CIRCULAR

STIPULATING TIME LIMIT, PROCESS AND PROCEDURE FOR TRANSITION APPLIED TO THE CIRCUMSTANCE UNDER WHICH SHARES ARE OWNED IN EXCESS OF PERMITTED LIMIT AS PRESCRIBED IN ARTICLE 55 OF THE LAW ON CREDIT INSTITUTIONS

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Government's Decree No. 156/2013/NĐ-CP dated November 11, 2013 defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the request of the Chief Inspector of banks,

The Governor of the State Bank of Vietnam (hereinafter referred to as the State Bank) hereby provide regulations on the time limit, process and procedure for transition applied to the circumstance under which shares are owned in excess of permitted limit as prescribed in article 55 of the law on credit institutions.

Article 1. Scope of application and applicable entities

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2. This Circular shall apply to:

a) A single shareholder, or a shareholder in association with parties concerned (hereinafter referred to as “related shareholder group”) who takes ownership of excess shares;

b) Credit institutions of which an excess amount of shares are owned by a related shareholder group (hereinafter referred to as “credit institution”).

Article 2. Time limit, process and procedure for transition applied to the circumstance under which shares are owned in excess of permitted limit

1. The credit institution in associated with a single shareholder or the related shareholder group owning excess shares shall prepare the remedial plan for this excess share ownership (hereinafter referred to as “remedial plan”) with assurance that the percentage of shares owned by that shareholder or group in a credit institution must conform to permitted limit defined in the Law on Credit Institutions by December 31, 2015 at the latest, unless otherwise approved by the Prime Minister or treated in accordance with the restructuring plan approved by the State Bank. The remedial plan must have at least contents as follows:

a) List of single shareholders or related shareholder groups (specifying the relationship between a shareholder and parties concerned) that are taking ownership of excess shares, including the following information:

- Full name, number of identification card or passport, permanent residence address (applicable to individuals); name, address of the main office, business scope, number of the Certificate of Enterprise Registration, tax code (applicable to organizations);

- Amount and ratio of shares to the charter capital owned in a credit institution (specifying the amount and ratio of shares to the charter capital entrusted to other organization or individual; information of the entrusted party, and the relationship between the entrusted party and the shareholder (when appropriate));

- Amount and ratio of shares to the charter capital currently entrusted by other organization or individual; information of the entrusting party, and the relationship between the entrusting party and the shareholder (when appropriate);

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b) Remedial measures and schedule;

c) Commitment of the credit institution to coordinating and encouraging single shareholders or related shareholder group to take remedial measures in accordance with the abovementioned schedule.

2. Within the permitted period when the plan mentioned in Clause 1 of this Article is implemented, or within the permitted period specified in the restructuring plan approved by the State bank, a single shareholder, or an related shareholder group owning excess shares, shall not be allowed to own more shares of a credit institution in any form, except when they:

a) Receive bonus shares or dividends paid in the form of shares;

b) Purchase shares additionally issued when a credit institution wishes to increase their charter capital through the public offering of their shares to the general public but they must ensure that the percentage of shares owned after such purchase conforms to the permitted share limit stipulated in Article 55 of the Law on Credit Institutions.

3. From the effective date of this Circular, credit institutions shall not be allowed to extend any credit or new credits (if they have already extended credit before) to a single shareholder, or a shareholder that belongs to the related shareholder group currently owning excess shares or persons related to that shareholder.

4. Individual shareholders, or shareholding organizations with their representative of the portion of contributed capital being the member of the Board of Directors, the Control Board or the Director General (Director) of the credit institution, all of whom are owning excess shares, shall be permitted to transfer an amount of such excess shares.

Article 3. Post-transition treatment

If, after the deadline defined in Clause 1 Article 2 hereof or the deadline specified in the restructuring plan approved by the State Bank, a single shareholder or related shareholder group have not managed to comply with permitted share limit in accordance with regulations laid down in the Law on Credit Institutions, the State Bank shall apply the following measures:

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a) are shareholders or belong to the related shareholder group currently owning excess shares in credit institutions;

b) are the representatives of a portion of contributed capital or persons related to entities specified at Point a of this Clause.

2. Refuse to consider recommending their staff members to the Board of Directors or the Control Board of the credit institution in which a single shareholder or the related shareholder group currently owning excess shares is investing.

3. Prevent a single shareholder or a related shareholder group currently owning excess shares from increasing the amount of shares owned in a credit institution in any form, except for the case stipulated in Clause 2 Article 2 hereof; from receiving cash dividends (if available) on the amount of excess shares until they manage to comply with the permitted share limit in accordance with regulations.

4. Take other necessary measures in accordance with laws, including those to be taken to restructure the credit institution in which a single shareholder or a related shareholder group is investing upon the request of the State Bank.

Article 4. Responsibilities of credit institutions

1. Review the list of shareholders, related shareholder groups as stipulated by the Law on Credit Institutions, and coordinate with these shareholders in preparing the remedial plan as prescribed in Clause 1 Article 2 hereof for submission to the State Bank (forwarded by the Department of Bank Inspection and Supervision or the State Bank branches located in cities or provinces where the credit institution's main office is located without the presence of that Department) within 30 days from the effective date of this Circular.

2. Supervise and encourage shareholders owning excess shares to implement the remedial plan specified in Clause 1 Article 2 hereof. Submit the monthly report (before the 10^th day of the month following the reporting month) to the State Bank (forwarded by the Department of Bank Inspection and Supervision or the State Bank branches located in cities or provinces where the credit institution's main office is located without the presence of that Department) on the outcome of the remedial plan implementation which clearly states:

- Current status of shareholders or related shareholder groups owning excess shares with sufficient information stipulated at Point a Clause 1 Article 2 hereof;

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3. Take on the reporting responsibility for issues relating to shareholders and shares upon the request of the State Bank in specific periods (when applicable).

4. Add the remedial plan mentioned in Clause 1 Article 2 hereof (including remedial measures and schedule) to the content of the plan for operational restructuring of the credit institution in order to implement them in a consistent manner upon the request of the State Bank (if the plan for such restructuring has not included this content).

Article 5. Responsibilities of shareholders or related shareholder groups currently owning excess shares

1. Coordinate with the credit institution in preparing plans and taking remedial measures in order to assure the compliance with legal regulations on share ownership limit and other applicable laws.

2. Comply with applicable regulations pertaining to rights and obligations of shareholders, and transfer of shares within the credit institution.

3. Assume legal liability for the accuracy and sufficiency of information provided for the credit institution.

Article 6. Responsibilities of the State Bank braches located in cities or provinces where the credit institution’s main office is located (except for areas where the Department of Bank Inspection and Supervision is located)

1. Receive reports submitted by credit institutions on the plan to remedy ownership of excess shares in accordance with this Circular; direct credit institutions to complete the remedial plan (when necessary); report to the State Bank (forwarded by the Department of Bank Inspection and Supervision) on the remedial plan prepared by these credit institutions.

2. Monitor and supervise the credit institution’s implementation of the remedial plan; on a periodic basis (before the 20^th day of the month following the reporting quarter), submit the report to the State Bank (forwarded by the Department of Bank Inspection and Supervision) on the implementation outcome, inclusive of contents defined in Clause 2 Article 4 hereof, in which possible solutions to any difficulty or complaint that the credit institution is faced with must be suggested (when appropriate).

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1. The Department of Bank Inspection and Supervision:

a) Receive reports submitted by credit institutions with their main office located in Hanoi or Ho Chi Minh city on the plan to remedy ownership of excess shares in accordance with this Circular; direct credit institutions to complete the remedial plan (when necessary); monitor and supervise the implementation of the remedial plan which has been submitted to the State Bank;

b) Receive, aggregate reports submitted by credit institutions with their main office located in Hanoi and Ho Chi Minh city as mentioned in Clause 2 Article 4 and by the State Bank branches located in cities or provinces as mentioned in Clause 2 Article 6 hereof;

c) Act as the central consultant that gives advice to the Governor of the State Bank on how to deal with recommendations submitted by the State bank branches located in cities or provinces as well as difficulties in relation to the approach to ownership of excess shares in a credit institution.

2. Other Departments:

Coordinate in dealing with recommendations submitted by the State Bank branches located in cities or provinces and related problems or difficulties upon the request of the Department of Bank Inspection and Supervision.

Article 8. Effect

This Circular shall come into force from July 15, 2015.

Article 9. Implementation

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PP. THE GOVERNOR
THE DEPUTY GOVERNOR




Nguyen Phuoc Thanh