OPERATIONAL NETWORK OF COMMERCIAL BANKS

1. This Circular provides for the operational network of commercial banks, including:

a) Establishment, opening of operations, name change, relocation, termination of operation, dissolution of branches, transaction offices, representative offices, and public service providers in Vietnam; branches, representative offices, and subsidiary banks in foreign countries;

b) Change of supervisory branches of transaction offices;

c) Conversion of domestic branches into transaction offices and vice versa;

d) Conversion of legal forms of overseas subsidiary banks of commercial banks.

2. This Circular stipulates the provision of notices on information on the establishment, relocation, dissolution, and termination of the operations of branches, transaction offices, and representative offices in Vietnam and relevant information for business registration agencies.

3. The operational network of Lien Viet Joint Stock Commercial Bank shall comply with this Circular and the regulations of the State Bank of Vietnam on postal transaction offices affiliated with Lien Viet Joint Stock Commercial Bank.

1. Commercial banks.

2. Organizations and individuals relevant to the operational network of commercial banks. 

For the purpose of this Circular, the following terms shall be construed as follows:

1. Operational network of commercial banks includes domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks of commercial banks as prescribed by the law.

2. Branch refers to a dependent unit of a commercial bank, which performs dependent accounting and has seals and tasks of implementing one or several functions of commercial banks according to the assignments of the commercial bank in conformity with the law.

3. Transaction office refers to a type of branch managed by another domestic branch of a commercial bank, which performs accounting under the form of recording in accounting books, has seals, and is located in a province or centrally affiliated city where the supervisory branch is located.  The transaction office shall not:

a) Approve or decide on the credit extension for a client exceeding two (2) billion VND or an amount of foreign currency with equal value after conversion, unless the credit extension is guaranteed by money, savings cards, security instruments issued by the commercial bank, government bonds, or state cash vault bills;

b) Provide international money transfer or payment services.

4. Supervisory branch of a transaction office refers to a branch assigned to perform several managerial contents for a transaction office in the same province or city following the intramural regulations of the commercial bank in conformity with this Circular.

5. Representative office refers to a dependent unit of a commercial bank, which has seals and performs the representative function under the authorization of the commercial bank.  The representative office shall not engage in business operations.

6. Public service provider refers to a dependent unit of a commercial bank, which has seals and performs one or several business operation support activities of the commercial bank, including:

a) Researching and applying banking technologies to commercial banks;

b) Providing professional and technical training and advanced training for officials and employees of commercial banks;

c) Performing as contact offices and researching the market;

d) Storing databases and collecting and processing information used for business operations of commercial banks;

dd) Performing other activities for business operation support of commercial banks in conformity with the law.

7. Overseas subsidiary bank of a commercial bank (hereinafter referred to as "overseas subsidiary bank") refers to a bank in which a commercial bank or a commercial bank and relevant persons of the commercial bank own more than 50% of its charter capital or more than 50% of its equity capital with voting rights, established abroad under foreign laws.

8. Time of request is the date prescribed in the written request for the establishment of a domestic branch, transaction office, representative office, or public service provider; an overseas branch, representative office, or subsidiary bank of a commercial bank.

9. Urban areas of Hanoi City and Ho Chi Minh City include cities (if any) and districts of Hanoi City and Ho Chi Minh City.

10. Suburban areas of Hanoi City and Ho Chi Minh City include other areas of Hanoi City and Ho Chi Minh City not prescribed in Clause 9 of this Article.

11. Rural areas are administrative boundary areas, excluding areas of wards of district-level towns, districts, and cities.

12. Heads are directors of branches, directors of transaction offices or equivalents, and heads of representative offices.

13. Information on heads includes full names, sex, date of birth, ethnicity, nationality, type of legal documents of individuals, number of legal documents of individuals, issuance date, issuance place, permanent address, and contact address.

14. Information on names includes names, names in foreign languages, and abbreviated names.

15. Information on addresses includes addresses, phone numbers, fax numbers, emails, and websites.

1. The Governor of the State Bank of Vietnam (SBV) shall consider approving commercial banks’ establishment, termination, and dissolution of domestic branches (excluding cases of voluntary termination), establishment of overseas branches, representative offices, and subsidiary banks, and conversion of legal forms of overseas subsidiary banks.

2. The Chief Inspector of the Banking Inspection and Supervision Agency shall consider approving commercial banks’ establishment, termination, and dissolution of domestic transaction offices, representative offices, and public service providers (excluding cases of voluntary termination).

3. Directors of SBV branches in provinces and centrally affiliated cities shall consider approving:

a) Relocation of branches and transaction offices;

b) Voluntary termination of operations of branches and transaction offices;

c) Change of supervisory branches of transaction offices.

4. In specific cases, the Governor of SBV shall consider approving:

a) The establishment of domestic branches, representative offices, public service providers, and transaction offices; overseas branches, representative offices, and subsidiary banks of commercial banks based on the procedures prescribed in this Circular in conformity with actual conditions to:

(i) Serve the objectives of socio-economic development, politics, security, national defense, foreign affairs, and monetary policy management in each period;

(ii) Assist commercial banks in resolving people’s credit funds under special control;

b) Conversion of transaction offices into domestic branches of commercial banks based on applications, conditions, and procedures for the establishment of domestic branches prescribed hereof in conformity with actual conditions to implement schemes for restructuring of credit institutions approved by competent authorities;

c) Contents concerning the operational network of commercial banks under special control according to the restructuring schemes approved based on the procedures prescribed hereof.

1. A commercial bank shall formulate an application in Vietnamese. Submitted documents in Vietnamese shall be copies of the originals or certified copies or copies enclosed with the originals for comparison; in cases where the applicant submits copies enclosed with the originals for comparison, the applicant shall confirm the accuracy of copies compared to the originals.  Vietnamese translations of documents in foreign languages shall bear the authenticated or certified signatures of the translators as prescribed by the law. 

2. Documents submitted to SBV or an SBV branches in a province or centrally affiliated city by a commercial bank under this Circular shall bear the signature of the legal representative or the person authorized by the legal representative of the commercial bank.  Where a legal representative wishes to authorize another person, the authorization must be made through a power of attorney formulated in compliance with the law.

3. The application of the commercial bank shall be submitted to SBV or an SBV branch under one of the following forms:

a) Online submission through the National Public Service Portal or the Public Service Portal of SBV regarding an application for relocation of branches or transaction offices in a province or centrally affiliated city according to Article 19 of this Circular, an application for change of supervisory branches of transaction offices according to Article 22 of this Circular, and an application for voluntary termination of branches or transaction offices according to Article 29 of this Circular;

b) In-person submission at the Single-Window Department of SBV or the SBV branch;

c) Submission via postal services.

4. When submitting the application through the National Public Service Portal or the Public Service Portal of SBV, the e-application may use digital signatures according to the law on the implementation of online administrative procedures.

Where the National Public Service Portal or the Public Service Portal of SBV encounters problems or errors, leading to the inability to receive or exchange electronic information, the declaration, submission, receipt, result return, exchange, and information feedback shall be carried out through postal services or in person at the Single-Window Department of the SBV branch. 

5. Documents in an e-application shall be electronic copies scanned from the originals (under PDF format).

A commercial bank shall meet the following conditions to establish domestic branches:

1. Regarding a commercial bank operating for 12 months or more from its opening date to the time of request:

a) The real value of its charter capital on December 31 of the year preceding the requesting year is not lower than the legal capital. The real value of the charter capital shall be determined under the regulations of the Governor of SBV on prudential limits and ratios based on the audited separate financial statements of the year preceding the requesting year;

b) Its business operation is profitable according to the consolidated financial statement and audited separate financial statements of the year preceding the requesting year;

c) It complies with the limits specified in Articles 134, 135, 136, and 137; Clause 1 Article 138 and Article 142 of the Law on Credit Institutions and guidelines of SBV on the mentioned regulations for 12 consecutive months before the requesting month;

d) It properly and adequately implements regulations on the classification of assets, amounts and methods of setting up risk provisions, and use of provisions for control and management of risks according to the law in the quarter preceding the time of the request;

dd) Its bad debt ratio, according to regulations of SBV on the classification of assets on December 31 of the year preceding the requesting year and on the last day of the month preceding the time of the request, does not exceed 3% or another ratio according to decisions of the Governor of SBV in each period;

e) At the time of the request, its Board of Directors, Board of Members, and Control Board have the quantity and structure in compliance with the law and are not lack of Directors-General;

g) At the time of the request, it has an internal audit department and an internal control system in compliance with Articles 57 and 58 of the Law on Credit Institutions and relevant laws;

h) It does not incur any administrative penalty for violations against regulations on organization, administration, and operation (excluding violations of intramural regulations); credit extension; prudential ratios; classification of assets, off-balance sheet commitments, and amounts and use of provisions for control and management of risks according to the law on administrative penalties for violations in monetary and banking for 12 months before the time of the request;

i) It is not under network expansion restriction;

k) It meets the conditions for the number of branches permitted to be established according to Article 7 and Article 8 of this Circular;

l) In case of requesting the establishment of branches in areas that are not rural areas, it must be classified as grade A or B according to the latest ranking result notified by SBV at the time of the request and the time of approval (excluding commercial banks not subject to ranking according to regulations of the Governor of SBV on the ranking of credit institutions and foreign bank branches);

m) At the time of the request, units in its domestic network approved for establishment in the year preceding the requesting year have operated. 

2. Regarding a commercial bank operating for less than 12 months from its opening date to the time of request:

a) The real value of its charter capital in the month preceding the time of the request, determined under the regulations of the Governor of SBV on prudential limits and ratios, is not lower than the legal capital;

b) Its business operation is profitable until the month preceding the time of the request;  

c) It complies with the limits specified in Articles 134, 135, 136, and 137; Clause 1 Article 138 and Article 142 of the Law on Credit Institutions and guidelines of SBV constantly from the opening date to the time of the request;

d) It properly and adequately implements regulations on the classification of assets, amounts and methods of setting up risk provisions, and use of provisions for control and management of risks according to the law in the quarter preceding the time of request and its bad debt ratio, according to regulations of SBV on the classification of assets, on the last day of the month preceding the time of the request, does not exceed 3% or another ratio according to decisions of the Governor of SBV in each period;

dd) It complies with Points e, g, h, i, k, and m Clause 1 of this Article.

1. The number of branches and transaction offices of a commercial bank may establish shall be determined using the formula below:

300 billion VND x N1 + 100 billion VND x M1 + 50 billion VND x N2 + 20 billion VND x M2 < C

Where:

- C is the real value of the charter capital of the commercial bank according to Point a Clause 1 Article 6 or Point a Clause 2 Article 6 of this Circular.

- N1 is the number of branches established and pending approval for establishment in the urban areas of Hanoi City and Ho Chi Minh City.

- N2 is the number of branches established and pending approval for establishment in the suburban areas of Hanoi City, Ho Chi Minh City, and provinces and centrally affiliated cities.  

- M1 is the number of transaction offices established and pending approval for establishment in the urban areas of Hanoi City and Ho Chi Minh City.

- M2 is the number of transaction offices established or pending approval for establishment in the suburban areas of Hanoi City, Ho Chi Minh City, and provinces and centrally affiliated cities. 

2. The determination of the locations of branches and transaction offices established and pending approval for establishment in areas prescribed in Points N1, N2, M1, and M2 in Clause 1 of this Article shall be based on the administrative boundary areas at the time of the request and the time of the approval.

Aside from meeting the requirements prescribed in Article 7 of this Circular, commercial banks shall also meet the following requirements:

1. A commercial bank may establish up to 10 branches in each urban area of Hanoi City or Ho Chi Minh City.

2. A commercial bank operating for less than 12 months from its opening date to the time of the request may establish no more than 3 branches. Such branches shall not be established in the same province or centrally affiliated city in a fiscal year.

3. A commercial bank operating for 12 months or more from its opening date to the time of the request may establish no more than 5 branches. The number of branches in rural areas shall account for at least 50% of the total branches established in a fiscal year.  

4. Aside from the quantity prescribed in Clause 3 of this Article, commercial banks that have completed the procedure for voluntary termination of branches in urban areas of Hanoi City or Ho Chi Minh City may establish a number of branches equivalent to the number of terminated branches in other provinces and centrally affiliated cities.

A commercial bank shall meet all of the following conditions to establish overseas branches and subsidiary banks:

1. It meets the conditions prescribed in Points a, c, d, dd, e, g, h, i, and m Clause 1 Article 6 of this Circular.

2. It is classified as grade A or B according to the latest ranking result notified by SBV at the time of the request and the time of the approval, excluding the case where it is not subject to ranking according to regulations of SBV on the ranking of credit institutions and foreign bank branches.

3. It has been operating for at least 3 years from its opening date to the time of the request.

4. Its total assets reach at least 100.000 billion VND according to the audited consolidated financial statement of the year preceding the requesting year.

5. Its business operation is profitable according to consolidated financial statements and audited separate financial statements of the 3 years before the requesting year.

A commercial bank shall meet all of the following conditions to establish domestic representative offices and public service providers and overseas representative offices:

1. It has been operating for at least 12 months from its opening date to the time of the request.

2. It meets the conditions prescribed in Points e and g Clause 1 Article 6 of this Circular.

3. In the case of representative office establishment, aside from meeting the conditions prescribed in Clauses 1 and 2 of this Article, it must meet the conditions prescribed in Points h and i Clause 1 Article 6 of this Circular.

A commercial bank shall meet the following conditions to establish transaction offices:

1. It meets the conditions prescribed in Points a, b, c, d, dd, e, g, h, i, and m Clause 1 Article 6 of this Circular.

2. In case of requesting the establishment of transaction offices in areas that are not rural areas, it must be classified as grade A or B according to the latest ranking result notified by SBV at the time of the request and the time of the approval (excluding commercial banks not subject to ranking according to regulations of the Governor of SBV on the ranking of credit institutions and foreign bank branches);

3. Any expected supervisory branch of transaction offices shall meet the following conditions:

a) It has been operating for at least 12 months from its opening date to the time of the request.

b) Its bad debt ratio, according to regulations of SBV on the classification of assets on December 31 of the year preceding the requesting year and on the last day of the month preceding the time of the request, does not exceed 3% or another ratio according to decisions of the Governor of SBV in each period;

c) It does not incur any fine for administrative violations in monetary and banking for 12 months before the time of the request;  

d) Its difference in revenues and expenses of the year preceding the requesting year is positive.

4. The establishment of new transaction offices does not cause the limit specified in Article 7 and Article 12 of this Circular to be exceeded.

Aside from the maximum permissible number of transaction offices prescribed in Article 7 of this Circular, commercial banks shall also meet the following requirements:

1. The number of transaction offices of a commercial bank in the urban areas of Hanoi City or Ho Chi Minh City shall not be larger than 2 times the number of the current branches of the commercial bank in each area. The number of transaction offices shall not exceed 20.

2. The number of transaction offices of a commercial bank in a province or centrally affiliated city shall not be larger than 3 times the number of current branches of the commercial bank in such a province or city. 

3. Where the number of transaction offices established before the effective date of this Circular exceeds the number prescribed in Clauses 1 and 2 of this Article or the number of transaction offices at the time of the request is equal to the number prescribed in Clauses 1 and 2 of this Article, a commercial bank may establish no more than 2 transaction offices in the rural areas of a province or centrally affiliated city in a fiscal year.  The total number of transaction offices established under this Clause shall not exceed the number of the current branches of the commercial bank in each province or centrally affiliated city at the time of the request.

4. A commercial bank operating for 12 months or more from its opening date to the time of the request may establish no more than 10 transaction offices. The number of transaction offices in rural areas shall account for at least 50% of the total transaction offices established in a fiscal year.  

5. The number of transaction offices managed by 1 branch shall be decided by the commercial bank in conformity with the managerial capacity of each branch.

1. Commercial banks’ written requests for SBV to approve the establishment of domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks following the form prescribed in Appendix No. 01 enclosed herewith.

2. Resolutions or decisions of Boards of Directors or Boards of Members on the establishment of domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks.

Regarding the establishment of transaction offices, resolutions or decisions of Boards of Directors or Boards of Members must specify the expected names and locations (including information on concerned communes), expected supervisory branches of transaction offices, specialties to be carried out by transaction offices, geographical scope of operations, and main target clients.

3. Resolutions or decisions of General Meetings of Shareholders (regarding joint-stock commercial banks); resolutions or decisions of Boards of Members (regarding limited liability commercial banks with two or more members); consent of proprietors (regarding single-member limited liability commercial banks) regarding the approval for the establishment of overseas subsidiary banks.

4. A scheme to establish a domestic branch shall have the following mandatory contents:

a) Full name in Vietnamese, abbreviated name in Vietnamese; expected location (including information on the concerned commune); operational contents; main target clients;

b) Reasons for the establishment and selection of the establishment location;

c) Organizational structure: organizational diagram including departments of the branch;

d) Feasibility research: analysis of the business environment, target markets, business opportunities that need to be seized, and plans for market domination;

dd) Expected business scheme in the first 3 years, including the expected balance and accounting sheet; business result report; grounds to develop the scheme and presentation of the feasibility of the implementation of the scheme in each year.

5. A scheme to establish an overseas branch or overseas subsidiary bank shall have the following mandatory contents:

a) Full name in Vietnamese and foreign language, abbreviated name in Vietnamese and foreign language (if any), and legal form (regarding overseas subsidiary banks);

b) Location (name of the country and specific address (if any));

c) Capital provided for the overseas branch or overseas subsidiary bank;

d) Operational contents; operational time; main target clients;

dd) Reasons for the establishment and selection of host country;

e) Organizational structure and network: organizational diagram including the headquarters and departments at the headquarters; operational network of the overseas subsidiary bank (if any);

g) Relevant legal information: relevant regulations of the host country on permission for foreign credit institutions to establish and operate branches and subsidiary banks in such a host country (names, numbers, dates of the documents);

h) Feasibility research: analysis of the business environment, target markets, business opportunities that need to be seized, and plans for market domination;

i) Control methods of the commercial bank applicable to the overseas branch or overseas subsidiary bank, specifying the following mandatory contents: methods (outsourcing or self-performing) and reasons for method selection; implementation of methods; estimated costs of method implementation; expected difficulties and solutions;

k) Expected business scheme in the first 3 years, including the expected balance and accounting sheet; business result report; currency flow report (regarding overseas subsidiary banks); grounds to develop the scheme and presentation of the feasibility of the implementation of the scheme in each year;

l) Expected impact and effectiveness of the establishment of the overseas branch or overseas subsidiary bank, issues (if any) concerning the assurance of operational safety for the commercial bank and solutions; minimum prudential ratio and limitations of capital contributions and shares of the commercial bank after the establishment of the overseas subsidiary bank;

m) Handling schemes and measures of the commercial bank in case the overseas branch or overseas subsidiary bank has severe impacts on the commercial bank;

n) Information on founding members, founding shareholders (names, addresses); expected capital contributions, contribution rates, shares, and share ownership ratio of founding members and founding shareholders of the overseas subsidiary bank.

6. Other documents proving compliance with conditions for the establishment of domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks according to this Circular.

1. A commercial bank shall submit an application to SBV once before September 30 every year, excluding cases prescribed in Clause 4 Article 4 of this Circular.

2. The commercial bank shall prepare an application following Article 13 of this Circular and submit it to SBV (Single-Window Department).  Within 5 working days after receiving the application as prescribed in this Clause, SBV shall send a written document to the commercial bank to confirm the receipt of the adequate application or request additions to the application in case the application is inadequate.

3. Within 10 working days after receiving the adequate application according to Article 13 of this Circular, the Banking Inspection and Supervision Agency shall collect written feedback from the following units:

a) The People’s Committee of the province or centrally affiliated city regarding feedback on the necessity of additional branches in its areas (in case of requesting the establishment of domestic branches);

b) The SBV branch where the commercial bank intended to establish domestic branches and transaction offices regarding feedback on the necessity of additional branches and transaction offices in the district where the commercial bank requests the establishment of branches and transaction offices; feedback on areas with expected new branches and transaction offices; and compliance with conditions prescribed in this Circular regarding expected supervisory branches of transaction offices in its areas (in case of requesting the establishment of transaction offices).

4. Within 14 working days after receiving the documents from the Banking Inspection and Supervision Agency, the People’s Committee of the province or centrally affiliated city and the SBV branch prescribed in Points a and b Clause 3 of this Article shall provide written feedback on the requested contents.

5. Within 20 working days after receiving adequate feedback from concerned units, SBV shall issue a written approval for or disapproval of the eligibility of the commercial bank for establishing domestic branches and transaction offices.  In case of disapproval, SBV shall answer and explain in writing.

6. Within 45 days after receiving the adequate application according to Article 13 of this Circular, SBV shall consider issuing a written approval for or disapproval of the commercial bank’s establishment of overseas branches, representative offices, and subsidiary banks; domestic representative offices and public service providers.  In case of disapproval, SBV shall answer and explain in writing.

7. Within 12 months from the date SBV issues the written approval as prescribed in Clauses 5 and 6 of this Article, the commercial bank shall open domestic branches, transaction offices, representative offices, and public service providers approved for establishment for operations.  After the mentioned time limit, if the commercial bank fails to carry out the opening, the written approval of SBV shall be annulled.

8. Within 24 months from the date SBV issues the written approval as prescribed in Clause 6 of this Article, the commercial bank shall open overseas branches, representative offices, and subsidiary banks approved for establishment for operations.  After the mentioned time limit, if the commercial bank fails to carry out the opening, the written approval of SBV shall be annulled.

1. Requirements for opening of domestic branches and transaction offices:

a) Possession of ownership or legal rights to use branches and transaction offices; the premises, excluding transaction offices, must ensure the storage of documents, convenience, and safety for transactions and assets with adequate systems of security and protection assurance and power supply systems that can be constantly maintained, meeting the requirements for fire safety;

b) The branches must have cash vaults that ensure safety under the standards prescribed by SBV.  Where the commercial bank has more than one branch in the same province or centrally affiliated city, it shall have at least one branch with a cash vault according to the regulations of SBV and assume responsibility for transferring money from branches without cash vaults to the branch with the cash vault after the end of the trading hours of each working day;

c) Branches and transaction offices must have information technology systems connected directly to the headquarters, and transaction offices must be directly connected to their supervisory branches; ensure that information technology systems and databases operate constantly, safely, and confidentially regarding professional operations;

d) Branches and transaction offices must have sufficient personnel, including Directors of branches, Directors of transaction offices, or equivalents, and personnel engaging in professional specialties at such branches and transaction offices. The Director of a branch or transaction office shall not simultaneously be the Director of another branch or transaction office. The Director of a branch shall not simultaneously be the Director of a transaction office;

dd) Directors of branches or equivalents (in case of branch opening) must meet the standards and conditions prescribed in Clause 5 Article 41 of the Law on Credit Institutions.

2. The commercial bank shall submit a written report to the SBV branch where its domestic branches and transaction offices are located within 7 working days before the expected opening date of such branches and transaction offices, specifying the following contents:

a) Expected opening date and compliance with requirements for the opening of domestic branches and transaction offices;

b) Information on heads, names, and addresses of domestic branches and transaction offices.

3. The commercial bank shall open its domestic branches and transaction offices after meeting the requirements prescribed in Clause 1 of this Article and completing legal procedures for the operations of branches and transaction offices as per regulation.

1. A commercial bank shall decide on the opening of domestic representative offices and public service providers and submit a written report to the SBV branches where such representative offices and public service providers are located within 7 working days before the opening date.  A report on the opening of representative offices shall include information on the expected opening date and information on heads, names, and addresses of representative offices.

2. The commercial bank shall carry out the opening of overseas branches, representative offices, and subsidiary banks according to foreign laws and submit a report to SBV (through the Banking Inspection and Supervision Agency) within 7 working days before the opening date.

1. A commercial bank shall decide on the change of the names of domestic branches and transaction offices.

2. Within 5 working days from the date domestic branches and transaction offices operate under new names, the commercial bank shall submit a written report to the SBV branch where such domestic branches and transaction offices are located on the change of the information on names of domestic branches and transaction offices, excluding the case prescribed in Clause 3 of this Article.

3. Where the change of the names of domestic branches and transaction offices takes place before the opening of such branches and transaction offices, the commercial bank shall comply with Clause 2 Article 15 of this Circular.

1. A commercial bank shall decide on the conversion of domestic branches into transaction offices; submit reports to SBV (through the Banking Inspection and Supervision Agency) and the SBV branch where transaction offices are located on the conversion of domestic branches into transaction offices and supervisory branches of transaction offices within 5 working days after deciding on the conversion and from the completion of procedures for putting transaction offices into operation.

2. The conversion of domestic branches into transaction offices is not required to comply with Clauses 1 and 2 Article 12 of this Circular.

3. Commercial banks converting domestic branches into transaction offices in the urban areas of Hanoi City or Ho Chi Minh City may not establish additional branches in such areas for 3 years from the conversion.

1. A commercial bank may relocate its branches and transaction offices within the province or centrally affiliated city or between provinces or centrally affiliated cities, excluding cases in the following regulations:

a) The commercial bank shall not relocate branches and transaction offices from rural areas to non-rural areas. The determination of the location of branches and transaction offices in rural areas shall be based on administrative boundary areas at the time of requesting the relocation and at the time of the approval; 

b) The commercial bank is not permitted to relocate branches and transaction offices from the suburban areas of Hanoi City or Ho Chi Minh City or another province or centrally affiliated city to the urban areas of Hanoi City or Ho Chi Minh City.

2. A commercial bank relocating its branches and transaction offices shall meet the following conditions:

a) It meets the conditions prescribed in Clause 1 Article 15 of this Circular;

b) In case of relocating branches and transaction offices between provinces or centrally affiliated cities, such branches and transaction offices must have been operating for at least 3 years at the time of the request for the relocation;

c) In case of relocating transaction offices between provinces and centrally affiliated cities, aside from the conditions prescribed in Points a and b of this Clause, the relocation must meet the conditions prescribed in Clause 2 Article 12 and the conditions applicable to supervisory branches of transaction offices prescribed in Clause 3 Article 11 of this Circular.

3. An application for the relocation of a branch and/or transaction office includes:

a) Written request of the commercial bank for the approval for the relocation of branches and transaction offices, specifying the following mandatory information: current name and location, expected new location, reason for the relocation, plan for the relocation to ensure operational continuity, and commitment to complying with Point a Clause 2 of this Article within 7 working days before the expected opening date at the approved location;

b) Scheme to handle assets, rights, obligations, and relevant benefits (in case of relocating a domestic branch and/or transaction office between provinces and centrally affiliated cities);

c) In case of relocating a transaction office between provinces and centrally affiliated cities, aside from the document prescribed in Points a and b of this Clause, the commercial bank shall enclose the following documents with the application:

(i) Written request for the change of the supervisory branch of the transaction office, including the following mandatory contents:

- Name and location of the current supervisory branch and name and location of the supervisory branch to manage the relocated transaction office;

- The current name and location and the expected name and location of the transaction office requested for a change of the supervisory branch.

(ii) Resolution or decision of the Board of Directors of the Board of Members approving the change of the supervisory branch of the transaction office.

4. Approval procedure for cases of relocating a domestic branch and/or transaction office within a province or centrally affiliated city:

a) The commercial bank shall prepare an application according to Clause 3 of this Article and submit it to the SBV branch where the branch or transaction office is located;

b) Within 10 working days after receiving the adequate application according to this Circular, the mentioned SBV branch shall issue a written document (including an e-document) to the commercial bank approving or disapproving the relocation of the branch or transaction office. In case of disapproval, the SBV branch shall answer and explain in writing.

5. Approval procedure for cases of relocating a domestic branch and/or transaction office between provinces and centrally affiliated cities:

a) The commercial bank shall prepare an application according to Clause 3 of this Article and submit it to the SBV branch where the branch or transaction office is expected to be located;

b) Within 5 working days after receiving the adequate application according to this Circular, the mentioned SBV branch shall collect written feedback from:

(i) The SBV branch where the branch or transaction office is currently located regarding the scheme to handle assets, rights, obligations, and relevant benefits and the reason for the relocation;

(ii) The People’s Committee of the province or centrally affiliated city where the branch is expected to be located regarding the necessity of additional branches in its area in case of relocating domestic branches between provinces and centrally affiliated cities.

c) Within 5 working days after receiving the written requests from the SBV branch where the branch or transaction office is expected to be located, the SBV branch where the branch or transaction office is currently located, the People’s Committee of the province or centrally affiliated city where the branch is expected to be located shall send written feedback on the requested contents;

d) Within 10 working days after receiving adequate feedback from the concerned units, the SBV branch where the branch or transaction office is expected to be located shall issue a written document (including an e-document) to the commercial bank approving or disapproving the relocation of the branch or transaction office. In case of disapproval, the SBV branch shall answer and explain in writing.

6. The commercial bank shall submit a written report to the SBV branch prescribed in Clause 4 of this Article or Point d Clause 4 of this Article on compliance with Point a Clause 2 of this Article within 7 working days before the expected operating date at the approved location.  In case of relocating the branch or transaction office before the opening date, the commercial bank shall comply with Clause 2 Article 15 of this Circular.

7. Within 12 months from the date SBV issues a written approval, the commercial bank shall put the branch or transaction office into operation at the approved location.  After the mentioned time limit, if the commercial bank fails to carry out the opening, the written approval of SBV shall be annulled.

8. In case of changing the address of the domestic branch or transaction but the location remains the same, the commercial bank shall send a written notice to the SBV branch where such a branch or transaction office is located on the change of information on the address of the domestic branch or transaction office within 7 days from the date of the change.

1. A commercial bank shall decide on the change of names and relocation of domestic representative offices and public service providers; overseas branches, representative offices, and subsidiary banks.

2. Within 5 working days from the date domestic representative offices and public service providers; overseas branches, representative offices, and subsidiary banks operate under new names or at new locations, the commercial bank shall submit a written report to SBV (through the Banking Inspection and Supervision Agency) and the SBV branch where the domestic representative offices and public service providers are located on such change.  The written report on the change of names or relocation of representative offices shall include information on the names and addresses of representative offices.

In case of relocating domestic representative offices and public service providers to other provinces or centrally affiliated cities, the commercial bank shall submit a report to the previous SBV branch where the representative offices and public service providers are located and the new SBV branch where the representative offices and public service providers are located.

The change of names of domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks in case of reorganization of commercial banks shall comply with the guidelines of SBV on the reorganization of credit institutions.

1. Conditions for changing supervisory branches of transaction offices include changes before opening transaction offices.

Branches expected to manage transaction offices shall meet all of the conditions prescribed in Clause 3 Article 11 of this Circular.

2. Application includes:

a) Written request of the commercial bank for the change of the supervisory branch of a transaction office, including the following mandatory contents:

(i) Reason for the change;

(ii) Name and location of the current supervisory branch and name and location of the new supervisory branch to manage the transaction office;

(iii) Name and address of the transaction office requested for the change of the supervisory branch. 

b) Resolution or decision of the Board of Directors of the Board of Members approving the change of the supervisory branch of the transaction office.

3. Procedure:

a) The commercial bank shall prepare an application according to this Circular and submit it to the SBV branch where the branch is located;

b) Within 14 working days after receiving the adequate application according to this Circular, the mentioned SBV branch shall issue a written document (including an e-document) or request the Governor of SBV to issue a document approving or disapproving the request of the commercial bank under jurisdiction as prescribed in Article 4 of this Circular. In case of disapproval, the written document sent to the commercial bank shall specify the reason.

4. Within 6 months from the issuance of the written approval, the commercial bank shall complete procedures for changing the supervisory branch of the transaction office as per regulation.  After the mentioned time limit, if the commercial bank fails to complete procedures for changing the supervisory branch of the transaction office, the written approval prescribed in Point b Clause 3 of this Article shall be annulled.

5. In case of changing supervisory branches due to the relocation of transaction offices between provinces and centrally affiliated cities, comply with Article 19 of this Circular.

1. Within 7 working days before the expected opening date according to Article 15 of this Circular or within 7 working days after receiving the written approval from the SBV branch according to Clauses 4 and 5 Article 19 of this Circular, a commercial bank shall disclose the following information:

a) Number, date, and contents of the written approval of SBV regarding the establishment of branches and transaction offices and/or relocation of branches and transaction offices;

b) Name, location, and expected opening date or previous name, location, and new location of the branch or transaction office, as well as other information (if necessary).

2. Within 7 working days after receiving the written approval from SBV as prescribed in Article 22 of this Circular, the commercial bank shall disclose the number, date, and contents of such written approval.

3. Within 7 working days from the change as prescribed in Point b Clause 4 Article 4, Article 17, Article 18, Clause 8 Article 19, Article 20, and Article 21 of this Circular, the commercial bank shall disclose its decision on such contents.

4. The commercial bank shall disclose the information prescribed in Clauses 1, 2, and 3 of this Article on its website and the websites of its concerned domestic branches and transaction offices.

5. The commercial bank shall submit a written request to SBV (Communication Department) for disclosure of contents prescribed in Clause 1 of this Article on the web portal of SBV and 1 printed newspaper for 3 consecutive issues or 1 e-newspaper of Vietnam. Within 3 working days after receiving the written request from the commercial bank, SBV (Communication Department) shall disclose the relevant information on its web portal.

A commercial bank may convert the legal form of a subsidiary bank from a limited liability company to a joint stock company and vice versa; from a single-member limited liability company to a limited liability company with two or more members and vice versa when the following conditions are met:  

1. It meets the conditions prescribed in Points e and g Clause 1 Article 6 of this Circular.

2. Its converted subsidiary bank complies with Clause 7 Article 3 of this Circular.

3. Where the commercial bank increases the capital at the subsidiary bank during the conversion, aside from the conditions prescribed in Clauses 1 and 2 of this Article, the following conditions shall be met:

a) Conditions prescribed in Points a, c, d, and dd Clause 1 Article 6 of this Circular;

b) Conditions prescribed in Clause 4 and 5 Article 9 of this Circular.

1. Commercial bank’s written request for SBV to approve the conversion of the legal form of the overseas subsidiary bank.

2. Resolution of the General Meeting of Shareholders (regarding a joint-stock commercial bank); resolution of the Board of Members (regarding a limited liability commercial bank with two or more members); consent of the proprietor (regarding a single-member limited liability commercial bank) regarding approval for the conversion of the legal form of the overseas subsidiary bank.

3. Scheme to convert the legal form of the overseas subsidiary bank, specifying the following mandatory contents:

a) Full name in Vietnamese and foreign language, abbreviated name in Vietnamese and foreign language (if any);

b) Location (name of the country and specific address);

c) Capital provided for the overseas subsidiary bank;

d) Operational contents; operational time; main client targets;

dd) Reasons for the legal form conversion;

e) Expected additional capital or decreased capital at the overseas subsidiary bank before the legal form conversion;

g) Organizational structure and network of the overseas subsidiary bank after the legal form conversion: organizational diagram including the headquarters and departments at the headquarters; operational network of the overseas subsidiary bank (if any);

h) Relevant legal information: relevant regulations of the host country on permission for foreign credit institutions to convert legal forms of subsidiary banks in such a host country (names, numbers, dates of the documents);

i) Feasibility research: analysis of the business environment, target markets, business opportunities that need to be seized, and plans for market domination after the legal form conversion;

k) Control methods of the commercial bank applicable to the overseas subsidiary bank, specifying the following mandatory contents: methods (outsourcing or self-performing) and reasons for method selection; implementation of methods; estimated costs of method implementation; expected difficulties and solutions;

l) Expected business scheme of the overseas subsidiary bank in the first 3 years after the legal form conversion, including the expected balance and accounting sheet; business result report; currency flow report; grounds to develop the scheme and presentation of the feasibility of the implementation of the scheme in each year;

m) Expected impact and effectiveness of the legal form conversion of the overseas subsidiary bank, issues (if any) concerning the assurance of operational safety for the commercial bank and solutions; minimum prudential ratio and limitations of capital contributions and shares of the commercial bank after the legal form conversion of the overseas subsidiary bank;

n) Handling schemes and measures of the commercial bank in case the overseas subsidiary bank has severe impacts on the commercial bank;

o) Changed information on founding members, major shareholders (names, addresses); expected capital contributions, contribution rates, shares, and share ownership ratio of founding members and major shareholders of the overseas subsidiary bank after the legal form conversion.

4. Other documents proving compliance with Article 24 of this Circular.

1. The commercial bank shall prepare an application following Article 25 of this Circular and submit it to SBV (Single-Window Department).

2. Within 45 working days after receiving the adequate application as prescribed in Article 25 of this Circular, SBV shall issue a written document approving or disapproving the commercial bank’s legal form conversion of its overseas subsidiary bank. In case of disapproval, the written document sent to the commercial bank shall specify the reason.

3. Within 24 months from the issuance of the written approval of SBV, as prescribed in Clause 2 of this Article, the commercial bank shall complete procedures for converting the legal form.  After the mentioned time limit, if the commercial bank fails to complete the procedures for converting the legal form, the written approval of SBV shall be annulled.

1. Domestic branches, transaction offices, representative offices, and public service providers of the commercial bank shall be terminated or dissolved in the following cases:

a) Automatic termination or dissolution;

b) Voluntary termination or dissolution;

c) Compulsory termination or dissolution.

2. Overseas branches, representative offices, and subsidiary banks of the commercial bank shall be terminated and dissolved under the law of the host country where they are located.

3. The commercial bank shall:

a) Handle assets, rights, obligations, and relevant benefits of domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks subject to termination or dissolution;

b) Store records and documents relevant to the termination and dissolution of domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks;

c) Carry out legal procedures for the termination or dissolution of domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks according to the law.   

1. Domestic branches, transaction offices, representative offices, and public service providers; overseas branches and representative offices shall be automatically terminated or dissolved when the commercial bank is terminated or dissolved.   

2. Procedures for automatic termination and dissolution of domestic branches, transaction offices, representative offices, and public service providers; overseas branches and representative offices shall comply with the law on termination and dissolution of commercial banks.

1. An application for voluntary termination of domestic branches or transaction offices includes:

a) Commercial bank’s written request for the termination of branches or transaction offices, specifying the reasons;

b) Resolution or decision of the Board of Directors of the Board of Members of the commercial bank on the termination of branches or transaction offices;

a) Scheme to handle assets, rights, obligations, and relevant benefits of domestic branches and transaction offices subject to the termination.

2. Procedure for voluntary termination of a domestic branch:

a) The commercial bank shall prepare an application according to Clause 1 of this Article and submit it to the SBV branch where the branch is located;

b) Within 45 days after receiving the adequate application according to this Circular, the mentioned SBV branch shall issue a written document (including an e-document) approving or disapproving the request of the commercial bank. In case of disapproval, the SBV branch shall answer and explain in writing.

3. Procedure for voluntary termination of a transaction office:

a) The commercial bank shall prepare an application according to Clause 1 of this Article and submit it to the SBV branch where the transaction office is located;

b) Within 14 working days after receiving the adequate application according to this Circular, the mentioned SBV branch shall issue a written document (including an e-document) approving or disapproving the request of the commercial bank. In case of disapproval, the SBV branch shall answer and explain in writing.

4. Within 45 days from the date the SBV branch issues the written approval prescribed in Point b Clause 2 and Point b Clause 3 of this Article, the commercial bank shall carry out legal procedures as prescribed by the laws to terminate the branch or transaction office and submit written reports on the termination date to SBV (through the Banking Inspection and Supervision Agency) and the SBV branch where the branch or transaction office is located.

5. Regarding the voluntary termination of representative offices and public service providers, within 5 working days from the termination of representative offices or public service providers, the commercial bank shall submit written reports to SBV (through the Banking Inspection and Supervision Agency) and the SBV branch where the representative offices or public service providers are located, specifying the reasons and the termination date.

1. The Governor of SBV has the authority to impose compulsory termination on any domestic branch of commercial banks. 

2. The Chief Inspector of the Banking Inspection and Supervision Agency has the authority to impose compulsory termination on any domestic transaction office, representative office, or public service provider of commercial banks. 

3. A domestic branch, transaction office, representative office, or public service provider of a commercial bank shall be considered for termination when it is subject to one of the following cases:

a) There is evidence that the application for the establishment of the branch, transaction office, representative office, or public service provider has false information, leading to an incorrect assessment of compliance with conditions for the establishment of branches, transaction offices, representative offices, and public service providers of commercial banks;

b) Its operation is different from the permitted operational contents according to the law.

4. A domestic branch of a commercial bank shall be subject to compulsory termination in case the difference in revenues and expenses in 3 consecutive years is negative, excluding the following cases:

a) The domestic branch of the commercial bank is established in a rural area;

b) The new branch is in its first 3 years of operation.

5. A domestic branch or transaction office of a commercial bank shall be subject to compulsory termination in case of relocating the domestic branch or transaction office without the written approval of an SBV branch.

6. The SBV branch where the branch, transaction office, representative office of the commercial bank shall, based on Clauses 3, 4, and 5 of this Article, send a written explanation to SBV (through the Banking Inspection and Supervision Agency) to request the termination of such branch transaction office, representative office of the commercial bank.

7. b) Within 14 working days from after receiving the written document from the SBV branch according to Clause 6 of this Article or during the inspection or supervision procedure, the cases prescribed in Clauses 3, 4, and 5 of this Article are discovered, the Banking Inspection and Supervision Agency shall issue a written document or request the Governor of SBV to issue a written document requesting the commercial bank to terminate the branch, transaction office, representative office, or public service provider.

8. Within 90 days from the date SBV issues the written document prescribed in Clause 7 of this Article, the commercial bank shall complete the termination of the branch, transaction office, representative office, or service provider and submit reports on the termination date to SBV and the SBV branch.

1. A commercial bank shall terminate or dissolve an overseas representative office or subsidiary bank under the law of the host country and relevant Vietnamese laws.

2. Within 14 working days before the termination date of the overseas branch, representative office, or subsidiary bank, the commercial bank shall submit reports on the reason and the termination or dissolution time to SBV (through the Banking Inspection and Supervision Agency).

Within 7 working days after the termination or dissolution date of a domestic branch, transaction office, representative office, or public service provider; overseas branch, representative office, or subsidiary bank (excluding cases of automatic termination or dissolution according to Article 28 of this Circular) the commercial bank shall disclose and post the termination or dissolution on its website, at its headquarters, and its supervisory branch (regarding the termination of a transaction office) and on the central or local newspaper of the province or centrally affiliated city where the branch, transaction office, representative office, or public service provider is located.  Mandatory contents include:

1. Name and address of the domestic branch, transaction office, representative office, or public service provider; overseas branch, representative office, or subsidiary bank subject to the termination or dissolution.

2. Termination or dissolution time.

3. Responsibilities of the commercial bank regarding assets, rights, obligations, and relevant benefits of the domestic branch, transaction office, representative office, or public service provider; overseas branch, representative office, or subsidiary bank subject to the termination or dissolution.

Within 5 working days from the date the commercial bank decides to change the head of a domestic branch, transaction office, or representative office, it shall submit a written report on the change of the information on the head to the SBV branch where the domestic branch, transaction office, or representative office is located.

1. Within 5 working days after receiving the written document from the commercial bank prescribed in Clause 2 Article 15 and Clause 1 Article 16 of this Circular, the SBV branch shall send a written notice on the information on the head, name, and address of the concerned branch, transaction office, or representative office enclosed with the written approval for the establishment or relocation of the domestic branch, transaction office, or representative office (if any) to the provincial business registration agency.

2. Within 5 working days after receiving the written document from the commercial bank prescribed in Clauses 6 and 8 Article 19 and Clause 2 Article 20 of this Circular, the SBV branch shall send a written notice on the change of the information on the address of the concerned branch, transaction office, or representative office enclosed with the written approval for the relocation of the domestic branch and transaction office to the provincial business registration agency.

3. Within 5 working days after receiving the written document from the commercial bank prescribed in Clause 2 Article 17, Clause 2 Article 20, and Article 33 of this Circular, the SBV branch shall send a written notice on the change of the information on the head and name of the concerned branch, transaction office, or representative office to the provincial business registration agency.

4. Within 5 working days after receiving the written document from the commercial bank prescribed in Clauses 4 and 5 Article 29 and Clause 8 Article 30 of this Circular, the SBV branch shall send a written notice enclosed with the report of the commercial bank to the provincial business registration agency.

1. Take legal liability for the accuracy, adequacy, and truthfulness of information provided in applications.

2. Have plans to develop domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks for presentation to competent authorities for approval every year.

3. Every 6 months or year, formulate reports following Appendix No. 02 enclosed herewith. E-reports shall be made for submission through the reporting system of SBV.

4. Disclose information as prescribed in this Circular.

5. Assume responsibility for the organization and operation of branches and transaction offices; submit reports to SBV branches where branches and transaction offices are located on the handling of arising issues relevant to the organization and operation of branches and transaction offices in their areas.

6. Regularly manage and supervise the operation of branches and transaction offices.

7. Implement other contents prescribed in this Circular.

1. Take responsibility before the Governor of SBV when implementing matters under their jurisdiction as prescribed in this Circular.

2. Receive applications and approve or disapprove cases within the jurisdiction of Directors of SBV branches as prescribed in Article 4 of this Circular.

3. Manage, inspect, and supervise the operation of branches, transaction offices, public service providers, and representative offices of commercial banks in their areas, including inspections under plans or in necessary cases regarding compliance with requirements for opening and relocation of branches and transaction offices after the opening or relocation of branches and transaction offices by commercial banks.

5. Submit written reports and written proposals to the Governor of SBV for the termination of branches, transaction offices, representative offices, and public service providers of commercial banks when they are subject to one of the cases prescribed in Clauses 3, 4, and 5 Article 30 of this Circular.

4. SBV branches where concerned branches and transaction offices are expected to be located according to Clause 5 Article 19 of this Circular shall submit written notices to the current SBV branches of such branches and transaction offices on approval for the relocation of branches and transaction offices between provinces and centrally affiliated cities.

1. Take responsibility before the Governor of SBV when implementing matters under their jurisdiction as prescribed in this Circular.

2. Perform as the authority receiving, assessing, and requesting the Governor of SBV to issue approval or disapproval according to Article 14, Article 26, and Article 30 of this Circular for cases under the jurisdiction of the Governor of SBV according to Article 4 of this Circular.

3. Receive applications and issue approval or disapproval according to Articles 14 and 30 of this Circular for cases under the jurisdiction of the Chief Inspector of the Banking Inspection and Supervision Agency according to Article 4 of this Circular.

4. Assess and request the Governor of SBV to handle issues relevant to the establishment, termination, and dissolution of domestic branches, transaction offices, representative offices, and public service providers; overseas branches, representative offices, and subsidiary banks of commercial banks.

5. Provide written approvals for the establishment of branches, transaction offices, and representative offices according to Article 14 of this Circular for SBV branches where such branches, transaction offices, and representative offices are expected to be located by commercial banks for notice provision for business registration agencies.

6. Summarize reports of units according to this Circular.

Other Departments in SBV shall provide feedback on relevant matters when receiving directives from the Governor of SBV as proposed by the Banking Inspection and Supervision Agency.

1. Commercial banks are not required to adjust the number of branches and transaction offices established before the effective date of this Circular. Any commercial bank that wishes to establish new units in its network shall comply with this Circular (excluding Clause 3 of this Article).

2. Branches and transaction offices that fail to comply with Point d Clause 1 Article 15 of this Circular shall adopt measures to ensure compliance with this Circular within 6 months from the effective date of this Circular.

3. Commercial banks’ written requests for approval for establishment of domestic branches and transaction offices; establishment of domestic representative offices and public service providers and overseas branches, representative offices, and banks with 100% capital in foreign countries submitted to SBV before the effective date of this Circular shall continue to be processed under Circular No. 21/2013/TT-NNHN dated September 9, 2013 of the Governor of SBV (amended). 

1. This Circular comes into force as of August 15, 2024.

2. The following documents and regulations shall be annulled from the effective date of this Circular: 

a) Circular No. 21/2013/TT-NHNN dated September 9, 2013 of the Governor of SBV;

b) Circular No. 01/2022/TT-NHNN dated January 28, 2022 of the Governor of SBV;

c) Article 13 of Circular No. 29/2015/TT-NHNN dated December 22, 2015 of the Governor of SBV;

d) Article 2 of Circular No. 17/2018/TT-NHNN dated August 14, 2018 of the Governor of SBV;

dd) Clause 3 Article 1 of Circular No. 14/2019/TT-NHNN dated August 30, 2019 of the Governor of SBV.

Chief of Office, Chief Inspector of the Banking Inspection and Supervision Agency, Directors of units of SBV, and commercial banks shall implement this Circular./.