Bản dịch văn bản 03/2007/TT-NHNN
Circular 03/2007/TT-NHNN
Cơ quan ban hành: Ngân hàng Nhà nước Việt Nam
Ngày ban hành: 2007-06-05

CIRCULAR Guiding the implementation of a number of articles of the Government's Decree no. 22/2006/ND-CP of February 28, 2006, on organization and operation of foreign bank branches, joint-venture banks, banks with 100% foreign capital, and represen-tative offices of foreign credit institutions in Vietnam Pursuant to Article 67 of the Government's Decree No. 22/2006/ND-CP of February 28, 2006, on organization and operation of foreign bank branches, joint-venture banks, banks with 100% foreign capital, and representative offices of foreign credit institutions in Vietnam (below referred to as the Decree), the State Bank of Vietnam (below referred to as the State Bank) guides the implementation of the Decree as follows: Part I GENERAL PROVISIONS I. SCOPE OF REGULATION AND SUBJECTS OF APPLICATION 1. This Circular guides the implementation of a number of articles of the Decree and applies to foreign bank branches, joint-venture banks, banks with 100% foreign capital, and representative offices of foreign credit institutions in Vietnam. II. Interpretation of terms In this Circular, the terms below are construed as follows: 2. "Competent representative" means Chairman of the Board of Directors or General Director (Director) of a foreign bank, a foreign credit institution, a Vietnamese bank to a joint venture or an organization contributing capital to founding a bank with 100% foreign capital; a person authorized in writing by him/her; or a person who is, as defined by the charter or internal regulation of this organization, competent to sign documents specified in this Circular and perform relevant tasks within the ambit of his/her vested powers. 3. "Executive officer" means General Director (Director), Deputy General Director (Deputy Director), Chief Accountant or head or deputy head of an executive or professional unit or section. 4. "Operation inauguration" means the commencement of banking activities; "date of operation inauguration" means the date on which operation commences. III. CONDITIONS, DOSSIERS AND PROCEDURES FOR GRANT OF LICENSES FOR OPENING OF FOREIGN BANK BRANCHES; ESTABLISHMENT AND OPERATION LICENSES OF JOINT-VENTURE BANKS OR BANKS WITH 100% FOREIGN CAPITAL; LICENSES FOR OPENING OF REPRESENTATIVE OFFICES OF FOREIGN CREDIT INSTITUTIONS (below collectively referred to as licenses) 5. Licensing conditions 5.1. General conditions applicable to foreign bank branches, joint-venture banks and banks with 100% foreign capital a/ Foreign banks commit no serious violations of regulations on banking activities and other legal provisions of the countries of origin within three (3) consecutive years preceding the year of license application and until the State Bank examines their dossiers of application; b/ Foreign banks have experience in international activities and are ranked average and stable or above by international credit rating agencies, and show their capability to fulfill financial commitments and normally operate even when there are unfavorable developments in the economic situation and conditions; c/ Foreign banks have a sound financial status, satisfying the following minimum criteria: - Achieving the minimum capital safety ratio of at least 8% or more and other safety assurance ratios according to international practice; the non-performing loan (NPL) ratio of less than 3% in the year preceding the year of license application and until the State Bank examines their dossiers of application; - Profitably operating for at least three (3) consecutive years preceding the year of license application. d/ Competent supervisory and inspection agencies of the countries of origin are capable of supervising all operations of foreign banks on the basis of general review of those operations according to international practice; and have concluded commitments (memoranda of understanding, agreements, letters of exchange and other documents of equivalent validity) to cooperate with the State Bank in operation management and supervision and information exchange. 5.2. Conditions for opening foreign bank branches Apart from the general conditions specified at Point 5.1 above, to be granted a license to open a branch, a foreign bank (parent bank) must satisfy the following conditions: a/ The conditions specified in Clause 2, Article 106 of the Law on Credit Institutions, including: - The foreign bank branch has an allocated capital at least equal to the legal capital level prescribed by the Government; - The executive officer has the full civil act capacity and professional qualifications suitable to banking activities; the General Director (Director) of the foreign bank branch must satisfy the following minimum criteria: + Being physically fit, having professional ethics, being honest, incorruptible and knowledgeable of law, and having a sense of law observance; + Possessing a university or postgraduate diploma in economics, banking, finance, law or business administration; + Having worked in the finance or banking domain for at least three (3) years. - The foreign bank branch has feasible business plans, including a business and operation plan for at least three (3) first years under the guidance on dossiers at Point 6.1.b of this Circular; - The foreign bank is permitted by a competent authority of the country of origin to open a branch in Vietnam; - The competent authority of the country of origin issues a document guaranteeing its capability to supervise all operations of the Vietnam-based branch; - The foreign bank issues a document confirming its responsibility for all obligations and commitments of its Vietnam-based branch, ensuring that the actual value of the branch’s allocated capital is maintained at a level not lower than the legal capital and fully complies with the State Bank's regulations on operation safety. b/ The foreign bank has total assets at least equivalent to USD 20 billion in the year preceding the year of license application. 5.3. Conditions for establishment and operation of joint-venture banks and banks with 100% foreign capital Apart from the general conditions specified at Point 5.1 above, to be granted an establishment and operation license for a joint-venture bank or a bank with 100% foreign capital, a foreign bank must satisfy the following conditions: a/ The conditions specified in Clause 1, Article 22 of the Law on Credit Institutions, including: - The joint-venture bank or the bank with 100% foreign capital has a charter capital at least equal to the legal capital level prescribed by the Government; - The manager or executive officer of the joint-venture bank or the bank with 100% foreign capital has the full civil act capacity and professional qualifications suitable to the bank's operations; members of the Board of Directors and the Control Board and the executive officer satisfy the conditions and criteria specified by the Law on Credit Institutions and the State Bank's guidance on conditions and criteria for members of the Board of Directors and the Control Board and executive officers of credit institutions; - The joint-venture bank or the bank with 100% foreign capital has feasible business plans, including a business and operation plan for at least three (3) first years under the guidance on dossiers at Point 6.2.b of this Circular; - The joint-venture bank or the bank with 100% foreign capital has an organization and operation charter compliant with the provisions of Vietnamese law. b/ The foreign bank and its capital-contributing members being foreign organizations are permitted by a competent authority of the country of origin to participate in establishing a joint-venture bank or a bank with 100% foreign capital in Vietnam; c/ The foreign bank has total assets at least equivalent to USD 10 billion at the end of the fiscal year preceding the year of license application; d/ The foreign bank and its capital-contributing members make a written commitment with the State Bank on: - Its readiness to provide financial, technological, administration, management and operational supports for the joint-venture bank or the bank with 100% foreign capital; - Maintenance of the actual value of the charter capital of the joint-venture bank or the bank with 100% foreign capital not lower than the legal capital and in full compliance with the State Bank's regulations on operation safety. e/ Vietnamese banks which contribute capital to establishing joint-venture banks or foreign organizations other than foreign banks which contribute capital to establishing banks with 100% foreign capital must also be banks or organizations that are prestigious and financially capable and conduct healthy operation and efficient and profitable business on the aforesaid principles of this Circular. Specifically, a Vietnamese bank must satisfy the following conditions: - Having operated for at least five years; - Having a total asset of at least VND 10,000 billion and a non-performing loan ratio of less than 2% of the total outstanding loans, and committing no violation of the State Bank's regulations on safety in banking activities in the period from the year preceding the year of license application to the date the State Bank examines the dossier of application; - Conducting profitable business for three (3) consecutive years preceding the year of license application. 5.4. Conditions for opening a representative office of a foreign credit institution a/ The foreign credit institution is a legal entity permitted to conduct banking operations in the country of origin; b/ The foreign credit institution is permitted by a competent authority of the country of origin to open a representative office in Vietnam; c/ The foreign credit institution has cooperative relations with Vietnamese economic organizations or wishes to seek, promote and develop cooperative relations with Vietnamese economic organizations; d/ The foreign credit institution commits no serious violation of regulations on banking activities and other legal provisions of the country of origin within three (3) consecutive years preceding the year of license application until the State Bank examines its dossier of license application. 6. Dossiers of license application 6.1. A dossier of application for a license to open a foreign bank branch comprises: a/ An application for a license to open a foreign bank branch, signed by a competent representative of the foreign bank; b/ A business plan that is proved feasible and has at least the following principal contents: - Necessity to establish a branch, customer demand, capacity to meet the demand for banking services, capacity to manage risks, and capability to apply modern technologies to managing banking activities and risks; - Projects geographical area of operation and human resources; - Organizational structure and management, executive and internal audit apparatuses; the internal inspection and control system, and the mechanism for preventing and combating money laundering, which are rationally organized in compliance with Vietnamese law and international practice; - Business activities and business operation methods; - The asset balance sheet; a report on incomes and expenses; a report on cash flow, major financial indicators, projected safety ratios and relevant explanations on projected economic benefits and efficiency in three (3) first years of operation of the foreign bank branch in Vietnam. c/ The charter of the foreign bank; d/ Curriculum vitae (with certification of the foreign bank) and diplomas and certificates evidencing professional qualifications and skills of the General Director (Director) of the foreign bank branch; e/ A copy of the establishment and operation license of the foreign bank granted by a competent authority of the country of origin; f/ A document of a competent authority of the country of origin permitting the foreign bank to open a branch in Vietnam. In case regulations of the country of origin do not require a written permission, there must be an evidence of non-existence of such requirement; g/ A document of a competent authority of the country of origin supplying information on, and certifying the law observance and financial status of the foreign bank within three (3) consecutive years preceding the year of license application, showing its capability to satisfy the conditions specified at Items a and c, Point 5.1 above; h/ A written commitment of a competent inspection or supervisory authority of the country of origin to assure its capability to supervise all activities of the foreign bank (including activities of the foreign bank branch in Vietnam) on the basis of general review of those activities according to international practice; i/ The foreign bank's audited annual financial statements for the latest three (3) years; j/ A document of an international credit rating organization (Moody's, Standard & Poor, Fitch, etc.) rating the foreign bank; k/ A written commitment of the foreign bank to take full responsibility for all obligations and commitments of its Vietnam-based branch; to maintain the actual value of the branch's allocated capital not lower than the legal capital level and in compliance with the State Bank's regulations on operation safety; l/ A general report on the history of establishment, development and operation of the foreign bank up to the time of reporting and its future development orientations. 6.2. A dossier of application for an establishment and operation license for a joint-venture bank or a bank with 100% foreign capital comprises: a/ An application for a license for establishment and operation of a joint-venture bank in Vietnam, jointly signed by competent representatives of the joint-venture parties; or an application for a license for establishment and operation of a bank with 100% foreign capital in Vietnam, signed by a competent representative of the parent bank; b/ A business plan (already approved by the joint-venture parties or the parent bank and the capital-contributing members) that is proved feasible and has at least the following principal contents: - Necessity to establish the bank, customer demand, capacity to meet the demand for banking services, capacity to manage risks, and capability to apply modern technologies to managing banking activities and risks; - Projects geographical area of operation and human resources; - Organizational structure and management, executive and internal audit apparatuses; the internal inspection and control system, and the mechanism for preventing and combating money laundering, which are rationally organized in compliance with Vietnamese law and international practice; - Business activities and business operation methods; - The asset balance sheet; a report on incomes and expenses; a report on cash flow, major financial indicators, projected safety ratios and relevant explanations on projected economic benefits and efficiency in the first three (3) years of operation of the bank in Vietnam. c/ Curricula vitae of members of the Board of Directors and the Control Board and the General Director (Director) of the bank with certifications of competent agencies (agencies where these individuals are working or agencies managing and monitoring personal records) and diplomas and certificates evidencing their professional qualifications and skills; d/ The list of capital-contributing members and contributed charter capital proportions and the specific capital contribution plan, signed by those members with their commitments and clearly stating the value of contributed capital in a foreign currency or Vietnam dong or in kind (for in-kind contributions, there must be documents of title and valid valuation of contributed assets); e/ The capital-contributing members' audited annual financial statements for the latest three (3) years; f/ The joint-venture contract having the principal contents specified by law, for joint-venture banks; or the capital contribution contract or agreement between the capital-contributing members, for banks with 100% foreign capital; g/ Copies of the establishment and operation licenses of the capital-contributing members; h/ A document of a competent authority of the country of origin permitting the foreign bank to contribute capital to establishing a joint-venture bank or the parent bank and other foreign capital-contributing members to contribute capital to establishing a bank with 100% foreign capital in Vietnam. In case regulations of the country of origin do not require a written permission, there must be an evidence of non-existence of such requirement; i/ A document of a competent authority of the country of origin supplying information on, and certifying the law observance and financial status of the foreign bank and other foreign capital-contributing members within three (3) consecutive years preceding the year of license application, showing their capability to satisfy the conditions specified in Items a and c, Point 5.1 above; j/ A written commitment of a competent inspection or supervisory authority of the country of origin to assure its capability to supervise all activities of the foreign bank (including activities of the join-venture bank or the bank with 100% foreign capital in Vietnam) on the basis of general review of those activities according to international practice; k/ A document of an international credit rating organization (Moody's, Standard & Poor, Fitch, etc.) rating the foreign bank; l/ The organization and operation charters of the capital-contributing members; m/ The draft charter of the joint-venture bank or the bank with 100% foreign capital; n/ A written commitment of the capital-contributing members on: - Their readiness to provide financial, technological, administration, executive and operational assistance to the joint-venture bank or the bank with 100% foreign capital in Vietnam; - Maintenance of the actual value of the charter capital of the joint-venture bank or the bank with 100% foreign capital not lower than the legal capital and in compliance with the State Bank's regulations on operation safety; o/ A general report on the history of establishment, development and operation of the capital-contributing members up to the time of reporting and their future development orientations. 6.3. A dossier of application for a license to open a representative office of a foreign credit institution comprises: a/ An application for a license to open a representative office in Vietnam, signed by a competent representative of the foreign credit institution and clearly stating the operation purpose and scope of the representative office; b/ A copy of the operation license of the foreign credit institution granted by a competent authority of the country of origin; c/ A document of a competent authority of the country of origin permitting the foreign credit institution to open a representative office in Vietnam. In case regulations of the country of origin do not require a written permission, there must be an evidence of non-existence of such requirement; d/ A document of a competent authority of the country of origin supplying information on and certifying the law observance of the foreign credit institution; e/ The foreign credit institution's audited annual financial statements for the latest three (3) years; f/ The curriculum vitae of the chief representative in Vietnam (with certification of the foreign credit institution); g/ A general report on the history of establishment, development and operation of the foreign credit institution up to the time of reporting and its future development orientations. 7. Procedures and order for licensing and licensing contents 7.1. A dossier of application must be made in two (2) sets, one in Vietnamese and another in English, and: a/ The dossier set in English must be consularly legalized, except for the following: - Documents of competent authorities of the country of origin sent directly to the State Bank; - Annual financial statements originally made in English. b/ Copies in Vietnamese and English translations of Vietnamese documents must be certified by a Vietnamese notary public according to the law on notarization. Particularly, translations of annual financial statements may be certified by agencies or organizations with the translation competence and function. Original documents in Vietnamese (or their duplicates) which are made in Vietnam are not required to be translated into English. 7.2. All documents in the above original dossier must be made in two (2) additional copies and sent to the State Bank (the Department for Banks and Non-Bank Credit Institutions, below referred to as the Department for Banks). Within 20 working days after receiving the dossier, the State Bank (the Department for Banks) shall certify in writing that the dossier is complete or notify the dossier status and request addition of information and supplementation of the dossier (if the dossier is incomplete or invalid). Within 10 working days after receiving the added information and supplemented dossier, the State Bank (the Department for Banks) shall certify in writing that the dossier is complete or further notify the dossier status according to the above principle. 7.3. After receiving a complete dossier of application, the State Bank (the Department for Banks) shall send a document to the following agencies to collect their opinions on the application: a/ The People's Committee of the province or centrally run city where the office of the branch, bank or representative office is intended to be located. b/ The Ministry of Public Security (the Department for Economic Security). c/ The State Bank Inspectorate. d/ The State Bank's branch in the province or city where the office of the branch, bank or representative offices is intended to be located. Within 30 working days (or 20 working days for dossiers of application for licenses to open representative offices) from the date of receipt of the State Bank's document, the concerned agencies shall give their written opinions to the State Bank (the Department for Banks). If no written opinion is received from a concerned agency within that time limit, the State Bank will regard that agency has no opposition to the application. 7.4. Within 90 working days (or 30 working days for dossiers of application for licenses to open representative offices) from the date of receipt of a complete dossier of application, the State Bank shall grant or refuse to grant a license. In case of refusal to grant a license, the State Bank shall give the reason in writing. 7.5. The State Bank shall specify operations and operation durations in licenses. The operation duration of foreign bank branches, joint-venture banks or banks with 100% foreign capital does not exceed 99 years. The operation duration of representative offices of foreign credit institutions does not exceed five years. IV. EXTENSION OF OPERATION DURATION 8. Conditions for having the operation duration extended: 8.1. Conditions for foreign bank branches, joint-venture banks and banks with 100% foreign capital operating in Vietnam: a/ They have conducted efficient and profitable operation; commit no violation of regulations on safety in banking activities; have committed no serious violation of law for three (3) consecutive years preceding the year of application for operation duration extension and until the State Bank examines their dossiers of application for operation duration extension; b/ Their managerial, executive and internal audit apparatuses and internal inspection and control systems operate in a stable, safe, efficient and lawful manner. 8.2. Conditions for foreign banks: a/ They always fulfill their commitments toward their branches, joint-venture banks or banks with 100% foreign capital operating in Vietnam; b/ They are permitted by competent authorities of the countries of origin to maintain the operation of their branches, joint-venture banks or banks with 100% foreign capital in Vietnam; c/ Competent inspection or supervisory authorities of the countries of origin well fulfill their commitments with the State Bank of Vietnam on coordinated management and supervision of, and exchange of information on, banking activities; d/ Apart from the above conditions, the State Bank shall consider and grant licenses for operation duration extension based on the conditions required for the grant of new licenses (first-time licenses) at Points 1, 2 and 3, Clause 5, Section III above. 8.3. Conditions for representative offices of foreign credit institutions a/ They commit no serious violations of law for three (3) consecutive years preceding the year of application for operation duration extension and until the State Bank examines their dossiers of application for operation duration extension; b/ Apart from the above condition, the State Bank shall consider and grant licenses for operation duration extension based on the conditions required for the grant of new licenses (first-time licenses) at Point 5.4 of Section III above. 9. A dossier of application for operation duration extension comprises: a/ An application for operation duration extension, signed by a competent representative of the foreign bank (parent bank) or the foreign credit institution (for foreign bank branches and representative offices of foreign credit institutions); or signed by the Chairman of the Board of Directors of the bank with 100% foreign capital or the joint-venture bank (for banks with 100% foreign capital and joint-venture banks). The application must explain and clearly state the capacity and commitment to satisfy the conditions specified in Clause 8 of Section III above. b/ A resolution of the Board of Directors of the bank with 100% foreign capital or the joint-venture bank on further extension of the operation duration of the bank. c/ A general report on operation from the date of grant of the license, specifically on operation and business activities in the latest three (3) years, and an operation and business plan for the extended operation duration. d/ Audited annual financial statements for the latest three (3) years of the foreign bank or the foreign credit institution, and other capital-contributing members of the bank with 100% foreign capital or the joint-venture bank. e/ Documents of competent foreign authorities: - Permitting the foreign bank, foreign credit institution or other foreign capital-contributing members to continue maintaining the operation of the foreign bank branch, joint-venture bank, bank with 100% foreign capital or representative office of the foreign credit institution in Vietnam; - Supplying information on, and certifying the law observance and financial status of the foreign bank, foreign credit institution or other foreign capital-contributing members within three (3) consecutive years before the application for operation duration extension, and showing the capability to satisfy the conditions specified at Items a and c, Point 5.1 of Section III above. f/ Other documents requested by the State Bank. 10. Procedures and order for extending the operation duration a/ Dossiers of application for extension of the operation duration of foreign bank branches, joint-venture banks or banks with 100% foreign capital must be submitted to the State Bank (the Department for Banks) at least 180 days, or at least 60 days for representative offices of foreign credit institutions, before the expiration of the operation duration. b/ The dossiers, procedures and order for extending the operation duration are compiled and carried out like those for the grant of new licenses specified in Clause 7, Section III, Part I of this Circular. However, the State Bank does not require consular legalization or authentication of seals and signatures in dossiers of application for operation duration extension, except for some important documents which are required by the State Bank to be authenticated. V. LICENSES AND OPERATION DURATION EXTENSION FEES 11. Within 15 working days from the date of being licensed or having their operation duration extended, joint-venture banks, banks with 100% foreign capital, foreign bank branches or representative offices of foreign credit institutions shall pay a license fee or an operation duration extension fee at the Transaction Bureau of the State Bank. 12. The levels of the license fee and operation duration extension fee are specified by the Ministry of Finance. Paid fee amounts are not allowed to be deducted from the legal capital and are not refundable in any circumstances. VI. REGISTRATION AND INAUGURATION OF OPERATION 13. To inaugurate their operation, foreign bank branches, joint-venture banks and banks with 100% foreign capital must fully satisfy the conditions for operation inauguration specified in Article 15 of the Decree. 14. At least 30 days before the date of operation inauguration, a foreign bank branch, joint-venture bank or bank with 100% foreign capital shall report in writing the State Bank (the Department for Banks, the State Bank Inspectorate and the State Bank's branch in the province or city where its head office is located) on the date of operation inauguration and satisfaction of the conditions for operation inauguration, including the condition on setting up of an appropriate internal inspection and control system to effectively prevent and manage risks; and concurrently notify the date of inauguration to the business registry office, the People's Committee of the province or centrally run city where its office is located, and to concerned agencies and organizations according to law. 15. When considering that the conditions for operation inauguration are not yet fully satisfied, especially when internal inspection and control systems, computer and vault systems cannot yet effectively and safely operate, the State Bank may request foreign bank branches, joint-venture banks or banks with 100% foreign capital to postpone commencement of operation. VII. HANDLING OF CASES WHEN THE ACTUAL VALUE OF ALLOCATED CAPITAL OF FOREIGN BANK BRANCHES OR THE CHARTER CAPITAL OF JOINT-VENTURE BANKS OR BANKS WITH 100% FOREIGN CAPITAL IS LOWER THAN THE LEGAL CAPITAL 16. A joint-venture bank, bank with 100% foreign capital or parent bank (for a foreign bank branch) shall ensure contribution of the deficit amount of its charter capital or allocated capital as compared to the legal capital within six months from the date the actual value of the charter capital or the allocated capital becomes lower than the legal capital. VIII. ORGANIZATIONAL TRANSFORMATION OF JOINT-VENTURE BANKS INTO BANKS WITH 100% FOREIGN CAPITAL OR VICE VERSA 17. Conditions for transformation Cases of transformation must satisfy the conditions required for the grant of establishment and operation licenses of joint-venture banks or banks with 100% foreign capital specified at Point 1 or 3, Clause 5, Section III, Part I of this Circular. 18. Dossiers for transformation 18.1. Transformation of joint-venture banks into banks with 100% foreign capital A dossier for transformation of a joint-venture bank into a bank with 100% foreign capital must be compiled like a dossier of application for an establishment and operation license of a bank with 100% foreign capital specified at Point 6.2, Section III, Part I of this Circular. In addition, a joint-venture bank wishing to be transformed shall also submit: a/ An application for transformation into a bank with 100% foreign capital, signed by the Chairman of the Board of Directors of the joint-venture bank; b/ A minutes (or resolution) of a meeting of the Board of Directors of the joint-venture bank on its agreement on the transformation into a bank with 100% foreign capital; c/ A contract (or commitment) on transfer of capital of the Vietnamese party to the joint-venture to a foreign capital transferee. The capital transfer must ensure that more than 50% of the charter capital of the bank with 100% foreign capital is held by a foreign bank. 18.2. Transformation of banks with 100% foreign capital into joint-venture banks A dossier for transformation of a bank with 100% foreign capital into a joint-venture bank must be compiled like a dossier of application for an establishment and operation license of a joint-venture bank specified at Point 6.2, Section III, Part I of this Circular. In addition, a bank with 100% foreign capital wishing to be transformed shall also submit: a/ An application for transformation into a joint-venture bank, signed by the Chairman of the Board of Directors of the bank; b/ A minutes (or resolution) of a meeting of the Board of Directors of the bank on its agreement on the transformation into a joint-venture bank; c/ A contract (or commitment) on transfer of capital to the Vietnamese party to the joint-venture. The capital transfer must ensure the holding ratio specified in Article 46 of the Decree (the capital contribution ratio of the foreign party must not exceed 50% of the charter capital of the joint-venture bank). 19. Procedures and order for transformation 19.1. The dossier, procedures and order for licensing the transformation must be compiled and carried out as for the grant of new licenses specified in Clause 7, Section III, Part I of this Circular. 19.2. After receiving new licenses and the State Bank's decisions on withdrawal of old licenses, joint-venture banks or banks with 100% foreign capital shall publish on newspapers these contents and carry out procedures for business registration and commencement of operation specified in Articles 14 and 15 of the Decree, the provisions of Section VI, Part I of this Circular and relevant provisions of law. IX. CURRENCY USED IN ACCOUNTING, FINANCE AND REPORTING 20. The currency used in accounting is Vietnam dong. If foreign bank branches, joint-venture banks or banks with 100% foreign capital need to account in a foreign currency for reporting to head offices of foreign banks, they shall send a written request to the Ministry of Finance for consideration and approval before they can conduct accounting in that foreign currency. 21. The Ministry of Finance shall make and send copies of documents on its handling results to the State Bank for information and coordinated management. X. CHANGES SUBJECT TO WRITTEN APPROVAL BY THE STATE BANK 22. Apart from changes subject to written approval by the State Bank specified elsewhere in this Circular, foreign bank branches, joint-venture banks, banks with 100% foreign capital shall obtain the State Bank's written approval before renaming themselves, changing their charter capital or allocated capital; amending or supplementing their charters; or changing their operations or operation scope. 23. For these changes, dossiers are specified as follows: 23.1. For renaming, a dossier comprises: a/ An application for approval of renaming, signed by the Chairman of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital, or by a competent person of the foreign bank (for a foreign bank branch), clearly stating the reason for renaming. Particularly for joint-venture banks and banks with 100% foreign capital, the request for changes in the charter due to the renaming must be clearly stated. b/ A resolution of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital on renaming; and a written approval of the foreign bank’s renaming of a competent authority of the country of origin (for a foreign bank branch). c/ Other documents requested by the State Bank in case of necessity. 23.2. For change of charter capital or allocated capital, a dossier comprises: a/ An application for approval of the change of the charter capital, or allocated capital, signed by the Chairman of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital, or by a competent person of the foreign bank (for a foreign bank branch), clearly stating the reason for change (increase or reduction of capital) and the duration for effecting the change; or clearly stating the request for changes in the charter (for a joint-venture bank or a bank with 100% foreign capital). b/ A resolution of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital on its consent to the change of the charter capital. c/ If the bank with 100% foreign capital or the joint-venture bank increases its capital due to change of capital-contributing members, it shall submit additional documents specified in Section VI, Part III on dossiers for transfer of capital to new partners outside banks with 100% foreign capital or joint-venture banks. d/ Other documents requested by the State Bank in case of necessity. 23.3. For change in or addition of operations or operation scope, a dossier comprises: a/ An application for approval of the change in or addition of operations or operation scope, signed by the Chairman of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital or the General Director (Director) of the foreign bank branch and clearly stating the reason for and the nature of the change in or addition of operations or operation scope, and the request for changes in the charter (if any) due to that change. b/ A resolution of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital on its consent to the change in or addition of operations or operation scope. c/ Other documents requested by the State Bank in case of necessity. 23.4. For charter amendment or supplementation, a dossier comprises: a/ An application for approval of the charter amendment or supplementation, signed by the Chairman of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital and clearly stating the reason for the amendment or supplementation. b/ A resolution of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital on its consent to the charter amendment or supplementation (this regulation does not apply to cases of charter amendment or supplementation due to changes specified at Points 1, 2 and 3 of this Clause). c/ Other documents requested by the State Bank in case of necessity. 24. Procedures for processing a/ The dossiers of application for approval of changes must be sent to the State Bank (the Department for Banks). Within 30 working days from the date of receipt of complete and valid dossiers, the State Bank shall approve or disapprove in writing the proposed changes. In case of disapproval, the State Bank shall clearly state the reason. b/ Within 30 days from the date of receipt of the State Bank's written approval, joint-venture banks, banks with 100% foreign capital and foreign bank branches shall register the approved changes with business registry offices (for changes related to contents of business registration certificates) and other competent state agencies according to law and publish those changes on two consecutive issues of a central newspaper and a local newspaper. Part II FOREIGN BANK BRANCHES I. Operation network 25. Foreign bank branches may not open transaction counters in any forms outside their locations indicated in their licenses, except for installation of automated teller machines (ATM). 26. The installation of ATMs, installation and use of peripheral devices in service of payment of credit cards, payment cards and non-cash payment shall comply with relevant provisions of law and the State Bank Governor's guidance. 27. Foreign bank branches may locate their units or sections not conducting transactions with customers outside their locations only after obtaining the State Bank's approval on a case-by-case basis. II. Relocation of branches 28. Dossiers of application for approval of relocation: 28.1. For relocation within the same province or centrally run city, a dossier comprises: a/ An application for approval of branch relocation, signed by the General Director (Director) of the foreign bank branch, clearly stating (or enclosed with a written explanation of) the necessity of the relocation and the address, position and area of the new branch location, and proving that the new office can satisfy requirements of banking activities and conditions on vault security and safety. b/ Documents evidencing the foreign bank branch's lawful right to use its office at the new location once it is approved by the State Bank. 28.2. For relocation from a province or centrally run city to another, a dossier comprises: Apart from the documents specified at Point 28.1 above, of which the application for relocation approval must be signed by a competent representative of the foreign bank, the foreign bank shall additionally submit: a/ An operation plan for first three (3) years at the new location, showing the feasibility of the relocation and having the following principal contents: - Necessity of relocation, customer demand and capacity to satisfy the demand for banking services; - Operations and business operation methods; - An asset balance sheet; a report on incomes and expenses; a report on cash flow, major financial indicators, projected safety ratios and related explanations proving projected economic benefits and efficiency in the first three years of operation of the foreign bank branch at the new location. b/ A document of a competent authority of the country of origin permitting the foreign bank to relocate its branch (if this authority's previous document clearly states the province or city of Vietnam where the foreign bank branch opens its branch). 29. Relocation procedures and order 29.1. After receiving a complete dossier of application for relocation approval, the State Bank (the Department for Banks) shall send a document to the following agencies to gather their opinions on the requested relocation: a/ The People's Committees of the provinces or centrally run cities where the foreign bank branch is operating and where it intends to move to. b/ The State Bank Inspectorate. c/ The State Bank's branches of the provinces or centrally run cities where the foreign bank branch is operating and where it intends to move to. 29.2. Within 20 working days after receiving the document of the State Bank, the above concerned agencies shall send their written opinions to the State Bank (the Department for Banks). If it receives no written opinions of concerned agencies on this matter within that time limit, the State Bank will regard that those agencies have no opposition to the requested relocation of the foreign bank branch. 29.3. Within 30 working days after receiving a complete dossier of application for relocation, the State Bank shall approve or disapprove the relocation in writing. In case of disapproval, the State Bank shall clearly state the reason. 29.4. After receiving the State Bank's written approval, the foreign bank branch shall, within 180 days, complete the fulfillment of obligations toward and settlement of benefits for related individuals and organizations; carry out procedures for business registration, publish the relocation on newspapers, complete other relevant procedures specified by law and commence its operation at the new location. III. OPENING OF ADDITIONAL BRANCHES 30. Conditions for opening additional branches 30.1. Conditions for foreign bank branch(es) currently operating in Vietnam: a/ Committing no violations of regulations on safety in banking activities and no serious violations of law within three (3) consecutive years preceding to the year of application for permission to open additional branches and until the State Bank examines dossiers of application for permission to open additional branches. b/ Conducting efficient and profitable operation; having managerial, executive, internal audit apparatuses and internal inspection and control systems that operate in a stable, safe, effective and lawful manner. 30.2. Conditions for foreign banks: a/ They always fulfill their commitments toward their branches operating in Vietnam; b/ They are permitted by competent authorities of the countries of origin to open more branches in Vietnam; c/ Competent inspection and supervisory authorities of the countries of origin well fulfill their commitments with the State Bank on coordination in management and supervision and exchange of information on supervision of banking activities; d/ Apart from the above conditions, the State Bank shall, pursuant to the provisions of Article 34 of the Decree, consider and license additional branches on the basis of the conditions for licensing foreign bank branches (grant of new licenses) at Points 1 and 2, Clause 5, Section III, Part I of this Circular. 31. Dossiers, procedures and order for licensing: Dossiers, procedures and order for licensing and contents of licenses to open additional branches are similar to those applicable to the grant of licenses to open foreign bank branches (grant of new licenses) specified in Section III, Part I of this Circular. The State Bank may consider the exemption from some documents which are already available in foreign banks' previous dossiers of application for branch opening licenses, and from procedures for consular legalization and authentication of seals and signatures. IV. USE OF ALLOCATED CAPITAL Allocated capital of a foreign bank branch must be used on the following principles: 32. It must be used for investment, business, provision of loans or depositing at credit institutions at home and abroad according to relevant provisions of law and current regulations on management of foreign exchange and capital transactions. 33. It must be used for purchase of and investment in fixed assets or assets in service of business activities of foreign bank branches, which must not exceed 50% of their own capital; 34. For allocated capital amounts deposited at overseas credit institutions, foreign banks shall make commitments (signed by their competent representatives) on full transfer of those capital amounts back to Vietnam immediately upon the request of the State Bank. V. OPERATIONS Depending on the types, scales and domains of operation of foreign banks (parent banks), the State Bank shall specify the operations of foreign bank branches in their licenses and on the following principles: 35. Depending on types of parent banks, which are commercial banks, development banks, investment banks or other types of bank, the State Bank shall specify types of banking activities that foreign bank branches are permitted to conduct corresponding to types of their parent banks and according to the Law on Credit Institutions. 36. Foreign bank branches may conduct professional operations of commercial banks, development banks, investment banks or other types of bank according to the Law on Credit Institutions and the provisions of law on operation of those types of bank on the basis of non-discriminatory treatment principle (like Vietnamese banks of the same type), except for some limitations specified by the State Bank of Vietnam in compliance with Vietnam's bilateral and multilateral international commitments in the banking domain and professional operations that even parent banks are not permitted to conduct according to regulations of the countries of origin. 37. Foreign bank branches may conduct professional operations which are not stated in their licenses when: a/ They obtain the State Bank's written approval; or, b/ There are legal documents providing for the performance of these professional operations and clearly stating foreign bank branches, as applicable subjects, are permitted to conduct these professional operations. In this case, though these legal documents are regarded as supplements to their licenses, foreign bank branches shall still strictly comply with the provisions of Clauses 35 and 36 above. VI. BLOCKADING OF CAPITAL AND ASSETS 38. The State Bank may blockade capital and assets of a foreign bank branch in the following cases: a/ The actual value of the allocated capital of the foreign bank branch decreases to a level lower than the legal capital for more than six months. b/ The foreign bank branch violates the regulation on the safety ratio in banking activities and fails to take remedies as requested in writing by the State Bank. c/ The foreign bank branch commits a serious violation of law. d/ The parent bank shows signs of insolvency or is placed by a competent authority of the country of origin under special control or is requested to be dissolved or liquidated or falls bankrupt or has its establishment and operation license revoked. e/ The parent bank fails to fulfill the obligation committed with its branches operating in Vietnam and the State Bank. f/ The State Bank orders the dissolution or termination of operation of the foreign bank branch and revoke its license. 39. The State Bank may cancel the measure of blockading capital and assets of a foreign bank branch when: a/ The parent bank and/or the foreign bank branch have remedied their violation or problem. b/ The procedures for dissolution, termination of operation or revocation of the foreign bank branch's license are completed. VII. DISSOLUTION, TERMINATION OF OPERATION 40. Dossiers for dissolution or termination of operation 40.1. For the case of termination of operation specified in Clause 1 or 2, Article 41 of the Decree (expiration of the operation duration or voluntary termination of operation), a dossier comprises: a/ An application for dissolution or termination of operation of the foreign bank branch signed by a competent representative of the foreign bank and sent to the State Bank (the Department for Banks) at least 180 days before the intended date of dissolution or termination of operation. For termination of operation ahead of time, the application must clearly state the intended date of termination of operation of the foreign bank branch in Vietnam. b/ A plan on liquidation, dissolution or termination of operation, stating the order and procedures for liquidating payables and receivables; methods, time limits for and plans on payment of payables and recovery of receivables, settlement of obligations toward and benefits of concerned individuals and organizations; and a plan on remittance of capital, profits and assets to abroad. c/ Other documents as requested by the State Bank. 40.2. For the case of the parent bank's dissolution or bankruptcy (specified in Clause 4, Article 41 of the Decree): Apart from the documents specified at Point 40.1 above, the foreign bank shall additionally submit a document of a competent authority of the country of origin on dissolution or bankruptcy of the foreign bank. 41. Procedures and order for dissolution or termination of operation of a foreign bank branch: a/ Within 30 working days after receiving a complete dossier specified above or when finding it necessary to revoke the foreign bank branch's license in the cases specified in Clause 3, Article 41 of the Decree, the State Bank shall issue a decision on termination of operation of the foreign bank branch, setting up of a team for supervising the liquidation, dissolution or termination of operation of the foreign bank branch and other contents (including a request for blockading of capital and assets of the foreign bank branch when necessary). Copies of this decision will be sent to the State Bank's branch and the People's Committee of the province or centrally run city where the foreign bank branch is located, the business registry office, police office and concerned organizations and individuals. b/ Upon receiving the aforesaid decision of the State Bank, the foreign bank branch shall promptly stop conducting new banking transactions (receiving deposits, borrowing, providing loans, etc.); post up the decision at its office and concurrently publish the announcement of termination of operation on three consecutive issues of a central newspaper and a local newspaper of the locality where its office is located for carrying out procedures for its liquidation, dissolution or termination of its operation. c/ The foreign bank branch shall carry out procedures for liquidation according to the plan on liquidation and the provisions of Vietnamese law, under the direction and supervision by the liquidation team set by the State Bank Governor. d/ After the foreign bank branch completes the liquidation procedures, fulfills all obligations toward and settles all benefits of concerned individuals and organizations according to the provisions of Vietnamese law and upon obtaining relevant documents evidencing the completion, fulfillment or settlement (certification by tax agencies, documents on liquidation of the office lease contract, etc.), the State Bank shall issue a decision on dissolution or termination of operation and revocation of the foreign bank branch's license, and publishes this decision on three consecutive issues of a newspaper. e/ Within 15 working days after the foreign bank branch receives the State Bank's decision on revocation of its license, the foreign bank branch shall return the license to the State Bank and may remit abroad its remaining capital, assets and profits (if any) after the liquidation according to the current provisions of law on foreign exchange management. VIII. CAPITAL CONTRIBUTION AND PURCHASE OF SHARES 42. Foreign bank branches may contribute capital to or purchase shares from enterprises and other credit institutions only when they are so clearly authorized in writing and allocated specific capital amounts by their parent banks for capital contribution or share purchase. 43. The capital contribution, share purchase, conditions for capital contribution, contributed capital amounts and ratio, and methods of capital contribution must comply with current provisions of law on principles applicable to foreign banks that contribute capital or purchase shares from enterprises and other credit institutions. Part III JOINT-VENTURE BANKS, BANKS WITH 100% FOREIGN CAPITAL I. Provisions on organization, administration, management and control 44. Joint-venture banks or banks with 100% foreign capital shall perform their organization, administration, management and control under the provisions of the Law on Credit Institutions, the Decree and legal documents guiding the implementation of the Law on Credit Institutions and this Circular (specialized legal provisions). 45. If the aforesaid law and legal documents contain no such provisions, joint-venture banks or banks with 100% foreign capital may comply with the provisions of the Law on Enterprises, legal documents guiding the implementation of the Law on Enterprises and relevant provisions of law (general legal provisions) and applicable to limited liability companies. 46. If specialized legal provisions and general legal provisions are different on the same issue, joint-venture banks and banks with 100% foreign capital shall comply with specialized legal provisions. II. BOARDS OF DIRECTORS, CONTROL BOARDS, GENERAL DIRECTORS (DIRECTORS) 47. Board of Directors a/ The Board of Directors is the highest leading body of a joint-venture bank or bank with 100% foreign capital; the representative of capital-contributing members founding the joint-venture bank or bank with 100% foreign capital in exercising the rights and performing the obligations of the owner. b/ Chairman, Vice Chairmen and other members of the Board of Directors of a joint-venture bank or bank with 100% foreign capital are elected and designated by the parties to the joint venture or the capital-contributing members in compliance with the provisions of the joint-venture contract and the charter of the joint-venture bank or the bank with 100% foreign capital and with the State Bank Governor's approval. c/ A Board of Directors is composed of at least three (3) members, of whom at least two (2) (including its chairman) may not be executive officers (not involved in the management of the joint-venture bank or the bank with 100% foreign capital); and at least half of members of the Board of Directors must reside in Vietnam during their term of office. d/ The organization, structure, functions, tasks, powers, criteria and specific conditions for members, and other contents related to the organization and operation of the Board of Directors of a joint-venture bank or a bank with 100% foreign capital must comply with the provisions of the Law on Credit Institutions, the Decree and legal documents guiding the implementation of the Law on Credit Institutions, the charter of the joint-venture bank or the bank with 100% foreign capital, and the provisions of the Law on Enterprises on members' councils of limited liability companies, and adhere to the principles specified in Section I of this Part. 48. Control Board a/ The organization, structure, functions, tasks, powers, criteria and specific conditions for members, and other contents related to the organization and operation of the Control Board of a joint-venture bank or a bank with 100% foreign capital must comply with the provisions of the Law on Credit Institutions, the Decree and legal documents guiding the implementation of the Law on Credit Institutions, the charter of the joint-venture bank or the bank with 100% foreign capital, and the provisions of the Law on Enterprises on control boards of limited liability companies, and adhere to the principles specified in Section I of this Part. b/ The head and members of the Control Board are elected and designated by the parties to the joint venture or the capital-contributing members in compliance with the provisions of the joint-venture contract, the charter of the joint-venture bank or the bank with 100% foreign capital and with the State Bank Governor's approval. c/ The Control Board is composed of at least three (3) members, of whom at least two (2) (including its head) may not be executive officers (not involved in the management of the bank) so as to assure the independence and effectiveness of the internal audit in inspecting and reviewing the effectiveness and efficiency of the internal inspection and control system; and at least half of Control Board members must reside in Vietnam during their term of office. 49. General Director (Director) a/ The General Director (Director) is appointed and dismissed by the Board of Directors of a joint-venture bank or a bank with 100% foreign capital and approved by the State Bank Governor. b/ The General Director (Director) of a joint-venture bank or a bank with 100% foreign capital may not concurrently hold the post of Chairman of the Board of Directors or Head of the Control Board of that bank and must reside in Vietnam during his/her term of office; c/ The General Director (Director) of a joint-venture bank or a bank with 100% foreign capital is responsible before the Board of Directors for the management of daily activities of the bank; d/ Specific criteria, conditions, tasks and powers of the General Director (Director) of a joint-venture bank or a bank with 100% foreign capital comply with the provisions of the Law on Credit Institutions, the Decree, relevant legal documents guiding the implementation of the Law on Credit Institutions, the charter of the joint-venture bank or the bank with 100% foreign capital; and the provisions of the Law on Enterprises applicable to general directors (directors) of limited liability companies, and adhere to the principles specified in Section I of this Part. III. DOSSIERS, PROCEDURES AND ORDER FOR APPROVING THE APPOINTMENT OR DISMISSAL OF MEMBERS OF BOARDS OF DIRECTORS OR CONTROL BOARDS OR GENERAL DIRECTORS (DIRECTORS) 50. A dossier for appointment or dismissal of a member of the Board of Directors or the Control Board comprises: a/ An application for approval of the appointment or dismissal of a member of the Board of Directors or the Control Board jointly signed by a competent representative of the parent bank and representatives of the joint-venture parties (for newly founded joint-venture banks or banks with 100% foreign capital), or the Chairman of the Board of Directors or a competent person representing the Board of Directors (for operating banks). b/ A minutes of a meeting or a resolution of the joint-venture parties (for joint-venture banks) or the capital-contributing members (for banks with 100% foreign capital) on appointment or dismissal of a member of the Board of Directors or the Control Board. c/ Curriculum vitae of the appointed member, certified by concerned joint-venture parties or capital-contributing members (for newly founded joint-venture banks or banks with 100% foreign capital), or by the Chairman of the Board of Directors (for operating banks). d/ Diplomas and certificates evidencing professional qualifications of the member whose appointment is proposed for approval. 51. A dossier for appointment or dismissal of the General Director (Director) of a joint-venture bank or a bank with 100% foreign capital comprises: a/ An application for approval of the appointment or dismissal of the General Director (Director), signed by the Chairman of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital. b/ A resolution of the Board of Directors of the joint-venture bank or the bank with 100% foreign capital on appointment or dismissal of the General Director (Director). c/ Curriculum vitae of the nominated General Director (Director) certified by the Chairman of the Board of Directors. d/ Diplomas and certificates evidencing professional qualifications of the nominated General Director (Director). 52. Order and procedures for approval a/ Within 30 working days after receiving a complete dossier of application for approval of appointment or dismissal, the State Bank shall decide on approval or disapproval. In case of disapproval, the State Bank shall clearly state the reason. b/ After the appointment or dismissal is approved by the State Bank, joint-venture banks or banks with 100% foreign capital shall, within 30 working days, complete the registration of the personnel change with a competent state agency and carry out other procedures (if any) according to regulations. IV. RATIOS AND MODES OF CHARTER CAPITAL CONTRIBUTION 53. Ratios and modes of charter capital contribution by capital-contributing members of banks with 100% foreign capital, foreign parties and Vietnamese parties to joint-venture banks must be agreed upon by those members or parties themselves and clearly stated in the charters of joint-venture banks or banks with 100% foreign capital and adhere to the following principle: a/ For a bank with 100% foreign capital: The capital contribution ratio of the parent bank must exceed 50% of the charter capital; b/ For a joint-venture bank: The capital contribution ratio of the foreign party must not exceed 50% of the charter capital (except for special cases in which this ratio is decided by the Prime Minister). 54. Charter capital of joint-venture banks or banks with 100% foreign capital is contributed in Vietnam dong, a freely convertible foreign currency or in property. The contribution of capital in property and valuation of the contributed property must comply with the provisions of Article 4, Article 30 of the Law on Enterprises. 55. Charter capital may be restructured but may not decrease to a level lower than the legal capital. All changes in charter capital or capital contribution ratios of capital-contributing members or joint-venture parties are subject to approval by the State Bank. V. TRANSFER OF CONTRIBUTED CAPITAL 56. Principles for transfer The transfer of contributed capital amounts of capital-contributing members or joint-venture parties must adhere to the following principles: a/ The transfer of contributed capital amounts to other capital-contributing members in a bank with 100% foreign capital or parties to a joint-venture bank is prioritized. b/ When contributed capital amounts are transferred to new partners outside a bank with 100% foreign capital or a joint-venture bank, it is necessary to assure the capital contribution ratios specified in Clause 53 above and that: - For banks with 100% foreign capital: New partners and new parent bank (in case the transfer leads to the change of the bank owning more than 50% of the charter capital of the bank with 100% foreign capital) satisfy the conditions for participating in the establishment of a bank with 100% foreign capital under the provisions of Point 5.3, Section III, Part I of this Circular on the conditions for the grant of establishment and operation licenses to banks with 100% foreign capital. - For joint-venture banks: New partners satisfy the conditions for participating in the establishment of a joint-venture bank under the provisions of Point 5.3, Section III, Part I of this Circular on the conditions for the grant of establishment and operation licenses to joint-venture banks. c/ Capital-contributing members of banks with 100% foreign capital or parties to joint-venture banks may only transfer their contributed capital amounts after 5 years from the date they start their capital contribution to banks with 100% foreign capital or joint-venture banks. The capital transfer must be approved by the State Bank before being effected. 57. Dossiers of application for approval of capital transfer 57.1. In case the contributed capital amount of the Vietnamese party to a joint-venture bank is wholly transferred to the foreign party to that joint-venture bank or another foreign partner, thus leading to the organizational transformation of the joint-venture bank into a bank with 100% foreign capital, or the charter capital of a bank with 100% foreign capital is partly transferred to one or more Vietnamese banks, thus leading to the organizational transformation of the bank with 100% foreign capital into a joint-venture bank: Dossiers, procedures and order applicable to these cases of transfer are those applicable to the organizational transformation of joint-venture banks into banks with 100% foreign capital or vice versa specified in Section VIII, Part I of this Circular. 57.2. A dossier for capital transfer between parties to a joint-venture bank or capital-contributing members of a bank with 100% foreign capital comprises: a/ An application for approval of the transfer of contributed capital, signed by the Chairman of the Board of Directors of the bank with 100% foreign capital or the joint-venture bank, clearly stating: - The reason for transfer; - Other proposals (if any) on amendments or supplements to the charter, renaming or relocation of the head office, adjustments to the establishment and operation license of the bank or the joint-venture contract; change of members of the Board of Directors or the Control Board, the General Director (Director) of the bank; and other contents related to the capital transfer (if any) which need to be modified or supplemented. b/ A resolution of the Board of Directors of the bank on approval of the capital transfer; c/ The contract (commitment or agreement) on capital transfer between the capital transferor and the capital transferee; d/ Other documents requested by the State Bank in case of necessity. 57.3. A dossier for transfer of capital to a new partner outside a bank with 100% foreign capital or a joint-venture bank: In this case, the new partner shall make and send to the State Bank (the Department for Banks) an application for permission to receive a contributed capital amount in a bank with 100% foreign capital or a joint-venture bank, enclosed with documents evidencing its capability to satisfy the conditions for the establishment and operation of banks with 100% foreign capital or joint-venture banks specified at Point 5.3, Section III, Part I of this Circular, and those requested by the State Bank. Besides, the bank with 100% foreign capital or the joint-venture bank shall also send to the State Bank (the Department for Banks) the following documents: a/ An application for approval of the transfer of contributed capital, signed by the Chairman of the Board of Directors, clearly stating: - The reason for transfer; - A report on appraisal of the legal and financial status of the new partner and its capability to satisfy the conditions for joining the bank; - Other proposals (if any) on amendments or supplements to the charter, renaming or relocation of the head office, adjustments to the establishment and operation license of the bank or the joint-venture contract; change of members of the Board of Directors or the Control Board, the General Director (Director) of the bank; and other contents related to the capital transfer (if any) which need to be modified or supplemented. b/ A resolution of the Board of Directors of the bank on approval of the capital transfer; c/ The contract (commitment or agreement) on capital transfer between the capital transferor and the capital transferee; d/ Other documents requested by the State Bank in case of necessity. 57.4. Dossiers for transfer in case a capital-contributing member of a joint-venture bank or a bank with 100% foreign capital is bought out, merged, consolidated, divided or split up, thereby forming a new legal entity: In this case, the capital-contributing member that is bought out, merged, consolidated, divided or split up is called the taken-over party while the newly formed legal entity is called the takeover-receiving party. The takeover-receiving party shall receive the contributed capital as well as all benefits and obligations of the taken-over party in the bank with 100% foreign capital or the joint-venture bank. In this case, a dossier of application for the State Bank's approval comprises: a/ A written request, signed by the Chairman of the Board of Directors of the bank, for the State Bank's approval of the transfer, clearly stating: - The reason for transfer; - Other proposals (if any) on amendments or supplements to the charter, renaming or relocation of the head office, adjustments to the establishment and operation license of the bank or the joint-venture contract; change of members of the Board of Directors or the Control Board, the General Director (Director) of the bank; and other contents related to the capital transfer (if any) which need to be modified or supplemented. b/ Legal documents proving that the buyout, merger, consolidation, division or split-up is lawfully carried out and showing results of the buyout, merger, consolidation, division or split-up, such as benefits and obligations or the name of the new legal entity (in case of renaming). c/ Other documents requested by the State Bank for determining the newly formed legal entity's legal status and capability to satisfy the conditions for participating in establishment of the bank. 58. Procedures and order for examination and approval a/ Relevant documents in capital transfer dossiers, which are made abroad (if any), must be in English and consularly legalized (except for cases specified at Point 7.1, Section III, Part I of this Circular). Vietnamese copies and Vietnamese translations of those documents must be certified by a Vietnamese notary public according to the law on notarization. b/ Within 30 working days, or 90 working days for the case of capital transfer to a new partner outside a bank with 100% foreign capital or a joint-venture bank, after receiving a complete and valid dossier, the State Bank shall approve or disapprove in writing the request for capital transfer and accompanying changes. In case of disapproval, the State Bank shall clearly state the reason in writing. c/ After obtaining the State Bank's written approval on the capital transfer and accompanying changes, the bank with 100% foreign capital or the joint-venture bank shall, within 30 working days, shall register those changes with a business registry office according to the current provisions of law and concurrently publish them on three consecutive issues of a central newspaper and a local newspaper. VI. OPERATIONS OF JOINT-VENTURE BANKS AND BANKS WITH 100% FOREIGN CAPITAL 59. Joint-venture banks and banks with 100% foreign capital may conduct professional operations of commercial banks, development banks, investment banks or other types of bank under the provisions of the Law on Credit Institutions and relevant provisions of law on operation of those types of bank. 60. Based on the proposed type of operation and specific operations stated in applications and dossiers of application of establishment and operation licenses of joint-venture banks or banks with 100% foreign capital, the State Bank shall specify types and operations of joint-venture banks or banks with 100% foreign capital in their establishment and operation licenses on the principle of non-discriminatory treatment (joint-venture banks or banks with 100% foreign capital of a certain type may conduct professional operations specified for that type of bank like Vietnamese banks of the same type). 61. Joint-venture banks and banks with 100% foreign capital may conduct professional operations not stated in their licenses when: a/ They obtain the State Bank's written approval; or, b/ There is a legal document providing for the performance of these professional operations and clearly stating that joint-venture banks and banks with 100% foreign capital, as applicable subjects, are permitted to conduct these professional operations. In this case, that legal document is regarded as a supplement to the licenses, and joint-venture banks and banks with 100% foreign capital shall still strictly comply with the provisions of Clauses 59 and 60 above. Part IV REPRESENTATIVE OFFICES I. Registration and inauguration of operation of representative offices 62. Within 45 days from the date of grant of a license to open a representative office or within 15 days from the date of extension of that license, a foreign credit institution shall send to the People's Committee of the province or city where the representative office is located a dossier for registration of operation of representative office comprising: a/ An application for operation registration (under the guidance of the provincial/municipal People's Committee); b/ An office or house lease contract; c/ A registration of the numbers of foreigners (including foreigners and overseas Vietnamese) and Vietnamese working in the representative office, and labor contracts signed with these staff; d/ A written appointment of the chief representative, signed by a competent representative of the foreign credit institution and enclosed with the resume of the chief representative. 63. Within 15 (fifteen) working days after receiving the written operation registration from the People's Committee of the province or city where the representative office is located, the representative office shall send a copy of that written registration to the State Bank (the Department for Banks). 64. After being granted a written operation registration, a representative office shall carry out procedures for applying for a seal with the police office (the Police Department of the province or centrally run city where the representative office is located) under the police office's guidance. 65. Within 12 months after being licensed, a representative office shall inaugurate its operation and notify the date of operation inauguration to the State Bank (the Department for Banks), the State Bank's branch and People's Committee of the province or city where it is located. II. REPORTS ON OPERATION OF REPRESENTATIVE OFFICES 66. Representative offices of foreign credit institutions shall report in writing on their operation in the first six months of a year and the whole year to the State Bank (the Department for Banks), the State Bank's branches and People's Committees of provinces or cities where they are located. A biannual report must be sent before July 30 while an annual report within 90 days from the last day of the fiscal year. 67. Contents of a report: a/ The organizational structure of the office, personnel, numbers of Vietnamese and foreigners working in the office. b/ Main operations: - Marketing activities; - Investment, agency, credit and cooperation relations between the foreign credit institution and Vietnamese commercial banks and economic organizations; and role of the representative office in these activities; - Consultancy and training activities; - Other activities. c/ Operation orientations for the coming time. d/ Extraordinary report on an unexpected event that affects the safe and sound operation of the representative office. Such a report must be sent right upon the occurrence of the event. 68. In case of necessity, the State Bank may request representative offices to make extraordinary reports apart from periodical reports, supply documents or explain matters related to their activities. III. RENAMING OR RELOCATION OF REPRESENTATIVE OFFICES, CHANGE OF CHIEF REPRESENTATIVES 69. Foreign credit institutions' representative offices operating in Vietnam may rename themselves or relocate their offices from a province or centrally run city to another only after obtaining the State Bank's written approval. 69.1. Dossier and procedures for renaming a foreign credit institution's representative office in Vietnam: a/ A competent representative of the foreign credit institution sends to the State Bank (the Department for Banks) an application for approval of the renaming of the representative office, clearly stating the reason for renaming (due to consolidation, merger, division, split-up or buyout of the foreign credit institution), enclosed with the written approval or consent of a competent authority of the country of origin permitting the foreign credit institution to rename itself. b/ Within 30 working days after receiving a complete and valid dossier, the State Bank shall approve or disapprove in writing the renaming. In case of disapproval, the State Bank shall clearly state the reason. c/ Within 30 working days after receiving the State Bank's written approval of the renaming, the representative office shall register the renaming with the provincial/provincial People's Committee. 69.2. Dossier and procedures for relocation of a representative office from a province or centrally run city to another: a/ A competent representative of the foreign credit institution sends to the State Bank (the Department for Banks) an application for approval of the relocation of a representative office from a province or centrally run city to another, clearly stating the reason for relocation. b/ After receiving the application, the State Bank shall send a document consulting the People's Committee of the province or centrally run city where the representative office intends to move to. Procedures and order for further processing are those applicable to the grant of a new license to open a representative office (specified in Clause 8, Section III, Part I of this Circular). c/ After obtaining the State Bank's written approval of relocation, the foreign credit institution's representative office shall register and inaugurate its operation under the provisions of Part I of this Section. At the same time, the representative office shall liquidate and settle benefits of and obligations toward concerned individuals and organizations in the province or centrally run city where it is located according to the provisions of law (including return of the formerly leased office, liquidation of contracts, fulfillment of obligations toward laborers and tax obligations). 70. A representative office shall register its relocation within the same province or centrally run city or change of its chief representative according to regulations and the guidance of the provincial/municipal People's Committee. After obtaining approval of the provincial/municipal People's Committee, the representative office shall send to the State Bank (the Department for Banks) and the State Bank's branch in the locality a written notice on such approval, enclosed with a copy thereof. IV. DOSSIERS AND PROCEDURES FOR TERMINATION OF OPERATION OF REPRESENTATIVE OFFICES 71. In case of expiration of the operation duration (if at least 60 days before the expiration of the operation duration stated in the license, a foreign credit institution fails to submit a dossier of application for license extension or does not obtain the State Bank's approval though it has submitted a dossier of application for extension): a/ The State Bank shall request in writing the representative office to carry out procedures for operation termination and closure, such as returning the operation registration and the seal, liquidating the office lease contract, fulfilling its obligations and paying other debts (if any) to concerned individuals and organizations according to law. b/ After the representative office fulfills the above obligations and completes the above procedures (evidenced by relevant documents), the State Bank shall issue a decision on closure of the representative office and revocation of its license. 72. Voluntary termination of operation: a/ In this case, at least 60 days before the projected date of termination of operation of a representative office, its foreign credit institution shall send an application to the State Bank. b/ Procedures and order for handling the termination of operation shall comply with the provisions of Clause 71 above. 73. A representative office will have its license revoked when any of the events specified at Points a, b and e, Clause 1, Article 29 of the Law on Credit Institution occurs or when the foreign credit institution falls bankrupt or is dissolved: Procedures and order for handling the termination of operation shall comply with the provisions of Clause 71 above. V. SOME OTHER PROVISIONS ON REPRESENTATIVE OFFICES 74. Representative offices may only conduct operations within the operation duration stated in their licenses. Representative offices may neither sublease their offices, act as representatives for other organizations nor transfer their licenses to other organizations or individuals. 75. Representative offices shall make registration for and carry out other procedures related to their foreign and Vietnamese laborers with provincial/municipal People's Committees according to the provisions of law and the guidance of these provincial/municipal People's Committees. 76. Chief representatives may represent foreign credit institutions in signing contracts related to business and investment activities of foreign credit institutions with Vietnamese economic organizations or credit institutions only when they are lawfully authorized in writing by competent persons of those foreign credit institutions. A power of attorney must be made for each time of contract signing (in case of single authorization) and copies of that power of attorney must be sent to the State Bank (the Department for Banks and the State Bank's branch in the province or city) for monitoring. 77. Representative offices may open accounts exclusively for payments in foreign currencies or Vietnam dong of foreign-currency origin at banks lawfully operating in Vietnam under the Law on Credit Institutions (licensed banks) for payment of expenses for their activities. 78. Foreign credit institutions' representative offices in Vietnam have their own seals under the provisions of Vietnamese law and may use them only in transaction documents within the ambit of their powers and functions. Part V RESPONSIBILITIES OF UNITS OF THE STATE BANK 79. The Council for examination of dossiers of application for licenses to open foreign bank branches or establishment and operation licenses of joint-venture banks or banks with 100% foreign capital 79.1. The Council for examination of dossiers of application for licenses (below referred to as the Examination Council) is set up under the State Bank Governor's decision and composed of the Governor or a Deputy Governor (authorized by the Governor) as its Chairman and members of the State Bank's leadership and other members (including heads of the Legal Department, the Department for Banks, the Department for Strategies and Bank Development, the State Bank Inspectorate, the Bank for International Cooperation and the State Bank's branches in provinces or cities where banks intend to locate their branches or head offices) as its members. 79.2. The Chairman of the Examination Council shall: a/ Convene and chair meetings of members of the Examination Council; all meetings of the Examination Council must be recorded in minutes; b/ Assign tasks to members of the Examination Council within the ambit of their tasks and powers; c/ Decide on the grant of licenses according to the provisions of this Circular; d/ Take responsibility before the State Bank Governor for the grant of licenses, in case he/she is a Deputy Governor authorized by the Governor. e/ Within 90 working days after receiving a complete dossier of application for a license to open a foreign bank branch or an establishment and operation license for a joint-venture bank or a bank with 100% foreign capital, the Chairman of the Examination Council shall sign a decision on the grant of a license or refusal to grant a license (in case of refusal to grant a license, the reason must be clearly stated). 79.3. Members of the Examination Council shall perform their tasks under the direction by the Chairman of the Examination Council and take responsibility before the Chairman of the Examination Council for the task performance and their opinions. 80. Responsibilities of the Department for Banks 80.1. To examine dossiers and propose them to the Examination Council for decision on grant of licenses for opening of foreign bank branches or establishment and operation licenses for joint-venture banks or banks with 100% foreign capital. 80.2. To examine dossiers and propose them to the State Bank Governor for decision on: a/ Grant of licenses for opening of foreign credit institutions' representative offices in Vietnam. b/ Extension of operation duration or revocation of operation licenses of foreign bank branches, joint-venture banks, banks with 100% foreign capital or foreign credit institutions' representative offices in Vietnam. c/ Approval of personnel and changes subject to approval by the State Bank regarding foreign bank branches, joint-venture banks, banks with 100% foreign capital or foreign credit institutions' representative offices under the provisions of the Law on Credit Institutions and the guidance in this Circular. d/ Organizational transformation of joint-venture banks or banks with 100% foreign capital. e/ Operation networks of foreign bank branches, joint-venture banks or banks with 100% foreign capital. f/ Guidance (or requesting, in coordination with concerned units, the State Bank Governor to provide guidance) for foreign bank branches, joint-venture banks, banks with 100% foreign capital or foreign credit institutions' representative offices in Vietnam in implementing this Circular. 80.3. To coordinate with the State Bank Inspectorate in proposing to the State Bank Governor solutions when the actual value of the allocated capital of a foreign bank branch or the charter capital of a joint-venture bank or a bank with 100% foreign capital decreases to a level lower than the legal capital. 80.4. To certify the registration for performance of financial activities, accounting, making of general reports and of a general director in charge of two or more Vietnam-based branches of a foreign bank. 81. Responsibilities of the State Bank Inspectorate 81.1. To give its opinions on the capability to satisfy the conditions and requests for grant of licenses for, or extension of the operation duration, of foreign bank branches, joint-venture banks, banks with 100% foreign capital or foreign credit institutions' representative offices in Vietnam; to give its comments on impacts on the system safety within a time limit specified in this Circular; 82.2. To coordinate with the Department for Banks in proposing to the State Bank Governor solutions when the actual value of the allocated capital of a foreign bank branch or the charter capital of a joint-venture bank or a bank with 100% foreign capital decreases to a level lower than the legal capital. 82. Responsibilities of the Legal Department To give its opinions on legal issues related to dossiers, procedures and order for applying for licenses of foreign bank branches, joint-venture banks and banks with 100% foreign capital. 83. Responsibilities of the Department for Strategies and Bank Development To give its opinions on issues related to development strategies and prospects of sustainable development of foreign bank branches, joint-venture banks and banks with 100% foreign capital in the coming period. 84. Responsibilities of the Department for International Cooperation To assess arising issues related to Vietnam's commitments for its accession to the World Trade Organization. 85. Responsibilities of the Transaction Bureau 85.1. To guide foreign bank branches, joint-venture banks, banks with 100% foreign capital and foreign credit institutions' representative offices in: a/ Paying the licensing fee and the operation duration extension fee. b/ Carrying out procedures for opening accounts, transfer of capital into frozen accounts, and release of capital. 85.2. To send to the Department for Banks copies of documents certifying the receipt of full licensing or operation duration extension fee amounts, or documents certifying the transfer of capital into frozen accounts and release of capital. 86. Responsibilities of the State Bank's branches in provinces or cities 86.1. To notify their opinions on dossiers of application for licenses of foreign bank branches, joint-venture banks, banks with 100% foreign capital and foreign credit institutions' representative offices, and on matters related to banking activities in their localities to the Department for Banks within a time limit specified in this Circular, and give advice to the provincial/municipal People's Committees (when so requested). 86.2. To inspect and supervise the inauguration of operation and the capability of foreign bank branches, joint-venture banks and banks with 100% foreign capital to satisfy the conditions for operation inauguration under the provisions of this Circular. Part VI IMPLEMENTATION PROVISIONS I. EFFECT 87. This Circular takes effect 15 days after its publication in "CONG BAO" and replaces Circular No. 08/2000/TT-NHNN5 of July 4, 2000, guiding the implementation of the Government's Decree No. 13/1999/ND-CP of March 17, 1999, on organization and operation of foreign credit institutions and their representative offices in Vietnam. II. ADJUSTMENT OF ORGANIZATION AND OPERATION 88. For foreign bank branches and joint-venture banks 88.1. Foreign bank branches and joint-venture banks currently operating in Vietnam that are not required to have their licenses renewed to operate for a new duration (the maximum duration of 99 years) specified in the Decree may continue operating until the end of the duration stated in their current licenses and conduct operations under the State Bank Governor's decisions on change or addition of operations in licenses to open foreign bank branches or establishment and operation licenses of joint-venture banks. These decisions on change or addition of operations are issued and commonly applicable to the subjects mentioned at this Point in pursuance to the provisions of the Decree, this Circular and relevant provisions of law, in order to properly implement Vietnam's bilateral and multilateral commitments in the banking domain. 88.2. Foreign bank branches and joint-venture banks that are required to have their licenses renewed to operate for a new duration (the maximum duration of 99 years) specified in this Decree shall make and send dossiers of application for renewed licenses within three years from the effective date of this Circular. The conditions for the grant of licenses, dossiers, procedures and order for the grant of licenses and the license fee comply with the provisions applicable to the extension of the operation duration in Section IV, Part I of this Circular. 89. For sub-branches of foreign bank branches 89.1. For sub-branches that do not wish to operate for a new duration (the maximum duration of 99 years) specified in the Decree: a/ Within one (1) year from the effective date of this Circular, a foreign bank shall make and send an application signed by its competent representative to the State Bank Governor for a license to open a foreign bank branch in strict accordance with the Law on Credit Institutions, the Decree and this Circular. b/ A foreign bank branch (transformed from a sub-branch) must have an allocated capital at least equal to the legal capital prescribed by the Government and be granted by the State Bank a license with a duration equal to remaining operation duration of the sub-branch. 89.2. For sub-branches that wish to operate for a new duration (the maximum duration of 99 years) specified in the Decree: a/ Within three (3) years from the effective date of this Circular, a foreign bank shall make and send an application and a dossier to the State Bank (the Department for Banks) for a license to open a foreign bank branch in strict accordance with the Law on Credit Institutions, the Decree and this Circular. b/ In this case, the conditions for the grant of a license, dossiers, procedures and order for grant of a license and the license fee comply with the provisions applicable to the case of opening of additional branches specified in Section III, Part II of this Circular. 89.3. If a foreign bank does not wish to operate a sub-branch (it makes no application for a license under the provisions of Points 89.1 and 89.2 above), or its application for a license is rejected by the State Bank, or it makes a request for closure of its sub-branch, it shall carry out procedures for dissolving and terminating the operation of that sub-branch. Dossiers, procedures and order for dissolution and termination of operation of sub-branches comply with the provisions applicable to the case of dissolution and termination of operation of foreign bank branches in Section VII, Part II of this Circular. III. ORGANIZATION OF IMPLEMENTATION 90. The director of the Office, the director of the Department for Banks and Non-Bank Credit Institutions, the Chief Inspector of the State Bank, heads of units of the State Bank, directors of the State Bank's branches in provinces and centrally run cities, chairmen of Boards of Directors, heads of Control Boards and General Directors (Directors) of joint-venture banks and banks with 100% foreign capital, General Directors (Directors) of foreign bank branches and foreign credit institutions' chief representatives in Vietnam shall, within the ambit of their respective functions, tasks and powers, organize the implementation of the provisions of this Circular.