CIRCULAR

APPLICATIONS AND PROCEDURES FOR GRANTING APPROVAL FOR CHANGES OF COMMERCIAL BANKS AND FOREIGN BRANCH BANKS

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and Law on amendments to some Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017 defining functions, tasks, entitlements and organizational structure of the State Bank of Vietnam;

At the request of the Chief Inspector of the Banking Supervision Agency;

The Governor of the State Bank of Vietnam hereby promulgates a Circular on applications and procedures for granting approval for changes of commercial banks and foreign branch banks.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

1. This Circular provides for:

a) Applications and procedures for granting approval for changes, amendments to the incorporation and operation license of commercial banks, license for incorporation of foreign bank branches (hereinafter referred to as “the License”). To be specific:

(i) Renaming and relocation of headquarters of a commercial bank; renaming and relocation of a foreign branch bank (hereinafter referred to as “FBB”);

(ii) Increase in charter capital of a commercial bank and provided capital of a FBB;

(iii) Extension of the incorporation license;

b) Applications and procedures for granting approval for changes of a commercial bank or FBB:

(i) Sale or transfer of stakes of the owner of a single-member limited liability commercial bank; sale or transfer of stakes of the capital contributor of a multi-member limited liability commercial bank;

(ii) Sale or transfer of a major shareholder’s shares; sale or transfer of shares that results in a conversion into a major shareholder of a commercial bank;

(iii) Suspension of business for 05 working days or more, except suspension due to force majeure events.

2. The sale or transfer of shares or stakes that result in changing legal form of a commercial bank shall comply with regulations of the State Bank and relevant regulations of law.

3. The sale or transfer of 100% of stakes/charter capital of an acquired commercial bank shall comply with Clause 3 Article 3 of the Law on Amendments to some Articles of the Law on Credit Institutions dated November 20, 2017.

4. Foreign investors who purchase shares of Vietnamese commercial banks shall be subject to legislation on foreign investors' purchases of shares of Vietnamese credit institutions.

Article 2. Regulated entities

1. Commercial banks.

2. FBBs.

3. Organizations and individuals involved in applications and procedures for granting approval for changes of commercial banks and FBBs specified in this Circular.

Article 3. Rules for preparing and submitting applications for approval for changes

1. 01 application shall be prepared in Vietnamese language.  In case documents included in the application are prepared in a foreign language, they shall be consularly legalized as prescribed by Vietnamese law (except except for the cases in which consular legalization is exempted by the law on consular legalization) and translated into Vietnamese language. Translations from a foreign language into Vietnamese language shall be notarized or signature of the translator shall be notarized as prescribed by law.

2. For the copied documents, commercial banks and FBBs shall submit copies from the master registers or certified true copies or copies presented together with their originals for comparison purpose. In case the applicant submits copies presented together with their originals for comparison purpose, the person comparing the documents must affix his/her confirmation and signature onto the copies and is held liable for the accuracy of the copies against the originals.

3. The application form shall be signed by the legal representative of the commercial bank or FBB. If the application is signed by an authorized person, it must be enclosed with a power of attorney made as prescribed by law.

4. The application shall be submitted, directly or by post, to the State Bank of Vietnam (through the Banking Supervision Agency) or the authorized State Bank branch of a province or city (hereinafter referred to as “the State Bank”).

Article 4. The power to grant approval for changes

1. The Governor of the State Bank shall grant approval for changes specified in Clause 1 Article 1 of this Circular, of large-scale commercial banks and FBBs under the decision of the Governor of the State Bank of Vietnam.

2. The Director of State Bank branch of the province or city shall grant approval for changes specified in Clause 1 Article 1 of this Circular, of FBBs that are located within the province or city, except for the case specified in Clause 1 of this Article.

Chapter II

APPLICATIONS AND PROCEDURES FOR GRANTING APPROVAL FOR CHANGES OF COMMERCIAL BANKS AND FBBS

Article 5. Renaming

1. An application includes:

a) An application form, which contains at least:

(i) Current name;

(ii) Name expected to be changed, which shall comply with relevant regulations on naming;

(iii) Reasons for renaming;

b) A resolution or decision on approval for renaming of commercial bank of the General meeting of shareholders in case of a joint stock commercial bank, a resolution or decision on approval for renaming of commercial bank of the Board of Members in case of a multi-member limited liability commercial bank, an owner’s decision on approval for renaming of commercial bank in case of a single member limited liability commercial bank; a parent bank’s written approval for renaming of FBB in Vietnam.

2. Procedures for granting approval:

a) The commercial bank or FBB shall submit an application to the State Bank. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank shall request the commercial bank or FBB in writing to complete it.

b) Within 40 working days from the receipt of the satisfactory application, the State Bank shall consider amending the license. In case of rejection of the application, the State Bank shall respond and provide explanation in writing.

Article 6. Relocation of headquarters of commercial bank and relocation of FBB within the same province or city where commercial bank’s headquarters is located or FBB is located

1. An application includes:

a) An application form, which contains at least:

(i) Current location;

(ii) New location;

(iii) Reasons for relocation;

(iv) A plan to install equipment at the new headquarters which satisfies the requirements of a headquarters in accordance with regulations of law;

(v) A headquarters relocation plan, which is aimed at ensuring continuous operation;

b) A resolution or decision on approval for headquarters relocation of the General meeting of shareholders in case of a joint stock commercial bank, a resolution or decision on approval for headquarters relocation of the Board of Members in case of a multi-member limited liability commercial bank, an owner’s decision on approval for headquarters relocation in case of a single member limited liability commercial bank; a parent bank’s written approval for relocation of FBB in Vietnam.

c) Documents proving the commercial bank or FBB has or will have the right to legally use the headquarters at its new location.

2. Procedures for granting approval:

a) The commercial bank or FBB shall submit an application to the State Bank. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank shall request the commercial bank or FBB in writing to complete it.

b) Within 25 working days from the receipt of the satisfactory application, the State Bank shall grant a written approval for relocation of headquarters of the commercial bank or relocation of the  FBB. In case of rejection of the application, the State Bank shall respond and provide explanation in writing.

The State Bank’s written approval shall be valid for 12 months from the date on which it is signed.

3. At least 30 working days before the expected date of operating at the approved location, the commercial bank or FBB shall submit an application form for amendment to the License regarding the relocation of commercial bank’s headquarters or relocation of FBB, specifying the date of starting to operate at the approved location and its compliance with all requirements of a headquarters as prescribed by law.

4. Within 15 working days from the receipt of the application form specified in Clause 3 of this Article, the State Bank shall decide to amend the License regarding the relocation of commercial bank’s headquarters or relocation of FBB.

Article 7. Relocation of headquarters of commercial bank and relocation of FBB to another province or city where commercial bank’s headquarters is located or FBB is located

1. An application includes:

a) In case of the commercial banks: The documents specified in Clause 1 Article 6 of this Circular.

b) In case of the FBB:

(i) The documents specified in Clause 1 Article 6 of this Circular;

(ii) A business plan for the first 03 years of operation, which contains at least: forecasted demands for banking services at the new location; expected business strategy and changes in business strategy (if any); expected income in the first 03 years of operating at the new location and relevant descriptions.

2. Procedures for granting approval:

a) The commercial bank or FBB shall submit an application to the State Bank. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank shall request the commercial bank or FBB in writing to complete it.

b) Within 25 working days from the receipt of the satisfactory application, the State Bank shall grant a written approval for relocation of headquarters of the commercial bank or relocation of the  FBB. In case of rejection of the application, the State Bank shall respond and provide explanation in writing.

3. The State Bank’s written approval shall be valid for 12 months from the date on which it is signed.

4. At least 30 working days before the expected date of operating at the approved location, the commercial bank or FBB shall submit an application form for amendment to the License regarding the relocation of commercial bank’s headquarters or relocation of FBB, specifying the date of starting to operate at the approved location and its compliance with all requirements of a headquarters as prescribed by law.

5. Within 15 working days from the receipt of the application form specified in Clause 4 of this Article, the State Bank shall decide to amend the License regarding the relocation of commercial bank’s headquarters or relocation of FBB.

Article 8. Change of address of headquarters of commercial bank and address of FBB in case of no change of its location

1. In case of change of address of headquarters of commercial bank and address of FBB without changing its location, the commercial bank or FBB shall submit an application form for change of address and documentary evidences for change of address to the State Bank (except for the case in which address is changed due to change of administrative division).

2. Within 30 working days from the receipt of the application form, the State Bank shall decide to amend the License regarding the change of address of commercial bank’s headquarters or address of FBB.

Article 9. Extension of incorporation license

1. An application includes:

a) An application form, which contains at least:

(i) Expiration date of the license;

(ii) Requested extension;

(iii) Reason for extension;

b) A resolution or decision on approval for extension of the incorporation license of the General meeting of shareholders in case of a joint stock commercial bank, a resolution or decision on approval for extension of the incorporation license of the Board of Members in case of a multi-member limited liability commercial bank, an owner’s decision on approval for extension of the commercial bank’s incorporation license in case of a single member limited liability commercial bank; a parent bank’s written approval for approval for extension of the FBB’s incorporation license in Vietnam;

c) A general report on organizational structure and operation of the commercial bank or FBB in Vietnam, which specifies:

(i) Summary of operation in 03 consecutive years preceding the year in which the application is submitted, including main operational objectives related to capital structure, use of capital and income; organizational structure and operation of the management and internal audit apparatus and the internal audit system;

(ii) Expected business plan for the next 03 years.

2. Procedures for granting approval:

a) At least 06 months prior to the expiration date of the License, the commercial bank or FBB shall submit an application to the State Bank. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank shall request the commercial bank or FBB in writing to complete it.

b) Within 40 working days from the receipt of the satisfactory application, the State Bank shall decide to amend the License regarding the extension. In case of rejection of the application, the State Bank shall respond and provide explanation in writing.

Article 10. Suspension of business for 05 working days or more, except suspension due to force majeure events

1. An application includes:

a) An application form, which contains at least:

(i) Number of days and expected date of suspension of business;

(ii) Reasons and necessity for suspension of business;

(iii) Measures to be taken to minimize the effect of the business suspension on the rights and interests of customers;

b) A resolution or decision on approval for suspension of business of the Board of Directors in case of a joint stock commercial bank, a resolution or decision on approval for suspension of business of the Board of Members in case of a limited liability commercial bank, a decision on approval for suspension of business issued by the General Director of the FBB;

c) Documentary evidences for necessity for suspension of business.

2. Procedures for granting approval:

a) At least 45 working days prior to the expected date of suspension of business, the commercial bank or FBB shall submit an application to the State Bank. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank shall request the commercial bank or FBB in writing to complete it;

b) Within 30 working days from the receipt of the satisfactory application, the State Bank shall grant a written approval for suspension of business by the commercial bank or FBB. In case of rejection of the application, the State Bank shall respond and provide explanation in writing.

3. At least 07 working days prior to the date of suspension of business approved by the State Bank, the commercial bank or FBB shall publish a notification of its suspension of business, including information about the date and reasons for its suspension of business on its mass media, mass media of the State Bank and on a daily printed newspaper in 03 consecutive issues or an electronic newspaper of Vietnam.

Article 11. Increase in charter capital of joint stock commercial bank from the conversion of convertible bonds, additional charter capital reserve fund, share premium, retained earnings and other funds prescribed by law

1. An application includes:

a) An application form, which contains at least:

(i) Necessity for increase in charter capital;

(ii) Current charter capital, specifying the number of common shares, preference shares and treasury stocks; expected increase in charter capital;

(iii) Sources used for increasing charter capital;

(iv) Expected date of completing the increase in charter capital;

b) A resolution or decision of the General meeting of shareholders on approval for plan for increase in the charter capital of joint stock commercial bank from convertible bonds, additional charter capital reserve fund, share premium, retained earnings and other funds prescribed by law;

c)  The plan for increase in charger capital specified in Point b of this Clause shall contain at least:

(i) A plan for conversion of bonds into stocks, which includes: information about issued convertible bonds: number, face value and term of bonds; information about expected conversion of bonds into stocks: number of bonds, face value of bonds and rate of conversion (in case of increase in charter capital from conversion of convertible bonds into common stocks);

(ii) Information about the additional charter capital reserve fund, share premium, retained earnings and other funds determined according to the auditing result given by an independent audit firm; information about the amount of money from additional charter capital reserve fund, share premium, retained earnings and other funds which is used to increase charter capital (in case of increase in charter capital from the additional charter capital reserve fund, share premium, retained earnings and other funds);

(iii) A list of shareholders and holdings of shareholders that own shares whose value is at least 5% of voting share capital and of charter capital before and after the increase; list of shareholders and their related persons that own shares whose value is at least 20% of charter capital before and after the increase. These lists must include identity information (in case of an individual: full name and number of ID card or Citizen ID card or passport, place of issue, date of issue; in case of an organization: name of the organization, enterprise ID number, address of headquarters, full name of its legal representative, number of his ID card or Citizen ID card or passport, place of issue, date of issue) of shareholders and their related persons in accordance with regulations of law;

(iv) Information about the total holdings of foreign investors before and after the increase in charter capital.

2. Procedures for granting approval:

a) The commercial bank shall submit an application to the State Bank. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank shall request the commercial bank in writing to complete it;

b) Within 25 working days from the receipt of the satisfactory application, the State Bank shall grant a written approval for increase in charter capital. In case of rejection of the application, the State Bank shall respond and provide explanation in writing.

3. The State Bank’s written approval shall be valid for 12 months from the date on which it is signed.

4. The License shall be amended as follows:

a) Within 10 working days from the date of completing the issuance of stocks as prescribed by law, the commercial bank shall submit an application form for amendment to the License regarding the increase in charter capital and the following documents:

(i) State Securities Commission's document about the issuance of stocks;

(ii) Information specified in Points c(iii) and c(iv) Clause 1 of this Article after the completion of issuance of stocks.

b) Within 15 working days from the receipt of the application form, the State Bank shall decide to amend the License regarding the increase in charter capital.

Article 12. Increase in charter capital of joint stock commercial bank other than the cases specified in Article 11 of this Circular

1. An application includes:

a) An application form, which contains at least:

(i) Current charter capital and charter capital expected to be increased;

(ii) A commitment to notify share purchasers of rights and obligations of shareholders in accordance with regulations of the Law on Credit Institutions. To be specific:

- Take legal responsibility for the legitimacy of the sources of funding for purchasing shares; do not use credit extended by the credit institution or FBB to purchase shares; do not purchase shares in the name of another individual or juridical person in any form, unless it is authorized in accordance with law;

- Comply with regulations of the Law on Credit Institutions on the limits on ownership of shares by shareholders, shareholders and their related persons;

- Comply with regulations on major shareholders, major shareholders and their related persons;

(iii) In case the commercial bank’s increase in charter capital results in forming a major shareholder or turning a major shareholder to a common one, the application form must contain name of the shareholder and holdings before and after the increase in charter capital;

b) A resolution or decision of the General meeting of shareholders on approval for plan for increase in the charter capital of the commercial bank;

c) The plan for increase in the charter capital of the joint stock commercial bank specified in Point b of this Clause, which contains at least:

(i) Necessity for increase in charter capital;

(ii) Total charter capital expected to be increased; total face value, types of shares issued, share issuer; expected issuance and plan tailored for each issuance (if any);

(iii) Expected date of issuance and expected date of completing the issuance of additional stocks;

(d) A list of shareholders and holdings of shareholders that own shares whose value is at least 5% of voting share capital and of charter capital before and after the increase; list of shareholders and their related persons that own shares whose value is at least 20% of charter capital before and after the increase. These lists must include identity information of shareholders and their related persons as prescribed by law.

2. Procedures for granting approval, effective period of the written approval and amendment to the License regarding the increase in charter capital shall comply with Clauses 2, 3 and 4 Article 11 of this Circular.

Article 13. Increase in charter capital of limited liability commercial bank

1. An application includes:

a) An application form, which contains at least:

(i) Current charter capital and charter capital expected to be increased;

(ii) Necessity for increase in charter capital;

(iii) Information about the additional charter capital reserve fund, retained earnings and other funds determined according to the auditing result given by an independent audit firm; information about the amount of money from additional charter capital reserve fund, retained earnings and other funds which is used to increase charter capital (in case the sources of funding for increasing charter capital come from the additional charter capital reserve fund, retained earnings and other funds);

(iv) A commitment to use the lawful source of money of the owner or capital contributor to allocate or contribute (in case the sources of funding for increasing charter capital are additionally provided by the owner or a capital contributor);

b) A resolution or decision on approval for increase in charter capital of the Board of Members in case of a multi-member joint stock commercial bank, an owner’s decision on approval for increase in charter capital in case of a single member limited liability commercial bank, which contains at least:

(i) Total charter capital expected to be increased;

(ii) Expected stages of increase in charter capital;

(iii) Sources used for increasing charter capital;

(iv) expected date of completing the increase in charter capital;

c) In the cases where a multi-member limited liability commercial bank increases its charter capital from the contribution of the new capital contributors, apart from the documents specified in Points a and b of this Clause, the commercial bank shall submit the following documents:

(i) Regarding the new capital contributor that is a foreign credit institution:

- An audited financial statement of 05 years preceding the year in which the application is submitted and the latest financial statement by the time of submission;

- A copy of the incorporation and operation license or equivalent document;

- A document of a competent authority of the home country about the foreign credit institution, which contains at least: operations allowed to be carried out at the home country at the time of submission; compliance with law on banking and other regulations of law within 05 years preceding the year in which the application is submitted and by the time of submission; capital adequacy ratio and other ratios in accordance with regulations of the home country in the year preceding the year in which the application is submitted and by the time of submission; compliance with regulations on risk management and provision establishment in the year preceding the year in which the application is submitted and by the time of submission;

- A credit rating document issued by an international credit rating agency within 06 months before the time of submission of application;

- A charter;

- A report on establishment, operation and development orientations by the time of submission of applications;

- A document about expected election of representatives of contributions at the bank;

- A commitment to provide assistance in finance, technology, administration and operation to the bank, to ensure that the actual value of the bank’s charter capital is not smaller than legal capital and to comply with all regulations on operating safety in accordance with regulations of the State Bank;

- A commitment of the home country’s competent authority to ensure the ability to supervise all operations of the foreign credit institution (including operations of the limited liability bank to which capital is expected to be contributed) in accordance with international practice;

- A commitment that the new capital contributor is not a founding shareholder, owner, founding member or strategic shareholder of another Vietnamese credit institution;

(ii) Regarding the new capital contributor that is a Vietnamese commercial bank:

- A document about expected election of representatives of contributions at the bank, which provides identity information of such representatives;

- An audited financial statement of the year preceding the year in which the application is submitted and the latest financial statement by the time of submission;

- A report on compliance with the State Bank’s regulations on risk management and provision establishment at the time of submission; regulations on banking safety ratios in the year preceding the year in which the application is submitted and by the time of submission;

- A report on compliance with regulations on limits on purchase and holding of stocks of credit institutions in accordance with Clause 6 Article 103 of the Law on Credit Institutions.

- A report on minimum capital adequacy ratio and expected capital contribution and purchase of shares after the capital contribution.

- A commitment that the new capital contributor is not a founding shareholder, owner, founding member or strategic shareholder of another credit institution.

2. Procedures for granting approval for the increase in charter capital from retained earnings and other funds by a limited liability commercial bank are specified in Clause 2 Article 5 of this Circular.

3. Procedures for granting approval and effective period of the written approval for the increase in charter capital in case a limited liability commercial bank increases its charter capital from the additional contributions by the owner or capital contributor or contributions by new capital contributor are specified in Clauses 2 and 3 Article 11 of this Circular.

4. Amendment to the License after the State Bank grants an approval as prescribed in Clause 3 of this Article shall be amended as follows:

a) Within 15 working days from the date of completing the allocation and contribution of capital, the commercial bank shall submit an application form for amendment to the License regarding the increase in charter capital to the State Bank, which includes a report on the capital contributor’s contributions after the capital contribution and documents proving the contribution of capital by the owner or capital contributor for the purpose of increasing the charter capital;

b) Within 15 working days from the receipt of the application form, the State Bank shall decide to amend the License regarding the increase in charter capital.

Article 14. Increase in provided capital of FBB

1. An application includes:

a) An application form, which contains at least:

(i) Current provided capital and provided capital expected to be increased;

(ii) Necessity for increase in provided capital;

(iii) Information about the additional provided capital reserve fund, retained earnings and other funds determined according to the auditing result given by an independent audit firm; information about the amount of money from additional provided capital reserve fund, retained earnings and other funds which is used to increase provided capital (in case the sources of funding for increasing provided capital come from the additional provided capital reserve fund, retained earnings and other funds);

(iv) Capital expected to be additionally provided from the parent bank (in case sources of funding for increasing charter capital comes from the parent bank);

b) A parent bank’s written approval for the increase in provided capital of FBB in Vietnam, which contains at least:

(i) Total provided capital expected to be increased;

(ii) Expected stages of increase in provided capital (if any);

(iii) Sources of money used for increasing provided capital;

(iv) Expected date of completing the increase in provided capital.

2. Procedures for granting approval for the increase in provided capital from retained earnings and other funds by a FBB are specified in Clause 2 Article 5 of this Circular.

3. Procedures for granting approval for the increase in provided capital in case a FBB increases its provided capital from additional capital provided by the parent bank in accordance with Clause 2 Article 11 of this Circular.

The State Bank’s written approval shall be valid for 06 months from the date on which it is signed.

4. Amendment to the License after the State Bank grants an approval as prescribed in Clause 3 of this Article shall be amended as follows:

b) Within 15 working days from date of completing the increase in provided capital, the FBB shall submit an application form for amendment to the License regarding the increase in provided capital to the State Bank;

b) Within 15 working days from the receipt of the application form, the State Bank shall decide to amend the License regarding the increase in provided capital.

Article 15. Sale or transfer of 100% of stakes of an owner at a single member limited liability commercial bank

1. An application includes:

a) An application form, which contains at least:

(i) Name and address of headquarters of the owner and of the purchaser or the transferee;

(ii) Expected date of sale or transfer;

b) A written agreement on sale or transfer of stakes between the owner and the purchaser or the transferee;

c) Documents proving that the purchaser or the transferee satisfies the conditions applied to owners of single member limited liability commercial banks specified in Point c(i) Clause 1 Article 13 of this Circular.

2. Procedures for granting approval:

a) The commercial bank shall submit an application to the State Bank. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank shall request the commercial bank in writing to complete it;

b) Within 75 working days from the receipt of the satisfactory application, the State Bank shall grant a written approval for the sale or transfer. In case of rejection of the application, the State Bank shall respond and provide explanation in writing.

3. The State Bank’s written approval shall be valid for 03 months from the date on which it is signed.

4. Within 07 working days from the date of completing the sale or transfer, the commercial bank shall submit a report on sale or transfer enclosed with documents proving its completion of sale or transfer to the State Bank.

Article 16. Sale or transfer of stakes at a multi-member limited liability commercial bank

1. An application for sale or transfer of stakes to transferees that are capital contributors of the commercial bank includes:

a) An application form, which specifies:

(i) Name and address of headquarters of the seller, transferor, purchaser and transferee;

(ii) Proportion of sale or transfer of stakes; the holding and value of capital contributors’ stakes before and after sale or transfer of stakes;

(iii) Expected date of sale or transfer;

(iv) Reasons for sale or transfer;

b) A resolution or decision of the Board of Members of the commercial bank on the sale or transfer of stakes;

c) A written agreement on sale or transfer of stakes between the seller/transferor and the purchaser/transferee.

2. An application for sale or transfer of stakes of capital contributors to purchasers or transferees that are new capital contributors includes:

a) The documents specified in Clause 1 of this Article;

b) Documents proving that the purchasers or the transferees satisfy the conditions for purchase of stakes or receipt of transferred stakes of the multi-member limited liability commercial banks as prescribed by law, which include:

(i) Regarding the purchaser or transferee that is a foreign credit institution: documents specified in Point c(i) Clause 1 Article 13 of this Circular;

(ii) Regarding the seller or transferee that is a Vietnamese commercial bank: documents specified in Point c(ii) Clause 1 Article 13 of this Circular.

3. Procedures for granting approval, effective period of the written approval and report on completion of sale or transfer  are specified in Clauses 2, 3 and 4 Article 15 of this Circular.

Article 17. Sale or transfer of a major shareholder’s shares; sale or transfer of shares that results in a conversion into a major shareholder

1. An application for sale or transfer of a major shareholder’s shares includes:

An application form, which contains at least:

a) Information about the number, types and face value of the major shareholder's shares purchased, sold or transferred;

b) Information about the major shareholder involved in the sale or transfer of shares: identity information and title of the major shareholder (if the major shareholder is an individual) or title of the representative of the major shareholder (if the major shareholder is an organization) at the commercial bank, number of shares and ratio of voting shares being held to total voting share capital, number and ratio of common shares and preference shares (if any) being held to current charter capital and expected charter capital after the sale or transfer of shares;

c) Information about commitments and agreements related to holdings and restriction on transfer of shares of the major shareholder (if any);

d) Expected ratio of shares being held to charter capital of the major shareholder and related persons thereof after the sale or transfer of shares;

dd) Expected date of transaction.

2. An application for approval for sale or transfer of shares that result in a conversion into a major shareholder includes:

 An application form, which contains at least:

a) Information about the number, types and total face value of shares purchased or transferred;

b) Information about the purchaser and transferee: identity information, number and ratio of voting shares being held to total voting shares, number and ratio of common shares and preference shares (if any) being held to current charter capital and expected charter capital after the purchase or transfer of shares;

c) Expected ratio of shares being held to charter capital of the purchaser, transferee and related persons thereof after the purchase or transfer of shares;

d) Expected date of transaction;

dd) A commitment to notify the purchaser or transferee of shares of rights and obligations of the shareholder in accordance with regulations of the Law on Credit Institutions. To be specific:

(i) Take legal responsibility for the legitimacy of the sources of funding for purchasing shares; do not use credit extended by the credit institution or FBB to purchase shares; do not purchase shares in the name of another individual or juridical person in any form, unless it is authorized in accordance with law;

(ii) Comply with regulations of the Law on Credit Institutions on the limits on ownership of shares by shareholders, shareholders and their related persons;

(iii) Comply with regulations on major shareholders, major shareholders and their related persons;

3. Regarding the purchase of shares that results in a conversion into a major shareholder in case the joint stock commercial bank increases its charter capital, applications and procedures are specified in Article 12 of this Circular.

4. Procedures for granting approval and effective period of the written approval for sale or transfer are specified in Clauses 2 and 3 Article 15 of this Circular.

5. Within 07 working days from the end of the sale or transfer of shares, the commercial bank shall submit a report on sale or transfer of shares, which contains information specified in Points b and d Clause 1 of this Article to the State Bank.

Chapter III

IMPLEMENTATION CLAUSE

Article 18. Responsibilities of the Banking Supervision Agency

1. Take charge of receiving, appraising, consulting relevant units affiliated to the State Bank (if necessary), consolidating and submitting the changes specified in Articles 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17 within its power specified in Clause 1 Article 4 of this Circular to the Governor of the State Bank for consideration.

2. Submit the change and written opinions of the People’s Committee of the province or central-affiliated city about approval for the change specified in Article 7 of this Circular to the Governor of the State Bank for approval.

3. Take charge of receiving reports on the changes submitted by commercial banks and FBBs as prescribed in this Circular within its power specified in Clause 1 Article 4 of this Circular.

4. Take charge of requesting the Governor of the State Bank to decide to approve changes of large-scale FBBs as prescribed in Clause 1 Article 4 of this Circular.

Article 19. Responsibilities of State Bank branches of provinces and cities

1. Receive applications and grant approval for changes specified in Articles 5, 6, 8, 9, 10 and 14 within their power prescribed in Clause 2 Article 4 of this Circular.

2. Take charge of receiving reports on the changes submitted by commercial banks as prescribed in this Circular within its power specified in Clause 2 Article 4 of this Circular.

Article 20. Responsibilities of commercial banks and FBBs

1. Take legal responsibility of the accuracy, adequacy and truthfulness of the information provided in the application.

2. Complete applications at the request of the State Bank within 30 working days from date on which the State Bank makes its request in writing; By the aforementioned deadline, if the commercial bank or FBB fails to complete the applications as requested, the State Bank shall not consider granting approval for its changes.

3. Take other responsibilities prescribed in this Circular.

Article 21. Effect

1. This Circular comes into force from February 15, 2019.

2. The following documents shall cease to have effect:

a) Circular No. 06/2010/TT-NHNN dated February 26, 2010 of the Governor of the State Bank;

b) Circular No. 03/2007/TT-NHNN dated June 05, 2007 of the Governor of the State Bank.

Article 22. Implementation

Chief of Office, Chief Inspector of the Banking Supervision Agency, heads of affiliates of the State Bank of Vietnam, Directors of State Bank branches of provinces and cities, Presidents of Boards of Members, Chiefs of Boards of Supervisors and General Directors (Directors) of commercial banks, General Directors of FBBs are responsible for the implementation of this Circular./.

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