foreign banks must send written notices to the State Bank as
prescribed at Points a and b, Clause 1 of this Article on the list of elected
and appointed persons according to the form in Appendix 03 attached to this
Circular. ”.”
·
Thirdly, amending
and supplementing regulations on responsibilities of the
Central Banking Inspection and Supervision Authority
Specifically, Clause 10 Article 2 of Circular
No. 13/2019/TT-NHNN stipulates: “Article
2. Amending and supplementing a number of articles of Circular No.
22/2018/TT-NHNN dated September 5, 2018 of the Governor of the State Bank of
Vietnam guidelines for procedures and application for approval for provisional
lists of personnel of commercial banks, non-bank credit institutions and
foreign banks’ branches (hereinafter referred to as Circular No. 22/2018/TT-NHNN)
…
9. Clause 1 Article 121 is amended and
supplemented as follows:
“1. The Central Banking Inspection and Supervision Authority shall be
the focal point to assess the fulfillment of dossiers, standards and conditions
of expected personnel of credit institutions and foreign bank branches subject
to regulation stipulated in Clause 1, Article 4 of this Circular according to
the provisions of the Law on Credit Institutions and this Circular; get
opinions from related units ; sum up and submit to the Governor of the State
Bank for consideration, written approval or disapproval of expected personnel
of the credit institution, branches of foreign banks. “.”
v Name of legal document: Circular No. 14/2019/TT-NHNN issued on 30/08/2019 by the Governor of the State Bank of Viet Nam NHNN amendments to a number of articles in circulars of the State bank of Vietnam regulating regular reporting regime (referred to as the “Circular No. 14/2019/TT-NHNN”).
v Effective date: 15/10/2019.
Some content should be noted:
·
Firstly, amending the report on
vault safety.
Specifically,
Clause 4 Article 1 Circular No. 14/2019/TT-NHNN stipulates:“Article 1. Amendments to provisions of
reporting regime
…
4. Amendments to the reporting regime of vault safety under
Circular No. 01/2014/TT-NHNN dated January 06, 2014 of the Governor of the
State bank of Vietnam on transfer, reception, preservation and delivery of
cash, valuable assets and financial instruments (hereinafter referred to as
“Circular No. 01/2014/TT-NHNN"):
Article 69 of Circular 01/2014/TT-NHNN is revised as follows:
“Article 69. Report on vault safety
Annually, the branches of the State Bank, the credit institutions and
the foreign bank branches shall report on the vault safety as follows:
1. The report contents: Report on the facts, implementation
results, the weaknesses in the vault safety.
2. The report accepting agencies and deadline:
- The reports of the credit institutions, foreign bank branches
submitted to the branches of the State Bank located in their areas and the
superior credit institutions, foreign bank branches (if any) before January 01
of the year following the report year.
- The branches of the State Bank, the credit institutions, foreign
bank branches shall consolidate the report and submit to the State Bank (Issue
and Vault Department) before January 15 of the year following the report year.
3. The report submission and reception methods: The report must be
produced in physical form and sent directly or via postal service.
4. The data collection period: From December 15 of the year
preceding the year of the reporting period to December 14 of the reporting
period.
5. The report form: Using Form No. 01 issued together with this
Circular.””
·
Secondly, amending the regular reports on the management and use of digital
certificates.
Specifically, Clause 6 Article 1 Circular No. 14/2019/TT-NHNN stipulates:
“Article 1. Amendments to provisions of
reporting regime
…
6. Amendments
to the reporting regime of the management and use of digital certificates of
State Bank under Circular No. 28/2015/TT-NHNN dated December 18, 2015 of the
Governor of the State bank of Vietnam on management, use of digital signatures,
digital certificates and digital signature certification service of State Bank
(hereinafter referred to as “Circular No. 28/2015/TT-NHNN”):
Clause
1 Article 17 of Circular No. 28/2015/TT-NHNN is revised as follows:
“1.
The regular reports on the management and use of digital certificates:
a)
Name of the reports: report on reconciliation of the State Bank digital
certificate list.
b)
Contents of the reports: The list of digital certificates issued by the
certification authorities affiliated to the State Bank and the use conditions
thereof.
c)
Regulated entities: The units affiliated to the State Bank, the credit
institutions, the foreign bank branches, the State Treasury, the Deposit
Insurance of Vietnam and other organizations issued with the digital
certificates by the State Bank.
d)
Recipient of the reports: The Information Technology Department – the State
Bank.
e)
Submission and receipt methods of the reports:
- Physical
reports must be submitted directly or via the postal service;
- The
electronic reports in Excel format must be submitted to the email address
ca.nhnn@sbv.gov.vn or the electronic reports must be submitted via the online
public services of the State Bank.
g)
Submission frequency and deadline for the reports: on a 6-month basis, on June
20 and December 20 of the reporting year at the latest.
h)
Data collection period:
- The
data collection period with respect to the reports of the first 06 months of
the year shall be determined from December 15 of the year preceding the
reporting period to June 15 of the reporting period.
- The
release period of final report figures with respect to the reports of the last
06 months of the year shall be determined from June 15 to December 14
inclusively of the reporting period.
i) The
report form: Using Form No. 09 issued together with this Circular.””
2. LEGAL DOCUMENTS ISSUED IN 09/2019
2.1. Consolidated document No. 28/VBHN-NHNN in 2019 consolidated Circulars providing regulations on time limits, processes and procedures for transition applied to cases in which major shareholders of a credit institution and related persons thereof own shares equalling at least 5% of charter capital of another credit institution
v Name of legal document: Consolidated document No. 28/VBHN-NHNN in 2019 consolidated Circulars providing regulations on time limits, processes and procedures for transition applied to cases in which major shareholders of a credit institution and related persons thereof own shares equalling at least 5% of charter capital of another credit institution
v Consolidated date: 16/09/2019.
The content should be noted:
[1]
“Article
15. Tasks and powers of the Special Control Board
1. The Special Control Board performs the
tasks and powers prescribed in Article 146b of the Law on Credit Institutions
(amended and supplemented in 2017). The special control board shall perform its
tasks and powers through one or several of the following activities:
a) Request the specially controlled
credit institution to provide complete, accurate and timely information,
documents and records related to the operations of the specially controlled
credit institution, including the following information, documents, records:
(i) Financial situation, actual value of
charter capital and reserve funds;(ii) Actual situation on organization,
personnel, management, administration, information technology system and
internal control system;
(iii) Actual situation of operation,
business, investment; solvency when due;
(iv) Situation of assets and collaterals,
in which specific reports on bad debt situations, bad receivable debts,
potential structural debts become bad debts, bad debts sold to the Management
Company unresolved assets, accrued interests must be withdrawn as prescribed by
law but not yet withdrawn;
(v) List of customers (excluding credit
institutions, branches of foreign banks) receiving credit; list of
organizations and individuals sending money; other creditors;
(vi) Other information serving the
performance of tasks of the Special Control Board.
b) Requesting the specially controlled
credit institution to inventory existing cash and cash equivalents in the whole
system on the principle of performing cross-checking, cross - supervising and
reporting on performance results within 05 days after completing the inventory;
c) Organizing the supervision of the
inventory process specified at Point b of this Clause in accordance with the
reality and operation scope of the credit institution under special control;
d) In the period where there is no plan
for restructuring or restructuring the credit institution under special control
that has not been approved by the competent authority, based on the
information, documents and records approved by the group. Specially controlled
credit institutions provided for in points a and b of this clause or
information from independent audit reports, inspection conclusions and other
sources of information, Special Control Board assesses the operational status
of the credit institution under special control to actively implement or report
to the Governor of the State Bank (via the Central Banking Inspection and
Supervision Authority) or the Director of the State Bank branch handling measures
in accordance with the reality of specially controlled credit institutions;
dd) Approving before the credit
institution under special control performs a number of transactions and
operations;
f) Requesting the specially controlled
credit institution to report its operation results according to the contents
and frequency suitable to the reality of the specially controlled credit
institution;
g) Deciding to attend the meetings of the
Board of Directors, Board of Members, Board of Controllers of the credit
institution that are under special control and give opinions on the contents of
the meeting related to powers, duties of the special control committee;
h) Directing, inspecting, supervising and
controlling the operations of the credit institution under special control to
prevent the hiding, dispersing, pledging, mortgaging, and transferring of
assets and other acts that may cause damage to specially controlled credit
institutions;
i) Periodically as prescribed in the
Decision of special control or when necessary or at the request of the Governor
of the State Bank, Director of the State Bank branch, report to the Governor of
the State Bank (via the Central Banking Inspection and Supervision Authority,
for Special Control Boards of credit institutions under special control
specified in Clause 1, Article 6 of this Circular) or Directors of the branches
of State Bank (for the Special Control Board of a credit institution under
special control specified in Clause 2, Article 6 of this Circular) the situation
of management, administration, operation, business, investment, finance,
liquidity and other issues (if any) of the credit institution under special
control and recommendations and handling measures (if any); results,
difficulties and obstacles in the course of implementing the restructuring
plan, already approved by the competent authorities, and proposing and
proposing handling measures (if any);
k) Promptly reporting to the Governor of
the State Bank (via the Central Banking Inspection and Supervision Authority,
for the Special Control Board of the specially controlled credit institution
specified in Clause 1, Article 6 of the Circular) this Circular) or the
Directors of the branches of the State Bank (for the Special Control Board of
the credit institution under special control specified in Clause 2, Article 6
of this Circular) unusual developments in activities, potential risks, risks of
unsafety and law violations of credit institutions under special control;
difficulties and obstacles arising in the process of special control of the
credit institution and recommendations, recommendations for handling measures;
l) Promptly notifying the credit
institution under special control to information and direction of competent
authorities relating to operations and restructuring plans.
m) Other duties assigned by the Governor
of the State Bank or the Directors of the branches of the State Bank.”
[2]
“Article 6.
Competence to make decisions in the special control of the credit institution
1. The Governor of the State Bank shall
consider and decide the following contents regarding credit institutions which
are not People's Credit Funds:
a) Putting credit institutions in the
cases specified in Clause 1, Article 145 of the Law on Credit Institutions
(amended and supplemented in 2017), Article 4 and Article 5 of this Circular
into special control;
b) Forms of special control prescribed in
Article 7 of this Circular;
c) Establishing of a special control
board under the provisions of Articles 14 and 15 of this Circular;
d) Duration of special control;
dd) Noticing of special control as
prescribed in Article 9 of this Circular;
e) Disclosing special control information
in accordance with Article 10 of this Circular;
g) Actual value of charter capital and
reserve funds, record reduction of charter capital of commercial banks subject
to special control approved by the Government for compulsory transfer as
prescribed in Article 11 of this Circular;
h) Extending of the term of special
control as prescribed in Article 12 of this Circular;
i) Terminating special control as
prescribed in Article 13 of this Circular;
k) Other contents specified in the Law on
Credit Institutions (amended and supplemented in 2017) and this Circular.
2. Directors of branches of State Bank in
provinces, cities under the central Government's management (hereinafter
referred to as branches of the State Bank) shall consider and decide on the
following issues for credit institutions being People's Credit Funds are
headquartered in the area:
a) The contents specified at Points a, b,
c, d, dd, e, h and i, Clause 1 of this Article;
b) The contents specified at Points a and
b, Clause 3, Article 146; Clauses 1, 2, 3, 4, 5 and 7 of Article 146a (except
for the contents of special loans, extension of special loan terms of the State
Bank); Clauses 2 and 6, Article 146dd; Points a, b and d, Clause 2, Article
148b; Clauses 2, 3 and 4 (except for the case specified in Clause 3 of this
Article) Article 148c; Clauses 2, 3, 4, 5, 6 and 11 of Article 148d; Clauses 1
and 2, Article 149c and Clauses 1 and 2, Article 149d of the Law on Credit
Institutions (amended and supplemented in 2017).
For the contents specified at Point dd,
Clause 2, Article 148b; Clauses 7 and 12, Article 148, and Clause 3, Article
149c of the Law on Credit Institutions (amended and supplemented in 2017), the
Directors of the branches of the State Bank reports to the Governor of the
State Bank (via the Central Banking Inspection and Supervision Authority) to
approved before implementation.
3. The Directors of the branches of the
State Bank report and propose the Governor of the State Bank (via the Central
Banking Inspection and Supervision Authority) to propose the Government to
implement the contents specified in Clause 1, Article 146 of the Law on Credit
Institutions (amended and supplemented in 2017) for credit institutions being
People's Credit Funds are headquartered in the area.”
