| OFFICE OF THE NATIONAL ASSEMBLY OF VIETNAM | SOCIALIST REPUBLIC OF VIETNAM |
| No. 07/VBHN-VPQH | Hanoi, December 12, 2017 |
LAW
CREDIT INSTITUTIONS
Law No. 47/2010/QH12 dated June 16, 2010 of the National Assembly on Credit Institutions, which comes into force from January 01, 2011 is amended by:
Law No. 17/2017/QH14 dated November 20, 2017 of the National Assembly on amendments to some Articles of Law on Credit Institutions, which comes into force from January 15, 2018.
Pursuant to the 1992 Constitution of Socialist Republic of Vietnam amended by Resolution No. 51/2001/QH10; the National Assembly promulgates the Law on Credit Institutions 1.
Chapter I
GENERAL PROVISIONS
Article 1. Scope
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Article 2. Regulated entities
This Law applies to:
1. Credit institutions;
2. Foreign bank branches;
3. Representative offices of foreign credit institutions and other foreign institutions engaged in banking operations;
4. Organizations and individuals related to establishment, organization, operation, special control, reorganization and dissolution of credit institutions; establishment, organization and operation of foreign bank branches and representative offices of foreign credit institutions and other foreign institutions engaged in banking operations.
Article 3. Application of the Law on Credit Institutions, international treaties, international commercial practices and relevant laws
1. The establishment, organization, operation, special control, reorganization and dissolution of credit institutions; and establishment, organization and operation of foreign bank branches and representative offices of foreign credit institutions and other foreign institutions engaged in banking operations shall comply with this Law and other relevant laws.
2. In case regulations on establishment, organization, operation, special control, reorganization and dissolution of credit institutions: and establishment, organization and operation of foreign bank branches and representative offices of foreign credit institutions and other foreign institutions engaged in banking operations in this Law and other laws are inconsistent, this Law shall be applied.
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4. Organizations and individuals engaged in banking operations are entitled to reach agreement on the application of commercial practices, including:
a) International commercial practices provided by the International Chamber of Commerce;
b) Other commercial practices which are not contrary to the Vietnamese law.
Article 4. Interpretation of terms
In this Law, the terms below are construed as follows:
1. Credit institution means an enterprise conducting one, some or all banking operations. Credit institutions include banks, non-bank credit institutions, microfinance institutions and people's credit funds.
2. Bank means a type of credit institution which may conduct all banking operations under this Law. According to their characteristics and operation objectives, banks include commercial banks, policy banks and cooperative banks.
3. Commercial bank means a type of bank which may conduct all banking operations and other business activities under this Law for profit purposes.
4. Non-bank credit institution means a type of credit institution which may conduct one or some banking operations under this Law, apart from receiving deposits from individuals and providing payment services via client accounts. Non-bank credit institutions include finance companies, financial leasing companies and other non-bank credit institutions.
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5. Microfinance institution means a type of credit institution which mainly conducts some banking operations to meet the needs of low-income individuals and households, and super small-sized enterprises.
6. People's credit fund means a credit institution voluntarily established by legal entities, individuals and households as a cooperative with a view to conducting some banking operations under this Law and the Law on Cooperatives for the main purpose of mutual assistance in development of production and business and life.
7. Cooperative bank means a bank of all people's credit funds established by people's credit funds and some legal entities by capital contribution under this Law for the main purposes of systematic link, financial support and capital regulation within the system of people's credit funds.
8. Foreign credit institution means a credit institution established overseas under a foreign law.
Foreign credit institutions may be commercially present in Vietnam in forms of representative offices, joint-venture banks, wholly foreign-owned banks, foreign bank branches, joint-venture finance companies, wholly foreign-owned finance companies, joint-venture financial leasing companies and wholly foreign-owned financial leasing companies.
Joint-venture and wholly foreign-owned banks are commercial banks; joint-venture and wholly foreign-owned finance companies are finance companies: and joint-venture and wholly foreign-owned financial leasing companies are financial leasing companies under this Law.
9. Foreign bank branch means a foreign bank's subsidiary without legal entity status. The foreign bank is liable for all of the branch's obligations and commitments in Vietnam.
10. Core capital comprises the actual value of a credit institution's charter capital or a foreign bank branch's provided capital, reserve funds and other certain liabilities as stipulated by the State Bank of Vietnam (herein after referred to as “State Bank”).
11. License may be a license for establishment and operation of a credit institution, or license for establishment of a foreign bank branch or a representative office of a foreign credit institution or another foreign institution engaged in banking operations, which is issued by the State Bank. The State Bank's document on amendments to a license is an integral part of the license.
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a) Deposit receipt;
b) Credit extension;
c) Provision of payment service via account.
13. Deposit receipt means an act of receiving money from an organization or individual in forms of demand or term deposit, savings deposit, issuance of deposit certificate, promissory note or Treasury bill, or receiving deposit in another form in the principle of full payment of principal and interest to a depositor as agreed.
14. Credit extension means an agreement that allows an organization or individual to use a sum of money or a commitment to allow use of a sum of money on the repayment principle by lending, discounting, financial lease, factoring, bank guarantee or another other credit extension operation.
15. Provision of payment service via account means provision of payment instrument; provision of service of payment by check, payment order, collection order, bank card, letter of credit or another payment service to each client via their account.
16. Lending means a form of credit extension whereby the lender gives or commits to give the borrower a sum of money for use for a specific purpose in a certain period as agreed upon on the principle of payment of both principal and interest.
17. Factoring means a form of credit extension to the seller or the buyer by purchasing the right to collect accounts receivables or payables derived from the sale of goods or provision of services under sale contracts or service contracts.
18. Bank guarantee means a form of credit extension whereby a credit institution undertakes to act on behalf of the client to fulfill their financial obligations to the obligee in the event the client fails to fulfill or insufficiently fulfills their obligations as agreed; the client shall have the obligation to repay the debt to the credit institution as agreed.
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20. Re-discounting means an act of discounting negotiable instruments and other valuable papers which have been discounted prior to their due date
21. Monetary brokerage means provision of intermediary services with fee collection to arrange the performance of banking and other business transactions between credit institutions and other finance institutions.
22. Payment account means a client's demand deposit account opened by the client at a bank for use of payment services provided by such bank.
23. Derivative product means a financial instrument valued by predicted changes in the value of a principal asset, including exchange rate, interest rate, foreign exchange, currency or another principal asset.
24. Credit institution's capital contribution or share purchase means a credit institution's contribution of capital to form the charter capital or purchase of shares of an enterprise or another credit institution, including allocation or contribution of capital to a subsidiary or an associate company of the credit institution; or contribution of capital to an investment fund or entrustment of capital to other institutions for capital contribution or share purchase in the above forms.
25. Investment by capital contribution or share purchase to hold the right to control an enterprise includes investment accounting for over 50% of the charter capital or voting share capital of an enterprise or another investment sufficient to control decisions made by the Board of Members or General Meeting of Shareholders
26. Major shareholder of a joint-stock credit institution means a shareholder that directly or indirectly owns 5% or more of the voting share capital of that institution.
27. Indirect ownership means an organization's or individual's ownership of the charter capital or share capital of a credit institution through related entities or investment trust.
28. Related entity means an organization or individual that has a direct or indirect relation with another organization or individual in any of the following cases:
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b) Company or credit institution with its manager or members of the Board of Controllers, or with company or organization competent to appoint these persons and vice versa;
c) Company or credit institution with organization or individual that owns 5% or more of the charter capital or voting share capital of that company or credit institution and vice versa;
d) Individual with his/her spouse, father, mother, child or sibling;
dd) Company or credit institution with individual defined at Point d of this Clause of manager, member of the Board of Controllers, capital contributor or shareholder owning 5% or more of the charter capital or voting share capital of that company or credit institution and vice versa;
e) Individual authorized to act as a representative of an organization or individual specified at Points a, b, c, d and e of this Clause with authorizing organization or individual; among individuals authorized to represent the stakes of an institution;
g) 2 Other legal entities and individuals that pose risks to the operation of the credit institution or foreign bank’s branch, defined according to the rules and regulations of the credit institution or foreign bank’s branch or specified in writing on a case-by-case basis by the State bank through inspection or supervision.
29. Associate company of a credit institution means a company in which the credit institution or the credit institution and its related entities owns/own over 11% of the charter capital or voting share capital. However, the company is not a subsidiary of that credit institution.
30. Subsidiary of a credit institution is a company that falls within any of the following cases:
a) The credit institution or the credit institution and its related entities owns/own over 50% of the charter capital or voting share capital;
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c) The credit institution has the right to modify the charter of the company;
d) The credit institution and its related entities directly or indirectly controls/control the ratification of resolutions and decisions of the Board of Members or General Meeting of Shareholders or the Board of Directors of the company.
31. Managers of a credit institution include chairperson, members of the Board of Directors; chairperson, members of the Board of Members; Director General (Director) and holders of other managerial titles defined in the credit institution's charter.
32. Executives of a credit institution include the Director General (Director), Deputy Director General (Deputy Director), Chief Accountant, branch director and holders of other equivalent titles defined in the credit institution's charter.
33.3 Early intervention means the State bank requesting a credit institution or foreign bank’s branch to deal with the situations specified in Clause 1 Article 130a of this Law.
34.4 Special control means a situation in which a credit institution is put under direct control of the State bank as specified in Section 1 Chapter VIII of this Law.
35.5 Restructuring plan refers to either:
a) a recovery plan;
b) a plan for merger, amalgamation, transfer of 100% of shares/stakes;
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d) a mandatory transfer plan; or
dd) a bankruptcy plan.
36.6 Recovery plan means a plan for taking measures that ensure the credit institution placed under special control is able to recover from the situation that leads to the situation where it is placed under special control.
37.7 Plan for merger, amalgamation, transfer of 100% of shares/stakes means a plan that is implemented in case of merger or amalgamation of a credit institution or 100% of shares/stakes of the credit institution placed under special control is transferred.
38.8 Mandatory transfer plan means a plan in which the owner, capital contributors or shareholders of a commercial bank placed under special control has to transfer 100% of their shares/stakes to the transferee.
39.9 Transferee means a domestic credit institution, foreign credit institution or an investor that wishes to receive the shares/stakes under the mandatory transfer plan and is permitted by a competent authority to receive them.
40.10 Assisting credit institution means credit institution appointed to manage, control or assist in the operation of the credit institution placed under special control.
Article 5. Use of terms related to banking operations
An institution other than credit institution may not use the phrase or term "credit institution," "bank," "finance company," "financial leasing company," or other phrases or words in its name or title or in secondary parts of its name or title or in its transaction documents or advertisement if the use of such phrases or words can make clients misunderstand that it is a credit institution.
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1. Domestic commercial banks established and organized as joint-stock companies, except the case defined in Clause 2 of this Article.
2. State commercial banks established and organized as single-member limited liability companies with their wholly state-owned charter capital.
3. Domestic non-bank credit institutions established and organized as joint-stock or limited liability companies.
4. Joint-venture or wholly foreign-owned credit institutions established and organized as limited liability companies.
5. Cooperative banks and people's credit funds established and organized as cooperatives.
6. Microfinance institutions established and organized as limited liability companies.
Article 7. Autonomy in operation
1. Credit institutions and foreign bank branches have autonomy in their business activities and are responsible for their business results. Organizations or individuals must not illegally intervene in business activities of credit institutions and foreign bank branches.
2. Credit institutions and foreign bank branches may refuse to extend credit or provide other services when finding that they do not fully meet the conditions to do so or such credit extension or service provision is inefficient or noncompliant with law.
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1. Organizations that fully meet the conditions under this Law and other relevant laws and are licensed by the State Bank may conduct one or some banking operations in Vietnam.
2. Individuals and organizations other than credit institutions are prohibited from conducting banking operations, except for margin trading, purchase and sale of securities by securities companies.
Article 9. Competition and cooperation in banking operations
1. Credit institutions and foreign bank branches may compete and cooperate in banking operations and other business activities under law.
2. Competition restriction or unfair competition threatening to harm or harming the implementation of the national monetary policy, safety of the credit institution system, the interests of the State and the lawful rights and interests of organizations and individuals is prohibited.
3. The Government elaborates acts of unfair competition in banking operations and penalties for these acts.
Article 10. Protection of client’s interests
Credit institutions and foreign bank branches shall:
1. Participate in preservation and insurance of deposits under law and publicize their deposit preservation and insurance in their head offices and branches;
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3. Refuse to investigate, freeze, seize or transfer deposits of clients, except for cases where competent state agencies make requests under law or clients give consent;
4. Publicize deposit interest rates, service charges and rights and obligations of clients to each product and service provided;
5. Publicize official transaction time and not halt transactions during this time without permission. When halting transactions during official transaction time, a credit institution or foreign bank branch shall post notification of such halt at transaction places for at least 24 hours before the halt. Credit institutions and foreign bank branches may not halt transactions for more than one working day, except the case defined at Point e, Clause 1, Article 29 of this Law.
Article 11. Responsibilities for anti-money laundering and anti-terrorism financing
Credit institutions and foreign bank branches shall:
1. Neither cover nor conduct business activities related to amounts with illegal origin proved;
2. Make internal regulations on anti-money laundering and anti-terrorism financing;
3. Take measures for anti-money laundering and anti-terrorism financing;
4. Cooperate with competent state agencies in investigation into money laundering and terrorism financing.
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1. A legal representative of a credit institution shall be defined in the charter of that credit institution and must be one of the following persons:
a) Chairperson of the Board of Directors or the Board of Members of the credit institution;
b) General Director (Director) of the credit institution.
2. The legal representative of a credit institution shall reside in Vietnam. When he/she is absent from Vietnam, he/she shall authorize in writing another person who must be a manager or an executive of the credit institution currently residing in Vietnam to perform his/her rights and obligations.
Article 13. Information provision
1. Credit institutions and foreign bank branches shall provide account holders with information on transactions and credit balances of their accounts as agreed upon with these holders.
2. Credit institutions and foreign bank branches shall provide the State Bank with information related to their business activities and may receive from the State Bank information on clients who have credit relations with them under the State Bank's regulations.
3. Credit institutions and foreign bank branches may exchange information on their activities together.
Article 14. Information confidentiality
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2. Credit institutions and foreign bank branches shall keep information related to accounts, deposits, deposited assets and transactions of their clients confidential.
3. Credit institutions and foreign bank branches must not provide information related to accounts, deposits, deposited assets and transactions of their clients for other organizations and individuals except for cases where competent state agencies make requests under law or clients give consent.
Article 15. Backup database
1. Credit institutions and foreign bank branches shall establish backup databases in order to guarantee safe and constant operations.
2. The establishment of backup databases of people's credit funds, microfinance institutions and credit institutions which do not receive deposits shall comply with the State Bank's regulations.
Article 16. Share purchase by foreign investors
1. Foreign investors may purchase shares of Vietnamese credit institutions.
2. The Government shall specify the maximum permissible holdings of foreign investors and each investor in a Vietnamese credit institution; and requirements applicable to credit institutions for share sale to foreign investors.
Article 17. Policy banks
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2. The Government shall specify organization and operation by policy banks.
3. Policy banks shall conduct internal control and audit: make and issue internal procedures for professional operations; and make statistical reports and reports on operations and payments under the State Bank's regulations.
Chapter II
LICENSES
Article 18. Authority to issue and revoke licenses
The State Bank has authority to issue, modify and revoke licenses under this Law.
Article 19. Legal capital
1. The Government shall specify legal capital applicable to each type of credit institutions and foreign bank branches.
2. Each credit institution/foreign bank branch shall maintain the actual value of their charter capital or provided capital which is not smaller than their legal capital.
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Article 20. Requirements for issuance of licenses
1. A credit institution may obtain a license when fully meeting the following requirements:
a) Its charter capital or provided capital is not smaller than the legal capital;
b) Its owner is a single-member limited liability company and its founding shareholders or members are legal entities that are legally operating and financially capable for capital contribution. It’s founding shareholders or members are individuals who have full legal capacity and are financially capable for capital contribution.
The State Bank shall specify requirements applicable to owners of credit institutions that are single-member limited liability companies and founding shareholders and members;
c) Its managers, executives and members of the Board of Controllers fully meet the criteria and requirements under Article 50 of this Law;
d) Its charter complies with this Law and other relevant laws;
dd) It has an establishment plan and a feasible business plan which neither affect the safety and stability of the credit institution system nor create monopoly or restrict competition or create unfair competition within the credit institution system.
2. A joint-venture or wholly foreign-owned credit institution may obtain a license when fully meeting the following requirements:
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b) The foreign credit institution may conduct banking operations under the law of the country where it is headquartered;
c) Operations to be conducted in Vietnam are those that the foreign credit institution is issued with license to conduct in the country where it is headquartered;
d) The foreign credit institution's operations are healthy and it meets requirements on total assets, financial status and prudential ratios under the State Bank's regulations;
dd) The foreign institution makes a written commitment to provide assistance in finance, technology, governance, administration and operation for the joint-venture or wholly foreign owned credit institution. It guarantees that the joint-venture or wholly foreign-owned credit institution maintains the actual value of its charter capital which is not smaller than the legal capital and observes regulations on safety assurance under this Law;
e) A competent foreign authority has signed an agreement with the State Bank on inspection and supervision of banking operations and exchange of information on banking safety supervision and made a written commitment on consolidated supervision of the foreign credit institution's operations according international practices.
3. A foreign bank branch may obtain a license when fully meeting the following requirements:
a) It fully meets requirements specified in Points a,b,c and dd Clause 1 and Points b,c,d and e Clause 2 of this Article;
b) The foreign bank makes a written commitment to be liable for all obligations and commitments of its branch in Vietnam, and to ensure that the actual value of the branch's provided capital is not lower than the legal capital and it observes regulations on safety assurance under this Law.
4. A foreign credit institution or another foreign institution engaged in banking operations may obtain a license for its representative office when fully meeting the following requirements:
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b) Under the law of the country where it is headquartered, it may set up a representative office in Vietnam.
5. The State Bank shall set down requirements for issuance of licenses to cooperative banks, people's credit funds and microfinance institutions.
Article 21. Procedure and application for license
The State Bank shall issue regulations on procedure and application for license.
Article 22. Deadline for issuance of licenses
1. Within 180 days from the date of receipt of a complete and valid application, the State Bank shall issue or refuse to issue a license to the applicant.
2. Within 60 days from the date of receipt of a complete and valid application, the State Bank shall issue or refuse to issue a license for a representative office of a foreign credit institution or another foreign institution engaged in banking operations.
3. In case of refusal, the State Bank shall reply in writing and give reasons.
Article 23. Charges for issuance of licenses
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Article 24. Business and operation registration
After obtaining a license, the credit institution/foreign bank branch shall register business; and the representative office of foreign credit institution or another foreign institution engaged in banking operations shall register operation under law.
Article 25. Publishing of information on operations
A credit institution, foreign bank branch or representative office of a foreign credit institution or another foreign institution engaged in banking operations shall publish on the media of the State Bank and a Vietnamese daily newspaper for three consecutive issues or a Vietnamese e-newspaper for at least 30 days before the opening date the following information:
1. Its name and address of its head office;
2. Number of and date of issuance of its license/business registration certificate/operation registration certificate and its business activities issued with a license;
3. Its charter capital or provided capital;
4. Legal representative of the credit institution, Director General (Director) of the foreign bank branch or head of the representative office;
5. List of its founding shareholders or capital contributors or owners with their respective capital contributions;
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Article 26. Operation launch requirements
1. A credit institution, foreign bank branch or representative office of a foreign credit institution or another foreign institution engaged in banking operations that has been issued with a license may only operate from the opening date.
2. To launch its operation, a credit institution or foreign bank branch that has been issued with a license shall fully meet the following requirements:
a) It has registered its charter with the State Bank:
b) It possesses a business registration certificate. It has sufficient charter capital or provided capital, sufficient cash vaults fully meeting the State Bank's requirements and a head office that fully meets asset safety assurance conditions and banking operation requirements;
c) It has an organizational structure, and managerial and executive apparatus. The internal audit and risk management and internal control system shall conform to its type under this Law and other relevant laws;
d) Its information technology system meets managerial and operational requirements;
dd) It has an internal management regulation on the organization and operation by the Board of Directors, the Board of Members, the Board of Controllers and Director General (Director) and professional divisions at its head office; an internal regulation on risk management; and a regulation on network management;
e) Its charter capital or provided capital in Vietnamese dong has been fully deposited into the frozen account without interests opened at the State Bank for at least 30 days before the opening date. Its charter capital or provided capital shall be released after the opening date;
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3. A credit institution, foreign bank branch or representative office of a foreign credit institution or another foreign institution engaged in banking operations shall launch its operation within 12 months after obtaining a license. After the aforesaid deadline, if it fails to do so, the State Bank shall revoke its license.
4. A credit institution or foreign bank branch that has been issued with a license shall notify the State Bank of requirements for launch of its operation specified in Clause 2 of this Article for at least 15 days before the opening date. The State Bank shall suspend the launch when such institution or branch fails to fully meet the requirements under Clause 2 of this Article.
Article 27. License use
1. An institution that has been issued with a license shall use the name and strictly conduct operations as stated in its license.
2. An institution that has been issued with a license may neither tamper with, buy, sell, transfer, lease nor lend its license.
Article 28. License revocation
1. The State Bank shall revoke a license when:
a) The application for license contains false information in order to be eligible for obtainment of a license;
b) 11 The credit institution is divided or acquired; undergoes amalgamation, dissolution, bankruptcy or conversion;
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d) The credit institution or foreign bank branch seriously violates the law on compulsory reserves and prudential ratios;
dd) The credit institution or foreign bank branch fails to implement or fully implement the State Bank's decisions to assure banking operation safety;
e) With regard to a foreign bank branch, wholly foreign-owned credit institution or representative office of a foreign credit institution or another foreign institution engaged in banking operations, the foreign credit institution or another foreign institution engaged in banking operations is dissolved or goes bankrupt or has its license revoked by a competent authority of the country where it is headquartered.
2. The State Bank shall specify procedures for license revocation in the cases defined in Clause 1 of this Article.
3. An institution shall terminate its business activities from the effective date of the State Bank's decision to revoke its license.
4. The State Bank shall publish license revocation decisions in the mass media.
Article 29. Changes subject to the State Bank's approval
1. A credit institution or foreign bank branch shall obtain the State Bank's written approval before carrying out procedures for changing any of the following contents:
a) Its name or place of its head office;
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c) 12 Location of a branch of the credit institution;
d) Contents, scope and duration of operation;
dd) 13 Sale or transfer of the owner’s stakes; sale or transfer of a capital contributor’s stake; sale or transfer of a major shareholder’s shares; sale or transfer of shares that converts a major shareholder into a common shareholder and vice versa.
In case of sale or transfer of stakes of a credit institution that is a limited liability company, the buyer or transferee shall satisfy the requirements applied to owners and capital contributors specified in Article 20, Article 70 and Article 71 of this Law;
e) 14 Any business suspension of 05 working days or more, except suspension due to force majeure events;
g) 15 Listing of shares on a foreign securities market.”
2.16 Documents and procedures for making the changes specified in Clause 1 of this Article and adjustments to the License shall be specified by the State Bank.
3.17 Any change to the charter capital, transfer of stakes of capital contributors of a people's credit fund shall comply with regulations of the State bank.”
4. When obtaining approval for change to one or some contents specified in Clause 1 of this Article, a credit institution or foreign bank branch shall:
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b) Register the changes specified in Clause 1 of this Article with the competent state agency;
c) Publish the changes defined at Points a, b, c and d, Clause 1 of this Article in the media of the State Bank and on a Vietnamese daily newspaper for 3 consecutive issues or in a Vietnamese e-newspaper, within 07 working days after obtaining the State Bank's approval.
Chapter III
ORGANIZATION, GOVERNANCE AND ADMINISTRATION BY CREDIT INSTITUTIONS
Section 1. GENERAL PROVISIONS
Article 30. Establishment of branches, representative offices, public service providers and commercial presence
1. Depending on its type, after obtaining the State Bank's written approval, a credit institution may establish:
a) Branches, representative offices or public service providers in Vietnam, even in the province or central-affiliated city where it is headquartered;
b) Branches, representative offices and other forms of commercial presence in foreign countries.
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Article 31. Charter
1. The charter of a credit institution that is a joint-stock or limited liability company shall comply with this Law and other relevant laws. A charter shall contain the following principal contents:
a) Name and place of the head office;
b) Contents and scope of operation;
c) Duration of operation;
d) Charter capital, methods of capital contribution and increase and decrease in charter capital;
dd) Tasks and powers of General Meeting of Shareholders, Board of Directors, Board of Members, Director General (Director) and Board of Controllers;
e) Methods of election, appointment and dismissal of members of the Board of Directors and, Board of Members, Director General (Director) and Board of Controllers;
g) Full names, addresses, nationality and other basic characteristics of owners and capital contributors, for a credit institution that is a limited liability company; and of founding shareholders, for a credit institution that is a joint-stock company;
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i) Legal representatives;
k) Principles of finance, accounting, control and internal audit;
l) Methods of ratification of decisions of the credit institution; principles of settlement of internal disputes;
m) Bases and methods of determining remuneration, salaries and bonuses paid to managers, executives and members of the Board of Controllers;
n) Cases of dissolution;
o) Procedures for amendment to the charter.
2. Charters of cooperative banks and people's credit funds shall comply with Article 77 of this Law.
3. A credit institution's charter and its amendments shall be sent to 19 the State Bank within 15 days after they are approved.
Article 32. Organizational structure of credit institutions
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2. The organizational structure of a credit institution established as a single-member limited liability company or a limited liability company with two or more members comprises the Board of Members, the Board of Controllers and Director General (Director).
3. The organizational structure of a cooperative bank or people's credit fund shall comply with Article 75 of this Law.
Article 33. Persons prohibited from holding positions
1. Any of the following persons must not be a member of the Board of Directors, Board of Members, Board of Controllers, Director General (Director), Deputy Director General (Deputy Director) or a holder of equivalent title of a credit institution:
a) One of the persons specified in Clause 2 of this Article;
b) A person prohibited from acting as a manager or executive under the law on officials and public employees and the law on anti-corruption;
c) A person who used to be an owner of a private enterprise, a partner of a partnership, Director General (Director), a member of Board of Directors, Board of Members or Board of Controllers of an enterprise, chairperson or member of cooperative management board at the time when the enterprise or cooperative is declared bankrupt, except for case where such enterprise or cooperative is declared bankrupt due to force majeure;
d) A person who used to be a legal representative of an enterprise at the time when the enterprise has its operation terminated or is compelled to dissolve due to its serious violations against law, except case where the legal representative is recommended by a competent state agency to reorganize and consolidate such enterprise;
dd) A person who has their title of Chairperson of Board of Directors, member of the Board of Directors, Chairperson of the Board of Members, member of Board of Members, head of the Board of Controllers, member of the Board of Controllers or Director General (Director) of a credit institution terminated under Article 37 of this Law or has committed violations, causing the revocation of the credit institution's license as determined by the competent agency;
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g) A related entity of the Chairperson of the Board of Directors or the Board of Members must not act as Director General (Director) of the same credit institution.
h) 20 A person responsible for violation against regulations on licensing, administration, shares, capital contribution, share purchase, credit extension, purchase of corporate bonds, prudential ratios that results a fine in the maximum bracket under inspection conclusion.”
2. Any of the following persons must not act as a chief accountant or a director of a branch or subsidiary of a credit institution:
a) Minor or person with limited legal capacity or person who is legally incapacitated;
b) Person who is facing criminal prosecution or serving criminal sentence or decision of the Court;
c) Person who has been sentenced for any serious crime or worse;
dd) Person who has been sentenced for possession charge without having their criminal record expunged;
dd) Official, public employee or manager of division or higher level of an enterprise in which the State holds 50% or more of the charter capital, except for any person appointed to represent the State's stakes in the credit institution;
e) Officer, non-commissioned officer, professional army man or defense worker of an agency or unit under the Vietnam People's Army; officer, professional non-commissioned officer of an agency and unit under the Vietnam People's Police, except for any person appointed to represent the State's stakes in the credit institution;
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3. Father/mother, spouse, child or sibling of each member of the Board of Directors and the Board of Members, General Director (Director) or his/her spouse must not act as chief accountant or finance manager of a credit institution.
Article 34. Persons prohibited from concurrently holding different positions
1. The Chairperson of the Board of Directors or the Board of Members of a credit institution must not concurrently be an executive of that credit institution, except for case where the chairperson of the Board of Directors of a people's credit fund is concurrently a member of the Board of Directors of a cooperative bank. A member of the Board of Directors or the Board of Members of a credit institution must not concurrently be a manager of another credit institution, unless this institution is the subsidiary or a member of the Board of Controllers of that credit institution.
2. The head of the Board of Controllers must not concurrently be a member of the Board of Controllers or manager of another credit institution. A member of the Board of Controllers must not concurrently hold either of the following positions:
a) Member of the Board of Directors or the Board of Members, executive or employee of the same credit institution or its subsidiary, or employee of an enterprise whose member of the Board of Directors, executive or major shareholder is a member of the Board of Directors or the Board of Members, or the Director General (Director) of that credit institution;
b) Member of the Board of Directors or the Board of Members or executive of an enterprise whose member of the Board of Controllers is currently a member of the Board of Directors or the Board of Members or executive of the credit institution.
3.21 The General Director (Director), Deputy General Director (Deputy Director) and people holding equivalent positions of the credit institution must not concurrently hold the position of members of the Board of Directors, the Board of Members or the Board of Controllers of another credit institution, unless it is a subsidiary of the credit institution. The General Director (Director), Deputy General Director (Deputy Director) and people holding equivalent positions of the credit institution must not concurrently hold the position of director, deputy director and equivalent positions of another enterprise.
4. 22 The Chairperson of the Board of Directors, the Board of members, director of a credit institution must not concurrently hold the position of Chairperson of the Board of Directors, member of the Board of Directors, Chairperson of the Board of members, member of the Board of members, company’s president, General Director (Director), Deputy General Director (Deputy Director) and equivalent positions of another enterprise.
Article 35. Automatic loss of status
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a) He/she is legally incapacitated or dies;
b) He/she violates Article 33 of this Law;
c) He/she acts as a representative of the stakes of an organization which is a shareholder or capital contributor of the credit institution when this organization has its legal entity status terminated;
d) He/she is no longer the representative of stakes as authorized by the shareholder that is an organization;
dd) He/she is expelled from the Socialist Republic of Vietnam;
e) The credit institution has its license revoked;
g) The contract to hire Director General (Director) expires;
h) He/she is no longer a member of the cooperative bank or people's credit fund.
2. The Board of Directors or the Board of Members of a credit institution shall send a report enclosed with documents proving the automatic loss of status under Clause 1 of this Article to the State Bank within 05 working days after finding out such loss, take responsibility for the accuracy and truthfulness of this report, and carry out procedures for election and appointment to the vacant position under law.
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Article 36. Dismissal
1. The Chairperson or a member of the Board of Directors or the Board of Members; the head or a member of the Board of Controllers; or the Director General (Director) of a credit institution shall be dismissed from their position when:
a) He/she is a person with limited legal capacity;
b) He/she submits his/her resignation to the Board of Directors, the Board of Members or the Board of Controllers of the credit institution;
c) He/she fails to join activities of the Board of Directors, the Board of Members or the Board of Controllers for 6 consecutive months, except for force majeure events;
d) He/she fails to meet the criteria and requirements specified in Article 50 of this Law;
dd) The independent member of the Board of Directors fails to meet requirements for independence;
e) In other cases defined by the charter of the credit institution.
2. After being dismissed from their position, the chairperson or a member of the Board of Directors or the Board of Members; the head or a member of the Board of Controllers; or the Director General (Director) of a credit institution shall be liable for his/her decisions made during his/her office term.
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Article 37. Termination and suspension of holders of positions of the Board of Directors, the Board of Members, the Board of Controllers and Director General (Director)
1. The State Bank has the right to terminate or suspend the performance of the rights and obligations of the chairperson and members of the Board of Directors or the Board of Members, the head and members of the Board of Controllers, and executives of a credit institution who violate Article 34 of this Law and other relevant laws when they perform their rights and obligations; and request the competent agency to dismiss them from their positions, elect and appoint or designate replacements if necessary.
2. The Special Control Board has the right to terminate or suspend the performance of the rights and obligations of the chairperson and members of the Board of Directors and the Board of Members, the head and members of the Board of Controllers, and executives of a credit institution placed under special control, when necessary.
3. A person who is terminated or suspended from performing his/her rights and obligations under Clauses 1 and 2 of this Article shall be liable to remedy problems and violations related to his/her personal responsibility if requested by the State Bank, the Board of Directors, the Board of Members, the Board of Controllers of the credit institution or the Special Control Board.
Article 38. Rights and obligations of managers and executives of a credit institution
1. Exercise their rights and fulfill their obligations under law, the charter of the credit institution, resolutions and decisions of the General Meeting of Shareholders or owners or capital contributors of the credit institution.
2. Exercise their rights and fulfill their obligations in a honest and prudent manner, for the interests of the credit institution and its shareholders, capital contributors and owners.
3. Be loyal to the credit institution; do not use information, secrets, take advantage of business opportunities of the credit institution or abuse their positions and titles and the credit institution's assets for self-seeking purposes or interests of other organizations and individuals, thereby harming the interests of the credit institution and its shareholders, capital contributors and owners.
4. Keep dossiers and records of the credit institution in order to provide statistics for the credit institution for the purposes of management, administration and control of its activities and for the State Bank's inspection, supervision and examination.
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6. Promptly, fully and accurately notify the credit institution of possible conflicts of interests arising from the credit institution's benefits in other institutions or its transactions with other organizations and individuals and only conduct such transactions when the Board of Directors or the Board of Members give consent.
7. Do not enable themselves or their related entities to take loans or use other banking services of the credit institution with conditions that are better and favorable than those under the credit institution's general regulations.
8. Neither have their salaries and remuneration increased nor request bonuses when the credit institution suffers loss.
9. Fulfill other obligations defined by the credit institution's charter.
Article 39. Responsibility for publishing related interests
1. A member of the Board of Directors, the Board of Members or the Board of Controllers or the Director General (Director) or Deputy Director General (Deputy Director) and the holder of another equivalent post of a credit institution shall notify the credit institution of the following information:
a) Name, address of head office, business lines and activities, number of and date of issuance of the business registration certificate and place of business registration of the enterprise or economic organization in which he/she or his/her related entities owns/own shares/stakes in his/her/their name(s) or authorizes/authorize or entrusts/entrust another organization/ individual to own 5% or more of its charter capital;
b) Name, address of head office, business lines and activities, number of and date of issuance of the business registration certificate and place of business registration of the enterprise of which he/she or his/her related entities is/are a member/members of the Board of Directors, Board of Members or Board of Controllers or the Director General (Director).
2. The publishing the information specified in Clause 1 of this Article and changing related information shall be made in writing within 07 working days from the date on which such information is disclosed or changed.
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4.23 The credit institution shall notify the State bank in writing of the information specified in Clause 1 of this Article within 07 working days from the day on which the credit institution receives information according to Clause 2 of this Article.
Article 40. Internal control system
1. An internal control system is the combination of internal mechanisms, policies, procedures, and regulations and organizational structure of a credit institution or foreign bank branch. The system is built in compliance with the State Bank's guidance and implemented with a view to preventing, promptly detecting and handling risks and meeting set requirements.
2. A credit institution or foreign bank branch shall develop its internal control system to meet the following requirements:
a) Operation, protection, management and use of assets and resources are safe and effective;
b) Financial and managerial information system is truthful, appropriate, full and prompt;
c) The system shall follow and comply with the law and internal regulations and procedures.
3. Operations of the internal control system of a credit institution or foreign bank branch shall be internally audited and periodically assessed by an independent audit institution.
Article 41. Internal audit
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2. The internal audit unit shall objectively and independently review and assess the internal control system; independently assess the conformity and observance of internal regulations and policies and procedures established within the credit institution; and give recommendations in order to improve the effectiveness of systems, procedures and regulations, thereby contributing to ensure safe, effective and lawful operations of the credit institution.
3. Internal audit results shall be promptly reported to the Board of Directors or the Board of Members and the Board of Controllers and sent to the Director General (Director) of the credit institution.
Article 42. Independent audit
1. Before the end of a fiscal year, a credit institution or foreign bank branch shall select an independent audit institution which is eligible under the State Bank's regulations to audit its operations in the subsequent fiscal year.
2. Within 30 days after selecting an independent audit institution, the credit institution or foreign bank branch shall notify the State Bank of such audit institution.
3. A credit institution shall have another independent audit when the audit report contains qualified opinions of the independent audit institution.
4. Independent audit of a credit institution that is a cooperative shall comply with Clause 3, Article 75 of this Law.
Section 2. GENERAL REGULATIONS APPLICABLE TO CREDIT INSTITUTION THAT IS JOINT-STOCK COMPANY OR LIMITED LIABILITY COMPANY
Article 43. Board of Directors and Board of Members and their structures
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2. The term of a Board of Directors or Board of Members shall not exceed 05 years. A member of the Board of Directors or Board of Members shall have the same term of office as the Board of Directors or Board of Members. A member of the Board of Directors or Board of Members may be re-elected or re-appointed without term limit. The office term of an added or replaced member of the Board of Directors or Board of Members is the remaining term of the Board of Directors or Board of Members. The Board of Directors or Board of Members of the previous term shall continue to operate until the Board of Directors or Board of Members of the new term takes over its work.
3. When the number of members of the Board of Directors or the Board of Members is less than two-thirds of the total number of the members of a term or less than the minimum number of members prescribed in the credit institution's charter, within 60 days from the date on which the number of members is insufficient, the credit institution shall add members to the Board of Directors or Board of Members.
4. The Board of Directors or Board of Members shall use the credit institution's seal to perform its tasks and powers.
5. The Board of Directors or Board of Members shall have a secretary to assist it. The secretary's functions and tasks are regulated by the Board of Directors or Board of Members.
6. The Board of Directors or Board of Members shall set up committees to assist it in performing its tasks and powers, including the risk management committee and personnel committee. The Board of Directors or Board of Members shall define the tasks and powers of these two committees under the State Bank's guidance.
Article 44. Board of Controllers and its structure
1. The Board of Controllers shall conduct internal audit, inspect and assess the observance of law, internal regulations, charter, resolutions and decisions of the General Meeting of Shareholders or owners and the Board of Directors or Board of Members.
2. The Board of Controllers of a credit institution shall has at least 3 members. The number of its members shall be specified in the credit institution's charter. At least a half (1/2) of the members of the Board of Controllers must be full-time members and they shall not concurrently hold other positions or do other jobs in other credit institutions or enterprises.
3. The Board of Controllers shall have an assisting division and an internal audit division and may utilize the credit institution's resources or hire outside specialists and organizations to perform its tasks.
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5. When the number of members of the Board of Controllers is less than two-thirds of the total number of the members of a term or less than the minimum number of members prescribed in the credit institution's charter, within 60 days from the date on which the number of members is insufficient, the credit institution shall add members to the Board of Controllers.
Article 45. Tasks and powers of Board of Directors
1. Supervise the observance of law and the credit institution’s charter for governance and administration of the credit institution; be responsible to the General Meeting of Shareholders, owners and capital contributors for the performance of its assigned tasks and powers.
2. Issue its internal regulations; review its internal regulations and accounting and report policies on every year.
2a. 24 Dismiss, discipline, suspend personnel of the internal audit division; decide their salaries and other benefits.”
3. Conduct internal audit; have the right to employ independent consultants, access and fully, accurately and promptly receive information and documents related to the administration and management of the credit institution to perform its assigned tasks and powers.
4. Appraise biannual and annual financial statements of the credit institution; report to the General Meeting of Shareholders, owners or capital contributors on its appraisal of financial statements and its assessment of the reasonability, lawfulness, truthfulness and prudence in accounting, statistical work and financial report. Consult the Board of Directors or Board of Members before submitting its reports and recommendations to the General Meeting of Shareholders or owners or capital contributors.
5. Inspect accounting books, other documents and management and administration of the credit institution's operations when necessary or under resolutions or decisions of the General Meeting of Shareholders or at the request of major shareholders or groups of major shareholders or owners or capital contributors or the Board of Members under law. Conduct examination within 7 working days after receiving a request. Within 15 days after completing examination, report and explain examined matters to requesting organizations and individuals.
6. Promptly notify the Board of Directors or Board of Members when detecting that a manager of the credit institution commits violations: request the violator to immediately terminate his/her violations and remedy consequences, if any.
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8. Request the Board of Directors or Board of Members to convene extraordinary meetings or request the Board of Directors to convene extraordinary meetings of the General Meeting of Shareholders under this Law and the credit institution's charter.
9. Convene an extraordinary meeting of the General Meeting of Shareholders when the Board of Directors makes a decision seriously violating this Law or beyond its vested powers and in other cases under the credit institution's charter.
10. Perform other tasks and powers under the credit institution's charter.
Article 46. Rights and obligations of head of Board of Controllers
1. Organize the performance of tasks and powers of the Board of Controllers defined in Article 45 of this Law.
2. Prepare agendas of meetings of the Board of Controllers on the basis of its members' opinions related to the tasks and powers of the Board of Controllers; convene and chair its meetings.
3. On behalf of the Board of Controllers, sign documents under the jurisdiction of the Board of Controllers.
4. On behalf of the Board of Controllers, convene extraordinary meetings of the General Meeting of Shareholders under Article 45 of this Law or request the Board of Directors or Board of Members to convene extraordinary meetings.
5. Attend meetings of the Board of Directors or Board of Members, give opinions in these meetings but have no right to vote.
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7. Prepare working plans for and assign tasks to members of the Board of Controllers.
8. Ensure that members of the Board of Controllers receive information in a complete, objective and accurate manner and have enough time to discuss matters to be considered by the Board of Controllers.
9. Supervise and direct members of the Board of Controllers to perform their tasks, rights and obligations.
10. Authorize another member of the Board of Controllers to perform his/her tasks when he/she is absent.
11. Exercise other rights and fulfill other obligations under the credit institution's charter.
Article 47. Rights and obligations of members of Board of Controllers
1. Observe law, the credit institution's charter and internal regulations of the Board of Controllers in an honest and prudent manner, for interests of the credit institution and its shareholders, capital contributors and owners.
2. Elect a member of the Board to act as the head.
3. Request the head of the Board to convene an extraordinary meeting.
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5. Request officials and employees of the credit institution to provide statistics and explain business operations in order to perform assigned tasks.
6. Report on financial activities that are abnormal to the head and take responsibilities for their own assessment and conclusions.
7. Attend meetings of the Board, discuss and vote on matters within the scope of tasks and powers of the Board, except for those related to conflicts of their interests.
8. Exercise other rights and perform other obligations under the credit institution's charter.
Article 48. General Director (Director)
1. The Board of Directors or Board of Members shall appoint one of its members to act as the Director General (Director) or hire a Director General (Director), except for the case defined at Point c, Clause 1, Article 66 of this Law.
2. The Director General (Director) is the supreme executive of the credit institution and shall take responsibility to the Board of Directors or Board of Members for the performance of his/her rights and obligations.
Article 49. Rights and obligations of the Director General (Director)
1. Organize the implementation of resolutions and decisions of the General Meeting of Shareholders, Board of Directors or Board of Members.
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3. Set up the internal control system and maintain its effective operation.
4. Make and submit financial statements to the Board of Directors or Board of Members for approval or for report to the competent authority for approval. Take responsibility for the accuracy and truthfulness of financial statements, statistical reports, settlement statistics and other financial information.
5. Issue within his/her jurisdiction internal regulations; professional procedures to operate business administration, information and reporting systems.
6. Report on the credit institution's business activities and results to the Board of Directors, Board of Members, Board of Controllers, ' General Meeting of Shareholders and competent state agencies.
7. Decide the application of measures beyond his/her jurisdiction in cases of natural disasters, enemy sabotage, fires and incidents, take responsibility for these decisions and promptly report them to the Board of Directors or Board of Members.
8. Recommend and propose the organizational and operational structures of the credit institution to the Board of Directors or Board of Members or the General Meeting of Shareholders for decision according to its jurisdiction.
9. Request the Board of Directors or Board of Members to convene extraordinary meetings under this Law.
10. Appoint and dismiss holders of managerial and executive titles of the credit institution, except for those to be decided by the General Meeting of Shareholders, owners, capital contributors, Board of Directors or Board of Members.
11. On behalf of the credit institution, sign contracts under the credit institution's charter and internal regulations.
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13. Recruit employees; decide salaries and bonuses of employees according to his/her jurisdiction.
14. Exercise other rights and perform other obligations under the credit institution’s charter
Article 50. Criteria and requirements applicable to mangers, executives and holders of some other positions of a credit institution
1. A member of the Board of Directors or Board of Members shall fully meet the following criteria and requirements:
a) Being a person other than any person specified in Clause 1, Article 33 of this Law;
b) Possessing professional ethics;
c) 25 Having at least a bachelor’s degree;
d) 26 Having at least 03 years’ experience of working as a manager or executive of a credit institution, at least 05 years’ experience of working as an executive of a finance, banking, accounting or audit enterprise or an enterprise whose equity is not smaller than the legal capital of a credit institution, or at least 05 years’ experience of working in a finance, banking accounting or audit department.”
2. An independent member of the Board of Directors shall fully meet the criteria and requirements specified in Clause 1 of this Article and the following criteria and requirements:
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b) Neither receiving salary nor remuneration regularly of the credit institution other than allowances for members of the Board of Directors under regulations;
c) Having no spouse, father/mother, child, sibling or spouse of one of these persons who is a major shareholder of the credit institution, a manager or member of the Board of Controllers of the credit institution or its subsidiary;
d) Neither directly nor indirectly owning or representing ownership of 1% or more of the charter capital or voting share capital of the credit institution; not owning 5% or more of the charter capital or voting share capital of the credit institution together with his/her related entities;
dd) Not acting as a manager or member of the Board of Controllers of the credit institution at any time in the 5 preceding years.
3. A member of the Board of Controllers shall fully meet the following criteria and requirements:
a) Being a person other than any person specified in Clause 1, Article 33 of this Law;
b) Possessing professional ethics;
c) Having at least a bachelor’s degree in economics, business administration, law, accounting or audit field: having at least 3 years’ experience of working directly in banking, finance, accounting or audit field;
d) Not being a related entity of a manager of the credit institution;
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4. The Director General (Director) must fully meet the following criteria and requirements:
a) Being a person other than any person specified in Clause 1, Article 33 of this Law;
b) Possessing professional ethics;
c) Having at least a bachelor’s degree in economics, business administration or law field;
d) 27 Has at least 05 years’ experience of working as an executive of a credit institution or at least 05 years’ experience of holding the position of General Director (Director) or Deputy General Director (Deputy Director) of an enterprise whose equity is not smaller than the legal capital of a credit institution and at least 05 years’ experience of working in the finance, banking, accounting or audit field or has at least 10 years’ experience of working in the finance, banking, accounting or audit field;
dd) Residing in Vietnam during his/her office term
5. A Deputy Director General (Deputy Director), the chief account, director of a branch or subsidiary or the holder of an equivalent position must fully meet the following criteria and requirements:
a) Being a person other than any person defined in Clause 2, Article 33 of this Law; for a Deputy Director General (Deputy Director) who is not a person defined in Clause 1, Article 33 of this Law;
b) Having at least a bachelor’s degree in economics, business administration, law field or the profession under his/her charge; or having a bachelor’s degree in a discipline other than one of the above-mentioned fields and having at least 3 years’ experience of working directly in banking, finance field or the profession under his/her charge;
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6. The State Bank shall specify criteria and requirements applicable to managers, executives and members of the Board of Controllers of microfinance institutions.
Article 51. Approval for list of nominees for the positions of members of the Board of Directors or Board of Members and Board of Controllers and Director General (Director) of a credit institution
1. The list of nominees for the positions of members of the Board of Directors or Board of Members and Board of Controllers and Director General (Director) of a credit institution shall be approved in writing by the State Bank before these nominees are elected and appointed. Elected and appointed members of the Board of Directors, Board of Members and Board of Controllers and Director General (Director) of a credit institution shall be included in the list approved by the State Bank.
2. The State Bank shall specify procedures for and dossiers on approval for the list of nominees for the positions specified in Clause 1 of this Article.
3. A credit institution shall notify the State Bank of the list of elected and appointed holders of the positions specified in Clause 1 of this Article within 10 working days after such election and appointment.
Section 3. CREDIT INSTITUTION THAT IS JOINT-STOCK COMPANY
Article 52. Types of shares, shareholders
1. A joint-stock credit institution shall have ordinary shares. Holders of ordinary shares are ordinary shareholders.
2. A credit institution may have preference shares which include:
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b) Super-voting shares.
3. Participating preference shares are shares that provide their holders with higher dividends than those of ordinary shares or with stable annual dividends. Annual dividends include fixed dividends and extra dividends. Fixed dividends do not depend on the credit institution’s business performance and may be only paid when the credit institution earns profits. When a credit institution suffers losses or earns profits but such profits are insufficient for payment of fixed dividends, fixed dividends to be paid for participating preference shares shall be accrued in subsequent years. Fixed dividends and methods for determination of extra dividends shall be decided by the General Meeting of Shareholders and written on the certificates of participating preference shares. The total par value of participating preference shares must not exceed 20% of the charter capital of a credit institution.
Members of the Board of Directors and Board of Controllers, the Director General (Director) and other managers and executives of a credit institution shall not buy participating preference shares issued by the credit institution. Eligible buyers of participating preference shares shall be defined in the charter of a credit institution or decided by its General Meeting of Shareholders.
Rights of holders of participating preference shares shall be the same as those of holders of ordinary shares, except for the rights to vote, attend meetings of the General Meeting of Shareholders and nominate candidates for the Board of Directors and Board of Controllers.
4. Only institutions authorized by the Government and founding shareholders may hold super-voting shares. The super-voting powers of founding shareholders shall be effective for 03 years from the date the credit institution obtains a business registration certificate. After this period expires, super-voting shares shall become ordinary shares. Rights of holders of super-voting shares shall be the same as those of holders of ordinary shares, except for the right to transfer such shares to other persons.
5. Ordinary shares may not be converted into preference shares. Preference shares may be converted into ordinary shares under resolutions of the General Meeting of Shareholders.
6. 28 A joint-stock credit institution shall have at least 100 shareholders. The maximum number of shareholders is not limited except for commercial banks that are placed under special control and undergo mandatory transfer according to Section 1dd Chapter VIII of this Law
Article 53. Rights of holders of ordinary shares
1. Attend and give opinions at meetings of the General Meeting of Shareholders and cast votes in person or through their authorized representatives. Each ordinary share equals one vote.
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3. Be given priority to buy additional shares in proportion to their holding of ordinary shares in the credit institution;
4. Transfer their shares to other shareholders within the credit institution or to other organizations or individuals under this Law and the charter of such credit institution.
5. Consider, search and extract information from the list of voting shareholders and request modification of inaccurate information.
6. Consider, search, extract or photocopy the charter of the credit institution, books of minutes of meetings of the General Meeting of Shareholders and resolutions of the General Meeting of Shareholders.
7. Receive part of the remaining assets in proportion to the number of their shares in the credit institution when it is dissolved or goes bankrupt.
8. Authorize in writing others to exercise their rights and fulfil their obligations. Authorized persons may not stand as candidates in their own capacity.
9. Stand as candidates or nominate others to the Board of Directors or Board of Controllers under the charter of the credit institution or under law if the charter does not contain regulations. The list of candidates shall be sent to the Board of Directors by the deadline set by the Board of Directors.
Article 54. Obligations of holders of ordinary shares
1. Shareholders of a credit institution shall fulfill the following obligations:
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b) Be prohibited from withdrawing contributed share capital from the credit institution in any form, resulting in the decrease in the charter capital of the credit institution;
c) 29 Be responsible for the legitimacy of the sources of funding for contributing, buying, receiving shares at the credit institution; do not use credit extended by the credit institution or foreign bank’s branch to buy or receive shares from the credit institution; do not contribute capital or buy shares of a credit institution in the name of any other individual or legal entity in any form, unless authorized in accordance with law;
d) Comply with the charter and internal management regulations of the credit institution;
dd) Observe resolutions and decisions of the General Meeting of Shareholders and Board of Directors;
e) Be responsible for, when acting in the name of the credit institution in any form, any violation they have committed or business activities and other transactions they have conducted for self-seeking purposes or for the interests of other institutions or individuals.
2. A shareholder that makes investment using funding entrusted by an institution or individual shall provide the credit institution with information on the actual owner of shares which they are holding under a trusteeship at this credit institution The credit institution has the right to terminate shareholder rights of such shareholder when detecting that they do not provide accurate information on the actual owner.
Article 55. Holdings
1. A shareholder that is an individual must not own over 5% of the charter capital of a credit institution.
2. A shareholder that is an institution must not own over 15% of the charter capital of a credit institution, except for the following cases:
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b) Owning state shares at an equitized credit institution;
c) Owning shares of foreign investors under Clause 2, Article 16 of this Law.
3. 31 A shareholder and related entities of such shareholder must not own shares whose value exceeds 20% of charter capital of a credit institution, except for the cases specified in Points a, b, c Clause 2 of this Article. A major shareholder of a credit institution and related entities of such major shareholder must not own shares whose value is 5% or more of charter capital of another credit institution.”
4. A holding prescribed in Clause 1, 2 or 3 of this Article shall also include the number of shares bought using funding entrusted by other entities.
5. Within 05 years after obtaining a license, founding shareholders shall hold shares whose value is at least 50% of the charter capital of a credit institution. Founding shareholders that are legal entities shall hold shares whose value is at least 50% of the total shares of founding shareholders.
Article 56. Offering and transferring shares
1. Individual shareholders and institutional shareholders with their representatives that are members of Boards of Directors or Boards of Controllers or Directors General (Directors) of credit institutions must not transfer their shares during their office term.
2. While remedial measures are implemented according to a resolution of the General Meeting of Shareholders or SBV's decision due to personal responsibility of a member of Board of Directors or Board of Controllers, or General Director (Director), he/she must not transfer his/her shares, except for one of the following cases:
a) He/she acts as an authorized representative of an institutional shareholder which is merged, consolidated, divided, dissolved or goes bankrupt under law;
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c) 32 He/she transfers shares to another investor in order to implement the approved restructuring plan.
3. Listed shares of credit institutions shall be transferred under the law on securities.
4. Within 05 years after obtaining a license, founding shareholders may only transfer their shares to other founding shareholders in case they ensure holdings specified in Article 55 of this Law.
Article 57. Repurchase of shareholders' shares
A credit institution may repurchase its shareholders' shares if after fully paying for the repurchased shares, it still ensures safety ratios in banking operations and the actual value of its charter capital is not smaller than the legal capital. In case the repurchase of shares results in the decrease in the charter capital of a credit institution, the State Bank's written approval is required.
Article 58. Share certificates
A new credit institution shall issue share certificates to its shareholders within 30 days from the date of inauguration. In case a credit institution increases its charter capital, it shall issue share certificates to its shareholders within 30 days from the date on which its shareholders make full payment for subscribed shares;
Article 59. General Meeting of Shareholders
1. The General Meeting of Shareholders shall hold an annual meeting within 4 months after the end of a fiscal year. The General Meeting of Shareholders shall hold an extraordinary meeting under a convening decision of the Board of Directors in the following cases:
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b) The number of remaining members of the Board of Directors is smaller than the minimum number of members specified in Clause 1, Article 62 of this Law;
c) A shareholder or a group of shareholders that holds/hold over 10% of total ordinary shares for at least 6 consecutive months make/makes request(s) for an extraordinary meeting.
d) The Board of Controllers makes request for an extraordinary meeting;
dd) Other cases specified in the charter of the credit institution.
2. The General Meeting of Shareholders is composed of all voting shareholders. It is the supreme decision-making body of a credit institution. The General Meeting of Shareholders has the following tasks and powers:
a) Approve development orientations of the credit institution;
b) Amend the charter of the credit institution;
c) Approve regulations on the organization and operation of the Board of Directors and Board of Controllers;
d) Decide the number of members of the Board of Directors and Board of Controllers in each office term; elect, dismiss, add or replace members of the Board of Directors and Board of Controllers according to the criteria and requirements specified in this Law and the charter of the credit institution;
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e) Consider and handle according to its jurisdiction violations which are committed by the Board of Directors or Board of Controllers and cause damage to the credit institution and its shareholders;
g) Decide the organizational structure and managerial and executive apparatus of the credit institution;
h) Ratify plans for adjustment to the charter capital and share offering plans, covering types and quantity of new shares to be offered;
i) Ratify repurchase of sold shares;
k) Ratify plans for issuance of convertible bonds;
l) Approve annual financial statements and plans for distribution of profits after the credit institution's tax and other financial obligations are fulfilled;
m) Ratify reports of the Board of Directors and Board of Controllers on the performance of their assigned tasks and powers;
n) Decide the establishment of subsidiaries;
o) Ratify plans to contribute capital and purchase shares whose value is equal to or greater than 20% of the credit institution's charter capital from enterprises or other credit institutions, indicated in the latest financial statement that has been audited;
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q) Ratify contracts whose value is over 20% (a smaller ratio shall be specified in the credit institution's charter) of the credit institution's charter capital, indicated in the latest financial statement that has been audited, between the credit institution and members of the Board of Directors or Board of Controllers, the Director General (Director), major shareholders, related entities of managers, members of Board of Controllers or major shareholders of the credit institution; subsidiaries or associate companies of the credit institution;
r) Decide the division, amalgamation, merger, conversion or dissolution of, or request a court to establish bankruptcy procedures for the credit institution;
s) Decide solutions to major financial changes of the credit institution.
3. Decisions of the Shareholders' General Meeting shall be ratified as follows:
a) The General Meeting of Shareholders shall ratify decisions within its jurisdiction by voting at meetings or collecting written opinions;
b) Except for the case specified at Point c of this Clause, a decision of the General Meeting of Shareholders shall be ratified at a meeting when it is approved by a number of shareholders that represent at least 51% (a higher ratio shall be specified in the credit institution's charter) of total votes of all attending shareholders;
c) Decisions on the matters specified at Points b, h, p and r, Clause 2 of this Article shall be ratified by a number of shareholders that represent at least 65% (a higher ratio shall be specified in the credit institution's charter) of total votes of all attending shareholders;
d) The election of members of the Board of Directors and Board of Controllers shall be cumulative voting.
4. Decisions on the matters specified at Points a, d, e and r, Clause 2 of this Article shall be ratified by voting at meetings of the General Meeting of Shareholders.
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When an event that affects the safety of operations of a joint-stock credit institution occurs, the State Bank has the right to request the Board of Directors of such credit institution to convene an extraordinary General Meeting of Shareholders and decide matters requested by the State Bank.
Article 61. Report on results of meetings of General Meeting of Shareholders
Within 15 days after a meeting ends or the vote count finishes in case of collection of written opinions, all resolutions and decisions ratified by the General Meeting of Shareholders shall be sent to the State Bank.
Article 62. Board of Directors of a credit institution that is a joint-stock company
1. The Board of Directors of a credit institution that is a joint-stock company shall have between 5 and 11 members, including at least 1 independent member. At least a half of total members of the Board of Directors shall be independent members and members other than executives of the credit institution.
2. An individual and his/her related entities or representatives of stakes of an institutional shareholder and their related entities may participate in the Board of Directors. The number of such participants shall not exceed 1/3 of total members of the Board of Directors of a credit institution that is a joint-stock company, unless they are representatives of the State's stakes.
Article 63. Tasks and powers of Board of Directors
1. Organize establishment and inauguration of the credit institution after the first meeting of the General Meeting of Shareholders.
2. Be responsible to the General Meeting of Shareholders for performance of its assigned tasks and powers.
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4. Decide the establishment of branches, representative offices and public service providers.
5. 33 Dismiss, discipline, suspend, decide the salary and benefits of the General Director (Director), Deputy General Director (Deputy Director), chief accountant, secretary of the Board of Directors, other managers and executives according to regulations of the Board of Directors.
6. Ratify plans to contribute capital and purchase shares whose value is less than 20% of the credit institution's charter capital from enterprises or other credit institutions, indicated in the latest financial statement that has been audited.
7. Appoint representatives of stakes of the credit institution at other enterprises and credit institutions.
8. Decide to invest in, buy or sell the credit institution's assets whose value is equal to or greater than 10% of the credit institution's charter capital, indicated in the latest financial statement that has been audited, except for investments and transactions specified at Point p Clause 2 Article 59 of this Law.
9. Decide credit extension under Clause 7, Article 128 of this Law, except for transactions specified at Point q Clause 2 Article 59 of this Law under decision made by the General Meeting of Shareholders.
10. Ratify contracts whose value is equal to or smaller than 20% (a smaller ratio shall be specified in the credit institution's charter) of the credit institution's charter capital, indicated in the latest financial statement that has been audited between the credit institution and its subsidiaries and associate companies; between the credit institution and members of the Board of Directors or Board of Controllers, the Director General (Director), major shareholders or their related entities. In this case, each related entity does not have the voting right.
11. Examine, supervise and direct the Director General (Director) to perform his/ her assigned tasks: annually evaluate the work performance by the Director General (Director).
12. Issue internal regulations on organization, governance and operation by the credit institution in accordance with this Law and other relevant laws, except for matters within the jurisdiction of the Board of Controllers or General Meeting of Shareholders.
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14. Consider and approve annual reports.
15. Select professional assessment institutions to make valuation of assets contributed as capital other than the Vietnamese currency, freely convertible foreign currencies or gold according to regulations of law.
16. Request the State Bank Governor to approve matters under law.
17. Decide to offer new shares within the limit of eligible shares.
18. Decide offering prices of shares and convertible bonds of the credit institution.
19. Decide repurchase of shares of the credit institution.
20. Propose plans for distribution of profits and dividends to be paid; decide the time and procedures for paying dividends or settling business losses.
21. Prepare relevant contents and documents to request the General Meeting of Shareholders to decide matters within jurisdiction, except for those within the ambit of the tasks and powers of the Board of Controllers.
22. Approve operation programs and plans of the Board of Directors; programs, contents and documents that serve meetings of the General Meeting of Shareholders; convene meetings of the General Meeting of Shareholders or collect written opinions of shareholders in order to ratify resolutions or decisions of the General Meeting of Shareholders.
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24. Promptly notify the State Bank of information adversely affecting the status of members of the Board of Directors or Board of Controllers or the Director General (Director).
25. Perform other tasks and powers under the credit institution's charter.
Article 64. Rights and obligations of Chairperson of Board of Directors
1. Formulate working programs and plans of the Board of Directors.
2. Prepare programs, contents and documents for meetings of the Board of Directors; convene and chair these meetings.
3. Organize the ratification of decisions of the Board of Directors.
4. Supervise the implementation of decisions of the Board of Directors.
5. Chair meetings of the General Meeting of Shareholders'
6. Ensure that all members of the Board of Directors receive adequate, objective and accurate information and have sufficient time to discuss matters to be considered by the Board of Directors.
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8. Supervise members of the Board of Directors in performance of their assigned tasks as well as general rights and obligations.
9. Evaluate, at least once a year, the work performance by each member and committees of the Board of Directors and report evaluation results to the General Meeting of Shareholders.
10. Exercise other rights and perform other obligations under the credit institution’s charter
Article 65. Rights and obligations of members of Board of Directors
1. Honestly exercise their rights and perform their obligations under internal regulations of the Board of Directors and as assigned by the Chairperson of the Board of Directors for the interests of the credit institution and its shareholders.
2. Examine financial statements prepared by independent auditors, give opinions on or request executives of the credit institution, independent auditors and internal auditors to explain matters related to these statements.
3. Request the Chairperson of the Board of Directors to convene an extraordinary meeting of the Board of Directors.
4. Attend meetings of the Board of Directors, discuss and vote on matters within the tasks and powers of the Board of Directors under this Law, unless they are not allowed to cast votes because the matters conflict with their benefits. Be responsible to the General Meeting of Shareholders and Board of Directors for their decisions.
5. Implement resolutions and decisions of the General Meeting of Shareholders and Board of Directors.
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7. Exercise other rights and perform other obligations under the credit institution’s charter
Section 4. CREDIT INSTITUTION THAT IS SINGLE-MEMBER LIMITED LIABILITY COMPANY
Article 66. Tasks and powers of owners
1. The owner of a credit institution that is a single-member limited liability company has the following powers:
a) Decide the number of members of the Board of Members in each office term. The Board of Members shall have between 5 and 11 members;
b) Appoint authorized representatives to perform the owner's tasks and powers under this Law. Each representative has an office term of up to 5 years. Authorized representatives must satisfy all the criteria and requirements specified in Clause 1, Article 50 of this Law;
c) Appoint, dismiss or add members to the Board of Members, the Chairperson of the Board of Members, members of the Board of Controllers, Director General (Director), Deputy Directors General (Deputy Directors) and the chief accountant;
d) Decide the adjustment to the charter capital of the credit institution; transfer part or the whole of the charter capital of the credit institution and change the legal form of the credit institution;
dd) Decide the establishment of subsidiaries and associate companies;
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g) Decide reorganization and dissolution, or request the court to establish bankruptcy procedures for the credit institution;
h) Decide remuneration, salaries and other benefits of members of the Board of Members, members of the Board of Controllers and the Director General (Director).
2. The owner of a credit institution that is a single-member limited liability company has the following tasks:
a) Contribute capital in a full manner and on time as committed;
b) Observe the charter of the credit institution;
c) Identify and separate his/her assets from those of the credit institution;
d) Observe law on purchase, sale, borrowing, lending, rental and lease and other transactions between the credit institution and the owner;
dd) Perform other tasks under this law and the credit institution's charter.
Article 67. Tasks and powers of Board of Members
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2. The Board of Members of a credit institution that is a single-member limited liability company has the following tasks and powers:
a) Decide contents of, and amend, the charter of the credit institution;
b) Decide annual development strategies and business plans of the credit institution;
c) Request the owner of the credit institution to decide matters within his/her jurisdiction specified at Points c, d, dd, e and g, Clause 1, Article 66 of this Law;
d) Consider and approve annual reports;
dd) Decide to select an independent audit institution:
e) Examine, supervise and direct the Director General (Director) to perform his/ her assigned tasks; annually evaluate the work performance by the Director General:
g) Decide to settle losses arising during the business period;
h) Decide credit extension under Clause 7, Article 128 of this Law;
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k) Ratify decision to invest in, buy or sell the credit institution's assets whose value is equal to or greater than 20% (a smaller ratio shall be specified in the credit institution's charter) of the credit institution's charter capital, indicated in the latest financial statement that has been audited;
l) Decide to sign contracts between the credit institution and its subsidiary and associate companies; and contracts between the credit institution and members of the Board of Members, members of the Board of Controllers, the Director General (Director) or their related entities. In this case, each related entity does not have the voting right;
m) Decide solutions to market development, marketing and technology transfer;
n) Issue internal regulations on organization, governance and operation by the credit institution in accordance with laws;
o) Request the State Bank Governor to approve matters under law.
p) Supervise and assess business activities of the credit institution;
q) Perform other tasks and powers under the credit institution's charter.
Article 68. Rights and obligations of Chairperson of Board of Members
1. Formulate working programs and plans of the Board of Members.
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3. Convene and chair meetings of the Board of Members or collect members' opinions.
4. Supervise, or organize the supervision of, the implementation of decisions of the Board of Members.
5. Sign decisions on behalf of the Board of Members.
6. Ensure that all members of the Board of Members receive adequate, objective and accurate information and have sufficient time to discuss matters to be considered by the Board of Members.
7. Assign tasks to members of the Board of Members.
8. Supervise members of the Board of Members in performance of their assigned tasks as well as general rights and obligations.
9. Evaluate, at least once a year, the work performance by each member and the Board of Members and report evaluation results to the owner.
10. Exercise other rights and perform other obligations under the credit institution’s charter
Article 69. Rights and obligations of members of Board of Members
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2. Give opinions on or request executives of the credit institution, independent auditors and internal auditors to explain matters related to financial statements prepared by independent auditors.
3. Request the Chairperson to convene an extraordinary meeting of the Board of Members.
4. Attend meetings of the Board of Members, discuss and vote on matters within the tasks and powers of the Board of Members under this Law, unless they are not allowed to cast votes because the matters conflict with their benefits. Be responsible to the owner and Board of Members for their decisions.
5. Implement decisions of the owner and resolutions of the Board of Members.
6. Explain the performance of their assigned tasks to the owner and the Board of Members upon request.
7. Exercise other rights and perform other obligations under the credit institution’s charter
Section 5. CREDIT INSTITUTION THAT IS A LIMITED LIABILITY COMPANY WITH TWO OR MORE MEMBERS
Article 70. Capital contributors and their tasks and powers
1. Capital contributors of a credit institution that is a limited liability company with two or more members shall be legal entities, except for the case specified in Article 88 of this Law. The total number of members shall not exceed 05. The maximum permissible holdings for each member and his/her related entities shall not exceed 50% of the charter capital of a credit institution.
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a) Appoint their representatives to act as members of the Board of Members or Board of Controllers and dismiss them on the basis of their stakes in the credit institution or as agreed;
b) Receive information and reports on operations of the Board of Members and Board of Controllers, annual accounting books and financial statements and other documents of the credit institution;
c) Receive shared profits in proportion to their stakes after the credit institution has fulfilled tax and other financial obligations;
d) Be provided with the remaining assets of the credit institution in proportion to their stakes when the credit institution is dissolved or goes bankrupt:
dd) Lodge complaints and initiate lawsuits against members of the Board of Members or Board of Controllers or the Director General (Director) over their improper performance of their rights or obligations, adversely affecting their lawful rights and interests or those of the credit institution.
3. A capital contributor has the following tasks:
a) Be prohibited from withdrawing their stakes in any form, except for the transfer of stakes under Article 71 of this Law;
b) Comply with the charter of the credit institution;
c) Perform other tasks under this law and the credit institution's charter.
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1. Capital contributors may transfer their stakes and be given priority to increase their stakes by additional contribution when the credit institution increases its charter capital.
2. The State Bank shall specify conditions for receipt of stakes that have been transferred and repurchase of stakes of credit institutions.
Article 72. Board of Members
1. The Board of Members of a credit institution that is a limited liability company with two or more members has the following tasks and powers:
a) Have tasks and powers specified at Points a, b, d, dd, h, i, k, 1, m, n and o Clause 2, Article 67 of this Law;
b) Decide increase or decrease in the charter capital as well as the time and method of raising capital;
c) Report on financial status and business results of the credit institution, performance and exercise of tasks and powers that have been assigned by the Board of Members and its members at the request of capital contributors or competent state agencies;
d) Decide to repurchase of stakes under this Law;
dd) Appoint and dismiss the General Director (Director); decide to appoint, dismiss, sign and terminate contracts with the Director General (Director). Deputy Directors General (Deputy Directors), chief accountant, managers and other executives under its internal regulations;
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g) Approve annual financial statements and plans to use and distribute profits or handle losses of the credit institution;
h) Decide the establishment of subsidiaries, branches and representative offices; contribute capital to associate companies;
i) Decide reorganization of the credit institution;
k) Decide dissolution, or request the court to establish bankruptcy procedures for the credit institution;
l) Perform other tasks and powers under the credit institution's charter.
2. The Chairperson of the Board of Members of a credit institution that is a limited liability company with two or more members has the following rights and obligations:
a) Have rights and obligations specified at Clauses 1, 2, 3, 4, 5, 6, 7 and 8 Article 68 of this Law;
b) Evaluate, at least once a year, the work performance by each member and committees of the Board of Members;
c) Exercise other rights and perform other obligations under the credit institution’s charter.
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a) Have rights and obligations specified at Clauses 1, 2 and 3 Article 69 of this Law;
b) Attend meetings of the Board of Members, discuss and vote on all matters within the ambit of tasks and powers of the Board of Members under this Law, unless they are not allowed to cast votes under Point 1 Clause 2 Article 67 of this Law; be responsible to the Board of Members for their decisions;
c) Implement resolutions and decisions of the Board of Members;
d) Explain the performance of their assigned tasks to capital contributors and the Board of Members upon request;
dd) Exercise other rights and perform other obligations under the credit institution’s charter
Section 6. CREDIT INSTITUTION THAT IS COOPERATIVE
Article 73. Operation characteristics and objectives
A credit institution considered as a cooperative means a credit institution which is structured in a cooperative form and operates in the banking sector with a view to providing mutual assistance among members for effective performance of production, business and service activities and improvement of their life. Credit institutions that are cooperatives include cooperative banks and people's credit funds.
Article 74. Establishment of credit institutions that are cooperatives
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2. Members of a people's credit fund include individuals, households and other capital-contributing legal entities.
Article 75. Organizational structure
1. The organizational and managerial structure of a cooperative bank or people's credit fund is composed of the General Meeting of Members, Board of Directors, Board of Controllers and Director General (Director).
2. 34 The Chairperson and other members of the Board of Directors, the head and members of the Board of Controllers, the General Director (Director) of a cooperative bank or a people's credit fund shall satisfy the eligibility requirements in terms of qualifications, professional ethics, be conversant with banking and on the list approved by the State bank.
The State Bank shall specify procedures for and dossiers on approval for the list of nominees for the positions specified in this Clause.
3. Each cooperative bank or people's credit fund shall have internal audit and internal control systems and conduct independent audit under the State Bank's regulations.
Article 76. Charter capital
1. The charter capital of a cooperative bank or people's credit fund is the total capital contributed by its members. The charter capital is indicated in its charter.
2. The General Meeting of Members shall decide minimum and maximum capital contributions made by each member under the State Bank's regulations.
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1. The charter of a cooperative bank or people's credit fund shall not contravene this Law, the Law on Cooperatives and other relevant laws. The Charter shall contain the following contents:
a) Name and place of the head office;
b) Contents and scope of operation;
c) Duration of operation;
d) Charter capital, methods of capital contribution;
dd) Organizational structure, tasks and powers of the Board of Directors and Board of Controllers and rights and obligations of the Director General (Director);
e) Methods of conducting the General Meeting of Members and approving its decisions;
g) Rights and obligations of members;
h) Principles of finance, accounting, control and internal audit;
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k) Methods of managing, using, preserving and handling common assets and accumulated capital;
l) Cases and procedures related to division, separation, consolidation, merger, dissolution or bankruptcy;
m) Procedures for amendment to the charter.
2. The charter and its amendments of a cooperative bank or people's credit fund shall be sent to 35 the State Bank within 15 days after they are approved.
Article 78. Rights of members
1. Attend the General Meeting of Members or elect delegates to the General Meeting of Members, attend members' meetings and vote on matters within the jurisdiction of the General Meeting of Members.
2. Stand as candidates or nominate others to the Board of Directors or Board of Controllers and other titles under the charter of the cooperative bank or people's credit fund.
3. Deposit money, take loans and receive shared profits in proportion to their stakes and the use of services of the cooperative bank or people's credit fund.
4. Enjoy social welfare benefits of the cooperative bank or people's credit fund.
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6. Propose matters related to the operation of the cooperative bank or people's credit fund and request response. Request the Board of Directors or Board of Controllers to convene an extraordinary General Meeting of Members to settle urgent matters.
7. Transfer their stakes, benefits and obligations to others under law and the charter of the cooperative bank or people's credit fund.
8. Apply for withdrawal from the cooperative bank or people's credit fund under its charter.
9. Exercise other rights defined by law and the charter of the cooperative bank or people's credit fund.
Article 79. Obligations of members
1. Implement the charter of the cooperative bank or people's credit fund and resolutions of the General Meeting of Members.
2. Contribute capital under the charter of the cooperative bank or people's credit fund and relevant regulations.
3. Give cooperation and mutual assistance and contribute to encouragement and promotion of the development of the cooperative bank or people's credit fund.
4. Within the limit of their stakes, be responsible for risks or losses arising during the operation of the cooperative bank or people's credit fund.
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6. Compensate the cooperative bank or people's credit fund for damage caused by them.
Article 80. General Meeting of Members
1. The General Meeting of Members is the supreme decision-making body of a cooperative bank or people's credit fund.
2. The General Meeting of Members shall discuss and decide the following matters:
a) Reports on business results in a year, financial publicity, accounting, expected distribution of profits and settlement of losses, if any; and reports on operations of the Board of Directors and Board of Controllers;
b) Business orientations in the following year;
c) Increase or decrease in the charter capital; each member’s stakes;
d) Election or dismissal of the Chairperson and other members of the Board of Directors and the head and other members of the Board of Controllers;
dd) Approval for the list of new members and exclusion of members from the cooperative bank or people's credit fund at the request of the Board of Directors; decision on the exclusion of members;
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g) Amendments to the Charter;
h) Other matters at the request of the Board of Directors, Board of Controllers or at least 1/3 of total members.
Article 81. Board of Directors
1. The Board of Directors is a body which administers a cooperative bank or people's credit fund and is composed of the Chairperson and other members.
2. The General Meeting of Members shall decide the number of members of the Board of Directors, which must be at least 03.
3. The office term of the Board of Directors shall be decided by the General Meeting of Members and indicated in the charter. The office term shall be at least 02 and shall not exceed 05 years.
4. Each member of the Board of Directors shall be an individual member or a representative of the stake(s) of a juridical person. Members of the Board of Controllers, the chief account and treasurer of a cooperative bank or people's credit fund shall not concurrently act as members of the Board of Directors and their related entities.
5. The Chairperson and members of the Board of Directors may not authorize persons other than members of the Board of Directors to exercise their rights and perform their obligations.
Article 82. Tasks and powers of Board of Directors
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2. Appoint or dismiss Deputy Directors General (Deputy Directors) at the request of the Director General (Director).
3. Implement resolutions and decisions of the General Meeting of Members;
4. Prepare reports on assessment of business results; approve financial statements, reports on business plans and reports on the operation of the Board of Directors for submission to the General Meeting of Members.
5. Prepare agendas of the General Meeting of Members and convene the General Meeting of Members.
6. Organize the exercise of rights and performance of obligations of the cooperative bank or people's credit fund under law.
7. Consider the admission of new members and process members’ applications for withdrawal from the cooperative bank or people's credit fund, except for the case of expulsion of members, and request the General Meeting of Members to give approval.
8. Be responsible to the General Meeting of Members for their decisions.
9. Perform other tasks and powers defined in the charter of the cooperative bank or people's credit fund.
Article 83. Organization and operation of the Board of Controllers
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2. The head and members of the Board of Controllers shall be elected directly by the General Meeting of Members.
3. Each member of the Board of Controllers shall be an individual member or a representative of the stake(s) of a juridical person. Members of the Board of Controllers must not concurrently act as members of the Board of Directors, Director General (Director), Deputy Directors General (Deputy Directors), chief accountant, treasurer or professional employee of the cooperative bank or people's credit fund and related entities of such members of the Board of Directors, Director General (Director), Deputy Directors General (Deputy Directors), chief accountant, treasurer.
4. The Board of Controllers shall be responsible to the General Meeting of Members for the performance of their tasks and exercise of their powers.
5. The Board of Controllers shall have the same term of office as the Board of Directors.
Article 84. Tasks and powers of Board of Controllers
1. Examine and supervise the operation of the cooperative bank or people's credit fund under law.
2. Examine the implementation of the charter, resolutions and decisions of the General Meeting of Members and resolutions and decisions of the Board of Directors; supervise the operation of the Board of Directors, Director General (Director) and members of the cooperative bank or people's credit fund.
3. Examine financial operations and supervise the observance of accounting regimes, distribution of incomes, settlement of losses, and use of funds, assets and state supports; supervise safety in operations of the cooperative bank or people's credit fund.
4. Conduct internal audit in each period and field with a view to accurately assessing business activities and financial status of the cooperative bank or people's credit fund.
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6. Convene an extraordinary General Meeting of Members in the following cases:
a) The Board of Directors or Director General (Director) violates law or the charter of the cooperative bank or people's credit fund or a resolution of the General Meeting of Members or the Board of Directors fails to take or takes preventive measures in an ineffective manner at the request of the Board of Controllers;
b) At least 1/3 of total members of the Board of Controllers request the Board of Directors or Board of Controllers to convene the General Meeting of Members but the Board of Directors fails to convene an extraordinary General Meeting of Members within 15 days after receiving such request.
7. Notify the Board of Directors of and report to the General Meeting of Members and the State Bank on, control results; request the Board of Directors and Director General (Director) to overcome weaknesses and handle violations in the operation of the cooperative bank or people's credit fund.
Article 85. Director General (Director) of a cooperative bank or people's credit fund
The Board of Directors shall appoint one of its members or hire another person to act as the Director General (Director) of the cooperative bank or people's credit fund. The Director General (Director) is the supreme executive who administers daily activities of the cooperative bank or people's credit fund.
Article 86. Rights and obligations of the Director General (Director)
1. Implement business plans.
2. Organize the implementation of decisions of the Board of Directors.
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4. Sign contracts in the name of the cooperative bank or people's credit fund.
5. Submit annual financial statements to the Board of Directors.
6. Be responsible to the Board of Directors for his/her assigned tasks.
7. Perform other tasks and powers defined in the charter of the cooperative bank or people's credit fund.
Section 7. MICROFINANCE INSTITUTIONS
Article 87. Types of microfinance institutions
1. Microfinance institutions are established as limited liability companies.
2. The organizational structure, governance and administration of each microfinance institution shall comply with this Law and other relevant laws.
Article 88. Members, stakes, organizational structure and operation area of microfinance institution
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Section 8. FOREIGN BANK BRANCHES IN VIETNAM
Article 89. Governance and administration of foreign bank branches
1. Foreign banks shall decide the organizational structure, governance and administration of their branches in Vietnam in accordance with laws of countries where they are headquartered and with this Law on organizational structure, governance, administration, and internal control and audit, and the State Bank shall give written approval for the establishment of such branches.
2. Directors General (Directors) of foreign bank branches shall represent these branches to the law and be responsible for all operations of such branches and, according to their rights and obligations, administer daily activities under this Law and other relevant laws.
3. Directors General (Directors) of foreign bank branches must not participate in the governance or administration of credit institutions or other economic institutions and must not concurrently act as heads of representative offices of foreign banks in Vietnam.
4. Directors General (Directors) of foreign bank branches shall satisfy all criteria and requirements specified in Clause 4, Article 50 of this Law. The State Bank shall give written approval for the appointment of Directors General (Directors) of foreign bank branches Procedures and applications for approval for Directors General (Directors) of foreign bank branches and notification of appointed persons shall comply with Clauses 2 and 3, Article 51 of this Law,
5. When a foreign bank has two or more branches operating in Vietnam and implementing a uniform financial, accounting and reporting regime, it shall authorize the Director General (Director) of a branch to take responsibility to law for all operations of their branches in Vietnam.
Chapter IV
OPERATIONS OF CREDIT INSTITUTIONS
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Article 90. Scope of permissible operations of credit institutions
1. The State Bank shall elaborates scope, types and contents of banking operations and other business activities of each credit institution in the license issued to such credit institution.
2. Credit institutions shall not conduct any business activities other than banking operations and business activities specified in their licenses issued by the State Bank.
3. Banking operations and other business activities of credit institutions specified in this Law shall comply with the guidance of the State Bank.
Article 91. Interest rates and charges in business activities of credit institutions
1. Credit institutions may fix and shall publicize deposit interest rates and service charges applicable to their business activities.
2. Credit institutions and their clients may agree on interest rates and credit extension charges to be applied to their banking operations according to law.
3. If banking operations experience abnormal developments, in order to ensure safety for the credit institution system, the State Bank has the right to provide a mechanism for determining charges and interest rates applicable to business activities of credit institutions.
Article 92. Issuance of deposit certificates, promissory notes, treasury bills and bonds by credit institutions
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2. According to this Law and the Law on Securities, the Government shall provide for credit institutions' issuance of bonds, except for convertible bonds, to raise capital.
Article 93. Internal regulations
1. Pursuant to this Law and other relevant laws, credit institutions shall make and issue internal regulations on their professional operations, thereby ensuring the availability of internal control and audit and risk management mechanisms in association with each business activity and plans to tackle emergency cases.
2. Each credit institution shall issue the following internal regulations:
a) Credit extension and loan management for assurance about proper use of loans;
b) Classification of assets and deduction and use of loan loss provision;
c) Assessment of quality of assets and observance of capital safety ratio;
d) Liquidity management, including procedures for and limits on liquidity management;
dd) Internal control system and internal audit mechanism in conformity with the nature and scale of the credit institution;
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g) Administration of risks arising from its operations;
h) Procedures and principles of client identification for the purpose of prevention of the abuse of credit institutions from money laundering, terrorism financing and other criminal activities;
i) Plans to tackle emergency cases.
3. Credit institutions shall send internal regulations specified in Clause 2 of this Article to the Stale Bank right after their issuance.
Article 94. Consideration and approval for credit extension and inspection of loan use
1. Credit institutions shall request clients to provide documents proving the feasibility of their capital use plans, their financial capability, the lawfulness of capital use and loan security measures before deciding credit extension.
2. Credit institutions shall consider and approve credit extension on the principle of clear delegation of their responsibilities for appraisal and decision on credit extension.
3. Credit institutions are entitled and obliged to inspect and supervise the use of loans and repayment of debts by their clients.
4. Credit institutions may request clients to report on the use of loans and prove that loans are properly used.
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1. Credit institutions may terminate credit extension and collect debts prior to the due date when detecting that clients have provided false information or breached credit contracts.
2. If a borrower fails to make repayment of debt due, the credit institution may treat debts and assets pledged as collateral for loans according to the credit contract, guarantee contract and law, unless otherwise agreed by involved parties. The debt rescheduling, sale and purchase of debts by credit institutions shall comply with the State Bank's regulations.
3. In case a borrower or its/his/her guarantor cannot pay a debt due to bankruptcy, the credit institution shall collect the debt under the bankruptcy law.
4. Credit institutions may exempt or reduce interest rates and charges for clients according to their internal regulations.
Article 96. Retention of credit profiles
1. Credit institutions shall retain credit profiles, including:
a) Credit contracts and documents stating loan use purposes; dossiers on security measures;
b) Reports on financial status of clients;
c) Decisions on credit extension with signatures of competent persons; when such a decision is made by a collective, a written record of the decision approval is required;
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2. The duration for retention of credit profiles shall comply with law.
Article 97. E-banking operations
Credit institutions may conduct business activities through electronic means under the State Bank's guidance on risk management and the law on e-transactions.
Section 2. OPERATIONS OF COMMERCIAL BANKS
Article 98. Operations of commercial banks
1. Receiving demand deposits, term deposits, savings deposits and deposits of other types.
2. Issuing deposit certificates, promissory notes, treasury bills and bonds to raise domestic and foreign capital.
3. Extending credit by:
a) Lending;
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c) Providing bank guarantee;
d) Issuing credit cards;
dd) Domestic and international factoring for banks licensed for international payment;
e) Other forms of credit extension after obtainment of the State Bank's approval.
4. Opening payment accounts for clients.
5. Providing payment instruments.
6. Supplying the following payment services:
a) Domestic payment services, including check, payment order, collection order, letter of credit, bank card, and collection and payment services;
b) Provision of international payment services and other payment services after obtainment of the State Bank's approval.
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Commercial banks may borrow loans from the State Bank in the form of re-financing under the Law on State Bank of Vietnam.
Article 100. Borrowing of loans from credit institutions and financial institutions
Commercial banks may borrow loans from domestic and foreign credit institutions and financial institutions under law.
Article 101. Account opening
1. A commercial bank shall open a deposit account at the State Bank and maintain on this account an average balance which is not lower than the compulsory reserve ratio.
2. A commercial bank may open a payment account at another credit institution.
3. A commercial bank may open overseas deposit accounts and payment accounts under the law on foreign exchange.
Article 102. Organization of and participation in payment systems
1. Commercial banks may organize their internal payment systems and participate in the national inter-bank payment system.
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Article 103. Capital contribution and share purchase
1. Each commercial bank may only use its charter capital and reserve fund to contribute capital or purchase shares under Clauses 2, 3, 4 and 6 of this Article.
2. Commercial banks shall establish or acquire subsidiaries or associate companies to conduct the following business activities:
a) Securities underwriting and securities brokerage; management and distribution of securities investment fund certificates; and securities investment portfolio management and stock trade;
b) Financial lease;
c) Insurance.
3. Commercial banks may establish or acquire subsidiaries or associate companies operating in fields, including management of debts and utilization of assets 36, remittance, foreign exchange trade, gold trade, factoring, and issuance of credit cards, consumer credit, intermediary payment services and credit information.
4. Commercial banks may contribute capital to, or purchase shares from, enterprises operating in the following fields:
a) Insurance, securities, remittance, foreign exchange trade, gold trade, factoring, issuance of credit cards, consumer credit, intermediary payment services and credit information;
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5. The establishment and acquisition of subsidiaries or associate companies specified in Clauses 2 and 3 of this Article and the capital contribution and share purchase by commercial banks specified at Point b, Clause 4 of this Article are subject to the State Bank's written approval. The State Bank shall specify requirements, dossiers, and procedures for approval.
Requirements and procedures for establishment of subsidiaries and associate companies of commercial banks shall comply with relevant laws.
6. Commercial banks and their subsidiaries may purchase or hold shares of other credit institutions according to conditions and within the limits provided by the State Bank.
Article 104. Participation in monetary market
Commercial banks may bid for treasury bills and sell and purchase negotiable instruments, government bonds, treasury bills, state bank bills and other valuable papers in the monetary market.
Article 105. Trade and provision of foreign exchange services and derivative products
1. After obtaining the State Bank's written approval, commercial banks may trade and provide to domestic and foreign clients the following products and services:
a) Foreign exchange;
b) Derivatives regarding exchange rates, interest rates, foreign exchange, currency and other financial products.
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3. Commercial banks' provision of foreign exchange services to clients shall comply with the law on foreign exchange.
Article 106. Entrustment and agent
Commercial banks may entrust, undertake entrustment or act as agents in sectors related to banking operations, insurance business and asset management according to the State Bank's regulations.
Article 107. Other business activities of commercial banks
1. Cash management, banking and financial consultancy, asset management and preservation, and security cabinet and safe lease.
2. Consultancy of corporate finance, business acquisition, sale, consolidation and merger and investment.
3. Trade in government bonds and corporate bonds.
4. Monetary brokerage services.
5. Securities depository, gold trade and other business activities related to banking operations after obtainment of the State Bank's written approval.
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Article 108. Banking operations of finance companies
1. Finance companies may conduct one or some banking operations below:
a) Receiving deposits from organizations;
b) Issuing deposit certificates, promissory notes, bills or bonds to raise capital from organizations;
c) Borrowing loans from domestic and foreign credit institutions and financial institutions under law; borrowing loans from the State Bank in the form of re-financing under the Law on the State Bank of Vietnam;
d) Providing loans, including installment loans and consumer loans;
dd) Providing bank guarantee;
e) Discounting and re-discounting negotiable instruments and other valuable papers;
g) Issuing credit cards, factoring, financial leasing and other forms of credit extension after obtainment of the State Bank's approval.
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Article 109. Opening accounts by finance companies
1. A finance company that receives deposits shall open a deposit account at the State Bank and maintain on this account an average balance which is not lower than the compulsory reserve ratio.
2. A finance company may open a payment account at a commercial bank or foreign bank branch.
3. A finance company licensed to issue credit cards may open an account at a foreign bank under the law on foreign exchange.
4. A finance company may open deposit accounts and loan accounts for their clients.
Article 110. Capital contribution and share purchase by finance companies
1. Each finance company may only use its charter capital and reserve fund to contribute capital or purchase shares under Clauses 2 and 3 of this Article.
2. Finance companies may contribute capital to, or purchase shares of, enterprises and investment funds.
3. Finance companies may only establish or acquire subsidiaries or associate companies operating in fields, including insurance, securities and management of debts and utilization of assets 37 after obtaining the State Bank's written approval.
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Requirements and procedures for establishment of subsidiaries and associate companies of finance companies shall comply with relevant laws.
Article 111. Other business activities of finance companies
1. Receiving capital entrusted by the Government, organizations and individuals for investment in production and business projects or credit extension under permission; entrusting capital to credit institutions for credit extension. The receipt of capital entrusted by individuals and capital entrustment to credit institutions for credit extension shall comply with the State Bank's regulations.
2. Participating in monetary market under Article 104 of this Law.
3. Selling and purchasing government bonds and corporate bonds.
4. Underwriting the issuance of government bonds and corporate bonds; acting as agents to issue bonds, stocks and other valuable papers.
5. Providing foreign exchange services under the State Bank's regulations
6. Acting as insurance agents.
7. Providing banking, finance and investment consultancy services.
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Section 4. OPERATIONS OF FINANCIAL LEASING COMPANIES
Article 112. Banking operations of financial leasing companies
1. Receiving deposits from organizations;
2. Issuing deposit certificates, promissory notes, bills or bonds to raise capital from organizations;
3. Borrowing loans from domestic and foreign credit institutions and financial institutions under law; borrowing loans from the State Bank in the form of re-financing under the Law on the State Bank of Vietnam;
4. Conducting financial lease;
5. Providing loans for financial lessees to add to their working capital.
6. Providing operating leases on the condition that the total value of assets under operating leases does not exceed 30% of their total assets.
7. Extending credit in other forms after obtainment of the State Bank's approval.
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Financial lease means the extension of medium- or long-term credit under a financial lease contract on any of the following conditions:
1. Upon the termination of the lease term under contract, the lessee is entitled to ownership right over the leased asset or continue the asset lease as agreed upon by the two parties;
2. Upon the termination of the lease term under contract, the lessee is prioritized to purchase the leased asset at a nominal price lower than the actual value of the leased asset at the time of repurchase;
3. The lease term of an asset is at least equal to 60% of the time required for its depreciation;
4. The total rent of an asset prescribed in the financial lease contract is at least equal to the value of that asset at the time of contract signature.
Article 114. Opening accounts by financial leasing companies
1. A finance leasing company that receives deposits shall open a deposit account at the State Bank and maintain on this account an average balance which is not lower than the compulsory reserve ratio.
2. A finance leasing company may open a payment account at a commercial bank or foreign bank branch.
Article 115. Capital contribution and share purchase by finance leasing companies
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Article 116. Other activities of financial leasing companies
1. Receiving capital entrusted by the Government, organizations and individuals for financial lease. The receipt of capital entrusted by individuals shall comply with the State Bank's regulations.
2. Participating in bidding for treasury notes organized by the State Bank.
3. Selling and purchasing government bonds.
4. Trading foreign exchange, providing foreign exchange services and entrusting financial lease under the Government's regulations.
5. Acting as insurance agents.
6. Providing banking, finance and investment consultancy services for financial lessees.
Section 5. OPERATIONS OF CREDIT INSTITUTIONS THAT ARE COOPERATIVES
Article 117. Banking operations of cooperative banks
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2. Cooperative banks may conduct some banking operations and other business activities under Section 2, Chapter IV of this Law after obtaining the State Bank's written approval.
Article 118. Operations of people's credit funds
1. Receiving deposits in Vietnam dong in the following cases:
a) Receiving deposits from their members;
b) Receiving deposits from organizations and individuals other than their members under the State Bank's regulations.
2. Providing loans in Vietnam dong in the following cases:
a) Providing loans for their members;
b) Providing loans for clients other than their members under the State Bank's regulations.
3. Providing money transfer services and conducting collection and payment for their members.
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a) Receiving capital entrusted by the Government, organizations and individuals;
b) Borrowing loans from credit institutions and financial institutions;
c) Contributing capital for establishment of cooperative banks;
d) Opening deposit accounts at the State Bank;
dd) Opening payment accounts at commercial banks or foreign bank branches;
e) Undertaking entrustment and acting as agents in some fields related to banking operations and asset management under the State Bank's regulations:
g) Acting as insurance agents;
h) Providing banking, finance and investment consultancy services for their members.
5. The State Bank shall specify the operation area of each people's credit fund in its license.
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Article 119. Capital raise by microfinance institutions
1. Receiving deposits in Vietnam dong in the following forms:
a) Compulsory savings under their regulations;
b) Deposits of organizations and individuals, including voluntary deposits of microfinance clients, except for those for payment purposes.
2. Borrowing loans from domestic and foreign credit institutions, financial institutions and other domestic and foreign individuals and organizations under law.
Article 120. Credit extension by microfinance institutions
1. Microfinance institutions may only extend credit in Vietnam dong by lending. Microfinance institutions' credit extension may be secured by compulsory savings or guaranteed by the group of depositors or loan borrowers.
2. Each microfinance institution shall maintain a ratio of the total balance of credit extended to each low-income individual/ household/micro-sized enterprise in the total credit balance which is not lower than the ratio provided by the State Bank.
Article 121. Opening accounts by microfinance institutions
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2. Microfinance institutions must not open payment accounts for their clients.
Article 122. Other operations of microfinance institutions
1. Entrusting lending and receiving entrustment for lending.
2. Providing financial consultancy services in the microfinance sector.
3. Providing collection and payment and money transfer services for microfinance clients.
4. Acting as insurance service agents.
Section 7. OPERATIONS OF FOREIGN BANK BRANCHES IN VIETNAM
Article 123. Operations of foreign bank branches in Vietnam
1. Foreign bank branches may conduct operations specified in Section 2, Chapter IV of this Article, except for the following operations:
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b) Operations which foreign banks must not conduct in the countries in which they are headquartered.
2. Foreign bank branches may only provide some foreign exchange services in the international market for their clients in Vietnam under the law on foreign exchange.
3. The State Bank shall specify operation contents of a foreign bank branch in its license under this Law in conformity with the size, type and field of operation of the foreign bank.
Chapter V
REPRESENTATIVE OFFICES OF FOREIGN CREDIT INSTITUTIONS AND OTHER FOREIGN INSTITUTIONS ENGAGED IN BANKING OPERATIONS
Article 124. Establishment of representative offices
Foreign credit institutions and other foreign institutions engaged in banking operations may establish representative offices in provinces and central-affiliated cities in the Vietnamese territory. In each province or central- affiliated city, a foreign credit institution or another foreign institution engaged in banking operations may only establish one representative office.
Article 125. Operations of representative offices
Representative offices of foreign credit institutions and other foreign institutions engaged in banking operations may conduct the following operations under their licenses granted by the State Bank:
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2. Conducting market surveys.
3. Promoting investment projects of foreign credit institutions or other foreign institutions engaged in banking operations in Vietnam
4. Accelerating and monitoring execution of contracts and agreements signed between foreign credit institutions or other foreign institutions engaged in banking operations and Vietnamese credit institutions or enterprises, and projects funded by foreign credit institutions or other foreign institutions engaged in banking operations in Vietnam;
5. Conducting other activities in compliance with Vietnam's law.
Chapter VI
RESTRICTIONS ON SAFE OPERATIONS OF CREDIT INSTITUTIONS
Article 126. Cases of ineligibility for credit extension
1. A credit institution or foreign bank branch must not extend credit to the following organizations and individuals:
a) Members of the Board of Directors, Board of Members or Board of Controllers, the Director General (Director), Deputy Director(s) General (Deputy Director(s)) and holders of equivalent positions in the credit institution or foreign bank branch; legal entities that are shareholders whose stake representatives are members of the Board of Directors or Board of Controllers of the credit institution, (with regard to credit institutions that are joint-stock companies), or legal entities that are capital contributors or owners of the credit institution, (with regard to credit institutions that are limited liability companies);
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2.38 Provisions of Clause 1 of this Article do not apply to people's credit funds and credit extension in the form of issuance of personal credit cards.
Limits of personal credit cards mentioned in Clause 1 of this Article shall comply with regulations of the State bank.”
3. Each credit institution/foreign bank branch must not extend credit to its clients on the basis of guarantee offered by any entity specified in Clause 1 of this Article. Each credit institution/foreign bank branch must not offer guarantee in any form for credit extended to any entity defined in Clause 1 of this Article by another credit institution.
4. Credit institutions must not extend credit to securities enterprises under their control.
5. Credit institutions must not extend credit on the basis of acceptance of their own shares or shares of their subsidiaries as guarantee.
6. 39 A credit institution or foreign bank’s branch must not extend credit for the purpose of capital contribution or purchase of shares of another credit institution.
7.40 Credit extension specified in Clauses 1, 3, 4, 5, 6 of this Article includes purchase of and investment in corporate bonds.”
Article 127. Restrictions on credit extension
1. A credit institution or foreign bank branch must not extend unsecured credit and concessional credit to the following entities:
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b) 41 Chief accountants of credit institutions and branches of foreign banks; the Chairperson and other members of the Board of Directors, the head and other members of the Board of Controllers, the Director, Deputy Director and people holding equivalent positions of people's credit fund;”
c) Major shareholders and founding shareholders;
d) An enterprise in which one of the entities specified in Clause 1, Article 126 of this Law owns more than 10% of its charter capital;
dd) Any person who appraises and approves the credit extension;
e) Subsidiaries and associate companies of the credit institution or enterprises under control of the credit institution.
2. The total balance of credit extension provided for the entities defined at Points a, b, c, d and dd, Clause 1 of this Article must not exceed 5% of the core capital of a credit institution or foreign bank branch.
3. Credit extension to the entities defined in Clause 1 of this Article shall be approved by the Board of Directors or the Board of Members of the credit institution and publicized within the credit institution.
4. The total balance of credit extension provided for an entity defined at Point e, Clause 1 of this Article must not exceed 10% of the core capital of a credit institution; and all entities defined at Point e, Clause 1 of this Article must not exceed 20% of the core capital of a credit institution.
5. 42 The total balance of credit extension mentioned in Clause 2 of this Article include the purchase of and investments in corporate bonds issued by the entities specified in Point a, Point c and Point d Clause 1 of this Article; the total balance of credit extension mentioned in Clause 4 of this Article include the purchase of and investments in bonds issued by the entities specified in Point e Clause 1 of this Article.”
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1. The total balance of credit of a commercial bank, foreign bank branch, people's credit fund or microfinance institution extended to a single client must not exceed 15% of its core capital; the total balance of credit of a commercial bank, foreign bank branch, people's credit fund or microfinance institution extended to a single client and related entities must not exceed 25% of its core capital.
2. The total balance of credit of a non-bank credit institution extended to a single client must not exceed 25% of its core capital; the total balance of credit of a non-bank credit institution extended to a single client and related entities must not exceed 50% of its core capital.
3. The total balance of credit extension specified in Clauses 1 and 2 of this Article do not include loans sourced from capital entrusted by the Government, organizations and individuals or loans of borrowers that are other credit institutions.
4. 43 The balance of credit extension mentioned in Clauses 1 and 2 of this Article includes the purchase of and investment in bonds issued by the clients and their related entities.
5. 44 Limits on and conditions for credit extension for investment or trade in shares and corporate bonds of credit institutions and foreign bank branches shall be specified by the State bank.”
6. In case a single client and related entities need capital in excess of the limits specified in Clause 1 or 2 of this Article, a credit institution or foreign bank branch may extend syndicated credit under the State Bank's regulations.
7. 45 In special cases, for the purpose of serving socio-economic tasks, if the financial capacity of a credit institution or foreign bank branch fails to meet the need of a client, the Prime Minister will consider raising the credit extension limits mentioned in Clause 1 and Clause 2 of this Article on a case-by-case basis.
The Prime Minister shall specify the conditions, necessary documents and procedures for raising the credit extension limits mentioned in Clause 1 and Clause 2 of this Article.”
8. The total credit extended by credit institution or foreign bank branch under Clause 7 of this Article must not exceed 4 times its core capital.
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1. The capital contributed or shares purchased by a commercial bank and its subsidiaries and associate companies to or from an enterprise operating in any sector specified in Clause 4, Article 103 of this Law must not exceed 11% of the charter capital of the enterprise.
2. The total capital contributed or shares purchased by a commercial bank to or from enterprises, including its subsidiaries and associate companies must not exceed 40% of its charter capital and reserve fund.
3. The capital contributed or shares purchased by a finance company and its subsidiaries and associate companies to or from an enterprise under Clause 2, Article 110 of this Law must not exceed 11% of the charter capital of the enterprise.
4. The total capital contributed or shares purchased by a finance company under Clause 1, Article 110 of this Law to or from enterprises, including its subsidiaries and associate companies must not exceed 60% of its charter capital and reserve fund.
5. Credit institutions must not contribute capital to, or purchase shares of, enterprises or other credit institutions that are their shareholders or capital contributors.
6. 46 The capital contribution and purchase of shares mentioned in Clause 1 and Clause 3 of this Article do not include contribution of capital to or purchase of shares by asset management companies that are subsidiaries or associate companies of the commercial bank or finance company of an enterprise under their management.”
Article 130. Prudential ratios
1. A credit institution or foreign bank branch shall maintain the following prudential ratios:
a) Solvency ratio;
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c) Maximum ratio of short-term capital for provision of medium-term and long-term loans;
d) Maximum foreign currency and gold status in comparison with core capital;
dd) Loan-to-deposit ratio;
e) 47 Ratio of purchased government bonds and government-backed bonds.
2. Commercial banks and foreign bank branches participating in the national inter-bank payment system shall hold a minimum quantity of valuable papers permitted to be used as mortgage as prescribed by the State Bank in each period
3. The State Bank shall specify prudential ratios defined in Clause 1 of this Article for each type of credit institution/foreign bank branch.
4. The total capital invested by a credit institution in another credit institution and its subsidiaries by capital contribution and share purchase and investments in forms of capital contribution and share purchase with a view to acquiring the right to control enterprises operating in banking, insurance and securities sectors shall be deducted from its core capital when calculating prudential ratios.
5.48 (Annulled)
Article 130a. Early intervention in credit institutions and foreign bank branches 49
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a) The credit institution fails to maintain the solvency ratio specified in Point a Clause 1 Article 130 of this Law for 03 consecutive months;
b) The credit institution fails to maintain the capital adequacy ratio specified in Point b Clause 1 Article 130 of this Law for 06 consecutive months;
c) The credit institution is ranked below average according to the State bank.
2. The State bank will consider making early intervention in a foreign bank branch in any of the cases specified in Point a, b, c Clause 1 of this Article.
3. Within 30 days from the day on which the written decision on early intervention is received from the State Bank, the credit institution or foreign bank branch shall submit a report to the State Bank on the situation specified in Clause 1 of this Article and a remedial plan, and implement it. The State bank will request the credit institution or foreign bank branch to revise the remedial plan where necessary.
The time limit for implementing the remedial plan is 01 year from the issuance date of the decision on early intervention.
4. The remedial plan shall contain one or some of the following measures:
a) Reduction of operating scope, avoid high-value transactions;
b) Increase in charter capital or provided capital; increase assets with high liquidity; sale or transfer of assets and other measures for assurance about banking safety;
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d) Reduction in operating costs, administrative costs; reduction in payment of salaries and bonuses to managers and executives;
dd) Intensification of risk management; reorganization of the management, and redundancy making;
e) Other measures prescribed by law.
5. If the credit institution or foreign bank branch fails to prepare a remedial plan in accordance with Clause 3 of this Article or fails to remedy the situation within the time limit specified in Clause 1 of this Article, the State Bank, depending on the risk level, will request the credit institution or foreign bank branch to take one or some of the measures specified in Clause 4 of this Article.
6. The State Bank shall issue a decision to stop the early intervention after the credit institution or foreign bank branch successfully remedies the situation mentioned in Clause 1 of this Article or when the credit institution is placed under special control.
7. The State Bank shall elaborate this Article.”
Article 131. Loan loss provision
1. Each credit institution or foreign bank branch shall make loan loss provision to settle losses on its operations. The loan loss provision shall be recorded as operating costs.
2. Classification of assets, amounts and methods of making loan loss provision and use of loan loss provision for settlement of losses on operations shall be specified by the State Bank after consulting the Ministry of Finance.
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Article 132. Real estate trade
Credit institutions must not trade in real estate, except for the following cases:
1. They purchase, invest in and own real estates used as their business buildings and offices or warehouses in direct service of their professional operations;
2. They lease out part of their own business buildings which are not yet used;
3. They hold real estate as a result of debt treatment. Within 03 years after issuing a decision to treat collateral that is real estate, the credit institution shall sell, transfer or repurchase this real estate, thereby ensuring the ratio of investments in fixed assets and use purposes of fixed assets specified in Article 140 of this Law.
Article 133. Requirements for safety in e-banking operations
Credit institutions and foreign bank branches shall ensure safety and confidentiality in e-banking operations under the State Bank's guidance.
Article 134. Rights and obligations of controlling companies
A company that directly or indirectly owns more than 20% of the charter capital or the voting share capital of or has the right to control a commercial bank before the effective date of this Law; or a commercial bank that has a subsidiary or associate company (herein referred to as “controlling company”) has the following rights and obligations:
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2. Contracts, transactions and other relations between the controlling company and the subsidiary or associate company shall be made and performed in an independent and impartial manner as same terms and conditions as those applied to independent legal entities.;
3. The controlling company must not intervene in organization and operation of the subsidiary or associate company beyond the rights of the owner, capital contributor or shareholder.
Article 135. Capital contribution and share purchase between subsidiaries or associate companies and controlling companies
1. A subsidiary and an associate company of a single controlling company must not contribute capital and purchase shares each other.
2. A subsidiary and an associate company of a credit institution must not contribute capital and purchase shares of such credit institution.
3. A credit institution that is a subsidiary or associate company of a controlling company must not contribute capital and purchase shares of such controlling company.
Chapter VII
FINANCE, ACCOUNTING AND REPORT
Article 136. Financial regime
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Article 137. Fiscal year
A fiscal year of each credit institution/foreign bank branch starts on January 01 and ends on December 31 of the calendar year.
Article 138. Accounting
Each credit institution/foreign bank branch shall perform accounting activities under the accounting law.
Article 139. Reserve fund
1. Every year, each credit institution or foreign bank branch shall deduct its after-tax profits to set up and maintain the following reserve funds:
a) Reserve fund for addition of charter capital or provided capital, which receives 05% of total after-tax profit set aside. This fund must not exceed the charter capital or provided capital of the credit institution or foreign bank branch;
b) Financial contingency fund;
c) Other reserve funds prescribed by law.
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Article 140. Purchase of and investment in fixed assets
A credit institution may purchase or invest in fixed assets whose value is not more than 50% of its charter capital and additional charter capital reserve fund in order to directly serve its operations. A foreign bank branch may purchase or invest in fixed assets whose value is not more than 50% of its provided capital and additional provided capital reserve fund to directly serve its operations
Article 141. Report
1. Credit institutions and foreign bank branches shall make reports under the law on accounting and statistics and periodical reports on professional operations under the State Bank's regulations.
2. In addition to the reports specified in Clause 1 of this Article, a credit institution/foreign bank branch shall promptly send a written report to the State Bank in the following cases:
a) Occurrence of abnormal developments in professional operations which may seriously affect their business activities;
b) Changes in organizational or executive structure or financial status of a major shareholder or other changes which may seriously affect their business activities.
c) 50 Renaming of a branch of the credit institution; suspension of business for less than 05 working days; listing of shares on the domestic securities market.”
3. Subsidiaries and associate companies of credit institutions shall send their financial statements and operation reports to the State Bank if requested.
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5. Within 180 days after the end of a fiscal year, joint-venture credit institutions, wholly foreign-owned credit institutions, foreign bank branches and representative offices in Vietnam of foreign credit institutions and other institutions engaged in banking operations shall send annual financial statements of foreign credit institutions or other foreign institutions engaged in banking operations to the State Bank.
6. Joint-venture credit institutions, wholly foreign-owned credit institutions and foreign bank branches shall promptly send written reports to the State Bank when foreign credit institutions undergo any of the following changes:
a) Division, separation, merger, consolidation, liquidation, bankruptcy or dissolution;
b) Renaming or relocation of their headquarters;
c) Change in major shareholders, Board of Directors or Executive Board;
d) Extraordinary changes which greatly affect their organization and operation.
Article 142. Reports of controlling companies
1. Within 120 days after the end of a fiscal year, in addition to reports and documents prescribed by law, a controlling company shall make and send a consolidated financial statement which has been audited to the State Bank under the accounting law.
2. Within 90 days after the end of a fiscal year, a controlling company shall make and send a general report on trade transactions and other transactions between it and its subsidiaries and associate companies to the State Bank.
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Within 120 days after the end of a fiscal year, credit institutions and foreign bank branches shall disclose their financial statements according to regulations of law.
Article 144. Overseas transfer of profits and assets
1. Foreign bank branches and wholly foreign-owned credit institutions in Vietnam may transfer the remaining profits overseas after making contributions to all funds and fulfilling all financial obligations under Vietnamese law.
2. Foreign parties in joint-venture credit institutions may transfer their shared profits overseas after such joint-venture credit institutions make contributions to all funds and fulfil all financial obligations under Vietnamese law.
3. Foreign bank branches, wholly foreign-owned credit institutions and foreign parties in joint-venture credit institutions may transfer their remaining assets overseas after liquidation and termination of their operations in Vietnam.
4. The overseas transfer of money and other assets prescribed in Clauses 1, 2 and 3 of this Article shall comply with Vietnamese law.
Chapter VIII
SPECIAL CONTROL, REORGANIZATION, BANKRUPTCY, DISSOLUTION AND LIQUIDATION OF CREDIT INSTITUTIONS
Section 1. SPECIAL CONTROL 51
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1. A credit institution might be placed under special control in any of the situation:
a) It has lost or is likely to lose solvency according to regulations of the State bank;
b) Its accrued loss exceeds 50% of charter capital and reserve funds according to the latest audited financial statement;
c) It fails to maintain the capital adequacy ratio specified in Point b Clause 1 Article 130 of this Law for 12 consecutive months or the capital adequacy ratio is below 4% for 06 consecutive months;
d) The credit institution is ranked low for 02 consecutive years according to the State bank.
2. When facing insolvency, the credit institution shall immediately submit a report to the State bank on the situation, measures that have been taken and will be taken, and proposals to the State bank.
Article 145a. Decision to place a credit institution under special control
1. The State Bank shall consider placing a credit institution under special control in any of the situation specified in Clause 1 Article 145 of this Law and establish a special control board to monitor the operation of such credit institution.
2. The State bank shall specify:
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b) Composition and operation of the special control board that is suitable for the special control method and situation of the credit institution.
3. From the date on which the credit institution is placed under special control, the principal and interest of refinancing loans granted by the State bank to such credit institution will be converted into special loans.
Article 145b. Termination of special control
The State Bank will consider terminating the special control in any of the following cases:
1. The credit institution has overcome the situation that results in the special control and adheres to the prudential ratios specified in Article 130 of this Law;
2. During the special control, the credit institution is acquired by or consolidated into another credit institution, or is dissolved;
3. The judge has appointed an official receiver or an enterprise responsible for management and liquidation of the assets of the credit institution to carry out bankruptcy procedures.
Article 146. Power to decide restructuring of a credit institution under special control
1. The Government has the power to:
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b) Approve the plan for mandatory transfer or bankruptcy of the credit institution placed under special control;
c) Implement special measures to ensure safety of the system of credit institutions, social safety and order after settling the credit institution placed under special control and submit a report to the National Assembly at the nearest meeting.
2. The Prime Minister has the power to:
a) Decide guidelines for restructuring according to the plan for recovery, merger, amalgamation, transfer of 100% of shares/stakes of commercial banks, cooperative banks and finance companies placed under special control;
b) Approve plans for recovery, merger, amalgamation, transfer of 100% of shares/stakes of commercial banks, cooperative banks and finance companies placed under special control;
c) Decide to grant special loans by the State bank with the interest rate up to 0% to credit institutions placed under special control.
3. The State Bank has the power to:
a) Decide guidelines for restructuring according to the plan for recovery, merger, amalgamation, transfer of 100% of stakes of people's credit funds and microfinance institutions;
b) Approve plans for recovery, merger, amalgamation, transfer of 100% of stakes of people's credit funds and microfinance institutions, except for the cases in which special loans are granted according to Point c Clause 2 of this Article;
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Article 146a. Tasks and powers of the State Bank to credit institutions placed under special control
1. Consider proposals of the special control board specified in Article 146b of this Law.
2. Consider applying one or some assisting measures specified in Clause 1 and Clause 2 of Article 148b of this Article before the restructuring plan is approved, except for the cases in which special loans are granted according to Point c Clause 2 Article 146 of this Law.
3. Appoint the chairperson and other members of the Board of Directors and the Board of members, the head and other members of the Board of Controllers, the General Director (Director), Deputy General Director (Deputy Director) and people holding equivalent positions of the credit institution placed under special control.
4. Decide, adjust the operations and scope and network of operation of the credit institution placed under special control.
5. Decide whether to implement or keep implementing measures for recovery of solvency if the credit institution has implemented an approved bankruptcy plan.
6. Decide to grant special loans by the State bank according to Point a Clause 1 Article 146d of this Law, except for the cases specified in Point c Clause 2 Article 146 of this Law.
7. Request the owner, capital contributors or shareholders of the credit institution placed under special control:
a) to submit reports on the use of shares/stakes;
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c) not to put up shares/stakes as collateral.
8. Perform other tasks and exercise other rights specified in this Law.
Article 146b. Tasks and powers of the special control board
1. Request the Board of Directors, the Board of Members, General Director (Director) of the credit institution placed under special control to:
a) Review and adjust the organizational structure, network, business operations; focus on collection of bad debts and treatment of collateral;
b) Reduce costs, including high interest rates of deposits and bonds; high rents.
2. Request the credit institution placed under special control to prepare and implement a restructuring plan in accordance with this Law.
3. Suspend certain business activities of the credit institution placed under special control if they increase the risk to the credit institution or are not conformable with the approved restructuring plan.
4. Dismiss or suspend the chairperson or member of Board of Directors, the Board of Members, the head or member of the Board of Controllers, the General Director (Director), the Deputy General Director (Deputy Director) and people holding equivalent positions of the credit institution placed under special control and request the State bank to appoint replacements.
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6. Request the State bank to consider changing the special control method; extending or terminating the special control; granting special loans or extending the terms thereof; collecting repayment of special loans; liquidating assets; revoking the license of the credit institution placed under special control.
7. Perform other tasks and exercise other rights specified in this law.
Article 146c. Responsibilities of credit institutions placed under special control, their owners, capital contributors, shareholders, Board of Directors, Board of members, Board of Controllers, the General Director (Director)
1. The credit institution placed under special control, its owner, capital contributors or shareholders have the responsibility to:
a) Develop the restructuring plan at the request of the special control board;
b) Implement the restructuring plan and guidelines approved by a competent authority;
c) Comply with decisions and requests of the State Bank according to Article 146a of this Law;
d) Comply with decisions and requests of the special control board according to Article 146b of this Law.
2. The Board of Directors, the Board of Members, the Board of Controllers, the General Director (Director) of the credit institution placed under special control has the responsibility to:
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b) Control and operate the credit institution; ensure safety of assets of the credit institution.
Article 146d. Special loans
1. A credit institution placed under special control will be granted a special loan by the State Bank, Deposit Insurance of Vietnam, Cooperative Bank of Vietnam and other credit institutions in the following cases:
a) The credit institution is facing insolvency or has become insolvent and such insolvency threatens the stability of the system while the credit institution is placed under special control, even if the credit institution is implementing the approved restructuring plan;
b) The loan is used according to the recovery plan or mandatory transfer plan approved.
2. The special loan shall be repaid before every other debts, including debts secured by collateral of the credit institution in the following cases:
a) When the loan is due, unless the restructuring plan or adjustments thereto is/are not approved;
b) The credit institution is dissolved or goes bankrupt.
3. The State Bank shall specify the grant of special loans to credit institutions placed under special control.
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1. The scope of operation of a credit institution placed under special control shall be decided by the State bank, except for the cases specified in Clause 3 Article 146b of this Law.
2. During the special control period, the credit institution shall comply with decisions of the State Bank instead of Articles 128, 130, 131 and 140 of this Law; If the mandatory loan loss provision exceeds the difference between annual revenues and expenditures (excluding provisional loan loss provision), the minimum provision shall be equal to the difference between annual revenues and expenditures.
3. The credit institution under special control is not required to maintain the compulsory reserve requirement.
4. The credit institution under special control is exempt from deposit insurance premiums and fees for participation in the people's credit fund system safety assurance fund.
5. The organization of the General Meeting of shareholders and publishing of information by the credit institution under special control shall comply with requirements of the State Bank and ensure safety of the system of credit institutions.
6. The quantity of members, tenure of the Board of Directors, the Board of Members, the Board of Controllers of the credit institution placed under special control shall be decided by the State Bank according to its performance.
In the cases where a new Board of Directors, Board of Members or Board of Controllers is not elected at the end of the tenure, the current one may keep performing their tasks as prescribed by law.
Section 1a. ASSESSMENT AND RESTRUCTURING OF CREDIT INSTITUTIONS PLACED UNDER SPECIAL CONTROL 52
Article 147. Assessment of overall situation of a credit institution placed under special control
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Otherwise, the special control board will appoint an independent audit organization.
2. Within 04 months from the issuance date of the decision to establish the special control board, the credit institution placed under special control shall send the special control board a report on self-assessment of its situation and propose the guidelines for its restructuring.
3. Within 05 months from the issuance date of the decision to establish the special control board, the special control board shall finish assessing the overall situation of the credit institution under special control, even if it fails to perform the self-assessment as prescribed in Clause 2 of this Article.
4. The assessment of overall situation of the credit institution under special control is specified in Clause 2 and Clause 3 of this Article, except for people's credit funds in which cases the assessment will be carried out on the basis of the report submitted by the independent audit organization as prescribed in Clause 1 of this Article.
5. The content of assessment shall be decided by the special control board, which has to include:
a) Financial status, actual value of charter capital and reserve funds;
b) Organizational structure and information technology system;
c) Business performance
6. The cost of hiring the independent audit organization and other costs relevant to the assessment shall be paid by the credit institution and recorded as its expenses.
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1. On the basis of assessment of overall situation of the credit institution under special control, the Board of Controllers shall propose guidelines for restructuring of the credit institution to the State Bank.
2. Within 60 days from the date on which the proposal is received from the special control board, the State Bank shall consider approving or request the Government or the Prime Minister to consider deciding the guidelines for restructuring of the credit institution under special control in accordance with Article 146 of this Law.
3. Within 30 days from the date on which the proposal is received from the State Bank, the Government or the Prime Minister shall consider deciding the guidelines for restructuring of the credit institution under special control in accordance with Article 146 of this Law.
Section 1b. PLAN FOR RECOVERY OF CREDIT INSTITUTIONS PLACED UNDER SPECIAL CONTROL 53
Article 148. Developing and approving the recovery plan
1. Within 60 days from the date of receipt of the decision on guidelines for restructuring policies according to the recovery plan, the credit institution under special control shall complete the recovery plan and submit it to the special control board.
2. Within 30 days from the date on which the recovery plan is received from the credit institution, the special control board shall submit a report on feasibility of the plan to the State Bank.
Regarding the recovery plan of a people's credit fund, the special control board shall cooperate with Deposit Insurance of Vietnam and the Cooperative Bank of Vietnam in assessing the feasibility of the plan. Regarding the recovery plan of a microfinance institution or finance company, the special control board shall cooperate with Deposit Insurance of Vietnam in assessing its feasibility.
3. Within 60 days from the date on which the report and recovery plan are received from the special control board, the State Bank shall consider approving the recovery plan or submit it to the Prime Minister for approval in accordance with Article 146 of this Law.
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Article 148a. Content of the recovery plan
1. A recovery plan shall contain:
a) A plan and time limit for increase in charter capital in case: the actual value of charter capital is smaller than legal capital; the capital adequacy ratio is below the permissible level imposed by the State bank; or the increase in charter capital is requested by the State bank to ensure operating safety of the credit institution;
b) A plan for business operation during the recovery period;
c) A plan for organizational structure and administration;
d) A plan for settlement of financial weaknesses, bad debts, collateral and measures for remedying violations against law;
dd) A plan for payment of deposits to clients that are legal entities, deposits and loans of other credit institutions; a plan for settlement of special loans (if any) including those specified in Clause 3 Article 145a of this Law;
e) Mandatory assisting measures specified in Article 148b;
g) Time limit for implementation of the recovery plan.
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a) A plan to provide assistance by the assisting credit institution for the credit institution placed under special control; a plan to provide assistance for the assisting credit institution;
b) A plan for paying salaries, bonus and other benefits to people participating in provision of assistance in administration and operation of the credit institution placed under special control;
c) A plan for paying salaries to employees of the credit institution placed under special control during the special control period.
Article 148b. Assisting measures for implementation of the recovery plan
1. A credit institution placed under special control that is a commercial bank, cooperative bank or finance company may apply one or some of the following assisting measures:
a) Sell bad debts without collateral or bad debts whose collateral has been distrained or collateral without legitimate documents held by the wholly state-owned organization established by the Government to treat bad debts of the credit institution;
b) Take special loans with an interest rate of as low as 0% from the State Bank;
c) Include the book values of the debts, receivables, stakes or shares in the balance sheets in expenses with the selling prices and provisions suitable to the financial status of the credit institution placed under special control for a maximum period of 10 years;
d) Exempt or reduce interest rates of refinancing and special loans from the State bank;
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e) Receive deposits or take loans from the assisting credit institution with a preferential interest rate;
g) Buy debts and corporate bonds held by the assisting credit institution that are classified as current non-performing loans as prescribed by the State Bank;
h) Buy or invest in an information technology system beyond the limits specified in Article 140 of this Article;
i) Other measures according to the approved recovery plan.
2. A credit institution placed under special control that is a people's credit fund or microfinance institution may apply one or some of the following assisting measures:
a) Measures specified in Point a Clause 1 of this Article;
b) Take special loans with an interest rate of as low as 0% from Deposit Insurance of Vietnam (technical reserve fund);
c) A microfinance institution may take a special loan with an interest rate of as low as 0% from the State Bank;
d) A people's credit fund may take a special loan from Cooperative Bank of Vietnam (people's credit fund system safety assurance fund) with an interest rate as low as 0%;
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3. Deposit Insurance of Vietnam may record the unrecoverable special loans as decreases in its loan loss provision.
4. Cooperative Bank of Vietnam may record the unrecoverable special loans as decreases in the people's credit fund system safety assurance fund.
Article 148c. Implementation of the recovery plan
1. The special control board shall instruct and supervise implementation of the approved recovery plan by the credit institution placed under special control.
2. At the request of the special control board, the State Bank shall decide or request the Prime Minister to decide the following matters:
a) Revisions to the recovery plan, including its extension;
b) Termination of the recovery plan to switch over to a plan for merger, amalgamation, transfer of 100% of shares/stakes at the request of the credit institution placed under special control.
3. The State Bank shall issue a decision to appoint the assisting credit institution according to the approved recovery plan.
4. In the cases where the State Bank is convinced that the credit institution placed under special control is not able to make recovery according to the recovery plan or the credit institution placed under special control fails to overcome the situation that leads it being placed under special control by the deadline for implementation of the recovery plan, the State Bank shall decide or request the Government or the Prime Minister to decide the guidelines for merger, amalgamation, transfer of 100% of shares/stakes, dissolution, mandatory transfer or bankruptcy of the credit institution placed under special control in accordance with Article 146 of this Law.
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The assisting credit institution shall:
1. Have a profitable business for the last 02 years according to its audited financial statement before it is appointed as the assisting credit institution;
2. Satisfy the prudential ratios specified in Article 130 of this Law;
3. Have a the Board of Members, Board of Directors and the Board of Controllers conformable with law;
4. Have an internal control system and internal audit system that comply with Article 40 and Article 41 of this Law.
Article 148dd. Rights and obligations of the assisting credit institution
1. Cooperate with the credit institution placed under special control in developing the recovery plan as prescribed in Clause 2 Article 148a of this Law.
2. Appoint qualified persons to participate in administration, control and operation of the credit institution placed under special control at the request of the State Bank.
3. Supervise the organization and operation of the credit institution placed under special control according to the approved recovery plan; propose revisions to the plan to the special control board.
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5. Sell debts and corporate bonds that are classified as current non-performing loans as prescribed by the State Bank to the credit institution placed under special control.
6. Buy back debts and corporate bonds that were sold in accordance with Clause 5 of this Article at the request of the State Bank.
7. Be eligible for refinancing loans with an interest rate as low as 0%; be allowed to reduce the reserve requirement by 50% according to the approved recovery plan.
8. Be exempted from restrictions on purchase of government bonds and government-backed bonds specified in Point e Clause 1 Article 130 of this Law.
9. Be allowed to apply the risk factor of 0% to the loans and deposits at the credit institution placed under special control when calculating capital adequacy ratio and classify them as current non-performing loans.
10. Include the salaries, bonus and other benefits of people participating in administration, control and operation of the credit institution placed under special control in expenses.
11. Be allowed to issue long-term bonds to Deposit Insurance of Vietnam under decision of the State Bank.
12. Be allowed to implement other assisting measures decided by the State bank.
Section 1c. PLANS FOR MERGER, AMALGAMATION, AND TRANSFER OF 100% OF SHARES/STAKES OF CREDIT INSTITUTIONS PLACED UNDER SPECIAL CONTROL 54
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1. A plan for merger, amalgamation, and transfer of 100% of shares/stakes shall be approved if all of the following conditions are satisfied:
a) Guidelines for merger, amalgamation or transfer of 100% of shares/stakes specified in Article 147a of this Law are approved, or in any of the cases of merger, amalgamation or transfer of 100% of shares/stakes specified in Clause 4 Article 148, Clause 2 and Clause 4 Article 148c of this Law;
b) There is a qualified acquiring or consolidating credit institution or qualified acquirer of 100% of the shares/stakes; and
c) The actual value of the charter capital of the credit institution after merger or amalgamation is not smaller than the legal capital and all prudential ratios specified in Article 130 of this Law are met.
2. Guidelines for merger, amalgamation or transfer of 100% of shares/stakes of a credit institution placed under special control in the cases specified in Clause 4 Article 148, Clause 2 and Clause 4 Article 148c of this Law shall be decided in accordance with Clause 2 and Clause 3 Article 147a of this Law.
Article 149a. Developing and approving the plan for merger, amalgamation, and transfer of 100% of shares/stakes
1. Procedures for developing and approving the plan for merger, amalgamation, and transfer of 100% of shares/stakes are specified in Clause 1, Clause 2 and Clause 3 Article 148 of this Law.
2. If the credit institution placed under special control fails to develop the plan or the plan is not approved by the competent authority by the deadline specified in Clause 1 and Clause 3 Article 148 of this Law, the State Bank shall request the Government to decide the guidelines for dissolution, mandatory transfer or bankruptcy of the credit institution placed under special control.
Article 149b. Contents of the plan for merger, amalgamation, and transfer of 100% of shares/stakes
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a) Name of the plan and procedures for implementation thereof;
b) Information about the acquired credit institution and the acquiring credit institution, the consolidating credit institutions or the investor that acquires 100% of the shares/stakes, including evidence about their qualification and capacity prescribed by law;
c) A plan for organization, administration and operation, including integration and conversion of the information technology system in case of merger or amalgamation;
d) A business plan for the period of 03 years after the merger, amalgamation or transfer of 100% of shares/stakes, including estimated prudential ratios specified in Article 130 of this Law;
dd) A plan for treatment of special loans taken, including those specified in Clause 3 Article 145a of this Law;
e) Mandatory assisting measures specified in Article 149c of this Law;
g) Schedule for implementation of the plan.
2. In case of transfer of 100% of shares/stakes, the plan shall include the method for overcoming the situation that leads to the situation where the credit institution is placed under special control.
Article 149c. Assisting measures for implementation of the plan for merger, amalgamation or transfer of 100% of shares/stakes
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1. Measures specified in Point a and Point c Clause 1 Article 148b of this Law;
2. If the loan loss provision is greater than the difference in annual revenues and expenses (excluding temporary provision), the loan loss provision shall comply with the approved plan and must not fall below the difference in revenues and expenses;
3. Other measures according to the approved plan.
Article 149d. Implementation of the plan for merger, amalgamation or transfer of 100% of shares/stakes
1. The State Bank shall provide instructions on and supervise the implementation of the approved plan.
2. The State Bank shall decide or request the Prime Minister to decide revisions to the plan, including extension of the plan duration at the request of the special control board.
3. Merger, amalgamation and transfer of 100% of shares/stakes shall be carried out as prescribed by law
4. If the credit institution placed under special control fails to implement the plan by the deadline, the State Bank shall consider deciding or request the Government to decide guidelines for dissolution, mandatory transfer or bankruptcy of such credit institution.
Section 1d. PLAN FOR DISSOLUTION OF CREDIT INSTITUTIONS PLACED UNDER SPECIAL CONTROL 55
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1. At the request of the State Bank, the Government shall decide guidelines for dissolution of the credit institution placed under special control in accordance with Article 147a or in any of the cases specified in Clause 4 Article 148, Clause 4 Article 148c, Clause 2 Article 149a or Clause 4 Article 149d of this Law when the credit institution meets all conditions for dissolution according to regulations of law on dissolution of enterprises and cooperatives.
2. Procedures for deciding guidelines for dissolution of a credit institution placed under special control in the cases specified in Clause 4 Article 148, Clause 4 Article 148c, Clause 2 Article 149a or Clause 4 Article 149d of this Law are specified in Clause 2 and Clause 3 Article 147a of this Law.
Article 150a. Organizing the dissolution
1. After the Government decides the guidelines for dissolution policies, the State Bank shall provide instructions and supervise the dissolution of the credit institution and supervise its asset liquidation in accordance with Clause 2 Article 156 of this Law.
2. The credit institution placed under special control shall be dissolved as prescribed by law.
Section 1dd. PLAN FOR MANDATORY TRANSFER OF COMMERCIAL BANKS PLACED UNDER SPECIAL CONTROL 56
Article 151. Mandatory transfer of a commercial bank placed under special control
1. The State Bank shall request the Government to decide guidelines for mandatory transfer of a credit institution placed under special control that is a commercial bank in accordance with Article 147a or in any of the cases specified in Clause 4 Article 148, Clause 4 Article 148c, Clause 2 Article 149a or Clause 4 Article 149d of this Law when all of the following conditions are satisfied:
a) The charter capital and balances of reserve funds are negative;
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2. Procedures for deciding guidelines for mandatory transfer of a commercial bank placed under special control in the cases specified in Clause 4 Article 148, Clause 4 Article 148c, Clause 2 Article 149a or Clause 4 Article 149d of this Law are specified in Clause 2 and Clause 3 Article 147a of this Law.
Article 151a. Developing and approving the plan for mandatory transfer of a commercial bank placed under special control
1. The State Bank shall request the commercial bank placed under special control to hire an independent audit organization to assess its financial status and determine the actual value of its charter capital and reserve funds, unless a report has been released by an independent audit organization in accordance with Article 147 of this Law in the last 06 months before the guidelines for mandatory transfer is decided by the Government.
2. On the basis of the actual value of charter capital and reserve funds determined by the independent audit organization and the request of the special control board, the State Bank shall decide the actual value of charter capital and reserve funds and record a decrease in charter capital of the commercial bank and necessary increase in capital to ensure that the charter capital is not smaller than legal capital.
3. The State Bank shall request the commercial bank placed under special control, in writing, to increase its charter capital over a specific period of time.
When the commercial bank has increased its charter capital, the State Bank shall request it to keep implementing the approved plan or develop and implement a recovery plan in accordance with Section 1b Chapter VIII of this Law, or the State Bank shall consider terminating the special control in accordance with Article 145b of this Law.
If the commercial bank fails to increase its charter capital, the special control board shall request the transferee to complete the mandatory transfer plan and submit it to the special control board within 60 days from the day on which the request is received.
4. Within 30 days from the day on which the mandatory transfer plan is received from the transferee, the special control board shall make assessment and submit a report on feasibility of the plan to the State Bank.
5. Within 60 days from the date of the receipt of the report and the mandatory transfer plan from the special control board, the State Bank shall request the Government to consider approving the plan.
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7. If a mandatory transfer plan is not developed or the plan is not approved, the State Bank shall request the Government to consider deciding the guidelines for bankruptcy of the commercial bank.
Article 151b. Content of the mandatory transfer plan
A mandatory transfer plan shall contain:
1. Information about the transferee;
2. A plan for increasing the charter capital and deadline for implementation of the plan;
3. A business plan suitable for the situation of the commercial bank in each stage;
4. A plan for organizational structure and administration.
5. A plan for settlement of weaknesses, bad debts and collateral.
6. A plan for settlement of deposits made by legal entities, deposits and loans of other credit institutions; a plan for settlement of special loans taken, including those specified in Clause 3 Article 145a of this Law;
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8. Assisting measures specified in Article 151c of this Law;
9. Schedule for implementation of the mandatory transfer plan.
Article 151c. Assisting measures for implementation of the mandatory transfer plan
The commercial bank placed under special control (the transferor) may apply one or some of the measures specified in Clause 1 Article 148b of this Law under the approved mandatory transfer plan.
Article 151d. Organizing the implementation of the mandatory transfer plan
1. The State Bank shall issue a decision on mandatory transfer of the commercial bank after the plan is approved. From the issuance date of the mandatory transfer plan, all rights and benefits of the owner, capital contributors or shareholders of the commercial bank shall be terminated.
2. A decision on mandatory transfer shall contain:
a) Name of the transferee; name of the commercial bank before and after the transfer; type of business and charter capital of the commercial bank after the transfer;
b) Termination of all rights and benefits of the owner, capital contributors or shareholders of the commercial bank; and;
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3. The transferee shall:
a) Exercise the rights of the owner, capital contributors and shareholders at the commercial bank;
b) Implement the approved mandatory transfer plan.
4. After the mandatory transfer, the commercial bank shall:
a) Follow procedures for changing its type of business (if any), and changing the owner, capital contributors or shareholders;
b) Implement the approved mandatory transfer plan.
5. Where necessary, the State Bank shall request the Government to consider revising the mandatory transfer plan, including extension of its deadline.
6. The State Bank shall provide instructions and supervise the implementation of the approved mandatory transfer plan.
7. If the commercial bank placed under special control fails to overcome the situation that leads to it being placed under special control by the deadline for implementation of the mandatory transfer plan, the State Bank shall request the Government to consider deciding the guidelines for bankruptcy of the commercial bank.
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1. The transferee that is a credit institution shall:
a) Have a profitable business for the last 02 years according to its audited financial statement before making the offer;
b) Satisfy the safety ratios specified in Article 130 of this Law; and
c) Has a feasible mandatory transfer plan which contains evidence that the transferee has sufficient capital to contribute according to the plan.
2. The transferee that is not a credit institution shall:
a) Be a legal entity; and
a) Satisfy the conditions specified in Point a and Point c Clause 1 of this Article.
Article 151e. Rights of the transferee
1. The transferee that is a credit institution is entitled to:
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b) Exemption from consolidating financial statements of the transferor;
c) Exclude the transferor when calculating the consolidated capital adequacy ratio;
d) Exemption from making provisions for decline in value of the capital contributed in the transferor and exclude them when calculating the limit on capital contribution or share purchase by the transferee.
The capital contribution or share purchase by the transferee shall comply with the ratios specified in the approved mandatory transfer plan;
dd) Sell and issue shares of the transferee to foreign investors in accordance with the approved plan;
e) Apply one or some assisting measures specified in Article 148b of this Law under the approved plan.
2. The transferee that is not a credit institution is entitled to hold shares/stakes of the transferor beyond the limits specified in Article 55 and Article 70 of this Law.
Article 151g. Settlement of shares/stakes exceeding limits and settlement of the commercial bank placed under special control after mandatory transfer
1. The settlement of shares/stakes of the commercial bank placed under special control by the transferee after mandatory transfer if they exceed the limits applied to credit institutions that are not placed under special control, or settlement of the commercial bank placed under special control after mandatory transfer shall be carried out in accordance with the approved mandatory transfer plan;
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a) Charter capital has been increased in accordance with the approved mandatory transfer plan;
b) It has been at least 01 year from the effective date of the decision on mandatory transfer.
Section 1e. PLAN FOR BANKRUPTCY OF CREDIT INSTITUTIONS PLACED UNDER SPECIAL CONTROL 57
Article 152. Bankruptcy of a credit institution placed under special control
1. The State Bank shall request the Government to decide guidelines for bankruptcy of credit institutions placed under special control specified in Article 147a or in any of the cases specified in Clause 4 Article 148, Clause 4 Article 148c, Clause 2 Article 149a, Clause 4 Article 149d, Clause 7 Article 151a or Clause 7 Article 151d of this Law when they are facing bankruptcy.
2. Procedures for deciding the guidelines for bankruptcy of a credit institution placed under special control in the cases specified in Clause 4 Article 148, Clause 4 Article 148c, Clause 2 Article 149a, Clause 4 Article 149d, Clause 7 Article 151a, Clause 7 Article 151d of this Law are specified in Clause 2 and Clause 3 Article 147a of this Law.
Article 152a. Developing and approving the bankruptcy plan
1. Within 30 days from the date on which the Government decides the guidelines for bankruptcy of a credit institution placed under special control, the special control board shall take charge and cooperate with such credit institution and Deposit Insurance of Vietnam in developing a bankruptcy plan and submitting it to the State Bank.
In case of bankruptcy of a people's credit fund, the special control board shall take charge and cooperate with such people's credit fund, Deposit Insurance of Vietnam and Cooperative Bank of Vietnam in implementing the bankruptcy plan.
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Article 152b. Content of the bankruptcy plan
A bankruptcy plan shall contain:
1. Assessment of the situation and progress of the settlement of the credit institution that is facing bankruptcy;
2. Assessment of impact of the bankruptcy plan on safety of the credit institution system;
3. A plan for payment of deposits made by individuals;
4. A schedule and responsibility for implementation of the bankruptcy plan.
Article 152c. Organizing the implementation of the bankruptcy plan
1. The State Bank shall direct and supervise the implementation of the approved bankruptcy plan, and request the credit institution to file for bankruptcy in accordance with the law on bankruptcy.
2. The State Bank shall request the Government to consider approving revisions to the bankruptcy plan where necessary.
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Section 2. REORGANIZATION, DISSOLUTION, BANKRUPTCY, LIQUIDATION AND FREEZE ON CAPITAL AND ASSETS
Article 153. Reorganization of credit institutions
1. Credit institutions may be reorganized by division, consolidation, amalgamation, merger or conversion after obtaining the State Bank's written approval.
2. The State Bank shall specify requirements, applications and procedures for approving reorganization of credit institutions.
Article 154. Dissolution of credit institutions and foreign bank branches
A credit institution or foreign bank branch shall dissolve itself in the following cases;
1. It voluntarily applies for the dissolution in case it can repay all debts and the State Bank gives written approval.
2. Upon expiration of its operation duration, it does not apply for extension or applies for extension but the extension is rejected by the State Bank.
3. Its license is revoked.
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1. After the State Bank issues a document on termination of special control or a document on the termination or non-application of solvency recovery measures, if the credit institution is facing bankruptcy, it shall file a petition to the Court to initiate the bankruptcy proceedings as per the Law on Bankruptcy.
2. Upon receipt of the petition to initiate the bankruptcy proceedings against the credit institution as provided in Clause 1 of this Article, the Court shall start the procedures for handling of the request for declaring bankruptcy and carry out procedures for liquidation of assets of the credit institution as per the bankruptcy law.
3. 58 After the judge appoints an official receiver or an enterprise responsible for management and liquidation of the assets, the State Bank shall revoke the license of the credit institution.”
Article 156. Liquidation of assets of credit institutions and foreign bank branches 59
1. In case a credit institution is declared bankrupt, the liquidation of its assets shall comply with the bankruptcy law.
2. In case of dissolution under Article 154 of this Law, the credit institution/foreign bank branch 60 shall liquidate its assets under the supervision of the State Bank and follow procedures for asset liquidation prescribed by the State Bank.
3. 61 While supervising the liquidation of assets of the dissolved credit institution, if the credit institution is found insolvent, the State Bank shall issue a decision to termination the asset liquidation and implement the plan for bankruptcy of the credit institution in accordance with Section 1e Chapter VIII of this Law.”
4. Any credit institution/foreign bank branch 62 that has it assets liquidated shall pay all costs related to the liquidation of assets
Article 157. Freezing capital and assets of foreign bank branch
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2. The State Bank shall specify cases of freeze and termination of freeze on capital and assets of each foreign bank branch.
Chapter IX
STATE MANAGEMENT AGENCIES
Article 158. State management agencies
1. The Government shall perform the uniform state management of banking operations throughout the country.
2. The State Bank shall take responsibility to the Government for state management of organization and operation of credit institutions and foreign bank branches.
3. Ministries and ministerial-level agencies shall, within the scope of their tasks and powers, perform state management of credit institutions and foreign bank branches according to regulations of law.
4. People's Committees at all levels shall perform state management of local credit institutions and foreign bank branches according to regulations of law.
Article 159. Inspection and supervision competence
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Article 160. Rights and obligations of entities subject to inspection and supervision
1. Promptly, adequately and accurately provide information and documents at the request of the State Bank during the inspection and supervision and, at same time, be responsible to law for the accuracy and truthfulness of provided information and documents.
2. Report and explain about risk and operational safety recommendations and warnings issued by the State Bank.
3. Comply with the State Bank's risk and operational safety recommendations and warnings.
4. Comply with the State Bank's inspection conclusions and handling decisions.
5. Exercise other rights and perform other obligations according to law.
Chapter X
Article 161. Transition
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2. Within 02 years after the effective date of this Law, credit institutions and foreign bank branches already established and operating under licenses granted by the State Bank before the effective date of this Law shall complete the organizational restructuring under this Law, except for the cases specified in Clauses 3, 4 and 5 of this Article.
3. From the effective date of this Law, the election, appointment, addition and replacement of members of the Boards of Directors, Boards of Members, Boards of Controllers, Directors General (Directors), Deputy Directors General (Deputy Directors), chief accountants, branch directors, directors of subsidiaries and holders of equivalent positions of credit institutions and Directors General (Directors) of foreign bank branches shall comply with Articles 33, 34,43,44, 48, 50, 51, 62, 66, 70 and 89 of this Law.
4. With regard to credit extension contracts signed before the effective date of this Law, credit institutions, foreign bank branches and clients may continue to implement signed agreements until their expiration. The modification of the above-said credit extension contracts may be effected only if such modification complies with this Law
5. The State Bank shall provide detailed guidance on deadline and procedures for conversion of credit institutions and foreign bank branches which have been operating before the effective date this Law in contravention of Articles 55, 103, 110,115, 129 and 135 of this Law.
6. Microfinance programs and projects of political organizations, socio-political organizations, non-governmental organizations and credit institutions which have been implemented before the effective date of this Law are not required to have their organization and operation adjusted according to this Law. The Prime Minister shall specify operations of microfinance programs and projects defined in this Clause.
7. From the effective date of this Law, institutions other than credit institutions which are conducting one or several banking operations shall immediately terminate banking operations, except for the cases prescribed in Clause 6 of this Article.
Article 162. Entry into force
1. This Law comes into force from January 01, 2011.
2. Law No. 02/1997/QH10 on Credit Institutions and Law No. 20/2004/QH11 on amendments to some Articles of the Law on Credit Institutions cease to be effective on the effective date of this Law.
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The Government shall elaborate and provide guidance on implementation of this Law's Articles and Clauses; and other necessary contents of this Law in order to meet state management requirements./.
CERTIFIED BY
CHAIRMAN
Nguyen Hanh Phuc
1 Law No. 17/2017/QH14 dated November 20, 2017 of the National Assembly on amendments to some Articles of Law on Credit Institutions is promulgated pursuant to:
“The Constitution of Socialist Republic of Vietnam;
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2 This Point is added by Clause 1 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
3 This Clause is added by Clause 2 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
4 This Clause is added by Clause 2 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
5 This Clause is added by Clause 2 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
6 This Clause is added by Clause 2 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
7 This Clause is added by Clause 2 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
8 This Clause is added by Clause 2 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
9 This Clause is added by Clause 2 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
10 This Clause is added by Clause 2 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
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12 This Point is amended by Clause 4 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
13 This Point is amended by Clause 4 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
14 This Point is amended by Clause 4 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
15 This Point is amended by Clause 4 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
16 This Clause is amended by Clause 4 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
17 This Clause is amended by Clause 4 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
18 This Point is amended by Clause 5 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
19 The phrase “phải được đăng ký tại” (shall be registered at) is replaced with the phrase “phải gửi” (shall be sent) according to Clause 18 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
20 This Point is added by Clause 6 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
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22 This Clause is added by Clause 7 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
23 This Clause is added by Clause 8 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
24 This Clause is added by Clause 9 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
25 This Point is amended by Clause 10 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
26 This Point is added by Clause 10 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
27 This Point is added by Clause 11 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
28 This Clause is amended by Clause 12 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
29 This Point is amended by Clause 13 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
30 This Point is amended by Clause 14 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
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32 This Point is amended by Clause 15 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
33 This Clause is amended by Clause 16 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
34 This Clause is amended by Clause 17 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
35 The phrase “phải được đăng ký tại” (shall be registered at) is replaced with the phrase “phải gửi” (shall be sent) according to Clause 18 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
36 The phrase “quản lý tài sản bảo đảm” (collateral management) is replaced with the phrase “quản lý nợ và khai thác tài sản” (management of debts and utilization of assets) according to Clause 18 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
37 The phrase “quản lý tài sản bảo đảm” (collateral management) is replaced with the phrase “quản lý nợ và khai thác tài sản” (management of debts and utilization of assets) according to Clause 18 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
38 This Clause is amended by Clause 19 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
39 This Clause is amended by Clause 19 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
40 This Clause is added by Clause 19 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
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42 This Clause is added by Clause 20 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
43 This Clause is amended by Clause 21 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
44 This Clause is amended by Clause 21 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
45 This Clause is amended by Clause 21 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
46 This Clause is added by Clause 22 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
47 This Point is amended by Clause 23 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
48 This Clause is annulled by Clause 24 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
49 This Article is added by Clause 25 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
50 This Point is added by Clause 25 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
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52 Article 147 and Article 147a are added by Clause 28 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
53 Articles 148, 148a, 148b, 148c, 148d and 148dd are added by Clause 28 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
54 Articles 149, 149a, 149b, 149c and 149d are added by Clause 28 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
55 Article 150 and Article 150a are added by Clause 28 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
56 Articles 151, 151a, 151b, 151c, 151d, 151dd, 151e and 151g are added by Clause 28 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
57 Articles 152, 152a, 152b, and 152c are added by Clause 28 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
58 This Clause is added by Clause 29 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
59 The phrase “,chi nhánh ngân hàng nước ngoài” (foreign bank branch) is added by Clause 30 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
60 The phrase “,chi nhánh ngân hàng nước ngoài” (foreign bank branch) is added by Clause 30 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
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62 The phrase “,chi nhánh ngân hàng nước ngoài” (foreign bank branch) is added by Clause 30 Article 1 of the Law No. 17/2017/QH14 on amendments to some Articles of the Law on Credit Institutions, which comes into force from January 15, 2018.
63 Article 2 and Article 3 of Law No. 17/2017/QH14 dated November 20, 2017 of the National Assembly on amendments to some Articles of Law on Credit Institutions, which comes into force from January 15, 2018 stipulate that:
“Article 2. Implementation
This Law comes into force from January 15, 2018.
Article 3. Transition
1. The restructuring of credit institutions placed under special control that are implementing the plans approved by competent authorities or commercial banks that are acquired before the effective date of this Law shall be carried out in accordance with the approved plans.
Revisions to an approved plan or development of a new restructuring plan shall be carried out in accordance with Sections 1, 1b, 1c, 1d, 1dd and 1e Chapter VIII of the Law on Credit Institutions No. 47/2010/QH12, which is amended by this Law.
2. During the special control period, the commercial banks that are acquired before the effective date of this Law may apply one or some of the assisting measures specified in Clause 1 Article 148b of the Law on Credit Institutions No. 47/2010/QH12, which is amended by this Law, under decisions of the Prime Minister at the request of the State Bank.
3. Regarding transfer of 100% of shares/stakes of commercial banks acquired before the effective date of this Law to other credit institutions or investors:
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b) The plan shall contain: information about the transferee; a plan for settling shares/stakes exceeding the limits of the acquired commercial bank if the transferee is a credit institution that is established and operates in Vietnam; a schedule for implementation the transfer plan; information specified in Clauses 2, 3, 4, 5 and 6 Article 151b of the Law on Credit Institutions No. 47/2010/QH12; information specified in Points d, dd, g of this Clause;
c) The transferee must satisfy the conditions specified in Article 151dd of the Law on Credit Institutions No. 47/2010/QH12, which is amended by this Law;
d) Stakes shall be transferred through negotiation with the buyers; the transfer price shall not fall below the actual value of charter capital and reserve funds determined by an independent audit organization and shall comply with the market price;
dd) The acquired commercial bank may implement one or some of the assisting measures specified in Clause 1 Article 148b of the Law on Credit Institutions No. 47/2010/QH12, which is amended by this Law, sell secured bad debts to a wholly state-owned organization established by the Government to settle bad debts of credit institutions;
e) The transferee shall exercise its rights specified in Article 151e of the Law on Credit Institutions No. 47/2010/QH12, which is amended by this Law;
g) The settlement of shares/stakes exceeding the limits of the acquired commercial bank if the transferee is a credit institution that is established and operates in Vietnam shall comply with Article 151g of the Law on Credit Institutions No. 47/2010/QH12, which is amended by this Law.
4. Managers, executives and people holding other positions of credit institutions or branches of foreign banks who are elected or designated before the effective date of this Law but fail to satisfy the conditions specified in the Law on Credit Institutions No. 47/2010/QH12, which is amended by this Law, may keep holding their positions until the end of their term of office.
5. Credit extension contracts that are concluded before the effective date of this Law may be executed until their expiration dates From the effective date of this Law, such credit extension contracts may only be revised if the revisions comply with the Law on Credit Institutions No. 47/2010/QH12, which is amended by this Law.
6. The State Bank shall specify the schedules and procedures for settlement of holdings in credit institutions of major shareholders and their related entities that are unconformable with Clause 3 Article 55 of the Law on Credit Institutions No. 47/2010/QH12, which is amended by this Law.
File gốc của Integrated document No. 07/VBHN-VPQH dated December 12, 2017 Law on Credit Institutions đang được cập nhật.
Integrated document No. 07/VBHN-VPQH dated December 12, 2017 Law on Credit Institutions
Tóm tắt
| Cơ quan ban hành | Văn phòng quốc hội |
| Số hiệu | 07/VBHN-VPQH |
| Loại văn bản | Văn bản hợp nhất |
| Người ký | Nguyễn Hạnh Phúc |
| Ngày ban hành | 2017-12-12 |
| Ngày hiệu lực | 2017-12-12 |
| Lĩnh vực | Tiền tệ - Ngân hàng |
| Tình trạng | Còn hiệu lực |