CIRCULAR

AMENDMENTS TO THE CIRCULAR NO. 40/2011/TT-NHNN DATED DECEMBER 15, 2011 OF THE GOVERNOR OF THE STATE BANK OF VIETNAM PROVIDING FOR LICENSING AND ORGANIZATION AND OPERATION OF COMMERCIAL BANKS, FOREIGN BANK BRANCHES, REPRESENTATIVE OFFICES OF FOREIGN CREDIT INSTITUTIONS AND OTHER FOREIGN ORGANIZATIONS PERFORMING BANKING ACTIVITIES IN VIETNAM

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

Pursuant to the Government’s Decree 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 Head of the Banking Supervision Agency;  

The Governor of the State bank of Vietnam promulgates a Circular providing amendments to the Circular No. 40/2011/TT-NHNN dated December 15, 2011 of the Governor of the State Bank of Vietnam providing for the licensing and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions and other foreign organizations performing banking activities in Vietnam.

Article 1. Amendments to Circular No. 40/2011/TT-NHNN dated December 15, 2011 of the Governor of the State Bank of Vietnam providing for the licensing and organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions and other foreign organizations performing banking activities in Vietnam (hereinafter referred to as “Circular No. 40/2011/TT-NHNN")

1. Article 3 is amended as follows:

“Article 3. Power to grant license

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

a) the grant of license to commercial banks and foreign bank branches

b) the replacement or modification of license granted to commercial banks or foreign bank branches that are subject to micro-inspection of the Banking Supervision Agency.

2. Each Director of the SBV’s branch in province or central-affiliated city shall have the power to decide:

a) the replacement or modification of license granted to foreign bank branches located in that province or city, except those prescribed in Point b Clause 1 of this Article;

b) the issuance or modification of license granted to representative offices.”

2. Clause 2 Article 5 is amended as follows:

“2. Order and procedures for granting a license for establishment of representative office:

a) The foreign credit institution or other foreign organization performing banking activities shall prepare an application for the license according to Article 13 or Article 18 of this Circular and then submit it directly or by post to the SBV's branch in province or central-affiliated city (hereinafter referred to as “SBV’s provincial branch”) where its representative office will be located.

Within 30 days from the receipt of the application, the SBV’s provincial branch shall give a written confirmation of the receipt of sufficient application to the applicant.  If an application is invalid or sufficient as required, the SBV’s provincial branch shall request the applicant in writing to complete it.

b) The SBV’s provincial branch shall issue the license within 60 days from the date of its written confirmation of sufficient application.  If an application is refused, the SBV’s provincial branch shall give a written response indicating the reason for such refusal to the applicant.”

3. Clause 8 Article 18 is amended as follows:

“8. Documents proving its right to use or that it will have the right to use the location where its representative office will be located.”

4. Section 5 is added to Chapter II as follows:

“Section 5

MODIFICATION OF LICENSE OF REPRESENTATIVE OFFICES

Article 18d. General provisions on changes in a representative office

1. A representative office shall prepare an application for modification of its license and then submit it directly or by post to the SBV’s provincial branch as prescribed in Point a Clause 2 Article 18dd of this Circular if it has the following changes;

a) Change of its name;

b) Relocation to another province or city;

c) Extension of operation duration.

2. A representative office shall send a written notification directly or by post to the SBV’s branch in province or city where it is located within 07 business days from the occurrence of one of the following changes:

a) Change of its chief representative;

b) Relocation within the same province or city;

c) Change of address without change of its location.

3. Representative offices shall prepare application for modification of license in the case prescribed in Clause 1 of this Article according to provisions in Article 13 of this Circular.

4. After obtaining an approval from the SBV's provincial branch for its modification of license with respect to the changes specified in Clause 1 of this Article, the representative office shall:

a) carry out procedures for registration of changes with a relevant competent authority;

b) start operation at the new location and terminate operation at the previous location within 06 months after obtaining an approval from the SBV's provincial branch for its modification of license with respect to the change specified in Point b Clause 1 of this Article;

c) publish the changes on SBV’s mass media and 03 consecutive issues of a daily printed newspaper or an online newspaper of Vietnam within 07 working days after obtaining an approval from the SBV's provincial branch for its modification of license.

Article 18dd. Application and procedures for modification of license of representative offices

1. An application for modification of license with respect to the changes specified in Clause 1 Article 18d of this Circular include:

a) An application form for modification of license which bears the signature of the legal representative of the foreign credit institution, or other foreign organization performing banking activities, and includes the following contents:

(i) Current contents;

(ii) Contents to be changed.  In case of change of name, the new name must comply with provisions in Clause 1 Article 23 of this Circular;

(iii) Reasons for such changes;

b) Documents explaining the change (in case of change of name); or documents proving that the representative office has or will have the right to use the new location (in case of relocation of a representative office);

c) Financial statements of the foreign credit institution or other foreign organization performing banking activities of the year preceding the year of application, which have been audited by an independent audit firm, and general report on operations of the representative office in case of extension of operation duration (which must specify the operations of the representative office within 03 years preceding the year of application and operation plan for the following year).

2. Procedures for modification of license:

a) The representative office shall submit an application to the SBV’s branch in the province or city where it is located in case of change of name or extension of operation duration, or where it is relocated to in case of relocation of the representative office.  In case of extension of operation duration, the application must be submitted at least 60 days before the expiry date of the license;

b) If an application is insufficient or invalid, within 05 business days from the receipt of the application, the SBV’s provincial branch shall request the representative office in writing to complete it;

c) Within 30 days from the receipt of sufficient and valid application, the SBV’s provincial branch shall issue a decision on modification of the license of the representative office.  If an application is refused, the SBV’s provincial branch shall give a written response indicating reasons for such refusal to the applicant.”

5. Point g and Point h are added to Clause 2 Article 36 as follows:

“g) Act as a contact point in charge of receiving, appraising and submitting applications for replacement or modification of license granted to commercial banks or foreign bank branches to the SBV’s Governor as prescribed in Point b Clause 1 Article 3 of this Circular;

h) Send written requests, enclosed with the applications, for opinions of relevant agencies of the SBV about applications for modification of the license regarding interest-rate derivatives, provision of commodities derivatives and securities depository."

6. Clause 8 Article 36 is amended as follows:

“8. Each SBV’s provincial branch shall:

a) Within 30 days from the receipt of the written request of the Banking Supervision Agency, the SBV's branch in the province or city where the commercial bank or foreign bank branch will be located shall appraise the received application for license and give a report thereto to the Banking Supervision Agency;  

b) Act as a contact point in charge of working with the government in the area where the commercial bank or foreign bank branch will be located about the establishment of such commercial bank or foreign bank branch (if any);

c) Act as the contact point in charge of inspecting, instructing and supervising commercial banks and foreign bank branches in complying and fulfilling requirements set out by law and by the SBV before their commencement of operations;

d) Suspend the commencement of operations of commercial banks and foreign bank branches in case they fail to meet requirements for commencement of operations;

dd) Submit reports to the SBV's Governor on the fulfillment of requirements and commencement of operations of commercial banks and foreign bank branches;

e) Receive and appraise applications prescribed in Article 18, Article 18c and Clause 1 Article 18dd of this Circular;  

g) Send written request for opinions of People’s Committee of the province or central-affiliated city where the representative office will be located about:

(i) the location of the representative office when processing an application for license for establishment of representative office as regulated in Clause 2 Article 5 of this Circular;

(ii) the relocation of the representative office to another province or city as regulated in Article 18dd of this Circular;

h) Take responsibility to manage and retain applications for license after having issued the license;

i) Receive notification of representative offices located in the province or city of their changes mentioned in Clause 2 Article 18d of this Circular;

k) Inform the Ministry of Public Security (via the Economic Security Department) of the person acting as Chief Representative after having granted the license to a representative office and of the replacement of the Chief Representative upon written notification given by the representative office; 

l) Carry out inspection of representative offices located in the province or city in accordance with law regulations.”

Article 2. 

1. The phrase “gửi qua đường bưu điện hoặc nộp trực tiếp cho Ngân hàng Nhà nước (qua Cơ quan Thanh tra, giám sát ngân hàng)" (“submit it by post or by hand to the SBV (via the Banking Supervision Agency)”) is replaced by the phrase “và nộp trực tiếp hoặc gửi qua dịch vụ bưu chính đến Ngân hàng Nhà nước Việt Nam hoặc Ngân hàng Nhà nước chi nhánh đối với trường hợp quy định tại điểm a khoản 2 Điều 3 Thông tư này" (“and submit it directly or by post to the SBV or the SBV's provincial branch for the case prescribed in Point a Clause 2 Article 3 of this Circular") in Clause 1 Article 18b of the Circular No. 40/2011/TT-NHNN (as amended in Clause 3 Article 1 of the Circular No. 17/2017/TT-NHNN dated November 20, 2017 of the SBV’s Governor).

2. The phrase “thay đổi thời hạn hoạt động” (“change of operation duration”) in the heading of Article 22 of the Circular No. 40/2011//TT-NHNN is removed.

3. The phrase “văn phòng đại diện” (“representative office”) in Point a Clause 1 Article 35 and Point dd Clause 2 Article 36 of the Circular No. 40/2011/TT-NHNN is removed.

4. Clause 2 Article 22 and Point b Clause 2 Article 36 of the Circular No. 40/2011/TT-NHNN are abrogated.

5. The phrase “Trưởng văn phòng đại diện” (“Chief representative”) in Point b Clause 1 Article 35 of the Circular No. 40/2011/TT-NHNN (as amended in Clause 16 Article 1 of the Circular No. 28/2018/TT-NHNN dated November 30, 2018 of the SBV’s Governor) is removed.

6. The Appendix 01 enclosed with the Circular No. 40/2011/TT-NHNN is replaced by the Appendix 01 enclosed with this Circular (including Appendix 01a (License for establishment and operation of commercial bank), Appendix 01b (including Appendix 01b1 and Appendix 01b2 (License for establishment of foreign bank branch)), Appendix 01c (License for establishment of representative office)).

7. Appendix 02c enclosed with the Circular No. 40/2011/TT-NHNN is replaced by Appendix 02c enclosed with this Circular.

Article 3. Transition

Applications for extension of operation duration of representative offices, whose license expires, submitted before the effective date of this Circular shall be processed by SBV’s provincial branches within their competence prescribed herein. 

Article 4. Responsibility for implementation 

Chief of Ministry’s Office, head of Banking Supervision Agency, heads of relevant units affiliated to the SBV, Directors of SBV’s provincial branches, Chairpersons of Boards of Directors, Chairpersons of Boards of Members, General Directors (Directors) of commercial banks, General Directors (Directors) of foreign bank branches, and Chief representatives of representative offices of foreign credit institutions or other foreign organizations performing banking activities shall be responsible for organizing the implementation of this Circular.

Article 5. Implementation

1. This Circular comes into force from January 17, 2020.

2. This Circular shall nullify:

a) Point b Clause 4 Article 1 and Article 2 of Circular No. 17/2017/TT-NHNN dated November 20, 2017 of the Governor of the State bank of Vietnam;

b) Clause 1 Article 1 of Circular No. 28/2018/TT-NHNN dated November 30, 2018 of the Governor of the State bank of Vietnam.