CIRCULAR

AMENDMENTS TO THE CIRCULAR NO. 24/2017/TT-NHNN DATED DECEMBER 29, 2017 OF THE GOVERNOR OF THE STATE BANK OF VIETNAM PRESCRIBING PROCEDURES FOR REVOCATION OF LICENSE AND LIQUIDATION OF ASSETS OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES, AND PROCEDURES FOR REVOCATION OF LICENSE OF REPRESENTATIVE OFFICES OF FOREIGN CREDIT INSTITUTIONS AND OTHER FOREIGN ORGANIZATIONS PERFORMING BANKING ACTIVITIES

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

Pursuant to the Law on credit institutions dated June 16, 2010 and the Law on amendments to the Law on credit institutions dated November 20, 2017;

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

Pursuant to the Government’s Decree No. 26/2014/ND-CP dated April 07, 2014 on organization and operation of the SBV Banking Supervision Agency, and the Government’s Decree No. 43/2019/ND-CP dated May 17, 2019 providing amendments to the Government’s Decree No. 26/2014/ND-CP dated April 07, 2014 on organization and operation of the SBV Banking Supervision Agency;

At the request of the Head of the SBV Banking Supervision Agency;

The Governor of the State Bank of Vietnam promulgates a Circular providing amendments to the Circular No. 24/2017/TT-NHNN dated December 29, 2017 of the Governor of the State Bank of Vietnam prescribing procedures for revocation of license and liquidation of assets of credit institutions and foreign bank branches, and procedures for revocation of license of representative offices of foreign credit institutions and other foreign organizations performing banking activities.

Article 1. Amendments to the Circular No. 24/2017/TT-NHNN dated December 29, 2017 of the Governor of the State Bank of Vietnam prescribing procedures for revocation of license and liquidation of assets of credit institutions and foreign bank branches, and procedures for revocation of license of representative offices of foreign credit institutions and other foreign organizations performing banking activities (hereinafter referred to as “Circular No. 24/2017/TT-NHNN”)

1. Article 3a is added as follows:

“Article 3a. Power to decide the revocation of license

1. The Governor of the State Bank of Vietnam (hereinafter referred to as “SBV’s Governor”) shall have the power to decide:

a) The revocation of license of credit institutions;

b) The revocation of license of foreign bank branches that are subjects of microprudential supervision of the SBV Banking Supervision Agency as assigned by the SBV’s Governor.

2. Each Director of SBV’s provincial branch shall have the power to decide:

a) The revocation of license of foreign bank branches located in the province, except those prescribed in Point b Clause 1 of this Article;

b) The revocation of license of representative offices located in the province.”.

 2. Clause 1 Article 7 is amended as follows:

“1. Approval of application for dissolution:

a) The credit institution or foreign bank branch shall:

(i) hire an enterprise that has been issued with a certificate of eligibility to provide valuation services as prescribed in the Law on valuation to carry out asset valuation and determine the owner's equity in the year preceding the year in which the application for dissolution is submitted, and in the last quarter before applying for dissolution;

(ii) work out an asset liquidation plan according to the provisions in Point b Clause 4 of this Article and based on the report on asset valuation and equity determination prescribed in Point a(i) of this Clause;

(iii) prepare an application as prescribed in Clause 4 of this Article and submit it directly at the Single-window Service Section or by post to the SBV, in case of revocation of license prescribed in Clause 1 Article 3a hereof, or to the relevant SBV's provincial branch, in case of revocation of license prescribed in Point a Clause 2 Article 3a hereof;

b) Within fifteen (15) days from receipt of the adequate and valid application as prescribed in Clause 4 of this Article, the SBV Banking Supervision Agency shall examine the received application and directly send written request or request the SBV’s Governor to send written request to:

(i) The relevant SBV’s provincial branch for its opinions about the credit institution or foreign bank branch’s organization, operation and capacity to pay off all debts and other asset liabilities; the asset liquidation, dissolution, license revocation, and proposed measures for handling of issues concerning the asset liquidation, dissolution, license revocation; impacts of the dissolution and license revocation on the safety of the local network of credit institutions;

(ii) The People’s Committee for its opinions about the dissolution and license revocation, and their impacts on local social, economic and political stability;

(iii) Relevant Ministries, regulatory authorities and affiliated units of SBV for their opinions about the asset liquidation, dissolution and license revocation (if necessary);

c) Within fifteen (15) days from receipt of the adequate and valid application as prescribed in Clause 4 of this Article, the SBV’s provincial branch shall examine the received application and send written request or request the SBV’s Governor to send written request for opinions as prescribed in Point b(ii) and Point b(iii) of this Clause;

d) Within fifteen (15) days from receipt of the written request for opinions, the requested agencies and units mentioned in Point b and c of this Clause are required to provide their opinions to the SBV Banking Supervision Agency or the SBV’s provincial branch;

dd) Within fifteen (15) days after the prescribed deadline for given opinions, the SBV Banking Supervision Agency or the SBV’s provincial branch shall consolidate received opinions, and, if the asset liquidation plan can prove the capacity to pay off all debts and asset liabilities as well as ensure rights and benefits of borrowers and creditors, request the SBV's Governor or the SBV's provincial branch to:

 (i) give written approval for dissolution in which the asset liquidation plan must be approved and the credit institution or foreign bank branch is requested to establish the asset liquidation council and carry out the liquidation of assets according to the approved asset liquidation plan; establish the liquidation supervision team; or

(ii) request the credit institution or foreign bank branch in writing to provide report on or explanation about related issues;

e) Within ten (10) working days from receipt of the report or explanation from the credit institution or foreign bank branch as prescribed in Point dd(ii) of this Clause, the SBV Banking Supervision Agency shall request the SBV’s Governor or SBV’s provincial branch to implement the provisions in Point dd(i) of this Clause;

g) If the asset liquidation plan cannot prove the capacity to pay off all debts and asset liabilities, the SBV Banking Supervision Agency shall consider requesting the SBV’s Governor or SBV’s provincial branch to give written refusal of the application for dissolution, in which reasons for such refusal must be specified.”.

3. Clause 3 Article 7 is amended as follows:

“3. Revocation of license in the case prescribed in Clause 1 of Article 3a:

a) Within a maximum duration of fifty (50) days from receipt of the asset liquidation report from the liquidation supervision team as prescribed in Point c, d Clause 2 of this Article, the SBV Banking Supervision Agency shall request the SBV’s Governor to: 

(i) issue the liquidation termination decision and decision to revoke license in the case prescribed in Clause 1 Article 13 hereof; or

(ii) issue the liquidation termination decision to initiate bankruptcy proceedings as prescribed by law in the case prescribed in Clause 2 Article 13 hereof. The SBV shall revoke the license after the Court’s Judge appoints a qualified receiver or asset management company; or

(iii) request the credit institution or foreign bank branch in writing to provide report on or explanation about any issues related to the asset liquidation;

b) Within ten (10) working days from receipt of the report or explanation from the credit institution or foreign bank branch as prescribed in Point a(iii) of this Clause, the SBV Banking Supervision Agency shall request the SBV’s Governor to implement the provision in Point a(i) or a(ii) of this Clause;

c) Within sixty (60) days from receipt of the asset liquidation report from the liquidation supervision team as prescribed in Point c, d Clause 2 of this Article, the SBV’s Governor shall issue a decision or document as prescribed in Point a of this Clause.”.

4. Clause 3a is added to Article 7 as follows:

“3a. Revocation of license in the case prescribed in Point a Clause 2 of Article 3a:

a) Within forty (40) days from receipt of the asset liquidation report from the liquidation supervision team as prescribed in Point c Clause 2 of this Article, Director of SBV’s provincial branch shall:

(i) issue the liquidation termination decision and the decision to revoke license; or

(ii) request the foreign bank branch in writing to provide report on or explanation about any issues related to the asset liquidation;

b) Within ten (10) working days from receipt of the report or explanation from the foreign bank branch as prescribed in Point a(ii) of this Clause, the Director of SBV’s provincial branch shall implement the provisions in Point a(i) of this Clause.”.

5. Article 8 is amended as follows:

“Article 8. Procedures for revocation of license of credit institutions and foreign bank branches

1. Based on the inspection conclusion or banking supervision report indicating the dissolution and revocation of license of the subject credit institution or foreign bank branch or the decision on dissolution of the credit institution placed under special control issued by a competent authority, the SBV Banking Supervision Agency shall request the SBV’s Governor to request the credit institution or foreign bank branch in writing to liquidate its assets and establish the asset liquidation council/liquidation supervision team.

2. The liquidation of assets shall be carried in accordance with regulations in Point b, c, d Clause 2 Article 7, Section 2 Chapter II hereof and relevant laws.

3. The license of the credit institution or foreign bank branch shall be revoked according to the procedures laid down in Clause 3, Clause 3a Article 7 hereof.”.

6. Clause 2 Article 9 is amended as follows:

“2. Within seven (07) working days from the effective date of the decision to revoke license:

a) In case of revocation of license prescribed in Clause 1 Article 3a hereof, the SBV shall publish the revocation of license of the credit institution or foreign bank branch on its web portal and send the decision to revoke license to the relevant People's Committee, National Financial Supervisory Commission, Ministry of Finance, credit institution or foreign bank branch and the SBV’s provincial branch to serve the performance of state management tasks and publish it on the website of the SBV’s provincial branch (if any);

b) In case of revocation of license prescribed in Point a Clause 2 Article 3a hereof, the SBV’s provincial branch shall publish the revocation of license of the foreign bank branch on its website (if available) and send the decision to revoke license to the relevant People's Committee, National Financial Supervisory Commission, Ministry of Finance, foreign bank branch and the SBV to serve the performance of state management tasks and publish it on the SBV’s web portal.”.

7. Article 10 is amended as follows:

“Article 10. Composition, duties and powers of asset liquidation council  

1. Composition of the asset liquidation council of a credit institution

a) The asset liquidation council is composed of the Chairperson of the Board of Directors, Chairperson of the Board of Members, at least an independent member of the Board of Directors (if any), head of the Control Board, General Director (Director), Chief Accountant, some other members of the Board of Directors, the Board of Members and the Control Board (if any), and majority shareholders, owners, capital-contributing members and five (05) clients who have highest account balances maintained at the credit institution (with their consent) at the time of application for dissolution. If the position of Chairperson of the Board of Directors or Chairperson of the Board of Members is vacant at the time of establishment and during the operation of the asset liquidation council of the credit institution, the competent authority shall appoint one of members of the Board of Directors or Board of Members to join the asset liquidation council. If the position of head of Control Board, General Director (Director) or Chief Accountant is vacant, the competent authority shall appoint other persons to join the asset liquidation council;

b) Chairperson of the asset liquidation council shall be Chairperson of the Board of Directors or Chairperson of the Board of Members. If the position of Chairperson of the Board of Directors or Chairperson of the Board of Members is vacant at the time of establishment and during the operation of the asset liquidation council of the credit institution, the person who is appointed by the competent authority to join the asset liquidation council as a substitute for Chairperson of the Board of Directors or Chairperson of the Board of Members as prescribed in Point a of this Clause shall act as the Chairperson of the asset liquidation council;

c) When a new Chairperson of the Board of Directors or Chairperson of the Board of Members of the credit institution is appointed, he/she shall act as the Chairperson of the asset liquidation council as a substitute for the person mentioned in Point b of this Clause.

2. Composition of the asset liquidation council of a foreign bank branch:

a) The asset liquidation council is composed of General Director (Director), Chief Accountant, at least a member appointed by the parent bank and five (05) clients who have highest account balances maintained at the foreign bank branch (with their consent) at the time of application for dissolution. If the position of General Director (Director) or Chief Accountant is vacant at the time of establishment and during the operation of the asset liquidation council of the foreign bank branch, the competent authority of the parent bank shall appoint a qualified person to join the asset liquidation council;

b) General Director (Director) of the foreign bank branch shall act as Chairperson of the asset liquidation council. If the position of General Director (Director) is vacant at the time of establishment and during the operation of the asset liquidation council of the foreign bank branch, the person appointed by the competent authority of the parent bank to join the asset liquidation council as a substitute for the General Director (Director) as prescribed in Point a of this Clause shall act as Chairperson of the asset liquidation council

c) When a new General Director (Director) of the foreign bank branch is appointed, he/she shall act as the Chairperson of the asset liquidation council as a substitute for the person mentioned in Point b of this Clause.

3. The credit institution or foreign bank branch shall decide the composition of its asset liquidation council as prescribed in Clause 1 or Clause 2 of this Article if it voluntarily applies for dissolution.

4. The asset liquidation council of the credit institution or foreign bank branch whose license is compulsorily revoked shall be decided by the SBV’s Governor or Director of SBV’s provincial branch and composed of:

a) The members prescribed in Clause 1, Clause 2 of this Article, who are recommended by the credit institution or foreign bank branch; or

b) Other members decided by the SBV's Governor at the request of the SBV Banking Supervision Agency, or decided by the Director of SBV’s provincial branch, if no members are recommended by the credit institution or foreign bank branch as prescribed in Clause 1, Clause 2 of this Article.

5. Duties and powers of the asset liquidation council:

a) Use the seal of the credit institution or foreign bank branch during the liquidation of its assets in accordance with regulations of law;

b) Review all assets, liabilities and off-balance sheet items specified in the balance sheet of the credit institution or foreign bank branch, make the list of its creditors and borrowers, including debt amounts of each one, at the time of liquidation of assets, and the list of its assets;

c) Carry out the liquidation of assets in accordance with regulations herein and relevant laws; adopt any measures for collecting debts and assets of the credit institution or foreign bank branch;

d) Submit reports on the liquidation of assets, distribution of assets and any other issues within the first 05 days of each month or on ad hoc basis;

dd) Costs incurred during the operation of the asset liquidation council shall be covered by the credit institution or foreign bank branch. Such costs shall be recorded in accordance with regulations of the Law on accounting;

e) The asset liquidation council is considered to complete its duties when the credit institution terminates its juridical person status or the foreign bank branch terminates operations as prescribed by law.”.

8. Clause 4 Article 12 is amended as follows:

“4. Within forty (40) days from receipt of the written request from the asset liquidation council or the liquidation supervision team as prescribed in Clause 2 of this Article, the SBV or the SBV’s provincial branch shall give a written approval or refusal of the written request for extension of liquidation time limit.”.

9. Clause 1 Article 13 is amended as follows:

“1. All debts and asset liabilities have been fully paid as prescribed in Clause 1, Clause 2 Article 11 hereof.”.

10. Clause 2 Article 16 is amended as follows:

“2. Leader and members of the liquidation supervision team shall assume responsibility before the SBV’s Governor or Director of SBV’s provincial branch for performance of their duties.”.

11. Clause 5 Article 16 is amended as follows:

“5. The liquidation supervision team shall be considered to complete its duties when the SBV’s Governor or Director of SBV’s provincial branch issues a decision to terminate the liquidation of assets of the credit institution or foreign bank branch.”.

12. Clause 7 Article 17 is amended as follows:

“7. The liquidation supervision team shall work under the direction of the SBV’s Governor or Director of SBV’s provincial branch.”.

13. Article 18 is amended as follows:

“Article 18. Procedures for revocation of license of representative offices

1. For a representative office that applies for approval of its termination of operation:

a) The representative office shall prepare an application as prescribed in Article 19 hereof, and submit it directly at the Single-window service section or by post to the SBV’s provincial branch;

b) Within five (05) working days from receipt of the adequate and valid application as prescribed in Article 19 hereof, the SBV’s provincial branch shall examine the received application and send written request to relevant affiliated units of the SBV for their opinions about the termination of operation, license revocation and proposed measures for handling of issues concerning the termination of operation and license revocation (if necessary);

c) Within seven (07) working days from receipt of the written request from the SBV’s provincial branch, the requested units mentioned in Point b of this Clause are required to give their opinions to the SBV’s provincial branch;  

d) Within twenty (20) days after the deadline for giving opinions, Director of the SBV’s provincial branch shall:

(i) issue a decision to revoke license, request the representative office to finalize the office lease contract and fulfill any liabilities and debts to relevant individuals and organizations, carry out procedures for termination of operation or shutdown of the representative office, and return the certificate of operation registration and seal as prescribed by law; or  

(ii) request the representative office in writing to provide report or explanation about any related issues;

dd) Within five (05) working days from receipt of the report or explanation from the representative office as prescribed in Point d(ii) of this Clause, the Director of SBV’s provincial branch shall implement the provisions in Point d(i) of this Clause.

2. For a representative office whose license is revoked:

In case the application for license of the representative office is found to contain fraudulent information, or the representative office operates against the license, or the foreign credit institution or other foreign organization performing banking activities is dissolved or declared bankrupt or has its license revoked or has its operation terminated according to a decision issued by the competent authority of the country where it is headquartered, the Director of SBV’s provincial branch shall implement the provisions in Point d(i) Clause 1 of this Article.

3. If no written request for extension of operation duration is submitted by the representative office as prescribed by the SBV, within ten (10) working days after the deadline for submission of the written request for extension of operation duration as prescribed, the Director of SBV’s provincial branch shall request the representative office in writing to finalize the office lease contract and fulfill any liabilities and debts to relevant individuals and organizations, carry out procedures for termination of operation or shutdown of the representative office, and return the certificate of operation registration and seal as prescribed by law.

4. If a written request for extension of operation duration is submitted by the representative office but refused in writing by the SBV’s provincial branch, the Director of the SBV’s provincial branch shall request the representative office through the written refusal to finalize the office lease contract and fulfill any liabilities and debts to relevant individuals and organizations, carry out procedures for termination of operation or shutdown of the representative office, and return the certificate of operation registration and seal as prescribed by law.”.

14. Clause 1 Article 20 is amended as follows:

“1. Within seven (07) working days from the effective date of the decision to revoke license, the SBV’s provincial branch shall publish information about the revocation of license of the representative office on its website (if available) and send the decision to revoke license to the relevant People's Committee, representative office and the SBV to serve its performance of state management tasks and publish it on the SBV’s web portal.”.

15. Clause 3 is added to Article 20 as follows:

“3. With regard to a representative office that submits no request for extension of operation duration as prescribed by the SBV or whose request for extension of operation duration is refused in writing by the SBV’s provincial branch, within seven (07) working days from the date on which the license becomes invalid, the SBV’s provincial branch shall publish information about the end of operation duration of the representative office on its website (if available) and send written notification thereof to the relevant People's Committee and the SBV to serve its performance of state management tasks and publish it on the SBV’s web portal.”.

16. Article 21 is amended as follows:

“Article 21. Responsibilities of relevant units

1. Credit institutions, foreign bank branches and representative offices are responsible for providing adequate and truthful information about their organization and operation, submitting required reports and complying with relevant laws on asset liquidation, dissolution and license revocation as prescribed herein.

2. The SBV Banking Supervision Agency is responsible for responding to any proposals concerning the liquidation of assets, dissolution and revocation of license of credit institutions and foreign bank branches as prescribed in Clause 1 Article 3a hereof, which fall beyond the authority of liquidation supervision teams; requesting the SBV’s Governor to deal with any issues falling beyond its authority and concerning the liquidation of assets, dissolution and revocation of license of credit institutions and foreign bank branches.

3. Each SBV’s provincial branch is responsible for responding to proposals concerning the liquidation of assets, dissolution and revocation of license of foreign bank branches and representative offices as prescribed in Clause 2 Article 3a hereof, which fall beyond the authority of liquidation supervision teams; appointing its representatives to join liquidation supervision teams in case of license revocation prescribed in Clause 1 Article 3a hereof if requested; requesting the SBV’s Governor to deal with any issues falling beyond its authority and concerning the liquidation of assets, dissolution and revocation of license of foreign bank branches, and the revocation of license of representative offices; providing its opinions at the request of the SBV Banking Supervision Agency as prescribed in Point b(i) Clause 1 Article 7 hereof.

4. The SBV’s branch in the province where a subject credit institution is headquartered and the SBV’s branch in the province where that subject credit institution’s branch is located shall be responsible for cooperating with the SBV Banking Supervision Agency in performing the liquidation of assets, dissolution and revocation of license of that credit institution.

5. Relevant Departments and units of the SBV are responsible for providing their opinions at the request of the SBV Banking Supervision Agency and SBV’s provincial branches by the deadlines prescribed in Article 7 and Article 18 hereof.".

Article 2.   

1. The phrase “Ngân hàng Nhà nước chi nhánh đối với tỉnh, thành phố không có Cục Thanh tra, giám sát ngân hàng hoặc Cơ quan Thanh tra, giám sát ngân hàng đối với tỉnh, thành phố có Cục Thanh tra, giám sát ngân hàng” (“the SBV’s branch in the province or city where there is no office of the SBV Banking Supervision Agency established or the SBV Banking Supervision Agency”) in Point b, c, d Clause 2 Article 7, Clause 2 Article 12 of the Circular No. 24/2017/TT-NHNN and the phrase “Ngân hàng Nhà nước chi nhánh đối với tỉnh, thành phố không có Cục Thanh tra, giám sát ngân hàng, Cơ quan Thanh tra, giám sát ngân hàng” (“the SBV’s branch in the province or city where there is no office of the SBV Banking Supervision Agency established”) in Clause 4, 5, 6 Article 17 of the Circular No. 24/2017/TT-NHNN are replaced by the phrase “Cơ quan Thanh tra, giám sát ngân hàng hoặc Ngân hàng Nhà nước chi nhánh” (“the SBV Banking Supervision Agency or the SBV’s provincial branch”).

2. The phrase “Báo cáo kết quả định giá, thẩm định giá tài sản, xác định giá trị doanh nghiệp” (“Report on asset valuation and business valuation”) in Point dd Clause 4 Article 7 of the Circular No. 24/2017/TT-NHNN is replaced by the phrase “Báo cáo kết quả thẩm định giá tài sản, xác định giá trị vốn chủ sở hữu của doanh nghiệp” (“Report on asset valuation and equity determination”).

3. The phrase “Ngân hàng Nhà nước” ("SBV”) in Point a Clause 1 Article 9 and Point a Clause 2 Article 14 of the Circular No. 24/2017/TT-NHNN is replaced by the phrase “Ngân hàng Nhà nước hoặc Ngân hàng Nhà nước chi nhánh” (“SBV or SBV’s provincial branch”).

4. The phrase “điểm d(i)” (“Point d(i)”) in Clause 1 Article 9 of the Circular No. 24/2017/TT-NHNN is replaced by the phrase “điểm đ(i)” (“Point dd(i)”).

5. The phrase “Thống đốc Ngân hàng Nhà nước (sau đây gọi tắt là Thống đốc)” (“the Governor of the State Bank of Vietnam (hereinafter referred to as “SBV’s Governor”) in Article 6 of the Circular No. 24/2017/TT-NHNN and the phrase “Thống đốc” (“SBV’s Governor”) in Clause 1 Article 14, Clause 3 Article 17 of the Circular No. 24/2017/TT-NHNN are replaced by the phrase “Thống đốc hoặc Giám đốc Ngân hàng Nhà nước chi nhánh” (“SBV’s Governor or Director of SBV’s provincial branch”).

6. The phrase “kết thúc thanh lý” (“completion of termination”) in Point b, c, d Clause 2 Article 7, Clause 2 Article 12, Article 13 of Circular No. 24/2017/TT-NHNN is replaced by the phrase “chấm dứt thanh lý” (“termination of completion”).

7. Point dd Clause 2 Article 7 and Clause 3 Article 12 of Circular No. 24/2017/TT-NHNN are abrogated.

Article 3. Organization of implementation

The Chief of Office, Head of SBV Banking Supervision Agency, heads of affiliated units of SBV, Directors of SBV's provincial branches, credit institutions, foreign bank branches and representative offices of foreign credit institutions or other foreign organizations performing banking activities are responsible for the implementation of this Circular.

Article 4. Implementation 

This Circular comes into force from December 17, 2020./.