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Circular No.: 13/2023/TT-NHNN dated October 31, 2023 of the State Bank of Vietnam on amendments to Circulars prescribing licensing, organization, operation and application and procedures for approval of changes of commercial banks and foreign bank branches

Date: 10/31/2023

 
THE STATE BANK OF VIETNAM
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THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No.: 13/2023/TT-NHNN
Hanoi, October 31, 2023
 
CIRCULAR
AMENDMENTS TO CIRCULARS PRESCRIBING LICENSING, ORGANIZATION, OPERATION, AND APPLICATION AND PROCEDURES FOR APPROVAL OF CHANGES OF COMMERCIAL BANKS AND FOREIGN BANK BRANCHES
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. 102/2022/ND-CP dated December 12, 2022 prescribing functions, tasks, powers and organizational structure of the State Bank of Vietnam;
At the request of the Head of the SBV Banking Supervision Agency;
The Governor of the State Bank of Vietnam (“SBV”) promulgates a Circular providing amendments to Circulars prescribing licensing, organization, operation, and application and procedures for approval of changes of commercial banks and foreign bank branches.
Article 1. Amendments to Circular No. 40/2011/TT-NHNN dated December 15, 2011 of SBV’s Governor  
1. Clause 5 and Clause 13 Article 2 are amended as follows:
“5. JV bank means a commercial bank that is established in Vietnam with capital contributed by a Vietnamese party (which comprises at least a Vietnamese bank and no more than a Vietnamese enterprise that is not a bank) and a foreign party (which comprises at least a foreign bank and no more than a foreign enterprise that is not a bank) on the basis of a JV contract. The JV bank shall be considered a Vietnamese juridical person and is headquartered in Vietnam.    The JV bank is established and organized in the form of a multi-member limited liability company with a maximum number of members of 05 of which any member and their related persons shall not hold more than 50% of the charter capital.”
“13. contributing member means any bank or non-bank enterprise that makes capital contribution to a JV bank; or a foreign credit institution that makes capital contribution to a wholly foreign-owned bank.”  
2. Point b(iii) and Point b(vi) Clause 3 Article 15 are amended as follows:
“(iii) The establishment license or business registration certificate or another document of equivalent validity (except Vietnamese enterprises);”
“(vi) Copies of passports of the organization’s legal representative and the person representing its capital contributed to the bank (for persons who do not Vietnamese citizenship);"
3. Point b(iii) is added to Point b Clause 3 Article 31 as follows:
“(iii) A new partner that is a non-bank enterprise is required to meet the following conditions:
- It is duly established under the law of Vietnam or the law of a foreign country;
- A state-owned enterprise must provide a written permission given by a competent authority to make capital contribution to the JV bank in accordance with regulations of law;
- If it is an enterprise issued with a license for establishment and operation in banking, securities or insurance sector, it must comply with capital contribution requirements laid down in relevant laws.
- It must have the owner's equity of at least VND 1.000 billion and total assets of at least VND 2.000 billion in the last 03 consecutive years prior to the year of submission of an application for approval for purchase and sale or transfer of the stake which is between 1% and 5% of the charter capital of the JV bank; or it must have the owner's equity of at least VND 200 billion and total assets of at least VND 400 billion in the last 03 consecutive years prior to the year of submission of an application for approval for purchase and sale or transfer of the stake which does not exceed 1% of the charter capital of the JV bank;
- If an enterprise is required to meet the legal capital requirement to operate in a certain business line, its owner's equity minus the legal capital must not be lower than the capital amount contributed as committed according to financial statements, which have been audited by an independent auditor and given no qualified opinion, of the year prior to the year of submission of an application for approval for purchase and sale or transfer of stake;
- It has a profitable business for the last 03 years prior to the year of submission of an application for approval for purchase and sale or transfer of stake;
- It is not allowed to use its funds raised or borrowed from other organizations or individuals to make capital contribution;
- It has fulfilled all tax and social insurance obligations as prescribed by law by the date of submission of an application for approval for purchase and sale or transfer of stake;
- It is not a founding shareholder, owner, founding member or strategic shareholder of another credit institution duly established and operating in Vietnam.”
4. Appendixes 02a, 03, 04, 05a, 05b, and 07 are replaced with Appendixes 02a, 03, 04, 05a, 05b, and 07 enclosed herewith.
Article 2. Amendments to Circular No. 50/2018/TT-NHNN dated December 31, 2018 of SBV’s Governor  
1. Point b(iii) is added to Point b Clause 2 Article 16 as follows:
“(iii) If the buyer or transferee is a non-bank enterprise, such an application includes:
- The establishment license or business registration certificate or another document of equivalent validity (except Vietnamese enterprises);
- The power of attorney giving authorization to a person representing its capital contributed to the bank as prescribed by law;
- Copies of passports of the enterprise’s legal representative and the person representing its capital contributed to the bank (for persons who do not Vietnamese citizenship);
- A competent authority’s written permission for enterprise’s contribution of capital to the bank;
- A report on satisfaction of requirements for new partners that are non-bank enterprises upon their receipt of transferred stakes of JV banks in accordance with SBV's regulations on licensing for, organization and operation of commercial banks, foreign bank branches, representative offices of foreign credit institutions and other organizations performing banking activities in Vietnam;
- Financial statements of the last 03 years prior to the year of submission of an application for approval for purchase and sale or transfer of stake, which have been audited by independent auditors and given no qualified opinion.
- A report on the nonbank enterprise’s financial capability to make capital contribution to the JV bank which is made using the form in Appendix 01 enclosed herewith;
- A statement of credit relationships made using the form in Appendix 02 enclosed herewith;
- Written confirmations of fulfillment of tax obligations and social insurance obligations given by the relevant tax authority and social insurance authority;
- A written statement that it is not a founding shareholder, owner, founding member or strategic shareholder of another credit institution duly established and operating in Vietnam.”
2. Appendixes 01 and 02 enclosed herewith are added to the Circular No. 50/2018/TT-NHNN.
Article 3. Responsibility for implementation
The Chief of Office, Head of SBV Banking Supervision Agency, heads of affiliated units of SBV, commercial banks, foreign bank branches, representative offices of foreign credit institutions or other foreign organizations performing banking activities, and relevant organizations and individuals are responsible for the implementation of this Circular.
Article 4. Implementation
1. This Circular comes into force from December 14, 2023.
2. Clauses 9 and 19 Article 1 and Clause 3 Article 2 of the Circular No. 28/2018/TT-NHNN dated November 30, 2018 of the SBV’s Governor providing amendments to the Circular No. 40/2011/TT-NHNN are abrogated./.
 
 
PP. GOVERNOR
DEPUTY GOVERNOR
(Signed and sealed)



Doan Thai Son
(This translation is for reference only)



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