Tiếng Việt| THE STATE BANK OF VIETNAM | THE SOCIALIST REPUBLIC OF VIETNAM |
| No. 19/2019/TT-NHNN | Hanoi, November 05, 2019 |
OPERATING NETWORKS OF MICROFINANCE INSTITUTIONS
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;
Pursuant to the Law on Amendments to some Articles of the Law on Credit Institutions dated November 20, 2017;
Pursuant to the Law on Enterprises dated November 26, 2014;
Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017 defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;
At the request of the Chief Inspector of the Banking Supervision Agency;
The Governor of the State Bank of Vietnam hereby promulgates a Circular on operating networks of microfinance institutions.
This Circular provides for:
1. Establishment, shutdown and dissolution of domestic branches, transaction offices and public service providers of microfinance institutions (hereinafter referred to as “MFIs”); opening and shutdown of transaction points of MFIs.
2. Renaming and relocation of branches, transaction offices, representative offices and public service providers of MFIs; change of branches managing transaction offices of MFIs.
3. Conversion of units under microfinance programs and projects into branches, transaction offices, public service providers and representative offices of MFIs.
1. MFIs.
2. Organizations and individuals involved in the establishment, shutdown and dissolution of domestic branches, transaction offices and public service providers; opening and shutdown of transaction points; renaming and relocation of branches, transaction offices, representative offices and public service providers; change of branches managing transaction offices; conversion of units under microfinance programs and projects into branches, transaction offices, public service providers and representative offices of MFIs.
For the purposes of this Circular, the terms below shall be construed as follows:
1. “operating network of an MFI” includes domestic branches, transaction offices, representative offices and public service providers.
2. “branch” means a dependent unit of an MFI, has its own seal and performs one or more functions of the MFI in accordance with its internal regulations and regulations of law.
3. “transaction office” means a branch or dependent unit of an MFI, is managed by a branch of the MFI, has its own seal, is located in the operating area of the branch managing it and performs one or more functions of the MFI in accordance with its internal regulations and regulations of law
4. “representative office” means a dependent unit of an MFI, has its own seal and performs one functions with the authorization of the MFI. A representative office is not allowed to carry out business activities.
5. “public service provider” means a dependent unit of an MFI, has its own seal and performs one or some activities aimed at assisting the business of the MFI as prescribed in Article 6 of this Circular.
6. “application date” means the date specified in the application form for establishment of a branch/transaction office/representative office/public service provider of the MFI.
Article 4. The power to grant approval for operating network of an MFI
1. The Governor of the State Bank of Vietnam has the power to:
a) grant approval for establishment of a branch/transaction office/representative office/public service provider of an MFI;
b) grant approval for compulsory shutdown or dissolution of branch/transaction office/representative office/public service provider of an MFI;
c) grant approval for conversion of a unit under microfinance program or project into a branch/transaction office/public service provider/representative office of an MFI.
2. The Director of the State Bank branch of a province or central-affiliated city has the power to:
a) grant approval for relocation of a branch/transaction office of an MFI within its province or city (including the relocation of the branch/transaction office prior to its inauguration);
b) grant approval for voluntary shutdown or dissolution of a branch/transaction office of an MFI;
Article 5. Regulations on transaction points
1. The MFI shall decide and take responsibility for the opening or shutdown of a transaction point under the management of a branch or transaction office within the operating area of such branch or transaction office in accordance with the Regulation on management of operation in transaction points and regulations of this Circular. The opening or shutdown of a transaction point shall be notified to the People’s Committee of the commune where the transaction point operates within 05 working days from the date on which the MFI decides to open or shut down the transaction point.
2. The branch/transaction office of the MFI shall only perform one or some of the following activities at its transaction point:
a) Do consumer surveys and referral marketing;
b) Provide counsels and instructions on establishment of savings and borrowing clienteles;
b) Provide clients with counsels and instructions about products, services and loan applications; receive loan applications; carry out loan disbursements and collect outstanding debts incurred from the credit contracts signed between the branch or transaction office and the client;
d) Receive a compulsory saving deposit or voluntary saving deposit which is restricted to 1,000,000 dong/day from a microfinance client;
dd) Make payment on compulsory saving deposits and voluntary saving deposits of microfinance clients.
3. Within 05 first working days of the first month of every quarter, the MFI or its branch shall send a notification containing the list of transaction points to the State Bank branch of the province or central-affiliated city where the MFI’s branch is located, whether by post or in person. The notification shall contain at least:
a) A list of transaction points operating in the province or city until the last working day of the previous quarter, which includes information about name of the branch or transaction office in charge of managing operation of each transaction point and location where the transaction point operates;
b) A list of transaction points opened and shut down during the previous quarter.
Article 6. Activities performed by public service providers
A public service provider of an MFI shall perform on or more activities aimed at assisting the business of the MFI:
1. Do researches and recommend applications to the MFI.
2. Provide professional and technical training to managers and heads of departments and employees of the MFI.
3. Store data, collect and process information serving the business of the MFI.
4. Other activities aimed at the business of the MFI in accordance with regulations of law.
Article 7. Operating areas and names of branches and transaction offices
1. A branch of the MFI operates within the province or central-affiliated city where it is located.
2. A transaction office operates within the operating area of the branch managing it.
3. The MFI’s branch or transaction office shall be named in accordance with relevant regulations of law as follows:
a) Name of the branch: Full name of the MFI - Branch (name of the branch);
b) Name of the transaction office: Full name of the MFI - Branch (name of the branch managing the transaction office) - Transaction office (name of the transaction office).
4. If the change of the administrative division results in the change of the operating area of the branch or transaction office, change of address of the branch or transaction office (without change of location of the branch or transaction office), the MFI is not required to make any adjustment as prescribed in Clauses 1 and 2 of this Article. The MFI shall send a notification of the change to the State Bank branch of the province or central-affiliated city where the MFI's branch or transaction office is located (hereinafter referred to as "the State Bank branch") within 05 working days from the date of change of the administrative division.
The number of branches of an MFI includes ones established and ones to be established and ensures:
VND 03 billion * N < C
Where:
- C means the real value of the MFI’s charter capital, which is calculated by addition (subtraction) of undistributed accumulated profits (unrealized accumulated losses) recognized on accounting books until the latest date preceding the application date.
- N means the number of branches established and to be established.
Article 9. Rules for preparing and submitting applications and notifications
1. Applications must be presented in Vietnamese language. Documents included in an application must be the originals or the copies from the master registers, certified copies or copies presented together with their originals for comparison as regulated by laws. If the applicant submits copies presented together with their originals for comparison, the person who compares documents must sign the copies and take responsibility for the consistency between the copies and the originals. Each application must include the list of documents.
2. The application forms and notifications of the MFI must be signed by its legal representative. If a person is authorized to do so, the application must contain a power of attorney prepared in accordance with regulations of law.
3. Applications and notifications of the MFI shall be submitted to the State Bank of Vietnam (hereinafter referred to as “the State Bank”) or State Bank Branch, whether by post or in person.
Article 10. Regulations on management of branches, transaction offices and transaction points
1. Every MFI shall make a Regulation on management of branches and transaction offices and Regulation on management of operation of transaction points to ensure that branches, transaction offices and transaction points operate in a safe and effective manner in accordance with regulations of law.
2. The Regulation on management of branches and transaction offices shall be promulgated by the Board of Members of the MFI and contain at least:
a) Transaction limits imposed on each level of management at branches and transaction offices by each product/service or group of products/services provided to clients;
b) Management and supervision mechanism, regulations on provision of information and submission of reports between headquarters and branches and between transaction offices and branches managing transaction offices;
c) Standards and conditions to be satisfied by the Branch Director, heads of transaction offices or equivalent titles in accordance with regulations of law and requirements for professional qualification and professional ethics.
d) Regulation on vault, fire safety, transfer and storage of documents in service of security and asset safety, including specific cash balance at the end of the day of branches and transaction offices, which is determined according to the operation, security and safety issues of such branches and transaction offices. The excessive cash balance at the end of the day shall be transferred to the bank account of the MFI.
3. The Regulation on management of transaction points shall be promulgated by the Director General (Director) of the MFI and contain at least:
a) Criteria for selecting transaction points suitable for their operation, ensuring risk control, safety and effectiveness during their operation;
b) Opening and shutdown of transaction points, including procedures for opening or shutting down of transaction points and power to do so, and assignment of persons to issue decisions (if any);
c) Scope of operation at transaction points, including specific transaction limits imposed on each transaction point by each product/service provided to clients;
d) Process for receiving and paying saving deposits, receiving documents, disbursement and collection of loans, rights and responsibilities of MFI's employees at transaction points;
dd) Measures for ensuring human safety; ensuring security and safety upon transfer of cash, documents and other assets during the operations carried out at transaction points.
4. Every MFI shall periodically review the Regulations specified in Clauses 2 and 3 of this Article at least once a year and make amendments (if necessary) in a manner that is suitable for its operation in each period.
ESTABLISHMENT OF BRANCHES, TRANSACTION OFFICES, REPRESENTATIVE OFFICES AND PUBLIC SERVICE PROVIDERS
Article 11. Conditions for establishment of branches
1. An MFI that has been operating for more than 12 months (from the date of inauguration to the application date) is entitled to establish no more than 03 branches in the fiscal year if the following conditions are met:
a) The actual value of the charter capital on December 31 of the year preceding the year of submission of the application shall not be lower than the legal capital;
b) It has a profitable business according to its audited financial statement of the year preceding the year of submission of the application and according to the latest financial statement before the application date.
c) It is not prohibited by a competent authority from expanding its operation at the application date;
d) It complies with regulations on safety ratios during its operation in the latest report before the application date.
dd) Its non-performing loan ratio on December 31 of the year preceding the year of submission of the application and in the latest report before the application date shall not exceed 3% or another ratio as decided by the State Bank’s Governor in each period;
e) It complies with regulations of law on number and structures of the Board of Members and Board of Controllers. The Director General (or Director) position of the MFI has not been left vacant for more than 06 consecutive months prior to the application date;
g) There should be an establishment scheme that contains the contents specified in Clause 4 Article 14 of this Circular;
h) The number of branches complies with Article 8 of this Circular.
2. An MFI that has been operating for less than 12 months (from the date of inauguration to the application date) is entitled to establish no more than 02 branches in the fiscal year if the following conditions are met:
a) The actual value of the charter capital in the latest report before the application date shall not be lower than the legal capital;
b) Its non-performing loan ratio in the latest report before the application date shall not exceed 3% or another ratio as decided by the State Bank’s Governor in each period;
c) The conditions set forth in Points c, d, e, g and h Clause 1 of this Clause.
Article 12. Conditions for establishment of transaction offices
An MFI is entitled to establish a transaction office if the following conditions are met:
1. The conditions set forth in Points a, b, c, d, dd, e and g Clause 1 Article 11 of this Circular.
2. The branch expected to manage the transaction office shall satisfy the following conditions:
a) It has been operating for at least 12 months, beginning from the date of inauguration to the application date;
b) Its non-performing loan ratio on December 31 of the year preceding the year of submission of the application and in the latest report before the application date shall not exceed 3% or another ratio as decided by the State Bank’s Governor in each period;
c) A branch is not entitled to manage no more than 05 transaction offices.
Article 13. Conditions for establishment of representative offices and public service providers
An MFI is entitled to establish a representative office or public service provider if the following conditions are met:
1. It has been operating for 12 months or more, beginning from the date of inauguration to the application date.
2. The conditions set forth in Points a, c, d and e Clause 1 Article 11 of this Circular.
3. There should be an establishment scheme that contains the contents specified in Clause 4 Article 14 of this Circular.
An application for approval for establishment of a branch, transaction office, representative office or public service provider shall include:
1. An application form for approval for establishment of a branch/transaction office/representative office/public service provider, which is made by the MFI using the form provided in the Appendix enclosed herewith.
2. A Resolution or Decision on establishment of a branch/transaction office/representative office/public service provider, which is made by the Board of Members.
3. A scheme for branch/transaction office establishment, which includes, inter alia, the following contents:
a) Full name and abbreviated name in Vietnamese language; address and operations of the branch/transaction office of the MFI;
b) Organizational structure of the branch/transaction office; expected key personnel (including Director of the branch, head of the transaction office, accountants and other key personnel according to the MFI's internal regulations);
c) Name and address of the branch expected to manage the transaction office (in case of applying for establishment of a transaction office);
d) Analysis of business environment (opportunities, challenges, strengths and weaknesses); clients and products to be provided;
dd) The expected business plan for the first 03 years of operation, which contains at least: Planned balance sheet; income statement; grounds for formulating the business plan and explanations about the capacity to implement the business plan in each year.
4. A scheme for representative office/public service provider establishment, which includes, inter alia, the following contents:
a) Full name and abbreviated name in Vietnamese language; address and operations of the representative office/public service provider of the MFI;
b) Reasons for establishment;
c) Expected key personnel (head of the representative office/public service provider, accountants and other key personnel according to the MFI's internal regulations);
d) The operation plan for the first year of operation.
5. Documents proving the fulfillment of the conditions for establishment of a branch/transaction office/representative office/public service provider specified in Articles 11, 12 and 13, except for documents proving the fulfillment of the conditions mentioned in Point c Clause 1 Article 11 of this Circular.
1. The MFI shall prepare an application for the type of its network member unit to be established in accordance with Article14 hereof, and submit it to the State Bank.
2. Within 07 working days from the receipt of the application specified in Clause 1 of this Article, the State Bank shall send a document stating its receipt of satisfactory application; if the application is not satisfactory, the State Bank shall request the MFI in writing to complete it.
The MFI shall complete the application within 60 days from the date on which it receives the written request from the State Bank. By the aforementioned deadline, if the MFI fails to complete the application, it shall submit a new application as prescribed in Clause 1 of this Article to the State Bank for consideration.
3. If the application for approval for establishment of a branch is submitted, within 07 working days from the receipt of the satisfactory application:
a) The State Bank shall send an enquiry about the branch establishment to the People’s Committee of the province or central-affiliated city where the branch is expected to be located;
b) The Banking Supervision Agency shall send an enquiry about the branch establishment to the People’s Committee of the province or central-affiliated city where the branch is expected to be located;
4. If the application for approval for establishment of a transaction office is submitted, within 07 working days from the receipt of the satisfactory application, the Banking Supervision Agency shall send an enquiry about the fulfillment of conditions in this Circular by the branch expected to manage the local transaction office to the State Bank of the area where the transaction office is expected to be located.
5. Within 10 working days from the receipt of the enquiry from the State Bank, the entities mentioned in Clauses 3 and 4 of this Article shall give their written opinions.
6. Within 15 working days from the receipt of the opinions from the entities mentioned in Clause 5 of this Article or from the receipt of the satisfactory application for establishment of the representative office or public service provider, the Banking Supervision Agency shall request the Governor of the State Bank to consider granting approval for establishment of the branch, transaction office, representative office or public service provider.
7. Within 60 days (if the application for approval for establishment of the branch or transaction office is submitted) or 45 days (if the application for approval for establishment of the representative office or public service provider is submitted) from the receipt of the satisfactory application, the State Bank shall give a written approval to the MFI; if the application is rejected, a written explanation shall be provided.
8. Within 12 months from the date on which the State Bank gives a written approval for establishment as prescribed in Clause 7 of this Article, the MFI must inaugurate the established branch, transaction office, representative office or public service provider. By the aforementioned deadline, if the MFI fails to inaugurate its branch, transaction office, representative office or public service provider, the written approval given by the State Bank shall be implicitly invalid.
Article 16. Conversion of units under microfinance programs and projects
1. The conversion of a microfinance program or project into an MFI shall also refer to the conversion of a unit under a microfinance program or project into a branch, transaction office, public service provider or representative office of an MFI and the conditions set forth in Articles 11, 12 and 13 of this Circular shall not be applied upon the conversion.
2. Upon the conversion of a microfinance program or project into an MFI, it is required to submit an application form for approval for the conversion of a unit under the microfinance program or project into a branch, transaction office, public service provider or representative office of the MFI. An application form shall contain at least:
a) Full name and abbreviated name of the branch/transaction office/public service provider/representative office in Vietnamese language;
b) Address of the branch/transaction office/public service provider/representative office.
1. The MFI is entitled to inaugurate a branch or transaction office (including the MFI’s branch or transaction office converted from a unit under the microfinance program or project) if the following requirements are met:
a) It has registered operation of the branch or transaction office as prescribed by law and publish information as prescribed in Article 18 of this Circular;
b) It has the legitimate right to own or use the premises of the branch or transaction office; the premises satisfies all conditions for ensuring asset safety and suits operation of the branch or transaction office;
c) The branch or transaction office must have a bank vault or safe in accordance with internal regulations of the MFI;
d) The branch or transaction office must have an information technology system maintaining the connection between the headquarters and the branch or transaction office and between the managing branch and the transaction office. The system must be operated safely for keeping confidentiality and serving statistics and reporting tasks;
dd) The branch or transaction office must employ adequate key personnel, including Director of the branch, head of the transaction office, accountants and professional staff according to the MFI's internal regulations;
e) The Director of the branch must satisfy the standards and conditions in accordance with regulations of the State Bank and internal regulations of the MFI. The head of the transaction office must satisfy the standards and conditions in accordance with internal regulations of the MFI;
g) A Regulation on branch/transaction office management should be made according to Clause 2 Article 10 of this Circular.
2. The MFI shall inaugurate a representative office or public service provider (including the MFI’s representative office or public service provider converted from a unit under the microfinance program or project) if the following requirements are met:
a) It has registered operation of the representative office as prescribed by law (in the case of inauguration of the representative office);
b) It has the legitimate right to own or use the premises of the representative office or public service provider;
c) The representative office or public service provider must employ key personnel in accordance with internal regulations of the MFI.
3. The MFI shall send the Regulation on branch/transaction office management; notification of the expected date of inauguration and its fulfillment of the conditions for inauguration specified in Clauses 1 and 2 of this Article to the State Bank branch at least 15 days before the expected date of inauguration.
4. The MFI’s branch, transaction office, representative office or public service provider converted from a unit under the microfinance program or project shall be inaugurated together with the MFI.
5. The unit under microfinance program or project converted into an MFI’s branch, transaction office, public service provider or representative office shall be inaugurated within 12 months from the date on which the State Banks gives the written approval for the operating network. By the aforementioned deadline, if the MFI fails to hold the inauguration, it must develop a plan for shutdown of the unit that is not inaugurated within 12 months from the deadline for inauguration and submit it to the State Bank branch.
Within 07 working days prior to the expected date of inauguration of the branch, transaction office, representative office or public service provider (including the MFI’s branch, transaction office, representative office or public service provider converted from a unit under the microfinance program or project), the MFI shall publish information about the establishment of the branch, transaction office, representative office or public service provider on the web portals of the State Bank and MFI (if any), on 03 consecutive issues of a daily printed newspapers or an online newspaper of Vietnam.
Article 19. Renaming of branches and transaction offices
Every MFI shall decide to rename its branch or representative office in accordance with regulations of law and this Circular and send a notification of the renaming to the State Bank branch within 05 working days from the date on which the MFI makes a decision on renaming.
Article 20. Relocation of branches and transaction offices
1. The MFI is allowed to relocate its branch or transaction office within the province or city specified in Clauses 1 and 2 Article 7 of this Circular and the location where the branch/transaction office is expected to be relocated to must meet the requirements specified in Points b, c and d Clause 1 Article 17 hereof.
2. An application for approval for relocation of a branch or transaction office includes:
a) An application form for relocation of a branch/transaction office, which is made by the MFI and contain at least: the current location, the location where the branch/transaction office is expected to be relocated to, the reasons for relocation, the relocation plan which must ensure the branch/transaction office’s uninterrupted operation;
b) A Resolution or Decision on relocation of a branch/transaction office, which is made by the Board of Members.
3. Procedures for granting approval for relocation of a branch/transaction office:
a) The MFI shall prepare an application as regulated in Clause 2 of this Article and submit it to the State Bank branch. If the application is not satisfactory, within 05 working days from the receipt of the application, the State Bank branch shall request the MFI in writing to complete it;
b) Within 10 working days from the receipt of the satisfactory application prescribed in Clause 2 of this Article, the State Bank branch shall give a written approval for relocation of the branch/transaction office to the MFI; if the application is rejected, a written explanation shall be provided.
4. The MFI must submit a report to the State Bank branch on its satisfaction of the requirements laid down in Clause 1 of this Article at least 15 working days before the estimated date of inauguration at the new location.
5. Within 12 months from the date on which the State Bank gives the written approval, the MFI’s branch or transaction office must operate at the approved location. By the aforementioned deadline, if the branch or transaction office fails to operate at the approved location, the written approval given by the State Bank shall be implicitly invalid.
Article 21. Renaming and relocation of representative offices and public service providers
1. The MFI shall decide the renaming and relocation of its representative office or public service provider in accordance with regulations of law.
2. The MFI shall send a notification of the renaming/relocation to the State Bank branch within 05 working days from the date on which the MFI makes a decision on renaming or relocation.
Article 22. Change of branches managing transaction offices
1. The MFI shall decide the change of branches managing transaction offices. The branch expected to manage transaction offices shall satisfy the conditions specified in Clause 2 Article 12 of this Circular.
2. Within 05 working days from the date of issuing the decision on change of the branch managing transaction offices, the MFI shall submit a report to the State Bank branch on fulfillment of the conditions in Clause 2 Article 12 of this Circular by the branch managing a transaction.
Article 23. Publishing of information about changes
Within 07 working days prior to the expected date of renaming of the branch, transaction office, representative office or public service provider (including the MFI’s branch, transaction office, representative office or public service provider converted from a unit under the microfinance program or project) or within 07 working days prior to the expected date of operation at the new location, the MFI shall publish information about the renaming or operation on the web portals of the State Bank branch and MFI (if any), on 03 consecutive issues of a daily printed newspapers or an online newspaper of Vietnam.
1. A branch, transaction office, representative office or public service provider shall be shut down or dissolved in the following cases:
a) Implicit shutdown or dissolution;
b) Voluntary shutdown or dissolution;
c) Compulsory shutdown or dissolution.
2. The MFI shall:
a) settle issues concerning assets, rights, obligations and related benefits of the branch, transaction office, representative office or public service provider that is shut down or dissolved in accordance with regulations of law;
b) keep documents, vouchers and other papers of the branch, transaction office, representative office or public service provider and all documents concerning the shutdown or dissolution;
c) carry out legal procedures for shutdown or dissolution of the branch, transaction office, representative office or public service provider in accordance with regulations of law.
1. If an MFI is shut down or dissolved, its branches, transaction offices, representative offices and service providers shall be implicitly shut down or dissolved.
2. Procedures for implicit shutdown or dissolution of a branch, transaction office, representative office or public service provider shall be carried out in accordance with regulations of law.
1. An application for approval for voluntary shutdown or dissolution of a branch or transaction office includes:
a) An application form for approval for shutdown or dissolution of the branch or transaction office, which is made by the MFI and specifies: reasons for shutdown or dissolution; name and address of the branch or transaction office to be shut down or dissolved; and commitments to settle issues concerning assets, rights, obligations and related benefits of the branch or transaction office to be shut down or dissolved;
b) A Resolution or Decision on approval for shutdown or dissolution of the branch or transaction office, which is made by the Board of Members;
c) A plan for settlement of assets, rights, obligations and related benefits of the branch or transaction office to be shut down or dissolved.
2. Procedures for granting approval for voluntary shutdown or dissolution of a branch or transaction office:
a) The MFI shall prepare an application as regulated in Clause 1 of this Article and submit it to the State Bank branch;
b) Within 45 days from the receipt of the satisfactory application prescribed in Clause 1 of this Article, the State Bank branch shall give a written approval; if the application is rejected, a written explanation shall be provided.
3. Within 45 days from the date on which the State Bank gives a written approval for the shutdown or dissolution of the branch or transaction office, the MFI must carry out legal procedures for shutdown or dissolution of the branch or transaction office and submit a report to the State Bank branch on the specific date of shutdown or dissolution of the branch and results thereof.
4. The MFI shall decide the voluntary shutdown or dissolution of a representative office or public service provider. Within 05 days from the date of deciding the shutdown or dissolution of the representative office or public service provider, the MFI must submit a report to the State Bank, which specifies on the specific date of shutdown or dissolution and reasons therefor.
1. The branch, transaction office, representative office or public service provider of an MFI shall be subject to the compulsory shutdown or dissolution if there are evidences that the application for establishment of the branch, transaction office, representative office or public service provider contains false information, resulting in inaccurate assessment of the fulfillment of establishment conditions.
2. In the case mentioned in Clause 1 of this Article, the State Bank branch shall submit a written request for approval for shutdown or dissolution of the branch, transaction office, representative office or public service provider, which must indicate reasons for the shutdown or dissolution to the State Bank.
3. Within 15 working days from the receipt of the written request for approval for shutdown or dissolution of the branch, transaction office, representative office or public service provider of the MFI from the State Bank as regulated in Clause 2 of this Article or the case mentioned in Clause 1 of this Article is discovered during the inspection or supervision, the Banking Supervision Agency shall request the Governor of the State Bank to request the related MFI in writing to shut down or dissolve its branch, transaction office, representative office or public service provider.
4. Within 90 days from the date on which the State Bank sends the written request for shutdown or dissolution of the branch, transaction office, representative office or public service provider to the MFI, the MFI must complete all procedures for shutdown or dissolution of the branch, transaction office, representative office or public service provider, and submit a report to the State Bank on specific date of shutdown or dissolution and results thereof.
5. Within 24 months from the date on which the State Bank sends the written request for compulsory shutdown or dissolution of a branch to the MFI, the MFI must develop a plan for handling the transaction office managing such branch in order to ensure the regulations of this Circular are complied with.
1. Within 07 working days from the date of shutdown or dissolution of the branch, transaction office, representative office or public service provider, the MFI must post notices of the shutdown or dissolution at its headquarters, the location of the branch, transaction office, representative office or public service provider that is shut down and the location of the branch managing transaction offices (except in the case where the transaction office is shut down) and publish information concerning the shutdown or dissolution on the web portals of the State Bank and MFI (if any), on 03 consecutive issues of a daily printed newspapers or an online newspaper of Vietnam.
2. Information to be published includes:
a) Name and address of the branch, transaction office, representative office or public service provider that is shut down or dissolved;
b) Date of shutdown or dissolution;
c) The MFI’s responsibility to settle issues concerning assets, rights, obligations and related benefits of the Responsibility of the non-bank credit institution to settle issues that is shut down or dissolved.
Article 29. Responsibilities of MFIs
Each MFI shall:
1. take legal responsibility for the adequacy and accuracy of information and documents provided in applications.
2. promptly notify the State Bank of any change related to the fulfillment of conditions and applications specified in this Circular, which is made while the State Bank is considering MFIs' requests.
Article 30. Responsibilities of the State Bank branches
Each State Bank branch shall:
1. receive applications and grant approval for the contents specified in Clause 2 Article 4 of this Circular.
2. direct, supervise and inspect the implementation of the plan in Clause 5 Article 17 of this Circular by MFIs.
3. receive reports and notifications submitted by MFIs as prescribed in this Circular.
4. cooperate with in Clause 5 Article 17 of this Circular in resolving the issues concerning organizational structures and operation of branches, transaction offices, representative offices and public service providers of local MFIs.
5. Within 05 working days from the date on which the State Bank branch gives a written approval as prescribed in Clause 2 Article 4 of this Circular or from the date on which the MFI's notification is received, the State Bank branch shall send a notification to the State Bank of the following:
a) Inauguration of the branch or transaction office;
b) Renaming or relocation of the branch or transaction office;
c) Change of the branch managing transaction offices;
d) Compulsory shutdown of the branch or transaction office.
Article 31. Responsibilities of the Banking Supervision Agency
The Banking Supervision Agency shall:
1. act as an agency in charge of receiving, appraising and requesting the Governor of the State Bank to give approval for the contents mentioned in Clause 1 Article 4 of this Circular.
2. cooperate with the State Bank branch in resolving the issues concerning organizational structures and operation of branches, transaction offices, representative offices and public service providers of local MFIs.
3. receive reports and notifications submitted by State Bank branches and MFIs as prescribed in this Circular.
1. This Circular comes into force from January 01, 2020.
2. MFIs are not required to make any adjustment as prescribed in Article 8 and Point c Clause 2 Article 12 of this Circular if their branches and transaction offices are established before the effective date of this Circular.
3. The Circular No. 08/2009/TT-NHNN dated April 28, 2009 of the Governor of the State Bank is null and void from the effective date of this Circular.
The Chief of the Office, Chief Inspector of the Banking Supervision Agency, heads of affiliates of the State Bank, Directors of State Bank branches in provinces or central-affiliated cities, Chairpersons of the Board of Directors, Chairpersons of the Board of Members, and Directors General (Directors) of MFIs are responsible for the implementation this Circular./.
|
| PP. THE GOVERNOR |
(Enclosed with the Circular No. 19/2019/TT-NHNN dated November 05, 2019 of the Governor of the State Bank)
| MICROFINANCE INSTITUTION | THE SOCIALIST REPUBLIC OF VIETNAM |
| No. ………………. | (Place name), date (dd/mm/yyyy) …. |
To: The Governor of the State Bank
The microfinance institution hereby kindly requests the State Bank to grant approval for establishment of the branch/transaction office/representative office/public service provider. To be specific:
I. The network member to be established
1. Establishment of a branch:
1.1. Name of the branch:
a. Full name in Vietnamese language; abbreviated name in Vietnamese language (if any).
b. Full name in English language (if any); abbreviated name in English language (if any).
1.2. Location of the branch.
2. Establishment of a transaction office:
2.1. Name of the transaction office:
a. Full name in Vietnamese language; abbreviated name in Vietnamese language (if any).
b. Full name in English language (if any); abbreviated name in English language (if any).
2.2. Location of the transaction office.
2.3. Name and location of the branch expected to manage the transaction office.
3. Establishment of a public service provider or representative office:
3.1. Name of the public service provider or representative office;
3.2. Location of the public service provider or representative office.
II. Assessment of the microfinance institution’s fulfillment of each condition for establishment of a branch/representative office/public service provider:
A. Conditions for establishment of a branch:
1. Regarding the microfinance institution has been operating for 12 months or more, beginning from the date of inauguration to the application date:
1.1. The actual value of the charter capital on December 31 of the year preceding the year of submission of the application is not lower than the legal capital.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The actual value of the charter capital on December 31, .... (specify the year): ………………
- The applicable legal capital of the MFI: ……………..
1.2. The microfinance institution has a profitable business according to its audited financial statement of the year preceding the year of submission of the application and according to the latest financial statement before the application date.
| a. Satisfactory □ | b. Unsatisfactory □ |
- Post-tax profit according to the audited financial statement ……… (specify the year): ……….
- Profit on ………… (specify the date): ……………… (specify the revenue and cost).
1.3. It is not prohibited by a competent authority from expanding its operation at the application date.
| a. Satisfactory □ | b. Unsatisfactory □ |
1.4. It complies with regulations on safety ratios during its operation in the latest report before the application date.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The capital adequacy ratio on ……………. (specify the date): ……….%;
- The solvency ratio on ……………. (specify the date): ……….%;
1.5. The non-performing loan ratio on December 31 of the year preceding the year of submission of the application and in the latest report before the application date does not exceed 3% or another ratio as decided by the State Bank’s Governor in each period.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The non-performing loan ratio on December 31, .... (specify the year): ....%
- The non-performing loan ratio on …….. (specify the date): ………..%
1.6. The microfinance institution complies with regulations of law on number and structures of the Board of Members and Board of Controllers. The Director General (or Director) title of the MFI has not been left vacant for more than 06 consecutive months prior to the application date:
| a. Satisfactory □ | b. Unsatisfactory □ |
- The Board of Members of the tenure: …………
| No. | Full name | Title (Chair, members) |
| 1. |
|
|
| 2. |
|
|
| ... |
|
|
- The Board of Controllers of the tenure:...
| No. | Full name | Title (Head, members, full-time members) |
| 1. |
|
|
| 2. |
|
|
| … |
|
|
- Full name of the Director General (Director):...
(If the Director General/Director title of the MFI has been left vacant: please clearly specify the date on which the title has been left vacant and reasons).
1.7. The microfinance institution prepares an establishment scheme as prescribed:
| a. Satisfactory □ | b. Unsatisfactory □ |
1.8. The microfinance institution complies with regulations on the number of branches:
| a. Satisfactory □ | b. Unsatisfactory □ |
- The number of current branches: ……………..
- The number of branches to be established: ……………
- The actual value of the charter capital recognized on accounting books until .... (specify the date): ....
2. Regarding the microfinance institution has been operating for less than 12 months, beginning from the date of inauguration to the application date:
2.1. The actual value of the charter capital in the latest report before the application date is not lower than the legal capital.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The actual value of the charter capital on ... (specify the date): ………..
- The applicable legal capital of the MFI: ………….
2.2. The non-performing loan ratio in the latest report before the application date does not exceed 3% or another ratio as decided by the State Bank’s Governor in each period.
| a. Satisfactory □ | b. Unsatisfactory □ |
The non-performing loan ratio on …….. (specify the date): ………..%
2.3. It is not prohibited by a competent authority from expanding its operation at the application date:
| a. Satisfactory □ | b. Unsatisfactory □ |
2.4. The microfinance institution complies with regulations on safety ratios during its operation in the latest report before the application date.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The capital adequacy ratio on ……………. (specify the date): ……….%;
- The solvency ratio on ……………. (specify the date): ……….%;
2.5. The microfinance institution complies with regulations of law on number and structures of the Board of Members and Board of Controllers. The Director General (or Director) title of the MFI has not been left vacant for more than 06 consecutive months prior to the application date.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The Board of Members of the tenure:...
| No. | Full name | Title (Chair, members) |
| 1. |
|
|
| 2. |
|
|
| ... |
|
|
- The Board of Controllers of the tenure:...
| No. | Full name | Title (Head, members, full-time members) |
| 1. |
|
|
| 2. |
|
|
| … |
|
|
- Full name of the Director General (Director):...
(If the Director General/Director title of the MFI has been left vacant: please clearly specify the date on which the title has been left vacant and reasons).
2.6. The microfinance institution prepares an establishment scheme as prescribed:
| a. Satisfactory □ | b. Unsatisfactory □ |
2.7. The microfinance institution complies with regulations on the number of branches:
| a. Satisfactory □ | b. Unsatisfactory □ |
- The number of current branches: …………………..
- The number of branches to be established: ……….
- The actual value of the charter capital recognized on accounting books until .... (specify the date): ....
B. Conditions for establishment of a transaction office
1. Conditions for establishment of a transaction office:
1.1. The actual value of the charter capital on December 31 of the year preceding the year of submission of the application is not lower than the legal capital.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The actual value of the charter capital on December 31, .... (specify the year):....
- The applicable legal capital of the MFI: ………….
1.2. The microfinance institution has a profitable business according to its audited financial statement of the previous year preceding the year of submission of the application and according to the latest financial statement before the application date.
| a. Satisfactory □ | b. Unsatisfactory □ |
- Post-tax profit according to the audited financial statement ……… (specify the year): ....
- Profit on ………… (specify the date): ……………… (specify the revenue and cost).
1.3. It is not prohibited by a competent authority from expanding its operation at the application date:
| a. Satisfactory □ | b. Unsatisfactory □ |
1.4. The microfinance institution complies with regulations on safety ratios during its operation in the latest report before the application date.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The capital adequacy ratio on ……………. (specify the date): ……….%;
- The solvency ratio on ……………. (specify the date): ……….%;
1.5. The non-performing loan ratio on December 31 of the year preceding the year of submission of the application and in the latest report before the application date does not exceed 3% or another ratio as decided by the State Bank’s Governor in each period.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The non-performing loan ratio on December 31, .... (specify the year): ....%
- The non-performing loan ratio on …….. (specify the date): ………..%
1.6. The microfinance institution complies with regulations of law on number and structures of the Board of Members and Board of Controllers. The Director General (or Director) title of the MFI has not been left vacant for more than 06 consecutive months prior to the application date:
| a. Satisfactory □ | b. Unsatisfactory □ |
- The Board of Members of the tenure: ………………
| No. | Full name | Title (Chair, members) |
| 1. |
|
|
| 2. |
|
|
| ... |
|
|
- The Board of Controllers of the tenure: …….
| No. | Full name | Title (Head, members, full-time members) |
| 1. |
|
|
| 2. |
|
|
| … |
|
|
- Full name of the Director General (Director):...
(If the Director General/Director title of the MFI has been left vacant: please clearly specify the date on which the title has been left vacant and reasons).
1.7. The microfinance institution prepares an establishment scheme as prescribed:
| a. Satisfactory □ | b. Unsatisfactory □ |
2. Conditions to be satisfied by a branch managing transaction offices:
2.1. The branch has been operating for at least 12 months, beginning from the date of inauguration to the application date.
| a. Satisfactory □ | b. Unsatisfactory □ |
- Date of inauguration of the branch: …………..
- Application date: ....
2.2. The non-performing loan ratio on December 31 of the year preceding the year of submission of the application and in the latest report before the application date does not exceed 3% or another ratio as decided by the State Bank’s Governor in each period.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The non-performing loan ratio on December 31, .... (specify the year): ....%
- The non-performing loan ratio on …….. (specify the date): ………..%
2.3. A branch is not entitled to manage no more than 05 transaction offices.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The number of transaction offices managed by the branch:....
- The number of transaction offices expected to be managed by the branch: ....
C. Conditions for establishment of a representative office or public service provider:
1.1. The actual value of the charter capital on December 31 of the year preceding the year of submission of the application is not lower than the legal capital.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The actual value of the charter capital on December 31, .... (specify the year): ....
- The applicable legal capital of the microfinance institution: ……….
1.2. The microfinance institution is not prohibited by a competent authority from expanding its operation at the application date:
| a. Satisfactory □ | b. Unsatisfactory □ |
1.3. The microfinance institution complies with regulations on safety ratios during its operation in the latest report before the application date.
| a. Satisfactory □ | b. Unsatisfactory □ |
- The capital adequacy ratio on ……………. (specify the date): ……….%;
- The solvency ratio on ……………. (specify the date): ……….%;
1.4. The microfinance institution complies with regulations of law on number and structures of the Board of Members and Board of Controllers. The Director General (or Director) title of the MFI has not been left vacant for more than 06 consecutive months prior to the application date:
| a. Satisfactory □ | b. Unsatisfactory □ |
- The Board of Members of the tenure: ………
| No. | Full name | Title (Chair, members) |
| 1. |
|
|
| 2. |
|
|
| … |
|
|
- The Board of Controllers of the tenure: …………..
| No. | Full name | Title (Head, members, full-time members) |
| 1. |
|
|
| 2. |
|
|
| … |
|
|
- Full name of the Director General (Director):...
(If the Director General (or Director) title of the MFI has been left vacant: please clearly specify the date on which the title has been left vacant and reasons).
1.5. The microfinance institution prepares an establishment scheme as prescribed:
| a. Satisfactory □ | b. Unsatisfactory □ |
III. Legal representative of the microfinance institution hereby undertakes to:
- Take legal responsibility for the accuracy and truthfulness of information and documents provided in this application.
- Promptly notify the State Bank of any change related to the fulfillment of conditions and application specified in this Circular, which is made while the State Bank is considering microfinance institution's request.
| Enclosed documents
| LEGAL REPRESENTATIVE OF THE MICROFINANCE INSTITUTION |
------------------------------------------------------------------------------------------------------
- 1 Circular No. 05/2019/TT-BTC dated January 25, 2019 accounting instructions for microfinance institutions
- 2 Circular No. 10/2018/TT-NHNN dated April 09, 2018 on applications and procedures for granting approval for changes of microfinance institutions
- 3 Circular No. 03/2018/TT-NHNN dated February 23, 2018
- 4 Law No. 17/2017/QH14 dated November 20, 2017
- 5 Law No. 68/2014/QH13 dated November 26, 2014, on enterprises
- 6 Law No. 46/2010/QH12 of June 16, 2010, on the State Bank of Vietnam
- 7 Law No. 47/2010/QH12 of June 16, 2010, on credit institutions
- 1 Circular No. 05/2019/TT-BTC dated January 25, 2019 accounting instructions for microfinance institutions
- 2 Circular No. 10/2018/TT-NHNN dated April 09, 2018 on applications and procedures for granting approval for changes of microfinance institutions
- 3 Circular No. 03/2018/TT-NHNN dated February 23, 2018