List of Vietnam Law
Circular No. 27/2018/TT-NHNN dated November 22, 2018 of the State Bank of Vietnam on cases of freezing of capital and assets of branches of foreign banks
Date: 11/22/2018
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STATE BANK
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SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness --------------- |
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No. 27/2018/TT-NHNN
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Hanoi, November 22, 2018
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CIRCULAR
CASES OF FREEZING OF CAPITAL AND ASSETS OF BRANCHES OF FOREIGN BANKS
Pursuant to the Law on The State bank of Vietnam dated June 16, 2010;
Pursuant to the Law on credit institutions dated June 16, 2010 and the Law on amendments to the Law on credit institutions dated November 20, 2017;
Pursuant to the Government's Decree No. 16/2017/ND-CP dated February 17, 2017 on functions, tasks, entitlements and organizational structure of the State bank of Vietnam;
At the request of Chief Banking Inspector;
The Governor of the State bank of Vietnam promulgates a Circular on cases of freezing of capital and assets of branches of foreign banks.
Article 1. Scope
This Circular provides for cases of freezing of capital and assets of foreign branch banks (FBB).
Article 2. Regulated entities
1. FBBs that are established and operating within Vietnam’s territory.
2. Organizations and individuals relevant to the freezing of capital and assets of FBBs.
Article 3. Definitions
1. Freezing of assets and capital means the State bank performing one or some of the following tasks:
a) Prohibit a FBB to transfer its capital and assets to abroad;
b) Freeze a FBB’s capital and assets deposited at the State bank;
c) Request a FBB to deposit its capital and assets to the State bank and freeze such capital or assets once deposited;
d) Request the credit institution to which a FBB’s capital or asset is deposited to freeze such capital or asset;
dd) Request a FBB to deposit its capital or asset to a credit institution and request such credit institution to freeze the FBB’s capital or asset once deposited.
2. Parent bank is the foreign bank that opens a branch in Vietnam.
Article 4. Rules for freezing and unfreezing capital and assets
1. The freezing and unfreezing of capital and assets of a FBB is meant to protect the depositors’ interests.
2. The Governor of the State bank shall consider freezing or unfreezing capital and assets of a FBB in any of the cases specified in Article 5 of this Circular. The decision to freeze a FBB’s capital and assets shall specify the reasons for freezing, beginning and ending time, freezing method and responsibilities of the branch.
3. The Governor of the State bank shall consider issuing a decision to unfreeze capital and assets of a FBB in any of the cases specified in Article 6 of this Circular. The decision to unfreeze a FBB’s capital and assets shall specify the time of unfreezing and responsibilities of the branch.
Article 5. Cases of freezing capital and assets
The State bank shall consider freezing a FBB’s capital and asset in the following cases:
1. The true value of granted capital of the FBB is smaller than the legal capital for more than 06 months.
2. The branch fails to maintain the adequacy ratio specified in Article 130 of the Law on credit institutions and fails to achieve the adequacy ratio by the deadline imposed by the State bank.
3. The accumulated loss incurred by the FBB exceeds 50% of its granted capital and reserve funds specified in the latest audited financial statement.
4. The parent bank fails to fulfill its commitments regarding its branch in Vietnam despite the State bank’s request.
5. There is information that the parent bank is suspected of insolvency or put under special control by the authority of its home country or it is ordered to undergo dissolution, bankruptcy or its license is revoked.
Article 6. Cases of unfreezing capital and assets
The State bank shall consider unfreezing a FBB’s capital and asset in the following cases:
1. The FBB has rectified the issues mentioned in Clause 1, 2, 3 Article 5 of this Circular.
2. The parent bank has fulfilled its commitments regarding its branch in Vietnam at the State bank’s request mentioned in Clause 4 Article 5 of this Circular.
3. The State bank receives information from a competent authority of the parent bank’s home country that such parent bank has rectified the issues mentioned in Clause 5 Article 5 of this Circular.
Article 7. Responsibilities of FBBs
1. Provide adequate and timely information and documents about its organization and operation as requested by the State bank in any of the cases mentioned in Article 5 of this Circular.
2. Comply with the State bank’s decision in case its capital and assets are frozen.
Article 8. Responsibilities of the credit institution requested by the State bank to freeze a FBB’s capital and assets
Freeze and unfreeze the FBB’s capital and asset under the State bank's Decision.
Article 9. Responsibilities of affiliates of the State bank
1. Bank Supervision and Inspection Agency shall:
a) Receive and transfer relevant information to the Governor for considering freezing and unfreezing capital and assets of FBBs.
b) Take charge and cooperate with other affiliates of the State bank in resolving issues that occur during the process of freezing and unfreezing capital and assets of FBBs.
2. Transaction centers shall:
Freeze and unfreeze capital and assets of FBBs under the State bank's decisions.
3. Finance – Accounting Department shall:
Provide instructions on accounting tasks during the process of freezing and unfreezing capital and assets of FBBs.
4. Other affiliates of the State bank shall:
a) Inform Bank Supervision and Inspection Agency of any of the cases specified in Article 5 of this Circular;
b) Cooperate with Bank Supervision and Inspection Agency in resolving issues that occur during the process of freezing and unfreezing capital and assets of FBBs.
Article 10. Effect
1. This Circular comes into force from January 10, 2019.
2. Section VI Part II of Circular No. 03/2007/TT-NHNN is annulled.
Article 11. Implementation
Chief of Office, the Chief Inspector, heads of affiliates of the State bank, Directors of provincial branches of the State bank, Directors (General Directors) of FBBs are responsible for the implementation of this Circular./.
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PP GOVERNOR
DEPUTY GOVERNOR (Signed and sealed) Nguyen Dong Tien (This translation is for reference only)
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