Bản dịch văn bản 02/1997/QH10
luat-02-1997-qh10
Cơ quan ban hành: Quốc hội
Ngày ban hành: 1997-12-12

LAW ON CREDIT INSTITUTIONS To ensure healthy, safe and effective operations of credit institutions; to protect the interests of the State, the legitimate rights and interests of organizations and individuals; and to contribute to the implementation of the national monetary policy as well as the development of the socialist-oriented multi-sector commodity economy under the State-regulated market mechanism; Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam; This Law provides for the organization and operation of credit institutions and banking activities conducted by other organizations. Chapter I GENERAL PROVISIONS Article 1.- Scope of regulation This Law provides for the organization and operation of credit institutions and banking activities of other organizations in the Socialist Republic of Vietnam. Article 2.- Application of the Law on Credit Institutions and relevant laws The organization and operation of credit institutions and banking activities of other organizations must comply with the provisions of this Law and other relevant provisions of law. The Government shall issue detailed stipulations on banking activities of other organizations. Article 3.- Application of international agreements and international practices in banking activities with foreign countries 1. In cases where an international agreement signed or acceded to by the Socialist Republic of Vietnam contains provisions different from those of this Law, the provisions of such international agreement shall apply. 2. The parties involved in banking activities may agree to apply an international practice, provided that such practice is not contrary to the law of the Socialist Republic of Vietnam. Article 4.- State policies on the formulation of various types of credit institutions 1. To uniformly manage all banking activities, to build a modern credit institution system capable of meeting the capital and banking service demands of the economy and the population, and to contribute to implementing the national monetary policy, ensuring the safety of the credit institution system and protecting the legitimate interests of depositors. 2. To invest capital and other resources in the development of State credit institutions, thus creating conditions for these institutions to play a leading and key role in the monetary market. 3. To develop policy banks that operate for a non-profit purpose to serve the poor and other policy beneficiaries in order to materialize the socio-economic policies of the State. 4. To protect the ownership and other legitimate rights and interests in the operation of cooperative credit institutions in order to create conditions for the laborers to assist one another in production and life. 5. To develop banks in service of agricultural and rural development as well as farmers with the preferential policies regarding capital, interest rates and borrowing terms. Article 5.- Credit policies The State shall adopt policies to mobilize domestic resources as a main source and make maximum use of foreign resources, to expand credit investment, contributing to the liberation of every production capacity, bringing into full play all potentials of various economic sectors and ensuring the leading role of State enterprises; to firmly maintain the socialist orientation and national sovereignty; to ensure the safety of the national financial and monetary system; to expand international cooperation and integration; to realize the national industrialization and modernization; and to contribute to meeting the requirements of socio-economic development, ensuring the national defense and security and raising the people's living standards. Article 6.- Credit policies for State enterprises The State shall adopt credit policies regarding capital and capital-borrowing terms for State enterprises, creating conditions for these enterprises to renew their equipment, modernize their technology, expand their production scope, conduct their business efficiently, play the leading role in the national economy and contribute to the country's socio-economic development. Article 7.- Credit policies for cooperatives and other forms of cooperative economy The State shall adopt credit policies to create conditions regarding capital and capital-borrowing terms so as to support cooperatives and other forms of cooperative economy in their renewal and development; to ensure that the State economy and the cooperative economy become the foundation of the national economy. Article 8.- Credit policies for agriculture, rural areas and farmers The State shall adopt preferential credit policies regarding capital, interest rates, capital-borrowing terms and duration for agriculture, rural areas and farmers in order to contribute to building the material base and infrastructure, stepping up the economic restructure in agriculture, developing the production of commodities and realizing the agricultural and rural industrialization and modernization. Article 9.- Credit policies for mountainous, island, deep-lying and remote areas and areas with difficult socio-economic conditions The State shall adopt preferential credit policies regarding capital, interest rates, capital-borrowing terms and duration, expands investment in the development of the commodity economy and economic exchange in mountainous, island, deep-lying and remote areas and areas with difficult socio-economic conditions. Article 10.- Credit policies for the poor and other social policy beneficiaries 1. The State shall adopt preferential credit policies regarding capital, interest rates, capital-borrowing terms and duration for the poor and other social policy beneficiaries so that they can have conditions to develop production and business. 2. The State shall adopt preferential credit policies regarding interest rates, capital-borrowing terms and duration for poor students so that they shall have conditions to study. Article 11.- International cooperation in the banking field The State shall perform uniform management, adopt a policy to expand international cooperation in the banking field on the basis of respecting independence, sovereignty, equality and mutual benefit along the direction of multilateralization and diversification; encourage the mobilization of foreign credit sources for investment in the economic development of Vietnam; and create conditions for credit institutions to promote cooperation with foreign countries in order to raise the efficiency in the operation of these institutions. Article 12.- Types of credit institutions 1. The Vietnamese credit institutions include: State credit institutions, joint stock credit institutions of the State and the people, and cooperative credit organizations. 2. Depending on the demands of the country's socio-economic development, the State shall allow the establishment of joint-venture credit institutions, non-bank credit institutions with 100% foreign capital in Vietnam; permit foreign banks to open their branches in Vietnam. Foreign credit institutions may open their representative offices in Vietnam. Such representative offices shall not be allowed to conduct business operations in Vietnam. 3. Only credit institutions that satisfy all conditions provided for by law shall be permitted to conduct a full range of monetary business operations and banking services to serve various domains of socio-economic activities. Article 13.- Banking activities of organizations which are not credit institutions 1. Organizations which are not credit institutions may be permitted by the State Bank to carry out several banking activities when they fully meet the conditions provided for in Clause 2, Article 22 of this Law. 2. Organizations which are not credit institutions but involved in banking activities shall have to comply with the provisions of this Law concerning the permitted banking activities. Article 14.- Right to carry out banking activities All organizations that fully meet the conditions provided for by this Law and other provisions of law and have operation licenses granted by the State Bank shall be entitled to carry out some or all banking activities in Vietnam. Article 15.- Right to business autonomy Credit institutions shall have the right to business autonomy and take responsibility for their own business results. No organization or individual can illegally intervene in the credit institutions' right to business autonomy. The credit institutions shall have the right to reject requests for credit granting, capital contribution or provision of banking services if they deem such requests are ineligible, ineffective or at variance with law. Article 16.- Cooperation and competition in banking activities 1. Organizations involved in banking activities shall be entitled to lawful cooperation and competition. 2. All acts of illegal competition that may adversely affect the implementation of the national monetary policy, the safety of the credit institution system and the legitimate interests of the concerned parties shall be strictly forbidden. 3. Acts of illegal competition include: a/ Illegal sale promotion; b/ Provision of falsified information, thus damaging the interests of other credit institutions and customers; c/ Speculation to manipulate the monetary, gold or foreign currency market; d/ Other acts of unlawful competition. Article 17.- Protection of the interests of depositors Credit institutions shall have to: 1. Join the organizations that preserve or underwrite deposits; the level of preservation or underwriting shall be stipulated by the Government; 2. Create favorable conditions for customers to deposit and withdraw their money at their request; ensure full repayment of the principal and interest on all deposits as scheduled; 3. Keep secret the customers' deposit balance; refuse the investigation, blocking, seizure, deduction or transfer of deposits without the consent of customers, except otherwise provided for by law. 4. Publicize the deposit interest rates. Article 18.- Transaction time Credit institutions shall have to announce their transaction time and shall not be allowed to cease transactions on their own will during the announced time. In case of cessation of transaction, a credit institution must post up a notice thereon at the transaction place not later than 24 hours in advance. Article 19.- Liability for money of illicit origin 1. Credit institutions and other organizations involved in banking activities shall not be allowed to conceal or provide any service related to any sum of money proven to be of illicit origin. 2. In cases where sums of money with illicit signs are detected, credit institutions and other organizations involved in banking activities shall immediately notify the competent State agencies thereof. Article 20.- Interpretation of words and expressions In this Law the following words and expressions are construed as follows: 1. A credit institution is an enterprise established under this Law and other provisions of law to deal in currencies, provide banking services through taking deposits and using deposits for granting credit and to provide payment service. 2. A bank is a type of credit institution that is allowed to carry out all banking activities and other related business operations. According to the nature and objective of operation, the types of banks include commercial banks, development banks, investment banks, policy banks, cooperative banks and other types of banks. 3. A non-bank credit institution is a type of credit institution that is allowed to carry out several banking activities as a routine business operation but is not allowed to take demand deposits or to provide payment services. Non-bank credit institutions include financial companies, financial leasing companies and other non-bank credit institutions. 4. A foreign credit institution is a credit institution established under the law of a foreign country. 5. A cooperative credit organization is an organization engaged in monetary business and provide banking services, established voluntarily by organizations, individuals and households to conduct banking operations in accordance with this Law and the Law on Cooperatives for the principal objective of mutual assistance in the development of production and business and in the improvement of their living standards. Cooperative credit organizations include cooperative banks, people's credit funds, credit cooperatives and other types. 6. A major shareholder is an individual or organization that owns more than 10% of the statutory capital or more than 10% of the voting shares of a credit institution. 7. A banking operation is a monetary business operation or a banking service of regularly taking deposits and using such deposits for granting credit and providing payment services. 8. A credit operation is a credit institution's operation to use its own and mobilized capital to grant credit; 9. A deposit is a sum of money deposited by a customer at a credit institution in the form of demand or time deposit, saving or other forms. A deposit may or may not bear interest and must be reimbursed to depositors. 10. Credit granting is a transaction in which a credit institution agrees to allow a customer to use a sum of money on the principle of repayment through the operations of lending, discounting, financial leasing, bank guaranty and others. 11. Financial leasing is a medium-term or long-term credit operation on the basis of an asset-leasing contract between the lessor that is a credit institution and a customer, the lessee. Upon the expiry of the lease duration, the lessee may purchase or continue to lease the asset on the terms agreed upon in the lease contract. During the lease duration, the contractual parties shall not be allowed to unilaterally cancel the contract. 12. Bank guaranty is a written commitment of a credit institution to the obligee for fulfilling a financial obligation on behalf of its customer when such customer has failed to fulfill the already committed obligation; the customer must acknowledge the debt and refund to the credit institution the amount of money already paid on his/her behalf. 13. Own capital includes the real value of the statutory capital, reserve funds and some "current liabilities" of a credit institution as prescribed by the State Bank. The own capital serves as basis for calculating the safety ratios in banking activities. 14. Discounting means the purchase of commercial papers and other short-term valuable papers by a credit institution from their beneficiaries before they become mature. 15. Re-discounting means the purchase of already discounted commercial papers and other short-term valuable papers before they become mature. Chapter II ORGANIZING AND MANAGING CREDIT INSTITUTIONS Section 1. GRANTING ESTABLISHMENT AND OPERATION LICENSES Article 21.- Competence to grant establishment and operation licenses The State Bank is the body competent to grant establishment and operation licenses to credit institutions and banking operation licenses to other organizations in accordance with the provisions of this Law and other provisions of law. Article 22.- Conditions for being granted establishment and operation licenses 1. The conditions for a credit institution to be granted an establishment and operation license include: a/ There is demand for banking activities in the place where the credit institution is to operate; b/ Having the capital prescribed in Article 83 of this Law; c/ The founding members are financially prestigious and capable organizations and individuals; d/ The managerial and executive personnel have the full capacity for civil acts and the professional qualifications suited to each type of credit institution; e/ Having the organization and operation Statute in accordance with the provisions of this Law and relevant laws; f/ Having a feasible business plan. 2. The conditions for an organization which is not a credit institution to be granted a license for banking activities include: a/ The banking activities are necessary and closely associated with the organization's principal operation; b/ Having sufficient capital and material conditions suitable to the banking operation requirements; c/ Having a contingent of personnel knowledgeable about banking operations; d/ Having a feasible business plan for banking activities. Article 23.- Dossier of application for an establishment and operation license 1. For credit institutions, the dossier of application for an establishment and operation license includes: a/ The application for an establishment and operation license; b/ The draft Statute; c/ The operation plan for the first three years, clearly stating the economic efficiency and benefits of banking activities; d/ A list, curricula vitae and certificates proving the capabilities and professional qualifications of founding members and members of the Managing Board, the Control Board and the general director (director); e/ The amount of contributed capital, the capital contribution plan and the list of capital contributing individuals and organizations; f/ The financial status and other information related to major shareholders; g/ The competent People's Committee's approval of the location of the credit institution's head office. 2. For organizations which are not credit institutions, the dossier of application for licenses to conduct banking activities includes: a/ The application for a license to conduct banking activities; b/ The establishment decision or license, the certificate of registration of the current business line(s); c/ The Statute; d/ The list and curricula vitae of the general director (director), members of the Managing Board and the Control Board (if any); e/ The financial status in the last three years; f/ The plan on banking activities. Article 24.- Time limit for granting licenses Within 90 days from the date of receipt of the full dossiers of application for establishment and operation licenses with regard to credit institutions, for licenses for banking activities with regard to organizations that are not credit institutions, the State Bank must grant or refuse to grant such licenses. In case of refusal, the State Bank shall have to clearly state in writing the reasons. Article 25.- Licensing fee The organization to which a license is granted shall have to pay a licensing fee in accordance with the provisions of law. Article 26.- Use of licenses 1. The organization to which a license is granted must use the right name and operate in compliance with the provisions in the license. 2. The forging, erasing, assignment, lease or lending of a license is forbidden. Article 27.- Business registration After being granted a license, a credit institution must register its business in accordance with the provisions of law. Article 28.- Conditions for operation 1. To conduct banking operations, a credit institution to which a license is granted must meet all the following conditions: a/ Having its Statute endorsed by the State Bank; b/ Having the business registration certificate, sufficient legal capital and a head office suitable to the banking operation requirements; c/ The portion of the legal capital contributed in cash must be deposited in an interest-free escrow account at the State Bank at least 30 days before the commencement of operation. This portion shall be released only after the credit institution starts its operation; d/ Publishing the provisions of its license on the central and local newspapers in accordance with the provisions of law; 2. To conduct banking activities, an organization which is not a credit institution and already granted a license for banking activities must meet all the following conditions: a/ Having the business registration certificate, a head office suitable to the banking operation requirements; b/ Publishing the provisions of the license on the central and local newspapers in accordance with the provisions of law. 3. Within 12 months after receipt of a license from the State Bank, the organization must start its operation. Article 29.- Revocation of licenses 1. An organization to which a license is granted may have its license revoked in one of the following cases: a/ The dossier of application for the license proves to have contained intentionally falsified information; b/ Past the time limit prescribed in Article 28 of this Law, the organization still fails to start its operation; c/ Voluntary dissolution or compulsory dissolution by decision of a competent agency; d/ Split-up, merger, consolidation or bankruptcy; e/ Operating for a wrong purpose; f/ Lack of the conditions prescribed in Clauses 1 and 2, Article 28 of this Law. 2. After its license is revoked, the organization must immediately terminate its banking activities. 3. The decision to revoke a license shall be announced by the State Bank through the mass media. Article 30.- The Statute 1. The Statute of a credit institution must contain the following principal contents: a/ The name and address of the head office; b/ Contents and scope of its operation; c/ Operation duration; d/ The statutory capital and the mode of capital contribution e/ Tasks and powers of the Managing Board, the general director (director) and the Control Board; f/ Procedures for voting, appointment or dismissal of the Managing Board members, the general director (director) and the Control Board; g/ Rights and obligations of shareholders; h/ Principles in financial, accounting, internal inspection and auditing activities; i/ Cases of dissolution and procedures for dissolution; j/ Procedures for amending the Statute. 2. The Statute of a credit institution shall be effected only after it is endorsed by the State Bank, except otherwise provided for by law. Article 31.- Changes subject to approval 1. A credit institution must seek the approval from the State Bank before it can change one of the following points: a/ Its name; b/ The level of legal and/or allocated capital; c/ The location of its head office, transaction office, branch or representative office; d/ The contents, scope and duration of its operation; e/ Assignment of registered shares that exceed the ratio prescribed by the State Bank; f/ The ratio of shares owned by major shareholders; g/ Members of the Managing Board, the general director (director) and members of the Control Board. 2. After obtaining the approval from the State Bank, the credit institution shall have to register with the competent State agency the change(s) prescribed in Clause 1 of this Article and make announcements thereon in the central and local newspapers in accordance with the provisions of law. Section 2. ORGANIZATIONAL STRUCTURE OF CREDIT INSTITUTIONS Article 32.- Opening of transaction offices, branches and representative offices; establishment of companies and non-business units Credit organizations are entitled to: 1. Open transaction offices, branches and representative offices in geographical areas inside and outside the country, where there is demand for their operation, even in areas where their head offices are based, after obtaining the written approval from the State Bank; 2. Set up attached companies which have legal person status, apply an independent cost accounting system with their own capital and operate in some financial, banking and insurance fields in accordance with the stipulations of the Government. 3. Establish non-business units after getting the approval from the State Bank. Article 33.- Conditions, dossiers and procedures for opening transaction offices, branches and representative offices; for establishing companies 1. Credit institutions may open transaction offices, branches and representative offices and set up companies under Article 32 of this Law when they satisfy the following conditions: a/ Having the minimum operating duration stipulated by the State Bank; b/ Having profitable business operations and a healthy financial status; c/ The managerial and executive mechanism and the internal inspection system function effectively; d/ The information system meets the management requirements; e/ Not violating the regulations on safety in banking activities and other relevant provisions of law. 2. The application dossier and procedures for opening transaction offices, branches, representative offices and for setting up companies of credit institutions shall comply with the regulations of the State Bank. Article 34.- Separation, splitting, merger, consolidation, purchase or dissolution The separation, splitting, merger, consolidation, purchase or dissolution of a credit institution must be approved in writing by the State Bank. Article 35.- Association between cooperative credit institutions Cooperative credit institutions shall be entitled to associate with one another in financial regulation and support so as to enhance mutual assistance for ensuring safety and efficiency in the operations of each institution. Section 3. ADMINISTRATION, MANAGEMENT AND CONTROL Article 36.- Administration, management and control 1. The election, appointment or dismissal of the chairman and other members of the Managing Board, the head and other members of the Control Board, the general director (director) of a credit institution shall comply with the provisions of law. 2. The chairman and other members of the Managing Board, the head and other members of the Control Board, the general director (director) of a credit institution must be ratified by the Governor of the State Bank or by a person authorized by the Governor of the State Bank, except for cases of appointment by the Prime Minister. Article 37.- Managing Board 1. The Managing Board of a credit institution has the function to administer the credit institution in accordance with the provisions of this Law and relevant laws. 2. The Managing Board is composed of at least three members who are possessed of professional prestige and morals and knowledgeable about banking activities. 3. The chairman and other members of the Managing Board shall not be allowed to authorize those people who are not members of the Managing Board to perform their tasks or powers. 4. The chairman of the Managing Board must not concurrently be the general director (director) or deputy general director (deputy director) of the same credit institution, except otherwise provided for by law. 5. The chairman of the Managing Board of this credit institution shall not be allowed to participate in the Managing Board or in the management of another credit institution, except for cases where the latter is the former's attached company. Article 38.- Control Board 1. The Control Board of a credit institution operates in accordance with the provisions of this Law and other provisions of law. 2. The Control Board is tasked to supervise the financial activities of the credit institution; oversee the observance of the accounting regime, operations of the internal inspection and auditing system of the credit institution. 3. The Control Board of a credit institution is composed of at least three people, including its head, and at least half of its member work on a full-time basis. 4. Members of the Control Board must have professional qualifications and morals required by the State Bank. 5. The Control Board may use the internal inspection and auditing system of the credit institution to perform its tasks Article 38.- General director (director) 1. The general director (director) of a credit institution is a person who take responsibility to the Managing Board for running day-to-day activities according to his/her tasks and powers in accordance with the provisions of this Law and other provisions of law. 2. The general director (director), deputy general director(s) (deputy director(s)) of a credit institution must meet the following criteria: a/ Residing in Vietnam during the working term; b/ Having the professional qualifications and capabilities to run a credit institution as defined by the State Bank. Article 40.- People who shall not be allowed to be members of the Managing Board and the Control Board, or executive officers 1. The following people shall not be elected to the Managing Board, the Control Board or appointed as general director (director) or deputy general director (deputy director): a/ Being under investigation for penal liability; b/ Having been sentenced for serious offenses of infringement upon the national security, serious offenses of infringement upon the socialist ownership or citizen's ownership; or serious economic offenses; c/ Having been convicted of other offenses and such criminal records have not yet been written off; d/ Being a former member of the Managing Board or former general director (director) of a bankrupt company, except for cases prescribed in Clause 2, Article 50 of the Law on Enterprises' Bankruptcy; e/ Being a former representative at law of a company which has been suspended from operation due to serious violation of law; 2. Parents, spouses, children and siblings of the Managing Board members, the general director (director) shall not be allowed to be members of the Control Board or the chief accountant of the same credit institution. Section 4. INTERNAL INSPECTION AND AUDITING SYSTEM Article 41.- Internal inspection and auditing system A credit institution shall have to set up an internal inspection and auditing system as part of the executive apparatus to assist the general director (director) in running all professional operations of the credit institution in a smooth, safe and lawful manner. Article 42.- Internal inspection Credit institutions shall have to regularly inspect the observance of law and internal regulations; directly inspect operations in all domains at their respective transaction offices, branches, representative offices and attached companies. Article 43.- Internal auditing Credit institutions shall have to audit their operations in each period and each area so as to accurately evaluate the results of their business operations and actual financial status. Article 44.- Reporting of internal inspection and auditing The result of internal inspection and auditing must be promptly reported to the general director (director), the Managing Board and the Control Board. Chapter III OPERATION OF CREDIT INSTITUTIONS Section 1. CAPITAL MOBILIZATION Article 45.- Taking deposits 1. Banks are entitled to take deposits from organizations, individuals and other credit institutions in the forms of demand deposits, time deposits and other types of deposits. 2. Non-bank credit institutions are entitled to take deposits with a term of one year or more from organizations and individuals as stipulated by the State Bank. Article 46.- Issuance of valuable papers When approved by the State Bank, credit institutions are allowed to issue certificates of deposits, bonds and other valuable papers so as to mobilize capital from organizations and individuals inside and outside the country. Article 47.- Capital borrowing among credit institutions Credit institutions are entitled to borrow capital from each other and from foreign credit institutions. Article 48.- Borrowing capital from the State Bank Credit institutions that are banks may borrow capital from the State Bank in the form of capital re-allocation under Article 30 of the Law on the State Bank. Section 2. CREDIT OPERATIONS Article 49.- Granting of credit Credit institutions are entitled to grant credit to organizations and individuals in the forms of loans, discounting of commercial papers and other valuable papers, guaranty, financial leasing and other forms as stipulated by the State Bank. Article 50.- Types of loans 1. Credit institutions may provide short-term loans for organizations and individuals to meet the need of capital for production, business, service and daily life. 2. Credit institutions may provide medium- and long-term loans for organizations and individuals to realize investment projects on developing production, business and services and improving the people's living conditions. Article 51.- Credit contracts The lending must be established in a credit contract. The credit contract must contain the lending conditions, the loan use purpose, the form of loan, the loan amount, the interest rate, the loan duration, the security form, the value of the property as security, the mode of debt repayment and other commitments agreed upon by the involved parties. Article 52.- Security of loans 1. Credit institutions shall take the initiative in seeking feasible and effective production and business projects which are capable of repaying debts so as to provide loans for. 2. Credit institutions shall provide loans which are secured with pledged or mortgaged property of borrowing customers, or with the third party's guaranty; shall not be allowed to provide loans which are pledged with the shares of the lending credit institution. 3. The provision of loans secured with the property formed from the borrowed capital and the provision of loans not secured with the customers' property shall comply with the stipulations of the Government. 4. State credit institutions may provide unsecured loans as designated by the Government. Losses of these loans due to objective reasons shall be handled by the Government. Article 53.- Consideration and approval of loans and inspection of the use of loans 1. Credit institutions are entitled to request customers to supply documents proving the feasibility of their business plans, their financial capabilities and those of the guarantor before deciding the lending. 2. Credit institutions shall have to organize the consideration and approval of loans on the principle of assignment of responsibilities between the loan evaluation and decision phases. 3. Credit institutions must inspect and supervise the process of borrowing capital, using loans and repaying debts by their customers. Article 54.- Loan termination, debt handling and adjustment of interest rates 1. A credit institution shall be entitled to terminate a loan and recover debts ahead of schedule when discovering that a customer has provided false information or breached the credit contract. 2. In case a customer fails to pay a due debt, if the involved parties do not otherwise agree, the credit institution shall be entitled to: a/ Sell the pledged property to recover the debt; assign or sell the mortgaged property to recover the capital within a given time limit prescribed by law; b/ Request the guarantor to perform the guaranty obligation; c/ Initiate a lawsuit against the customer who has breached the credit contract and/or the guarantor in accordance with the provisions of law. 3. In cases where a borrower or a guarantor fails to pay a debt due to bankruptcy, the recovery of debt by the credit institution shall comply with the provisions of legislation on enterprises' bankruptcy. 4. Credit institutions are entitled to interest rate and/or fee exemption or reduction; to rollover of debts, sale or purchase of debts in accordance with the regulations of the State Bank. The renewal of debts shall comply with the stipulations of the Government. Article 55.- Filing of credit dossiers 1. Credit institutions must file credit dossiers, including: a/ Credit contracts and documents clearly stating the use purpose of loans, legal basis of secured properties (if any); b/ Reports on the financial status of customers and guarantors; c/ Credit-granting decisions signed by competent persons; in case such a decision is made collectively, there must be a written report clearly stating that the decision has been adopted; d/ Documents derived from the use of loans and related to credit contracts. 2. The time limit for filing of credit dossiers shall comply with the provisions of law. Article 56.- Rights and obligations of the borrowers 1. A borrower shall have the following rights: a/ To reject any requests of a credit institution which are not in compliance with the provisions of the credit contract; b/ To complain or initiate lawsuits against groundless refusal of loans and violations of the credit contract in accordance with the provisions of law. 2. A borrower shall have the following obligations: a/ To provide sufficient and truthful information and documents related to the borrowing and to be accountable for the accuracy of such information and documents; b/ To use the loan for the right purpose and strictly observe other contents agreed upon in the credit contract; c/ To pay debt principal and interest as agreed upon in the credit contract; d/ To be answerable before law for failing to correctly perform the credit contract. Article 57.- Discounting, re-discounting and pledging of commercial papers and other short-term valuable papers 1. Credit institutions are entitled to grant credit in the form of discounting commercial papers and other short-term valuable papers. Owners of commercial papers and other short-term valuable papers must immediately transfer all legitimate rights and interests derived therefrom to the credit institutions. 2. Credit institutions are entitled to grant credit in the form of pledging commercial papers and other short-term papers. Credit institutions are entitled to exercise the legitimate rights and enjoy the legitimate interests derived therefrom in case the owners of such papers fail to fulfill the commitments made in the credit contracts. 3. Credit institutions are entitled to re-discount and pledge commercial papers and other short-term valuable papers among themselves. 4. Credit institutions which are banks may enjoy re-discounts and loans from the State Bank on the basis of pledging already discounted commercial papers and other short-term valuable papers. 5. The discounting, re-discounting and pledge of commercial papers and other short-term valuable papers for granting credits within the system of credit institutions shall be stipulated by the State Bank. Article 58.- Bank guaranty 1. Credit institutions are entitled to guarantee with their financial prestige and capability for the guarantee. 2. Credit institutions are entitled to guarantee loans, payment, performance of contracts, bid participation and other forms of bank guaranty for organizations and individuals. 3. Only banks which are allowed to perform the international payment can issue loan guaranty, payment guaranty and other forms of bank guaranty to the guarantees that are foreign organizations and individuals. Article 59.- Rights and obligations of guaranteeing credit institutions 1. A credit institution that makes a guaranty shall have the following rights: a/ To request customers to supply documents on their financial capability and documents related to the guaranteed transactions; b/ To request customers to secure its guaranty; c/ To collect guaranty service fees according to the regulations of the State Bank; d/ To supervise the performance of obligation by the guaranteed; e/ To refuse guaranty for customers who lack prestige. 2. Guaranteeing credit institutions are obliged to fulfill their commitments toward the guarantee when the guaranteed fails to perform or fulfill his/her obligations. Article 60.- Obligations of the guaranteed The guaranteed shall have the following obligations: 1. To supply sufficient and accurate information and documents related to the guaranty at the request of the guaranteeing credit institution. 2. To fulfill his/her commitments toward the guarantee and the guarantor. 3. To submit to the supervision by the guaranteeing credit institution over all operations related to the guaranteed obligations. 4. To acknowledge debts and pay principal, interest thereon and related expenses which the guaranteeing credit institution has paid in his/her behalf according to the guaranty commitment. Article 61.- Financial leasing 1. Financial leasing operations of organizations and individuals shall be conducted through financial leasing companies. 2. A financial leasing company (thereunder referred to as the lessor) is the owner of the assets for lease. Upon termination of a contract, the lessee shall be entitled to opt to either purchase the leased asset or continue the lease as agreed upon in the lease contract. 3. The lessor and the lessee shall not be allowed to unilaterally cancel the lease contract. Article 62.- Rights and obligations of the lessor: 1. The lessor shall have the following rights: a/ To buy or directly import the assets at the request of the lessee; b/ To request the lessee to compensate any damage caused by from the lessee's failure to fulfill the obligations to maintain, repair and pay insurance premiums for the leased asset during the lease term; c/ To recover the leased asset and request the lessee to immediately pay all rental when the lessee breaches the lease contract. 2. The lessor shall have the following obligations: a/ To sign contracts for purchase of assets, complete all procedures for the import of the assets and pay fully for the purchase of assets for lease; b/ To make compensation to the lessee in case the lessor breaches the lease contract. Article 63.- Rights and obligations of the lessee 1. The lessee shall have the following rights: a/ To select, negotiate and agree with the selling party on the technical specifications, categories, prices, insurance, mode and time limit for delivery, installation and warranty of the assets for lease; b/ To directly receive the assets for lease from the selling party as agreed upon in the asset purchasing contract; c/ To opt to either continue the lease or buy the leased asset upon termination of the lease contract; 2. The lessee shall have the following obligations: a/ To use the leased property for the right purpose as agreed upon in the lease contract; not to transfer the right to use the leased asset to another individual or organization without the written consent of the lessor; b/ To pay rental as stipulated in the lease contract and pay the expenses related to the import, tax and insurance of the leased asset; c/ To bear all risks of loss or damage to the leased asset and risks caused by the leased asset to another organization or individual; d/ To maintain and repair the leased asset during the lease term; e/ Upon the expiry of the lease, the lessee may buy the leased asset or continue the lease as agreed upon in the lease contract; f/ The lessee shall not be allowed to use the leased asset for pledging, mortgaging or guaranteeing any financial obligation. Article 64.- Credit activities of cooperative credit institutions Cooperative credit institutions are entitled to mobilize capital from their members and from various organizations and individuals to lend to their members. The lending to non-member recipients must be approved by the Congress of Members or the Congress Members' Delegates of Members' Delegates and such loans must not exceed the maximum level set by the State Bank. Section 3. PAYMENT AND TREASURY SERVICES Article 65.- Opening of accounts 1. Credit institutions may open deposit accounts at the State Bank and at other credit institutions. 2. Credit institutions which take deposits shall have to open deposit accounts at the State Bank and keep therein an average balance not lower than the compulsory reserve level set by the State Bank. 3. Credit institutions that are banks may open accounts for domestic and foreign customers. Customers may choose banks to open principal transaction account. Article 66.- Payment service Credit institutions that are banks may provide the following payment services: 1. Provision of payment instruments; 2. Provision of domestic payment services for customers; 3. Provision of international payment services when so permitted by the State Bank; 4. Provision of authorized payment and collection services; 5. Provision of other payment services stipulated by the State Bank. Article 67.- Treasury services Credit institutions are entitled to provide the cash collection and disbursement service for customers. Article 68.- Organizing and participating in various payment systems Banks are entitled to organize internal payment systems and participate in the domestic inter-bank payment system. The participation in the international payment systems must be permitted by the State Bank. Section 4. OTHER OPERATIONS Article 69.- Capital contribution and purchase of shares Credit institutions are entitled to use their statutory capital and the reserve funds for contributing capital to or purchasing shares of enterprises and other credit institutions in accordance with the provisions of law. Article 70.- Participation in the monetary market Credit institutions are entitled to participate in the monetary market organized by the State Bank, including the treasury bill auction market, domestic and foreign currency inter-bank markets and other short-term valuable paper market according to the regulations of the State Bank. Article 71.- Trading in foreign exchange and gold Credit institutions are entitled to trade in foreign exchange and gold on the domestic and international markets if so permitted by the State Bank. Article 72.- Fiduciary and agency operations Credit institutions shall be entitled to trust, accept trust or act as agent in areas related to banking operations, including the management of assets and investment capital of organizations and individuals as contracted. Article 73.- Dealing in immovable assets Credit institutions shall not be allowed to directly deal in immovable assets. Article 74.- Insurance business and service 1. Credit institutions are entitled to set up independent companies to do business in insurance in accordance with the provisions of law. 2. Banks are entitled to provide insurance services in accordance with the provisions of law. Article 75.- Consultancy services Credit institutions are entitled to provide financial and monetary consultancy services for customers. Article 76.- Other services related to banking activities Credit institutions are entitled to provide services in keeping precious objects, valuable papers, leasing safes, pawning and other services according to law. Section 5. RESTRICTIONS TO ENSURE SAFETY IN THE OPERATION OF CREDIT INSTITUTIONS Article 77.- Cases not eligible for loans 1. A credit institution shall not be allowed to provide loans for the following people: a/ Members of the Managing Board and the Control Board, the general director (director), deputy general director(s) (deputy director(s)) of the credit institution; b/ The people who evaluate, consider and approve loans; c/ Parents, spouses and children of the members of the Managing Board, the Control Board, the general director (director), deputy general director (deputy director). 2. The provisions in Clause 1 of this Article shall not apply to cooperative credit institutions. 3. Credit institutions shall not be allowed to accept guaranty from the people specified in Clause 1 of this Article as basis for granting credit to customers. Article 78.- Credit restriction 1. A credit institution shall not be allowed to grant credit without security or grant credit with preferential conditions to the following subjects a/ The auditing organization and auditors that are auditing the credit institution; the chief accountant and inspectors; b/ Major shareholders of the credit institution; c/ An enterprise where one of the people specified in Clause 1, Article 77 of this Law owns more than 10% of the statutory capital of such enterprise. 2. The total outstanding loans made to the subjects prescribed in Clause 1 of this Article shall not exceed 5% of the own capital of a credit institution. Article 79.- Loan and guaranty limits 1. The loan limit for a customer is stipulated as follows: a/ The total outstanding loans for a customer shall not exceed 15% of the own capital of a credit institution, except for loans from the trust fund sources of the Government, organizations and individuals or in cases where the customer is another credit institution. b/ In cases where the capital demand of a customer exceeds 15% of the own capital of a credit institution or the customer has a need to mobilize loans from various sources, credit institutions shall be allowed to syndicate loans in accordance with the regulations of the Governor of the State Bank; c/ In special cases, in order to implement socio-economic tasks but the credit institutions' syndicated loans still can not meet a customer's demand for capital, the Prime Minister may decide the maximum loan amount for each specific case. 2. The amount of guaranty for a customer and the total guaranty amount of a credit institution shall not be allowed to exceed the ratio between these amounts and the own capital of the credit institution set by the Governor of the State Bank. Article 80.- Limit of capital contribution and share purchase The level of capital contribution and share purchase by a credit institution in an enterprise, the aggregate level of capital contribution and share purchase by a credit institution in all enterprises shall not be allowed to exceed the maximum level set by the Governor of the State Bank for each type of credit institution. Article 81.- Safety ratios 1. A credit institution shall have to maintain the following safety ratios: a/ The liquidity that is determined by the ratio between the "credit" assets immediately payable and the "debit" assets payable at a given time of a credit institution; b/ The minimum capital safety ratio that is determined by the ratio between the own capital and the "credit" assets, including off-balance sheet commitments adjusted according to the degree of risk; c/ The maximum proportion of the short-term capital flows used for granting medium-term and long-term loans; d/ The maximum ratio of outstanding loans to the balance of deposits. 2. The Governor of the State Bank shall set the ratios mentioned in Clause 1 of this Article for each type of credit institution. 3. The total capital invested by a credit institution into another credit institution in the form of capital contribution or share purchase must be excluded from its own capital when calculating the safety ratios. Article 82.- Contingency reserve 1. A credit institution must establish a contingency reserve for banking operations. This contingency reserve must be accounted in the operational expenses. 2. The classification of "credit" assets, the level of deduction, the method of setting up the reserve and the use of the reserve for dealing with risks in banking operations shall be prescribed by the Governor of the State Bank after consulting the Minister of Finance. 3. In case a credit institution recovers the capital already offset by the contingency reserve, this recovered amount shall be considered turnover of the credit institution. Chapter IV FINANCE, COST-ACCOUNTING AND REPORTING Article 83.- Legal capital The level of the legal capital of each type of credit institution shall be stipulated by the Government. Article 84.- Financial revenue and expenditure 1. Financial revenues and expenditures of credit institutions shall comply with the provisions of law. 2. The Minister of Finance shall guide and supervise the implementation of the financial regime by credit institutions in accordance with the provisions of law. Article 85.- Fiscal year The fiscal year of a credit institution starts on January 1st and ends on December 31 of the calendar year. Article 86.- Cost-accounting Credit institutions shall have to apply cost-accounting according to the system of accounts and regulations on vouchers in accordance with the provisions of the legislation on accounting and statistics. Article 87.- Funds 1. Annually, credit institutions shall have to deduct part of their after-tax profits to set up and maintain the following funds: a/ The reserve fund for the statutory capital that is set up from a 5% deduction of after-tax profits. The maximum level of this fund shall be stipulated by the Government; b/ Other funds as prescribed by law. 2. Credit institutions shall not be allowed to use the funds prescribed in Clause 1 of this Article to pay share dividends. Article 88.- Purchase of and investment in fixed assets A credit institution may purchase and invest in its fixed assets by not more than 50% of its own capital. Article 89.- Reporting 1. Credit institutions shall have to comply with the regulations on financial reporting in accordance with the provisions of legislation on accounting and statistics and regular reporting on their operations in accordance with the regulations of the Governor of the State Bank. 2. Apart from regular reports, credit institutions shall have to promptly report to the Governor of the State Bank in the following cases: a/ Irregular developments in the professional operations which may seriously affect their business situation; b/ Substantial changes in the organizational structure. 3. Within 90 days from the end of the fiscal year, credit institutions shall have to submit annual reports to the State Bank in accordance with the provisions of law. Article 90.- Making public financial reports within 120 days from the end of the fiscal year, credit institutions shall to make public their financial reports in accordance with the provisions of law Chapter V SPECIAL CONTROL, BANKRUPTCY, DISSOLUTION AND LIQUIDATION Section 1. SPECIAL CONTROL Article 91.- Reporting on reimbursement difficulties When facing a risk of loosing its ability to reimburse customers, a credit institution shall have to immediately report to the State Bank on its present financial status, causes and measures already taken and to be taken to overcome the situation. Article 92.- Application of special control 1. Special control is the placing of a credit institution under the direct control of the State Bank because such credit institution faces a risk of loosing its ability of reimbursement or ability of payment.. 2. The State Bank shall have to inspect and discover in time cases facing the risk of loosing the ability of reimbursement or the ability of payment. 3. A credit institution may be placed in the state of special control in the following cases: a/ Facing the risk of loosing its reimbursement ability; b/ Facing the risk of loosing its payment ability due to irrecoverable debts ; c/ When the amount of its cumulative losses exceeds 50% of the total actual statutory capital and funds. Article 93.- Decision on special control 1. The Governor of the State Bank shall issue the decision to place a credit institution in the state of the special control. 2. The decision to place a credit institution in the state of the special control includes the following details: a/ The name of the credit institution to be placed under special control; b/ Reason(s) for the special control; c/ The full names of the members of the special control commission and their specific tasks; d/ Duration of the special control. 3. The decision on special control shall be notified by the State Bank to the competent State agency and concerned local agencies for coordinated implementation. 4. The placing of a credit institution in the state of special control shall not be made public. Article 94.- Tasks, powers and responsibilities of the special control commission 1. The special control commission shall have the following tasks: a/ To direct the Managing Board, the Control Board, the general director (director) of the credit institution placed in the state of special control to formulate the plan on strengthening its organization and operation; b/ To direct and supervise the application of the measures mentioned in the plan on strengthening the credit institution already approved by the special control commission; c/ To report to the State Bank on the situation of operation and the result of the execution of the plan on strengthening the credit institution. 2. The special control commission shall have the following powers: a/ To suspend the operations which are inconsistent with the already approved plan on strengthening the organization and operation, with the regulations on safety in banking activities, which may harm the interests of depositors; b/ To temporarily suspend the rights to administer, manage and control the credit institution of the members of the Managing Board, the Control Board, the general director (director), the deputy general director (director), if deemed necessary; c/ To request the Managing Board, the general director (director) to dismiss or suspend the work of the people who commit acts of law offenses or fail to abide by the already approved plan on strengthening the organization and operation. d/ To propose the Governor of the State Bank to extend or terminate the duration of special control; e/ To make recommendations to the Governor of the State Bank on special loans to credit institutions. 3. The special control commission shall take responsibility for its decisions in the course of exercising the special control. Article 95.- Duties of the credit institution under the special control The Managing Board, the Control Board and the general director (director) of the credit institution under the special control shall have the responsibility to: 1. To draw up a plan on strengthening the organization and operation of the credit institution and submit it to the special control commission for approval and organizing the execution of such plan; 2. To continue to manage, supervise and run the operations and ensure safety for the assets of the credit institution, except for cases specified in Point b, Clause 2, Article 94 of this Law; 3. To respond to the requests of the special control commission regarding the organization, management, supervision and running of the credit institution. Article 96.- Special loans In case of emergency, to ensure the ability to reimburse deposits to its customers, a credit institution may be provided with special loans by other credit institutions or the State Bank. Priority shall be given to the repayment of these special loans prior to all other debts of the credit institution. Article 97.- Termination of special control 1. The special control shall terminate in the following cases: a/ Upon the expiration of the special control duration without extension; b/ The operations of the credit institution return to normal; c/ Before the expiration of the special control duration, the credit institution is merged or consolidated; d/ The credit institution falls into the state of bankruptcy. 2. The special control shall be terminated by a decision of the Governor of the State Bank. This decision shall be notified to the concerned agencies. Section 2. BANKRUPTCY, DISSOLUTION, LIQUIDATION Article 98.- Bankruptcy of credit institutions After the State Bank issues a document on the non-application or termination of the application of the measures to rehabilitate the payment ability of a credit institution but such credit institution still loses its ability to pay mature debts, a Court may start procedures to settle the request for declaring the credit institution bankrupt in accordance with the Law on Enterprises' Bankruptcy. Article 99.- Dissolution of credit institutions A credit institution may dissolve in the following cases: 1. The credit institution voluntarily applies for the dissolution if it is able to pay all debts and the State Bank so approves. 2. Upon the expiration of the operating duration the credit institution does not apply for extension or applies for extension but such extension is rejected by the State Bank. 3. The credit institution has its establishment and operation license revoked. Article 100.- Liquidation of credit institutions 1. In case a credit institution is declared bankrupt, it shall be liquidated in accordance with the legislation on enterprises' bankruptcy. 2. When dissolving in accordance with Article 98 of this Law, the credit institution must conduct liquidation under the supervision of the State Bank. 3. All costs related to the liquidation shall be incurred by the liquidated credit institution. Chapter VI INFORMATION AND CONFIDENTIALITY Article 101.- Provision of information for account holders Credit institutions shall regularly provide information to account holders with information on the transactions and their balances of their accounts at the credit institutions. Article 102.- Exchange of information among credit institutions Credit institutions may exchange information among themselves on banking activities and customers. Article 103.- Exchange of information between the State Bank and credit institutions Credit institutions shall have to provide the State Bank with information related to the granting of credit to customers at the request of the latter and be provided by the latter with the information related to banking activities of customers who have relations with the credit institutions. Article 104.- Keeping secret banking information 1. Staff of credit institutions and concerned people are not allowed to disclose the national secrets and the credit institutions' business secrets they are aware of. 2. Credit institutions shall be entitled to reject the requests of organizations and individuals regarding the provision of information related to deposits and assets of customers as well as the operations of credit institutions; except for cases where it is so requested by competent State bodies under the provisions of law or so consented by customers. Chapter VII FOREIGN CREDIT INSTITUTIONS AND REPRESENTATIVE OFFICES OF FOREIGN CREDIT INSTITUTIONS IN VIETNAM Article 105.- Forms of operation 1. Foreign credit institutions shall be permitted to operate in Vietnam in the following forms: a/ Joint-venture credit institution; b/ Non-bank credit institutions with 100% foreign capital; c/ Foreign banks' branches in Vietnam. 2. Foreign credit institutions may open their representative offices in Vietnam. The representative offices of foreign credit institutions shall not be allowed to conduct business operations in Vietnam. Article 106.- Conditions for being granted establishment and operation licenses 1. Conditions for a joint-venture credit institution or a non-bank credit institution with 100% foreign capital to be granted the establishment and operations license include: a/ The conditions prescribed in Clause 1, Article 22 of this Law; b/ The foreign credit institution is permitted by a competent agency of the concerned foreign country to conduct banking operations; c/ The foreign credit institution is permitted by a competent agency of the concerned foreign country to operate in Vietnam; 2. Conditions for a foreign bank to be granted licenses for opening its branch(es) include: a/ The conditions prescribed in Points a, b, d and f, Clause 1, Article 22 of this Law; b/ The foreign bank is permitted by a competent agency of the concerned foreign country to open its branch(es) in Vietnam; c/ A competent agency of the concerned foreign country ensures in writing the ability to supervise the entire operations of the branch(es) to be opened in Vietnam; d/ The foreign bank ensures in writing to take responsibility for all obligations and commitments of its branch(es) in Vietnam. 3/ Conditions for a foreign credit institution to be granted the license for opening its representative office(s) include: a/ The foreign credit institution is a legal entity permitted to conduct banking operations overseas; b/ The foreign credit institution is permitted by a competent agency of the concerned foreign country to open its representative office(s) in Vietnam; c/ The foreign credit institution has cooperation relations with Vietnamese economic organizations. Article 107.- Competence to grant licenses The State Bank shall grant establishment and operation licenses to joint-venture credit institutions, non-bank credit institutions with 100% foreign capital; licenses for opening foreign banks' branches and foreign credit institutions' representative offices in Vietnam. Article 108.- Dossiers of application for licenses 1. The dossier of application for an establishment and operation license of a joint-venture credit institution or a non-bank credit institution in Vietnam includes: a/ The application for the establishment and operation license; b/ The draft Statute; c/ The operation plan for the first three years, clearly stating the economic efficiency and benefits of banking activities; d/ The list, curricula vitae and certificates of the professional capabilities and qualifications of the founding members, the members of the Managing Board and the Control Board, and the general director (director); e/ The level of contributed capital, the plan on capital contribution and the list of organizations and individuals that contribute capital; f/ The financial status and information related to major shareholders; g/ The approval of the People's Committee of the province or city directly under the Central Government where the credit institution is to open its head office; h/ The Statute of the foreign credit institution; i/ The operation license of the foreign credit institution; j/ The document issued by a foreign competent agency permitting the foreign credit institution to operate in Vietnam; k/ The financial balance sheet, the already audited profit-loss statement and the report on the operation situation in the last three years of the foreign credit institution; l/ The joint-venture contract with regard to a joint-venture credit institution; m/ The full name of the general director (director) of the joint-venture credit institution or non-bank credit institution with 100% foreign capital in Vietnam. 2. The dossier of application for a license to open a branch in Vietnam by a foreign bank includes: a/ The documents prescribed in Points a and c, Clause 1 of this Article; b/ The Statute of the foreign bank; c/ The operation license of the foreign bank; d/ The document issued by a foreign competent body permitting the foreign agency to open its branch to operate in Vietnam e/ The financial balance, the already audited profit-loss statement and the report on the operation situation in the last three years of the foreign bank; f/ The full name and the curriculum vitae of the general director (director) of the foreign bank's branch to be opened in Vietnam. 3. The dossier of application for a license to open a representative office in Vietnam by a foreign credit institution: a/ The application for opening a representative office in Vietnam; b/ The operation license of the foreign credit institution; c/ The document issued by a foreign competent body permitting the foreign credit institution to open a representative office in Vietnam; d/ The financial balance sheet, the already audited profit-loss statement and the report on the operation situation in the last three years of the foreign credit institution. e/ The full name and curriculum vitae of the head of the representative office in Vietnam. Article 109.- Operation contents The contents of operations of joint-venture credit institution, non-bank credit institutions with 100% foreign capital, foreign banks' branches in Vietnam and foreign credit institutions' representative offices in Vietnam shall comply with the provisions of this Law and other provisions of Vietnamese law. Article 110.- Capital, financial revenues and expenditure of foreign credit institutions operating in Vietnam 1. The level of the legal capital of joint-venture credit institutions, non-bank credit institutions with 100% foreign capital and the level of allocated capital of foreign banks' branches operating in Vietnam shall be stipulated by the Government. 2. Financial revenue and expenditure of foreign credit institutions operating in Vietnam shall comply with the provisions of Vietnamese law. Article 111.- Cost-accounting, reporting 1. Joint-venture credit institutions, non-bank credit institutions with 100% foreign capital, foreign banks' branches operating in Vietnam shall have to apply cost-accounting according to the system of accounts, the regulations on vouchers and financial reporting in accordance with the provisions of Vietnamese law. 2. Within 180 days from the date ending the fiscal year, joint-venture credit institutions, non-bank credit institutions with 100% foreign capital, foreign banks' branches and foreign credit institutions' representative offices in Vietnam shall have to send their annual reports to the State Bank. Article 112.- Remittance of profits and transfer of assets abroad 1. Foreign banks' branches and non-bank credit institutions with 100% foreign capital in Vietnam are entitled to remit abroad the remaining profits under their ownership after making deductions therefrom to set up funds and fully fulfilling the financial obligations in accordance with the provisions of Vietnamese law. 2. The foreign parties to joint-venture credit institutions may remit abroad their shared profits after the joint-venture credit institutions have made deductions therefrom to set up funds and fulfilled the financial obligations in accordance with the provisions of Vietnamese laws. 3. Foreign banks' branches, non-bank credit institutions with 100% foreign capital and foreign parties to joint-venture credit institutions may transfer abroad their remaining assets after liquidation and termination of operation in Vietnam. 4. The remittance of money and transfer of other assets abroad prescribed in Clauses 1, 2 and 3 of this Article shall comply with the provisions of Vietnamese law. Article 113.- Other provisions Pursuant to the basic principles of this Law, the Government shall stipulate in detail the organization and operation of joint-venture credit institutions, non-bank credit institutions with 100% foreign capital, foreign banks' branches in Vietnam and foreign credit institutions' representative offices in Vietnam; Chapter VIII STATE MANAGEMENT OVER THE OPERATION OF CREDIT INSTITUTIONS AND BANKING ACTIVITIES OF OTHER ORGANIZATIONS Article 114.- Unified State management The State shall exercise unified management over the operations of credit institutions and banking activities of other organizations. Article 115.- Contents of State management over banking operations The contents of State management of banking operations include: 1. Issuing and guiding the implementation of legal documents regarding banking operations; make policies, strategies and plans for the development of the system of credit institutions; 2. Granting and revoking establishment and operation licenses of banks; 3. Inspecting and supervising the operation of credit institutions and banking operations of other organizations in accordance with the provisions of law; 4. Taking measures to prevent and overcome risks; prevent acts of destroying currencies as well as illegal monetary activities; 5. Organizing the collection, processing and supply of information and forecasting the situation of the monetary market and the capital market; 6. Signing or acceding to international agreements on monetary and banking activities; 7. Managing the operations of Vietnamese credit institutions in foreign countries; 8. Organizing and managing the banking scientific research work 9. Organizing the training and building a contingent of managerial and professional personnel for the credit institution system. Article 116.- State management agencies 1. The Government shall exercise the unified State management over banking operations. 2. The Governor of the State Bank shall take responsibility to the Government for performing the State management over banking operations. 3. The ministries, the ministerial-level agencies and the agencies attached to the Government shall, within their tasks and powers, have to take the responsibility for State management over credit institutions and other organizations involved in banking activities in accordance with the provisions of law. 4. The People's Committees of all levels shall perform the State management over the credit institutions and other organizations involved in banking activities operating in the localities in accordance with the provisions of law. Chapter IX BANK INSPECTION, AUDITING OF CREDIT INSTITUTIONS AND BANKING ACTIVITIES OF OTHER ORGANIZATIONS Section 1. INSPECTION BY THE STATE BANK Article 117.- Bank Inspectorate Credit institutions and other organizations involved in banking activities shall be subject to the inspection by the Bank Inspectorate in accordance with the provisions of law. Article 118.- Rights of the inspected organizations When the Bank Inspectorate inspects, the inspected organization shall have the following rights: 1. To request the inspectors to produce the inspection decision, the inspector's card and to comply with the legislation on inspection; 2. To lodge complaints and denunciations or to initiate lawsuits to the competent State agency against the acts of inspectors or conclusion and decision of the Bank Inspectorate which they deem incorrect; 3. To demand compensation for damages caused by the Bank Inspectorate's acts or handling decisions in contravention of law. Article 119.- Obligations of inspected organizations When the Bank Inspectorate inspects, the inspected organization shall have the following obligations: 1. To respond to the request of the Bank Inspectorate concerning the inspection contents. 2. To abide by the handling decisions of the Banking Inspectorate. Article 120.- Powers of the Bank Inspectorate When inspecting, the Bank Inspectorate shall have the following powers: 1. To request the inspected subjects and related parties to provide materials, evidences and answer the questions related to the inspection contents; 2. To make an inspection report and recommendations on the handling measures; 3. To take measures to prevent and promptly handle violations in accordance with the provisions of law. Article 121.- Responsibilities of the Bank Inspectorate When inspecting, the Bank Inspectorate shall have the following responsibilities: 1. To produce the inspection decision and the inspector's card; 2. To comply with the inspection order and procedures, not to cause any troubles or hassles that may obstruct normal banking activities and damage the legitimate interests of credit institutions and other organizations involved in banking activities; 3. To report to the Governor of the State Bank on the inspection results and recommend handling measures; 4. To abide by law and take responsibility to the Governor of the State Bank and before law for the inspection conclusions and all of its acts and decisions. Section 2. AUDITING Article 122.- Auditing 1. Not later than 30 days before the end of the fiscal year, a credit institution shall have to choose an auditing organization that is not its internal auditing body to audit its operations. Such auditing organization must be approved by the State Bank. 2. In the course of auditing credit, the institution shall have to supply accurate and sufficient information requested by auditors in a timely manner. 3. The auditing of cooperative credit institutions shall be stipulated by the State Bank in compliance with the management requirements and operation scope of these institutions. Article 123.- Responsibilities of the auditor After auditing, the auditor shall have the responsibility: 1. To certify the accuracy, genuineness and lawfulness of accounting records and data and financial reports of credit institutions; 2. To comment and assess the observance of the financial and accounting policy and regulations by credit institutions; 3. To make recommendations to the audited credit institutions the problems detected in the course of auditing. Chapter X COMMENDATION AND HANDLING OF VIOLATIONS Article 124.- Commendation Organizations and individuals that have made achievements in banking activities, contributing to the promotion of the business and production development and the detection of acts of violation of legislation on currency and banking activities, shall be commended in accordance with the provisions of law. Article 125.- Acts violating legislation on currency and banking activities Acts of violation of legislation on currency and banking activities include: 1. Conducting business without license or not in compliance with the contents prescribed in the license granted by the State Bank; 2. Continuing banking operations after they have been suspended or the banking operation license has been revoked or expired; 3. Failing to comply with the regulations on the level of compulsory reserves and safety ratios, failing to apply the interest rates, commissions, service fees and fines already announced and post up, 4. Violating the regulations on cost-accounting and accountancy; insufficient or improper keeping or writing of accounting books; 5. Forcing credit institutions to grant credit, contribute capital, purchase shares or make guaranty in contravention of the regulations; abusing positions and powers for personal interests, covering up violators; 6. Illegal competition; 7. Opposing banking inspectors while they are on official duties; 8. Other acts of violating the legislation on currency and banking activities. Article 126.- Forms of handling violations Organizations and individuals that violate the provisions of Article 125 of this Law shall, depending on the nature and seriousness of their violations, be disciplined, administratively sanctioned or examined for penal liability, and pay compensation for any damage as provided for by law. Article 127.- Competence to handle violations The State Bank shall have the competence to handle administrative violations by organizations and individuals in the field of currency and banking activities in accordance with the provisions of law. Article 128.- Complaints, lawsuits against decisions on handling of administrative violations 1. Organizations and individuals that are sanctioned for administrative violations shall be entitled to lodge complaints against the handling decisions to the competent State agency(ies) or initiate lawsuits at a court. The making of complaints and initiation of lawsuits shall comply with the provisions of law. 2. During the time of lodging complaints or initiating a lawsuit, the organization or individual that is sanctioned for administrative violation shall still have to abide by the decision handling the administrative violation. When there is a competent State agency's decision to settle the complaint or when the court's decision or verdict takes legal effect, such competent State agency's decision or the court's decision or verdict shall be executed. Chapter XI IMPLEMENTATION PROVISIONS Article 129.- Provisions applicable to organizations involved in banking activities 1. Credit institutions already established and operating according to the operation licenses granted by the State Bank before the date of effect of this Law shall not have to fill the procedures to apply for new establishment and operation licenses. 2. The State Bank shall set a specific schedule for credit institutions to adjust their organizational structure and operations in accordance with the provisions of this Law and the documents guiding the implementation thereof. 2. The organizations which are not credit institutions involved in banking operations shall have to terminate the operations or apply for banking operation licenses from the date of effect of this Law. Article 130.- Effect of implementation 1. This Law takes effect from October 1st, 1998. 2. The Ordinance on Banks, Credit Cooperatives and Financial Companies of May 23, 1990 shall cease to be effective from the date this Law comes into effect. 3. The Government, the Supreme People's Court and the Supreme People's Procuracy shall, within their respective tasks and powers, organize the review of legal documents on currency and banking activities and annul, amend, supplement by themselves the existing documents or issue new ones or propose the Standing Committee of the National Assembly or the National Assembly to annul, amend or supplement the existing documents or issue new ones to make them comply with the provisions of this Law. Article 131.- Guidance on the implementation of this Law The Government shall specify and guide the implementation of this Law. This Law has been passed by the Xth National Assembly of the Socialist Republic of Vietnam at its second session on December 12, 1997. Chairman of the National Assembly NONG DUC MANH