THE GOVERNMENT -------	THE SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ---------------
No. 26/2014/ND-CP	Hanoi, April 07, 2014

 

DECREE

ON ORGANIZATIONAL STRUCTURE AND OPERATION OF BANKING INSPECTION AND SUPERVISION AUTHORITIES

Pursuant to the Law on Government Organization dated December 25, 2001;

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 Inspection dated November 15, 2010;

Pursuant to the Law on Prevention of Money Laundering dated June 18, 2012;

Pursuant to the Law on Deposit Insurance dated June 18, 2012;

Pursuant to the Law on Penalties for Administrative Violations dated June 20, 2012;

At the request of the Governor of the State Bank of Vietnam,

The Government promulgates a Decree on organizational structure and operation of banking inspection and supervision authorities.

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope

This Decree provides for organizational structure and operation of banking inspection and supervision authorities; banking inspectors, banking inspection collaborators; responsibilities of organizations and individuals in banking inspection and supervision.

Article 2. Inspected entities and supervised entities

1. Inspected entities include:

a) Organizations and individuals under the management of the State Bank of Vietnam (hereinafter referred to as “State Bank”);

b) Inspected entities specified in Article 52 of the Law on the State Bank of Vietnam, including the Policy Bank and credit institutions’ subsidiaries;

c) State-owned enterprises established by the Governor of the State Bank;

d) Units responsible for submitting reports on finance, banking operations and foreign exchange in accordance with the Law on Prevention of Money Laundering;

dd) Deposit insurance institutions;

e) Other organizations and individuals that are subject to observance of regulations of law on relevant fields.

2. Supervised entities include:

a) Supervised entities specified in Article 56 of the Law on the State Bank of Vietnam, including the Policy Bank and credit institutions’ subsidiaries;

b) Units responsible for submitting reports on finance and banking in accordance with the Law on Prevention of Money Laundering;

c) Other entities as prescribed by law.

Article 3. Application of provisions of international treaties

In the cases where an international treaty to which the Socialist Republic of Vietnam is a signatory contains provisions different from those of this Decree, the provisions of the treaty shall prevail.

Article 4. Rules for banking inspection and supervision

1. Centralization and uniformity shall be ensured in providing instructions and performing tasks at the central level through the local level.

2. Laws must be observed; accuracy, objectivity, truthfulness, openness, democracy, promptness shall be ensured; there shall be no overlapping issues in terms of the scope, targets, contents and duration of inspection among authorities charged with inspection; activities of organizations and individuals that are inspected and supervised entities must not be obstructed.

3. A banking inspection shall be carried out by an inspectorate or banking inspector.

4. Banking supervision shall be carried out on a regular basis.

5. Inspection and supervision of compliance with policies and laws must be carried out simultaneously with the inspection and supervision of risks in operations of inspected and supervised entities; banking inspection must be closely linked with banking supervision.

6. Inspection and supervision of operations of credit institutions shall be carried out.

7. Regulations of the Law on the State Bank and other relevant regulations of law shall be complied with; in the cases where banking inspection and supervision regulations of the Law on the State Bank are different from those of other laws, the regulations of the Law on the Sate Bank shall prevail.

8. The Governor of the State Bank shall specify procedures for carrying out banking inspection and banking supervision.

9. Other rules as prescribed by the law on inspection.

Article 5. Independent audit carried out to serve banking inspection and supervision

1. Banking inspection and supervision authorities have the right to request inspected and supervised entities to hire independent audit company to audit one, some, or all of contents of organizational structure, operation and finance when necessary in the following cases:

a) The credit institution is likely to be placed under special control;

b) The credit institution is eligible to have special control lifted;

c) The credit institution placed under special control has to have its financial condition assessed, have its value, actual value of charter capital and reserve funds determined, which is the basis for implementation of remedial measures in accordance with regulations of law;

d) The credit institution shall be reorganized as prescribed in Article 153 of the Law on Credit Institutions;

dd) A subsidiary, associate company and affiliated unit of a credit institution may affect the safety and soundness of the credit institution;

e) Inspected and supervised entities that are considered financially weak and need to be restructured;

g) The inspected and supervised entities have to have their financial condition, operation, level of safety and soundness assessed to provide a basis for implementation of safety measures.

h) The contents of inspection and supervision are beyond the capacity of banking inspection and supervision authorities;

i) Other cases as prescribed by law.

2. Inspected and supervised entities shall carry out an audit as prescribed in Clause 1 of this Article and shall pay for the audit.

Chapter 2.

ORGANIZATIONAL STRUCTURE, TASKS AND POWERS OF BANKING INSPECTION AND SUPERVISION AUTHORITIES

Article 6. Organizational structure of banking inspection and supervision authorities

Banking inspection and supervision authorities are regulatory bodies that include:

1. The Central Banking Inspection and Supervision Authority affiliated to the State Bank.

2. Provincial banking inspection and supervision authorities established in the provinces where the Departments of Banking Inspection and Supervision affiliated to the Central Banking Inspection and Supervision Authority are yet to be established.

Article 7. Central Banking Inspection and Supervision Authority

1. The Central Banking Inspection and Supervision Authority is an unit equivalent to the General Department, affiliated to the State Bank, takes responsibility for consulting with and assisting the Governor of the State Bank in performing state management of credit institutions, foreign banks’ branches, inspection, settlement of complaints and denunciations, actions against corruption and money laundering, and deposit insurance; carries out administrative inspection and specialized inspection and exercises banking supervision of relevant fields; take actions against money laundering and terrorism financing as prescribed by law and assigned by the Governor of the State Bank.

2. Organizational structure of the Central Banking Inspection and Supervision Authority includes Departments, offices at the headquarters and Departments of Banking Inspection and Supervision located in some provinces (below collectively referred to as “units affiliated to the Central Banking Inspection and Supervision Authority). Each unit affiliated to the Central Banking Inspection and Supervision Authority shall be divided into several departments.

The Director General of Department of Banking Inspection and Supervision may issue the decision on inspection and establishment of inspectorate, perform tasks and exercise powers of the person who issues the decision on inspection and imposition of penalties for administrative violations as prescribed by law.

3. The Prime Minister shall specify tasks, powers and organizational structure of Central Banking Inspection and Supervision Authority at the request of the Governor of the State Bank.

Article 8. Tasks and powers of the Chief Inspector

Chief Inspector is the head of the Central Banking Inspection and Supervision Authority. The Chief Inspector has the following tasks and powers:

1. direct and inspect the inspection and supervision under the management of the State Bank; direct the Central Banking Inspection and Supervision Authority to perform its tasks and exercise its powers as prescribed by law.

2. assume prime responsibility for addressing the overlapping issues in terms of scope, targets, contents and duration of inspection under the management of the State Bank; cooperate with Chief Inspectors of the provinces in addressing the overlapping issues in terms of scope, targets, contents and duration of inspection within such provinces.

3. issue the decision on inspection and establishment of inspectorate to the inspected entities under the management of the State Bank as assigned by the Governor of the State Bank or at the request of the Governor of the State Bank; perform tasks and exercise powers of the person who issues the inspection decision; request the Director of the branch of the State Bank to appoint banking inspectors or other officials to join the inspectorate; summon officials and public employees of the relevant authorities and units to join the inspectorate.

4. issue an inspection decision whenever an inspected entity is suspected of committing violations of law or there are risks to the operational safety of credit institutions or foreign banks’ branches and be responsible to the Governor of the State Bank for such decision.

5. In case of violations of law are suspected or there are risks to the operational safety of credit institutions or foreign banks’ branches, request the Director of branch of the State Bank (except for the branch where the Department of Banking Inspection and Supervision is established) to carry out an inspection of the inspected entity as assigned by the Governor of the State Bank; in the cases where the Director of branch of the State Bank rejects the request, the Chief Inspector may issue an inspection decision, inform the Governor of the State Bank and be responsible to the Governor of the State Bank for such decision.

6. resolve the issues in dispute between the Chief Inspector of a provincial banking inspection and supervision authority and the Director of the branch of the State Bank or request the Governor of the State Bank to do so.

7. request the Governor of the State Bank to suspend unlawful decision on inspection and supervision issued by the authority or unit under the management of the State Bank.

8. request the Governor of the State Bank to resolve issues concerning inspection and supervision; in case of failure to obtain the consent of the Governor of the State Bank, inform the Inspector General thereof.

9. request a competent authority to make amendments and issue the decision in conformity with management requirements; request the suspension or annulment of unlawful regulations found through the inspection and supervision.

10. impose penalties for administrative violations in accordance with the law on penalties for administrative violations.

11. request the Governor of the State Bank to assign responsibility and take actions against the person under the management of the Governor of the State Bank who is found committing violations of law or failing to comply with conclusions, proposals and decisions on inspection and supervision; request the head of an organization to assign responsibility and take actions against the person under the management of such organization who is found committing violations of law or failing to comply with conclusions, proposals and decisions on inspection and supervision.

12. request the Governor of the State Bank to make a decision within his/her competence and organize the implementation of measures for ensuring the safety of banking operations applied to the organizations and individuals under the management of the State Bank.

13. inform the Governor of the State Bank and Inspector General of the inspection within his/her responsibility; inform the Governor of the State Bank of other aspects of the Central Banking Inspection and Supervision Authority.

14. inspect the implementation of policies and laws, performance of tasks and exercise of powers by the heads of authorities and units under the management of the State Bank.

15. decide the meetings between supervised entities and banking inspectors and other officials working for the Central Banking Inspection and Supervision Authority.

16. decide the level of supervision applied to supervised entities, except for the entity decided by the Governor of the State Bank.

17. Perform other tasks and exercise other powers as prescribed by law or assigned by the Governor of the State Bank.

Article 9. Provincial banking inspection and supervision authorities

1. The provincial banking inspection and supervision authorities are units affiliated to the branches of the State Bank, assist the Directors of the branches of the State Bank in performing state management, carrying out administrative inspection, and banking inspection and supervision, settling complaints and denunciations, taking actions against corruption, money laundering and terrorism financing committed by the entities under their management, and inspected and supervised entities as assigned and authorized by the Governor of the State Bank and prescribed by law.

The provincial banking inspection and supervision authorities are under the management and direct instructions of the branch of the State Bank and professional guidance of Central Banking Inspection and Supervision Authority on banking inspection and supervision, settlement of complaints and denunciations, actions against corruption, money laundering and terrorism financing.

2. Each provincial banking inspection and supervision authority has its own seal.

3. A provincial banking inspection and supervision authority includes Chief Inspector of the provincial banking inspection and supervision authority, Deputy Chief Inspector of the provincial banking inspection and supervision authority, banking inspectors and other officials.

The Chief Inspector of the provincial banking inspection and supervision authority shall be appointed or dismissed by the Governor of the State Bank at the request of the Director of the branch of the State Bank and with the consent the Chief Inspector of the banking inspection and supervision authority. The Deputy Chief Inspector of the provincial banking inspection and supervision authority shall be appointed or dismissed by the Director of the branch of the State Bank at the request of the Chief Inspector of the provincial banking inspection and supervision authority.

4. The Governor of the State Bank shall specify tasks, powers and organizational structure of provincial banking inspection and supervision authorities in accordance with Article 10 of this Decree; decide to dissolve provincial banking inspection and supervision authorities where necessary.

Article 10. Tasks and powers of provincial banking inspection and supervision authorities

1. Formulate annual plan and submit it to the Director of the branch of the State Bank for approval; formulate and organize the implementation of inspection plan and work program within the responsibility of the provincial banking inspection and supervision authorities.

2. Inspect the implementation of policies and laws, performance of tasks and exercise of powers by organizations and individuals under the management of the branch of the State Bank.

3. Inspect the inspected entities under the management of the branch of the State Bank.

4. Inspect other cases assigned by the Chief Inspector or the Director of the branch of the State Bank.

5. Supervise the supervised entities under the management of the branch of the State Bank and in accordance with regulations of law.

6. Take remedial measures within its competence or request and propose competent organizations and individuals to take safety measures and take actions against inspected and supervised entities as prescribed by law.

7. Follow the professional guidance of the Central Banking Inspection and Supervision Authority on administrative inspections, banking inspection and supervision inspection, settlement of complaints and denunciations, actions against corruption, money laundering and terrorism financing.

8. Consult with and assist the Director of the branch of the State Bank in performing some tasks relating to licensing prescribed in Article 30 of this Decree as authorized by the Governor of the State Bank.

9. Monitor, expedite and inspect the compliance with the conclusions, proposals and decisions on inspection and supervision by the Director of the branch of the State Bank and provincial banking inspection and supervision authorities.

10. Perform the task of settling complaints and denunciations as prescribed by the law on complaints and denunciations.

11. Perform the task of preventing and combating corruption as prescribed by the law on anti-corruption.

12. Consult with and assist the Director of the branch of the State Bank in submitting consolidated reports on inspection, supervision, settlement of complaints and denunciations, and actions against corruption under the management of the branch of the State Bank that is assigned.

13. Submit reports, provide information and documents at the request of the Central Banking Inspection and Supervision Authority.

14. Provide professional training in inspection and supervision for banking inspectors and other officials working for provincial banking inspection and supervision authorities.

15. Assess the results and learn by experience of inspection and supervision under the under the management of the branch of the State Bank.

16. Perform the task of preventing money laundering and terrorism financing and perform other tasks and exercise other powers as prescribed by law or assigned by the Governor of the State Bank or the Director of the branch of the State Bank.

Article 11. Tasks and powers of the Chief Inspector of provincial banking inspection and supervision authority

1. Direct and inspect the inspection and supervision under the management of the branch of the State Bank; direct the provincial banking inspection and supervision authorities to perform their tasks and exercise their powers as prescribed in this Decree and other relevant legal documents.

2. Issue the decision on inspection and formation of inspectorate to the inspected entities under the management of the branch of the State Bank or at the request of the Chief Inspector of the State Bank’s banking inspection and supervision authority or the Director of the branch of the State Bank; perform tasks and exercise powers of the person who issues the inspection decision.

3. Issue an inspection decision in case of suspicions of the inspected entity’s violations of law or risks to the operational safety of credit institutions or foreign banks’ branches under his/her management and be responsible to the Director of the State Bank branch for such decision.

4. Request the Director of the branch of the State Bank to resolve issues concerning inspection and supervision within his/her competence; inform Chief Inspector in case the request is rejected.

5. decide the meetings between supervised entities and banking inspectors and other officials working for provincial banking inspection and supervision authorities.

6. Request a competent authority to make amendments and issue the decision in conformity with management requirements; request the suspension or annulment of unlawful regulations found through the inspection and supervision.

7. Impose penalties for administrative violations in accordance with the law on penalties for administrative violations, and report such to the Director of the branch of the State Bank and the Chief Inspector.

8. Request the Director of the branch of the State Bank to consider responsibility and take actions against the person under the management of the Director of the branch of the State Bank who is found committing violations of law or failing to comply with the conclusions and decisions on inspection and supervision.

9. Request the Director of the branch of the State Bank and competent authority to apply measures for ensuring safety of banking operations to the organizations and individuals under the management of the branch of the State Bank.

10. Suggest the Director of the branch of the State Bank to request Director of another branch of the State Bank, Chief Inspector to appoint banking inspectors and other officials to join the inspectorate; summon officials and public employees of relevant authorities and units to participate in the inspection.

11. Inform the Chief Inspector and the Director of the branch of the State Bank about the inspection, supervision and other issues under the management of the provincial banking inspection and supervision authorities.

12. Perform other tasks and exercise other powers as prescribed by law or assigned and authorized by the Chief Inspector and the Director of the branch of the State Bank.

Chapter 3.

BANKING INSPECTORS AND BANKING INSPECTION COLLABORATORS

Article 12. Banking inspectors

1. A bank inspector is an official working for a banking inspection and supervision authority, is appointed to the rank of inspector to perform the task of banking inspection and supervision and other tasks of the banking inspection and supervision authority.

2. Banking inspectors shall be appointed and dismissed in accordance with regulations of law.

3. The banking inspector shall be entitled to benefits, provided with advanced training of professional qualifications and maintain the fulfillment of necessary conditions for inspection and supervision in accordance with regulations of law.

4. In addition to the eligibility requirements for the inspector as prescribed in the Law on Inspection and relevant legal documents, a banking inspector needs to hold state management and legal qualifications in relevant fields and other eligibility requirements as prescribed by the Governor of the State Bank.

5. The banking inspector has tasks, powers and responsibilities as prescribed by law.

Article 13. Banking inspection collaborators

1. A banking inspection collaborator is a person who is not on the payroll of the banking inspection and supervision authority and is summoned to join an inspectorate by a competent person.

Banking inspection collaborators shall be summoned and employed in accordance with regulations of law.

2. The person who has the power to summon a banking inspection collaborator to join the inspectorate as prescribed in Clause 1 of this Article is the Governor of the State Bank, the Chief Inspector, the Director of the branch of the State Bank, the Chief Inspector of the provincial banking inspection and supervision authority or the Director General of the Department of Banking Inspection and Supervision.

3. A banking inspection collaborator is an official or public employee who has good moral and political qualities, and sense of responsibility, are honest, objective and just, hold appropriate qualifications in the inspection.

4. The banking inspection collaborator has tasks, powers and responsibilities as prescribed by law.

5. The banking inspection collaborator shall be entitled to benefits as prescribed by law and enabled to perform their tasks.

Chapter 4.

OPERATION OF PROVINCIAL BANKING INSPECTION AND SUPERVISION AUTHORITIES

SECTION 1. INSPECTION

Article 14. Administrative inspection

Administrative inspection shall be carried out as prescribed in the Law on Inspection, documents elaborating and providing guidelines for the Law on Inspection and other relevant legal documents.

Article 15. Contents and methods of banking inspection

1. Contents of banking inspection:

a) Carry out inspection of the compliance with the finance and banking laws and other relevant regulations of law, compliance with regulations specified in the license issued by the State Bank;

b) Consider and assess level of risk, risk management and financial condition of the inspected entities; consider and assess inherent risks, quality and effectiveness of the management operating system, internal audit and monitoring systems, and risk management system of credit institutions and foreign banks’ branches; identify, measure, monitor, control, reduce and handle risks by considering factors affecting the operational safety, quality, effectiveness of risk management system and risk tolerance of the credit institutions and foreign banks’ branches;

c) Request a competent authority to make amendments, annul or issue legislative documents to satisfy the state management requirements in finance and banking;

d) Request the inspected entity to take measures for minimizing, reducing and managing risks to ensure safety of banking operations and prevent violations of law.

dd) Detect, prevent and impose penalties for violations of law within competence; request a competent authority to impose penalties for violations of law.

2. Methods of banking inspection:

a) Carry out inspections according the plan approved by a competent authority;

b) Carry out an unscheduled inspection in case it is discovered that a inspected entity may violate laws or incur risks that threaten the safety and soundness of the inspected entity, or carry out an unscheduled inspection with a view to settling complaints and denunciations, taking actions against corruption, money laundering and terrorism financing or as assigned by the head of the competent authority.

Article 16. Grounds for issuing inspection decisions

The grounds for issuing inspection decisions are specified in Article 38 of the Law on Inspection, Article 54 of the Law on the State Bank of Vietnam and relevant legal documents.

Article 17. Formulation and approval of annual inspection plan

1. According to the orientation of the inspection plans and guidance of the Inspector General and management requirements of the State Bank, Central Banking Inspection and Supervision Authority shall submit the annual inspection plan of the banking inspection and supervision authority to the Governor of the State Bank for approval not later than the 15th of every November. The Governor of the State Bank shall consider and approve the annual inspection plan of the banking inspection and supervision authority not later than the 25^th of every November.

2. According to the annual inspection plan of the banking inspection and supervision authority, and the management requirements of the branch of the State Bank, the provincial banking inspection and supervision authority shall submit the annual inspection plan of the provincial banking inspection and supervision authority to the Director of the branch of the State Bank for approval not later than the 10^th of every December and shall inform the Central Banking Inspection and Supervision Authority thereof. The Director of the branch of the State Bank shall consider and approve the annual inspection plan of the provincial banking inspection and supervision authority not later than the 20^th of every December.

3. In case the annual inspection plan of the banking inspection and supervision authority needs adjusting, the Central Banking Inspection and Supervision Authority shall submit a written request to the Governor of the State Bank for approval for the adjusted inspection plan. Within 15 days from the day on which the written request submitted by the banking inspection and supervision authority is received, the Governor of the State Bank shall take responsibility for consideration and decision.

In case the annual inspection plan of the provincial banking inspection and supervision authority needs adjusting, the provincial banking inspection and supervision authority shall submit a written request to the Director of the branch of the State Bank for approval for the adjusted inspection plan. Within 15 days from the day on which the written request submitted by the provincial banking inspection and supervision authority is received, the Director of the branch of the State Bank shall take responsibility for his/her consideration and decision. The provincial banking inspection and supervision authority shall inform the Central Banking Inspection and Supervision Authority of the adjustments to the annual inspection plan of provincial banking inspection and supervision authority that has been approved by the Director of the branch of the State Bank.

4. In case the adjustments to the annual inspection plan made by the Director of the branch of the State Bank affect the inspection plan approved by the Governor of the State Bank, the Director of the branch of the State Bank shall inform the Chief Inspector thereof and submit the adjusted inspection plan to the Governor of the State Bank for approval.

5. The annual inspection plan specified in this Article shall be submitted to Central Banking Inspection and Supervision Authority and relevant organizations and individuals.

Article 18. The power to issue inspection decision and re-inspection decisions

1. The Chief Inspector, the Director General of the Department of Banking Inspection and Supervision and the Chief Inspector of provincial banking inspection and supervision authority shall issue the inspection and decision on inspection and establishment of the inspectorate. When necessary, the Governor of the State Bank or the Director of the branch of the State Bank (where the Department of Banking Inspection and Supervision is yet to be established) shall issue the decision on inspection and establishment of the inspectorate.

2. The Chief Inspector shall decide to re-inspect the case that has been concluded by the Director General of the Department of Banking Inspection and Supervision and the Chief Inspector of the provincial banking inspection and supervision authority, but violations of law are suspected; the case that has been concluded by the President of the People’s Committee of province, but violations of law are suspected as assigned by the Governor of the State Bank.

Article 19. Duration of inspection

1. An inspection carried out by the banking inspection and supervision authority shall last for a maximum of 45 days. If the case is complicated, the inspection may last for a maximum of 70 days. The Governor of the State bank shall request the Prime Minister to decide the cases in which the duration of an inspection is over 70 days.

2. Duration of an inspection shall begin from the day on which an inspection decision is issued to the day on which the re-inspection ends where the inspection is carried out.

3. The extension of inspection duration mentioned in Clause 1 of this Article shall be decided by the person who issues the inspection decision, unless the inspection has to take place for more than 70 days, in which case the Prime Minister will decide.

Article 20. Report on results and conclusions of inspection of credit institutions and foreign banks’ branches

1. Within 25 days from the end of the inspection of credit institutions and foreign banks’ branches, the leader of the inspectorate shall submit a report on the inspection results unless inspection conclusions are subject to approval by a competent organization.

2. Based on the report on results of inspection of credit institutions and foreign banks’ branches and explanations of the inspected entities (if any), within 25 days from the day on which the report on inspection results are received, the person who issues the inspection decision shall sign and issue the inspection conclusion unless the such conclusions are subject to approval by a competent or authority.

3. The Governor of the State Bank shall provide guidance on the contents of the report on inspection results and conclusions and post-inspection actions concerning the inspections of credit institution and foreign banks’ branches.

Article 21. Inspection of actions against money laundering, deposit insurance and inspection of relevant fields

1. The inspection of actions against money laundering shall be carried out as prescribed by the Law on Prevention of Money Laundering.

2. The inspection of deposit insurance shall be carried out as prescribed by the Law on Deposit Insurance.

3. The inspection of other relevant fields shall be carried out as prescribed by relevant laws and the laws on inspection.

Article 22. Submission of inspection conclusions and disclosure of inspection conclusions

1. Within 15 days from the day on which the inspection conclusion is signed, the inspection conclusion shall be submitted as follows:

a) For the inspection carried out by the Central Banking Inspection and Supervision Authority, the inspection conclusion shall be submitted to the Governor of the State Bank, Inspector General, Chief Inspector, inspected entity, the head of the supervisory authority of the inspected entity and relevant organizations and individuals.

b) For the inspection carried out by the provincial banking inspection and supervision authority, the inspection conclusion shall be submitted to the Central Banking Inspection and Supervision Authority, the Director of the branch of the State Bank, inspected entity, the head of the superior regulatory authority of the inspected entity (if any) and relevant organization and individual.

2. The inspection conclusion shall be made publicly available, except for the contents of the inspection conclusion that contains state secret and sensitive contents that may affect the safety of inspected entities’ operations.

3. The person who signs the inspection conclusion shall allow the contents of inspection conclusion to be made publicly available and take responsibility for making inspection conclusion publicly available, when necessary, inform the head of the regulatory authority of the same level thereof for consideration and decision.

4. Inspection conclusions shall be made publicly available as prescribed by law.

SECTION 2. BANKING SUPERVISION

Article 23. Contents and methods of banking supervision

1. Contents of banking supervision;

a) Collect, consolidate and process documents, information and data of the supervised entity on request; combine supervision of safety of the whole system of credit institutions with the supervision of safety of each credit institution or branch of a foreign bank;

b) Consider and monitor the compliance with regulations on safety of banking operations and other relevant regulations of law; compliance with conclusions, proposals and decisions on inspection and recommendations and warning about banking supervision;

c) Regularly analyze and assess financial condition, operation, management and level of risks of credit institutions and foreign banks’ branches, systemic risks; annually rank credit institutions by their safety level;

d) Detect and warn about factors, negative changes, risks that threaten operational safety of each credit institution and foreign bank’s branch and system of credit institutions; possible violations against the finance and banking laws;

dd) Request and propose measures for preventing and handling the supervised entities' risks and violations of law as prescribed by law.

2. Methods of banking supervision:

a) Banking supervision shall be exercised on a regular basis through macroprudential supervision, microprudential supervision and the use of methods, standards, supervision tools, communication system decided by the Governor of the State Bank;

b) Microprudential supervision is a form of prudential supervision applied to single entity and is exercised according to the system for ranking and assessing supervised entities; communication system serving macroprudential supervision; safety standards; tools, standards and financial analysis skills, operations; assessment, supervision and warning about the supervised entity’s types of risks and violations of law;

c) Macroprudential supervision is a form of prudential supervision applied to the whole system of credit institutions and foreign banks’ branches and is exercised according to indexes that show the soundness of financial system and operational safety; communication system serving analysis and macroprudential supervision; methods, tools, analysis and supervision procedures, warning about safety and stability of the systems of credit institutions and foreign banks’ branches; periodic or unscheduled reports on system safety and stability.

Article 24. Cooperation between banking inspection authorities and banking supervision authorities

1. Banking supervision result is one of the bases for formulation of the annual inspection plan and determination of scope, targets and contents of banking inspection.

2. Based on the banking supervision result, the competent person shall decide whether to issue a decision on banking inspection.

3. The inspection result is one of the bases for carrying out appropriate inspections.

Article 25. Remedial measures

Depending on the supervised entity’s level of safety and soundness and severity of its violations of the law, the banking inspection and supervision authority shall impose the following remedial measures:

1. Request the Governor of the State Bank or the person authorized by the Governor of the State Bank to impose remedial measures prescribed in Article 59 of the Law on the State Bank of Vietnam.

2. Request a competent authority to place a credit institution under special control and impose restructuring measures in accordance with regulations of law.

3. Request the supervised entity to submit reports at the request of the capacity of banking inspection and supervision authority.

4. Request the Governor of the State Bank or the person authorized by the Governor of the State Bank to decide to establish an inspectorate in order to monitor and supervise the supervised entity.

5. Request the Governor of the State Bank or the person authorized by the Governor of the State Bank to terminate violations of the law and operations that threatens the operational safety of the supervised entity.

6. Request the Governor of the State Bank or the person authorized by the Governor of the State Bank to impose measures for control of transactions that may pose risks and restrict growth and operations that affect the operational safety of the supervised entity.

7. Request a competent authority to suspend or dismiss the manager or executive, take actions against the individual who violates law or threatens the operational safety of the supervised entity; request a competent authority not to appoint, reappoint, dismiss and terminate the employment contract or impose other measures on the individuals who violates law or threatens the operational safety of the supervised entity.

8. Other remedial measures as prescribed by law.

Article 26. Grounds for banking supervision

1. Legislative documents that regulating the supervised entity.

2. Internal charter, documents and policies of the supervised entity.

3. Financial statements, operations reports, and periodic reports.

4. Statistical reports.

5. Inspection and audit results.

6. Other relevant information and documents as prescribed by law.

Article 27. Rights and obligations of banking inspection and supervision authorities during banking supervision

1. Request managers, executives and employees of the supervised entity to work with the banking inspection and supervision authority and provide relevant information and documents to serve banking supervision; check and assess documents, information and data provided by the supervised entity.

2. Consider and assess operations of the supervised entity, including domestic and international operations, operations of the supervised entity's parent company, subsidiary, associate company, affiliated unit that affect the supervised entity.

3. Warn about and recommend the supervised entity’s risks, operational safety and violations of law.

4. Check and verify information, documents and work with relevant entities and individuals of the supervised entity.

5. Request the supervised entity to provide information and documents for the supervision on a periodic or unscheduled basis; request the supervised entity's parent company, subsidiary, associate company, affiliated unit, and request organizations and individuals related to banking supervision to provide information and documents for the banking inspection and supervision authority to serve the supervision.

6. When necessary, request the supervised entity to carry out independent audit as prescribed in Article 5 of this Decree.

7. Request the supervised entity or the Governor of the State Bank or a competent authority to take measures for preventing, handling the supervised entity’s risks and violations of law, make amendments to, suspend the enforcement of or annul the regulations that are against law or affect safety of banking operations.

8. Impose penalties for administrative violations on the supervised entity that violates the law in accordance with regulations of law; force the supervised entity to terminate violations of law or professional operation or transaction that threatens safety or cause damage to the supervised entity.

9. Impose remedial measures on supervised entities as prescribed in Article 25 of this Decree.

10. Manage and use information and documents that serve banking supervision as prescribed by law and agreed by the providing party.

11. Impose supervising measures in conformity with the supervised entity’s level of risks, operational safety and severity of violations of law.

12. Inspect the supervised entity in case violations of law or risks to the operational safety are suspected.

13. Take charge and cooperate with relevant organizations and units in carrying out macroprudential supervision, reducing systemic risks, ensure the operational safety of banks and credit institutions.

14. Other rights and obligations as prescribed by law.

Article 28. Rights and obligations of supervised authorities during banking supervision

1. Exercise rights and fulfill obligations of a supervised entity as prescribed in Article 57 of the Law on the State Bank of Vietnam and Article 160 of the Law on Credit Institutions.

2. Accept and implement recommendations and warning of the banking inspection and supervision authority with respect to risks and threats to operational safety, and violations of law; implement measures for preventing, controlling, reducing and handling risks, threats to operational safety and violations of law.

3. Implement recommendations and decisions given by the banking inspection and supervision authority.

4. Other rights and obligations as prescribed by law.

SECTION 3. FORMULATION OF POLICIES AND LEGISLATIVE DOCUMENTS; LICENSING

Article 29. Formulation of policies and legislative documents

The Central Banking Inspection and Supervision Authority shall consult with and assist the Governor of the State Bank in formulating and promulgating within his/her competence or let the Governor of the State Bank promulgate policies and legislative documents on organizational structure, operations and operational safety of banks, banking inspection and supervision, deposit insurance and on actions against money laundering and terrorism financing under the management of the State Bank.

Article 30. Licensing

1. The Central Banking Inspection and Supervision Authority shall consult with or assist the Governor of the State Bank, and provincial banking inspection and supervision authority shall consult with or assist the Director of the branch of the State Bank (in case the Director of the branch of the State Bank is authorized by the Governor of the State Bank) in:

a) issuing, adjusting, adding, revoking the license for establishment and operation of credit institutions, license for establishment of foreign banks’ branches, license for establishment of representative offices of foreign credit institutions or other foreign organizations involved in banking activities and other licenses for operation of banks;

b) issuing and revoking the license for provision of credit information services by institutions;

c) confirming charter registration by credit institutions;

d) approving the trading, full division, partial division, consolidation, acquisition, conversion of legal forms, or dissolution of a credit institution or foreign bank’s branch; approving provisional lists of elected or appointed members of the Board of Members, Board of Directors, Board of Controllers and Director General (Director) of credit institutions, except for the personnel of commercial banks 100% of charter capital of which is held by the State, personnel that is appointed or introduced by the owner of state capital at Joint Stock Commercial Bank over 50% of charter capital of which is held by the State; approving the person expected to be appointed to the Director General (Director) of the foreign bank's branch; approving the establishment, termination and dissolution of domestic branch, representative office, service provider, foreign branch, representative office and other forms of foreign commercial presence of a credit institution; approving the establishment, acquisition of subsidiary or associate company of a credit institution; approving the capital contribution or purchase of shares by a credit institution; approving other issues concerning management, organizational structure, finance and operations in accordance with law that must be granted approval or permission by the State;

dd) resolving issues concerning organizational structure and management of credit institutions and foreign banks’ branches to ensure credit institutions and foreign banks’ branches operate in a safe and sound manner and in accordance with regulations of law.

e) exercising rights and fulfilling obligations of the representative of the owner of state capital at the state-invested credit institution in accordance with regulations of law;

g) formulating, organizing and monitoring the implementation of the scheme or policy for reorganizing, reinforcing and restructuring credit institutions and foreign banks’ branches.

2. The Central Banking Inspection and Supervision Authority shall decide some contents specified in Clause 1 of this Article as authorized by the Governor of the State Bank.

Chapter 5.

RESPONSIBILITIES OF ORGANIZATIONS AND INDIVIDUALS FOR OPERATIONS OF BANKING INSPECTION AND SUPERVISION AUTHORITIES

Article 31. Responsibilities of the Governor of the State Bank of Vietnam

1. Specific regulations on the relationship between authorities and units:

a) Between the Central Banking Inspection and Supervision Authority and the provincial banking inspection and supervision authority;

b) Between the Central Banking Inspection and Supervision Authority and the branch of the State Bank;

c) Between the Department of Banking Inspection and Supervision and the branch of the State Bank within the province;

d) Between the provincial banking inspection and supervision authorities.

2. Direct the operation of banking inspection and supervision authorities under the management of the State Bank.

3. Approve the annual inspection plan of the banking inspection and supervision authority.

4. Handle and direct the handling of conclusions and proposals of the banking inspection and supervision authorities.

5. Specify the provision of information and submission of reports by relevant organizations and individuals on banking inspection and supervision, settlement of complaints and denunciations, actions against corruption.

6. Provide instructions on safety standards in banking operations, methods and procedures for banking inspection and banking supervision.

7. Provide funding, facilities, technical infrastructure, clothes and other necessary conditions for banking inspection and supervision authority.

8. Other responsibilities as prescribed by law.

Article 32. Responsibilities of the Director of the branch of the State Bank

1. Responsibility of the Director of the branch of the State Bank where the Department of Banking Inspection and Supervision is yet to be established:

a) Direct the operations of the provincial banking inspection and supervision authorities under the management of the branch of the State Bank;

b) Approve the annual inspection plans of the provincial banking inspection and supervision authorities;

c) Promptly handle conclusions and proposals of the provincial banking inspection and supervision authorities.

d) Provide funding, facilities, technical infrastructure, clothes and other necessary conditions for provincial banking inspection and supervision authorities;

dd) Other responsibilities as prescribed by law and the State Bank.

2. Responsibilities of the Director of the branch of the State Bank where the Department of Banking Inspection and Supervision is established:

a) Within the competence, cooperate with the Central Banking Inspection and Supervision Authority and the Department of Banking Inspection and Supervision Authority in the inspection, supervision, settlement of complaints and denunciations, and actions against corruption;

b) Act as the focal point of the State Bank within the area in performing the task of submitting reports, cooperating with executive committees and local governments, resolving issues concerning finance and banking, and performing other tasks assigned by the Governor of the State Bank;

c) Other responsibilities as prescribed by law and the State Bank.

Article 33. Responsibility for cooperation between banking inspection and supervision authorities and relevant organizations involved in banking inspection and supervision

1. The banking inspection and supervision authority shall cooperate with other relevant organizations as prescribed in Article 11 of the Law on Inspection.

2. The organization or individual that is provided with information, documents and results of banking inspection and supervision authority by the banking inspection and supervision authority shall keep and use for the right purposes and in accordance with regulations of law soft; shall not use information, documents and results of banking inspection and supervision to negatively affect the stability, operational safety of banks, credit institutions and foreign banks' branches.

3. When it is necessary to ensure operational safety of credit institutions, State's assets and people's deposit, the banking inspection and supervision authority shall request:

a) a competent authority to inspect subsidiaries and associate companies of the credit institution or cooperate with the banking inspection and supervision authority in doing so;

b) a competent authority to supervise subsidiaries and associate companies of the credit institution or cooperate with the banking inspection and supervision authority to supervise in doing so;

c) a competent authority that has the power to manage, inspect, supervise to inspect and supervise; promptly provide sufficient results of inspection and supervision of subsidiaries and associate companies of the credit institution at the request of the banking inspection and supervision authority.

4. The banking inspection and supervision authority shall cooperate with a foreign authority the has the power to inspect and supervise banks as prescribed in Article 61 of the Law on the State Bank of Vietnam.

5. Inspection and supervision by foreign authorities:

a) The foreign authority that has the power to inspect and supervise banks, parent credit institutions and foreign credit institutions may inspect the operations of foreign banks’ branches, joint-venture credit institutions, wholly foreign-owned credit institutions, and other foreign institutions involved in banking operations in Vietnam. Before carrying out an inspection, the foreign authority that has the power to inspect and supervise banks, parent credit institutions and foreign credit institutions shall issue a written notice to the State Bank (the Central Banking Inspection and Supervision Authority) about contents and expected beginning and ending date of inspection;

b) Within 60 days from the end of the inspection, the foreign authority that has the power to inspect and supervise banks, parent credit institutions and foreign credit institutions shall submit a report on inspection results to the State Bank;

c) During the inspection, violations of law or threats that may affect the operational safety of the foreign bank’s branch, joint-venture credit institution, wholly foreign-owned credit institution, and other foreign institutions involved in banking operations are suspected, the foreign authority that has the power to inspect and supervise banks, parent credit institutions and foreign credit institutions shall send a written notice to the State Bank (the Central Banking Inspection and Supervision Authority) and propose remedial measures (if any).

6. When necessary, the banking inspection and supervision authority shall inspect foreign-based subsidiary and affiliated unit of the credit institution in accordance with regulations of this Decree and relevant regulations of law, and shall abide by the law of the country where the inspection is carried out and adhere to agreement signed with the foreign authority that has the power to inspect and supervise banks.

7. The provision and exchange of information, documents and results of inspection and supervision between the banking inspection and supervision authority and the foreign authority that has the power to inspect and supervise banks shall comply with regulations of Vietnam’s law and adhere to the agreement signed with the foreign authority the has the power to inspect and supervise banks.

Article 34. Responsibilities, rights and obligations of organizations and individuals that are inspected and supervised entities and responsibilities of relevant organizations and individuals

1. The inspected and supervised entities have responsibilities, rights and obligations in accordance with regulations of the Law on Inspection, the Law on the State Bank of Vietnam, the Law on Credit Institutions, Article 5 and Article 28 of this Decree and other relevant regulations of law.

2. The organization or individual shall promptly provide sufficient information and documents concerning banking inspection and supervision at the request of the banking inspection and supervision authority and in accordance with regulations of this Decree and other relevant regulations of law.

Chapter 6.

IMPLEMENTATION CLAUSE

Article 35. Effect

This Decree comes into force from June 01, 2014 and replaces the Government’s Decree No. 91/1999/ND-CP dated September 04, 1999 on organizational structure and operations of the banking inspection authority.

Article 36. Responsibility for implementation

1. The Governor of the State Bank is responsible for providing guidelines for this Decree.

2. Ministers, heads of ministerial agencies, heads of Governmental agencies, Presidents of the People’s Committees of provinces and Chief Inspector are responsible for the implementation of this Decree./.

 

ON BEHALF OF THE GOVERNMENT PRIME MINISTER Nguyen Tan Dung