This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
NATIONAL ASSEMBLY
SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
Law No.: 47/2010/QH12
LAW
ON CREDIT INSTITUTIONS
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam as amended
and supplemented in accordance with the Resolution No. 51/2001/QH10;
The National Assembly hereby promulgates the Law on Credit Institutions.
CHAPTER I: General Provisions
Article 1.
Governing scope
This Law provides for the establishment, management, organization, operation,
special control, reorganization, dissolution of credit institutions; the establishment,
management, organization, operation of foreign bank branches and of representative offices
of foreign credit institutions and other foreign institutions engaging in banking activities.
Article 2.
Applicability
This Law shall be applicable to the followings:
1. Credit institutions.
2. Foreign banks’ branches;
3. Representative offices of foreign credit institutions and of other foreign
institutions engaging in banking activities.
4. Organizations, individuals related to the establishment, organization, operation,
special control, reorganization and dissolution of credit institutions; the establishment,
organization and operation of foreign banks’ branches and of representative offices of
foreign credit institutions and other foreign institutions engaging in banking activities.
Article 3.
Application of the Law on Credit Institutions, International
Treaties and Relevant Laws
1. The establishment, organization, operation, special control, reorganization,
dissolution of credit institutions; the establishment, organization, operation of foreign banks’
branches and of representative offices of foreign credit institutions, and other foreign
institutions engaging in banking activities shall be subject to the provisions of this Law and
other relevant laws.
1
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
2. In case this Law and other related laws provide differently on establishment,
organization, operation, special control, reorganization, dissolution of credit institutions; the
establishment, organization, operation of foreign banks’ branches and of representative
offices of foreign credit institutions, other foreign institutions engaging in banking activities,
provisions of the Law on Credit Institutions shall be applied.
3. Where International Treaties to which the Socialist Republic of Vietnam is a
signatory or a member contain provisions that are different from those in this Law, the
provisions of such International Treaties shall prevail.
4. Organizations and individuals engaging in banking activities shall have the right
to consent to apply trade customs and practices, including:
a) International Chamber of Commerce’s trade customs and practices;
b) Other international customs and practices that are not contrary to the laws of
Vietnam.
Article 4.
Terms and definitions
In this Law, the following terms shall be understood as follows:
1.
Credit institution means an enterprise engaging in one or several or all banking
activities. Credit institutions include banks, non-bank credit institutions, microfinance
institutions and people’s credit funds.
2.
Bank means a form of credit institution permitted to carry out all banking
activities in accordance with provisions of this Law. On the basis of the nature and
objectives of their operations, banks are classified into commercial banks, social banks and
co-operative banks.
3.
Commercial bank means a form of bank permitted to carry out all banking
activities and other business activities in accordance with provisions of this Law with the
aim of making profit.
4.
Non-bank credit institution means a form of credit institution permitted to carry
out one or several banking activities in accordance with provisions of this Law, excluding
taking deposit from individuals and providing payments services through customers’
accounts. Non-bank credit institutions include finance companies, finance-leasing
companies and other non-bank credit institutions.
Finance-leasing company means a form of finance company mainly engaging in
finance lease in accordance with provisions of this Law.
5.
Microfinance institution means a form of credit institution mainly engaging in
several banking activities with the aim of serving low-income individuals, households and
microenterprises.
6.
People’s Credit Fund means a credit institution, established on a voluntary
basis in the form of co-operatives by legal entities, individuals and households to carry out
2
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
several banking activities in accordance with provisions of this Law and the Law on Cooperatives with the main purpose of mutually assisting each other in developing production,
doing business and improving living standards.
7.
Co-operative Bank means a bank of all people’s credit funds, established on the
basis of capital contribution from people’s credit funds and legal entities in accordance with
provisions of this Law with the main purpose of system integration, financial support and
capital flows harmonization within the people’s credit funds system.
8.
Foreign credit institution means a credit institution established in a foreign
country under foreign laws.
Foreign credit institutions may establish commercial presence in Vietnam in the
form of representative office, joint venture bank, 100% foreign owned bank, foreign bank’s
branch, joint venture finance company, 100% foreign owned finance company, joint venture
finance-leasing company, 100% foreign owned finance-leasing company.
Joint venture bank, 100% foreign owned bank means a form of commercial banks;
joint venture finance company, 100% foreign owned finance company means a form of
finance companies; joint venture finance-leasing company, 100% foreign owned financeleasing company means a form of finance leasing companies as stipulated in this Law.
9.
Foreign bank’s branches are dependent units of foreign banks, having no legal
status, and all of their obligations and undertakings in Vietnam are guaranteed by the foreign
bank.
10. Owned capital means the actual value of the chartered capital of a credit
institution or injected capital of a foreign banks’ branch plus reserves and certain types of
liabilities as stipulated by the State Bank of Vietnam (hereinafter referred to as State Bank).
11. License includes 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 and other foreign institutions engaging in
banking activities that are granted by the State Bank. Official documents issued by the State
Bank to amend and supplement License are integral parts of the License.
12. Banking operations mean regular business and provision of one or several of
following activities:
a) Acceptance of deposits;
b) Provision of credits;
c) Provision of payment services through customer’s account.
13. Acceptance of deposit means accepting funds from organizations and
individuals in the forms of demand deposits, term deposits, savings deposits, certificate of
deposit, bill of exchange, bill of credit and other forms of deposits on the principle of fully
repayment of principal and interest to the depositors as pre-agreed.
3
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
14. Provision of credit means an agreement for organizations, individuals to use a
certain amount of money or a commitment to allow organizations, individuals to use a
certain amount of money on the principle of repayment through lending, discounting,
financial leasing, factoring, bank guarantees and others types of credits.
15. Provision of payment services through customer’s account means providing
various payment instruments; carrying out cheque payment, payment order, authorized
payment, collection order, authorized collection, bank cards, letter of credit and other
payment services for customers through their accounts.
16. Lending means a form of credit provision whereby the lender hands over or
commits to hand over to a customer an amount of money to use for an identified purpose in
a certain period of time as pre-agreed on the principle of repayment of both the principal and
interest thereon.
17. Factoring means a form of credit provision to the seller or the buyer through
repurchasing without recourse accounts receivable or accounts payable arising from
buying/selling goods and services based on the contract of buying/selling goods and
services.
18. Bank guarantee means a form of credit provision whereby a credit institution
makes commitment with a third party to fulfill its client’s financial obligations in the event
that clients fails to fulfill or improperly fulfill her/his committed obligations; the client shall
accept the debt and repay credit institution as pre-agreed.
19. Discount means the purchase on a term basis or purchase with recourse of
negotiable instruments and other valuable papers of beneficiaries prior to maturity date of
such instruments or papers.
20. Rediscount means the discount of negotiable instruments and other valuable
papers which have been discounted before their term of payment becomes due.
21. Monetary brokerage means an act of an intermediary who arranges on a fee
basis the carrying out of banking activities and other business activities between credit
institutions, other financial institutions.
22. Payment account means on demand deposit account of a customer opened with
a bank for the purpose of using the payment services provided by the bank.
23. Derivative products means financial instruments that has value determined by
expected future price movements of an underlying financial asset such as exchange rate,
interest rate, currency, money or other financial assets.
24. Capital contribution, shares purchase by credit institutions means a credit
institution contributes capital to form chartered capital, or purchases shares of other
enterprises or credit institutions, including the injection of funds or contribution of capital to
their subsidiaries or affiliated companies; or contributes capital to investment funds and
entrusts other organizations to make capital contributions and/or buy shares in the abovementioned forms.
4
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
25. Investments in the form of capital contribution, shares purchase in order to
hold controlling interest of an enterprise include investments that account for more than
50% of the chartered capital or voting shares of an enterprise or other investments that is
sufficient to affect the decision of the Shareholders’ Meeting or Members’ Council.
26. Major shareholder of a joint stock credit institution means a shareholder
owning directly or indirectly five (05) percent or more of voting shares of that joint stock
credit institution.
27. Indirect ownership of capital means the ownership of chartered capital or
shares of a credit institution by organizations or individuals through their related parties or
in the form of investment trust.
28. Related parties means organizations, individuals having direct or indirect
relationship with other organizations, individuals that fall in one of the followings:
a) Mother company with its subsidiaries and vice versa; credit institution with its
subsidiaries and vice versa; subsidiaries which are owned by the same mother company or
the same credit institution with each others; administrators, members of the Board of
Controllers of the mother company or of the credit institution, individuals or organizations
having authority to appoint the formers with subsidiaries and vice versa;
b) A company or a credit institution with its administrators, members of the Board of
Controllers or with companies, credit institutions having authority to appoint those
administrators or members of the Board of Controllers and vice versa;
c) A company or a credit institution with organizations, individuals who own five
(05) percent or more of chartered capital or voting shares of that company or that credit
institution and vice versa;
d) An individual with her/his spouse, parents, children, and siblings;
e) A company or a credit institution with individual who falls in one of the cases
stipulated in sub-clause (d) of this Clause of administrators, members of the Board of
Controllers, capital contributors or shareholders owning five (05) percent or more of
chartered capital or voting shares of that company or credit institution and vice versa;
g) Individuals who are authorized by organizations, individuals stipulated in subclauses (a), (b), (c), (d), and (e) of this Clause with authorizing organizations, individuals;
individuals who are authorized to represent the portions of capital contribution of the same
organizations with each others;
29. Affiliate of a credit institution means a company of which a credit institution or
a credit institution and its related parties own more than 11% of chartered capital or more
than 11% of voting shares. Such company shall not be a subsidiary of the credit institution.
30.
Subsidiary of a credit institution means a company of which:
a) the credit institution or credit institution and its related parties own more than 50%
of chartered capital or more than 50% of voting shares; or
5
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
b) the credit institution shall have the right to directly or indirectly appoint most of or
all of the members of the Board of Directors, Members’ Council or the General Director of
the sub; or
c) the credit institution shall have the right to amend or supplement the Charter of the
sub; or
d) the credit institution and its related parties shall directly or indirectly control the
approval of resolutions, decisions of the Shareholders’ Meeting, Board of Directors,
Members’ Council of the sub.
31. Administrator of a credit institution includes Chairman and members of the
Board of Directors; Chairman and members of the Members’ Council, the General Director
(Director) and other administrative positions as stipulated in the Charter of the credit
institution.
32. Manager of a credit institution includes General Director, Vice General
Director, Chief Accountant, Branch Managers or other equivalent positions as stipulated in
the Charter of the credit institution.
Article 5.
Usage of the terms related to banking activities
Institutions that are not credit institutions shall not be allowed to use the terms
“credit institution”, “bank”, “finance company”, “finance-leasing company” or any other
phrases or terms in their names, positions or the extensions of their names, positions or in
their transaction documents or advertisements that the usage of such terms may mislead
their clients in taking them as a credit institution.
Article 6.
Organization forms of credit institutions
1. Domestic commercial banks shall be established and organized under the form of
joint stock company, except for the cases referred to in clause 2 of this Article.
2. State-owned commercial banks shall be established and organized under the form
of sole member limited liability company of which the State owns 100% of the chartered
capital.
3. Domestic non-banking credit institutions shall be established and organized under
the form of joint stock company or limited liability company.
4. Joint venture credit institutions, 100% foreign owned credit institutions shall be
established and organized under the form of limited liability company.
5. Co-operative banks, people’s credit funds shall be established and organized under
the form of co-operative.
6. Microfinance institutions shall be established and organized under the form of
limited liability company.
6
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
Article 7.
Right to business autonomy
1. Credit institutions, foreign bank’s branches shall have the right to business
autonomy and shall be self-responsible for their business results. None of organizations or
individuals shall be permitted to illegally intervene into business operations of a credit
institution, foreign bank’s branch;
2. Credit institutions, foreign bank’s branches shall have the right to reject credit
requests, or to reject to provide any other services if such requests are deemed ineligible,
inefficient and contrary to the provisions of the laws.
Article 8.
Right to banking operations
1. Any organization eligible under provisions of this Law and other related laws that
is granted with a License by the State Bank shall be permitted to conduct one or several
banking activities in Vietnam.
2. Individuals and organizations that are not credit institutions shall be prohibited to
carry out banking activities, except for margin trading and repo transactions that carried out
by securities companies.
Article 9.
Co-operation and competition in banking activities
1. Credit institutions, foreign bank’s branches may legally co-operate and compete in
banking operations and other business operations in accordance with provisions of the laws.
2. Any acts of competition constraint or unfair competition that likely damage or
damage the implementation of national monetary policies, the safety of the credit
institutions system, lawful interests of the State, rights and lawful interests of involving
organizations, individuals shall be strictly prohibited.
3. The Government shall stipulate in details unfair competition actions in banking
area and applicable remedies for such actions.
Article 10.
Protection of customer
Credit institutions, foreign bank’s branches shall have following responsibilities:
1. Participate in a deposit insurance or preservation organization in accordance with
provisions of the laws and publish information regarding their membership in a deposit
insurance, preservation organization at their head offices and branches.
2. Create favorable conditions for customers to deposit and withdraw money;
ensure the full and timely payment of both principal and interest of any sum of deposit;
3. Refuse any investigation, blockade, retention, transfer of customers’ deposits,
except for the case where being requested by competent state authority in accordance with
provisions of the laws or with the consent of the customers;
7
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
4. Publish interest rates applicable to deposits, service fees, rights and
responsibilities of customers regarding each type of products and services supplied.
5. Announce official transaction time and not being allowed to interrupt
transactions during announced time. In case a credit institution or foreign bank’s branch
intends to temporarily suspend its transactions during official transaction time, the credit
institution or foreign bank’s branch shall post an announcement at the transaction location at
least 24 hours prior to such suspension. A credit institution or a foreign bank’s branch shall
not be allowed to discontinue its transactions for more than one working day, except for the
cases specified in sub-clause 1(e) of Article 29 of this Law.
Article 11.
Responsibilities in respect to counter money laundering (AML)
and terrorism financing
Credit institutions, foreign bank’s branches shall have following responsibilities:
1. To not hide or carry out any business activities related to a sum of money, which
is proven to have illegal origin.
2. To develop internal regulations on anti-money laundering and terrorist financing.
3. To implement anti-money laundering and terrorist financing measures.
4. To cooperate with state authorities during investigation into money laundering
and terrorist financing activities.
Article 12.
Legal Representative of credit institution
1. The legal representative of a credit institution shall be specified in its Charter and
shall be one of the followings:
a) Chairman of the Board of Directors or Chairman of the Members’ Council of the
credit institution;
b) General Director or Director of the credit institution.
2. The credit institution’s legal representative shall reside in Vietnam; in case of
absence from Vietnam, a written power of attorney must be issued to another administrator,
manager of the credit institution who is residing in Vietnam to perform his/her duties and
powers.
Article 13.
Provision of information
1. Credit institutions, foreign bank’s branches shall provide their account holders
with information regarding account holders’ transactions and account balance in accordance
with agreements between credit institutions, foreign bank’s branches and account holders.
2. Credit institutions, foreign bank’s branches shall have responsibilities to provide
the State Bank information relating to their business operations and shall be provided by the
8
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
State Bank with information regarding customers who have credit relationship with them in
accordance with provisions of the State Bank.
3. Credit institutions, foreign bank’s branches may mutually exchange information
on their banking operations.
Article 14.
Security of information
1. Staff, administrators and managers of a credit institution, foreign bank’s branch
shall not be allowed to disclose business secrets of the credit institution or the foreign bank’s
branch.
2. Credit institutions, foreign bank’s branches shall ensure the confidentiality of
information relating to their customers’ accounts, deposits, deposited properties and
transactions at the credit institutions or foreign bank’s branches.
3. Credit institutions, foreign bank’s branches shall not be allowed to provide
information concerning deposits, deposited properties and transactions of their customers to
any other organizations and/or individuals, except for the cases where being requested by
competent state authorities in accordance with provisions of the laws or with the consent of
their customers.
Article 15.
Backup database
1. Credit institutions, foreign bank’s branches shall establish and maintain back-up
database to ensure the safety and continuity of their business operations.
2. The development of backup database of people’s credit funds, microfinance
institutions and non-deposit-taking credit institutions shall be stipulated by the State Bank.
Article 16.
Shares purchase of foreign investors
1. Foreign investors shall be allowed to purchase shares of Vietnamese credit
institutions.
2. The Government stipulates conditions, procedures, the maximum total level of
shares owned by all foreign investors, the maximum total level of shares owned by one
foreign investor in one Vietnamese credit institution; conditions for Vietnamese institutions
to sell shares to foreign investors.
Article 17.
Policy banks
1. The Government sets up policy banks to carry out business not for profit but for
the implementation of State socio-economic policies.
2. The Government shall stipulate the organization and operation of policy banks.
3. Policy banks must implement internal control, internal audits; develop and issue
internal procedures applicable to their operations; adopt statistical, operational and payment
activities reports in accordance with stipulations of the State Bank.
9
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
CHAPTER II: Licenses
Article 18.
Authority to grant and revoke Licenses
The State Bank shall be the competent authority to grant, amend, supplement and
revoke licenses in accordance with provisions of this Law.
Article 19.
Legal capital
1. The Government shall stipulate the legal capital level applicable to each type of
credit institutions, foreign banks’ branches.
2. Credit institutions, foreign banks’ branches shall maintain the actual value of their
chartered capital or injected capital at minimum equals to legal capital level.
3. The State Bank shall stipulate in details remedy measures when actual value of
chartered capital of credit institutions and injected capital of foreign bank’s branches falls
below the legal capital level.
Article 20.
Conditions for issuance of licenses
1. Credit institutions shall be granted with License when following conditions are
fully met:
a) Having chartered capital, injected capital level at least equals to legal capital
requirements;
b) The owners of sole member limited liability credit institutions, the founding
shareholders, the founding members who are legal entities and legally operating and having
sufficient financial capability to make capital contribution; the founding shareholders or the
founding members who are individuals and having full capacity for civil acts and sufficient
financial capability to make capital contribution.
The State Bank shall stipulate in details conditions for license applicable to owners
of sole member limited liability credit institutions, founding shareholders and founding
members.
c) The administrators, managers, members of the Board of Control shall meet all
criteria and conditions stipulated in Article 50 of this Law;
d) Having Charter that is line with provisions of this Law and other applicable
provisions of the laws;
e) Having a feasible establishment project, or business plan that the proposed
business shall not affect the safety and stability of the credit institutions system; shall not
create monopoly or competition constraints or unfair competition in the credit institutions
system.
10
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
2. Joint venture credit institutions, 100% foreign-owned credit institutions shall be
granted with License when following conditions are fully met:
a) The conditions set out in clause 1 of this Article;
b) The foreign credit institution is permitted to conduct banking activities in
accordance with provisions of the laws of its home country where its head quarter is located;
c) The proposed activities that the foreign credit institution is applying for to conduct
in Vietnam must be those permitted to conduct in its home country where its head quarter is
located;
d) The foreign credit institution must have sound business performance; and meets
the conditions as stipulated by the State Bank concerning total assets value, financial
standing and prudential ratios;
đ) The foreign credit institution shall commit in writing which to be sent to the State
Bank on its willingness to provide joint venture credit institutions, 100% foreign owned
credit institutions and foreign banks’ branches with financial, technological, managerial,
operational support, ensuring that these organizations can maintain the actual value of the
their chartered capital/injected capital not lower than the legal capital and fully satisfy the
provisions on prudential assurance provided in this Law;
e) The competent supervisory authority in home country has already signed MOU
with the State Bank on cooperation regarding supervision of banking activities and exchange
of prudential supervision information. The competent supervisory authority in home country
shall have written statement certifying that they supervise foreign credit institutions’
operations on consolidated basis and in accordance with international best practices.
3. Foreign bank’s branches shall be granted License when following conditions are
fully met:
a) Conditions stipulated in sub-clauses 1(a), 1(b), 1(c), 1(đ) and sub-clauses 2(b),
2(c), 2(d), 2(e) of this Article;
b) Foreign banks shall have written statement ensuring their responsibilities for all of
obligations and commitments of their branches in Vietnam; ensuring the actual value of the
injected capital not to fall lower than the legal capital level and the compliance of prudential
provisions stipulated in this Law.
4. Representative offices of foreign credit institutions and/or of other foreign
institutions engaging in banking activities shall be granted License if following conditions
are fully met:
a) The foreign credit institution, other foreign institutions engaging in banking
activities is a legal entity permitted to carry out banking activities in its home country;
b) Provisions of the laws in the home country where foreign credit institutions
and/or other foreign institutions engaging in banking activities place their head quarter allow
them to set up representative office in Vietnam.
11
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
5. The State Bank shall stipulate conditions for issuance of License for cooperative banks, people’s credit funds and microfinance institutions.
Article 21.
Application files, licensing orders and procedures
The State Bank shall stipulate in details requirements for application files, licensing
orders and procedures.
Article 22.
Duration for issuance of licenses
1. Within 180 days since the receipt date of completed application files, the State
Bank shall either grant or reject to grant the License to the applicants.
2. Within 60 days, since the receipt date of completed application files, the State
Bank shall either grant or reject to grant the License to the applicants for representative
offices of foreign credit institutions and/or of other foreign institutions engaging in banking
activities.
3. In cases of refusal of an application, the State Bank shall provide a written
statement of reasons.
Article 23.
Licensing fee
1. Credit institutions, foreign banks’ branches, representative offices of foreign credit
institutions and/or of other foreign institutions engaging in banking activities that have been
granted with License shall be obliged to pay a licensing fee in accordance with provisions of
the laws on fee and charges.
Article 24.
Business registration and operation registration
Upon being granted with a License, credit institutions and foreign bank’s branches
shall apply for Certificate of business registration; representative offices of foreign credit
institutions and/or of other foreign institutions engaging in banking activities shall apply for
Certificate of operations in accordance with provisions of the laws.
Article 25.
Publication of operational information
At least 30 days prior to the scheduled date of business commencement, credit
institutions, foreign bank’s branches, representative offices of foreign credit institutions
and/or of other foreign institutions engaging in banking activities shall publicize on mass
media means of the State Bank and one daily newspaper of Vietnam in three (03)
consecutive issues or one electronic press following details:
1. Name and address of the head quarter of credit institution; name and address of
foreign banks’ branch, representative offices of the foreign credit institutions and/or of other
foreign institutions engaging in banking activities.
12
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
2. Number and issuance date of License, Certificate of business registration,
Certificate of operation registration and permitted business activities.
3. Chartered capital or injected capital amount.
4. Legal representatives of the credit institutions, General Director (Director) of the
foreign banks’ branches, Chief of representative offices of foreign credit institutions and/or
of other foreign institutions engaging in banking activities.
5. List of founding shareholders/founding members and their respective levels of
contributed capital or owner of credit institutions.
6. Scheduled date of business commencement.
Article 26.
Conditions for commencing operations
1.
A credit institution or a foreign bank’s branch or a representative office of
foreign credit institution and/or of other foreign institution engaging in banking activities
that has been granted with License shall only be permitted to conduct operations from the
date of business commencement.
2. In order to commence operations, a licensed credit institution or a licensed foreign
bank’s branch shall satisfy all of the following conditions:
a) Having Charter registered with the State Bank;
b) Having Certificate of business registration; having adequate chartered/injected
capital as well as qualified bank vault in accordance with provisions of the State Bank; and
having appropriate office space that ensure the safety of assets and banking operations;
c) Having organizational structure, administration and management system, internal
audit, risk management and internal control system which is adequate to the type of credit
institutions as provided for in this Law and other related laws;
d) Having IT system which meets with requirements for management and scope of
operations of the credit institution;
đ) Having internal regulations on organization and operations of the Board of
Directors/Members’ Council, Board of Control, General Director (Director), functional units
at headquarter; having internal regulations on risk management and network management;
e) Having chartered/injected capital in VND fully deposited into a frozen noninterest bearing account opened with the State Bank at least 30 days prior to the date of
business commencement. Chartered/injected capital shall only be released after the credit
institution/foreign bank’s branch has commenced its business;
g) Having made public operational information as stipulated in Article 25 of this
Law.
13
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
3. Credit institutions/foreign bank’s branches/representative offices of foreign credit
institutions and/or of other foreign institutions engaging in banking activities shall
commence their business within 12 months from the issuance date of the License, otherwise
the State Bank shall revoke the License.
4. At least 15 days prior to scheduled date of business commencement, credit
institutions/foreign bank’s branches that have been granted with License shall be responsible
to inform the State Bank their conditions for business commencement as stipulated in clause
2 of this Article. The State Bank shall suspend the business commencement if credit
institutions/foreign bank’s branches do not meet conditions stipulated in clause 2 of this
Article.
Article 27.
Use of License
1. A licensed institution shall use the name specified in the license and operate
pursuant to contents of the license.
2. A licensed institution shall be strictly prohibited from forgering, erasing, trading,
transferring, leasing or lending the granted License.
Article 28.
Revocation of License
1. The State Bank shall revoke granted License in following circumstances:
a) The information provided in the application files has been proved to be fraudulent
for the purpose of getting the License;
b) Credit institution has been divided, separated, incorporated, merged, or went
bankrupted;
c) Credit institution/foreign bank’s branch/representative office of foreign credit
institution and/or of other foreign institution engaging in banking activities fails to operate in
accordance with the content provided in the License;
d) Credit institution/foreign bank’s branch seriously violates provisions of the laws
on reserves requirement and prudential ratios applicable to activities of credit institutions;
đ) Credit institution/foreign bank’s branch fails to comply or fails to fully comply
with settlement decisions of the State Bank in order to ensure the safety of banking
operations;
e) Applicable to foreign banks’ branches/100% foreign-owned banks/representative
offices of foreign credit institutions and/or of other foreign institutions engaging in banking
activities when foreign credit institutions or other foreign institutions engaging in banking
activities went bankrupted or have been dissolved or their licenses have been revoked by the
competent authority in their home country where their headquarters are located.
2. State Bank shall stipulate in details the order and procedures for the revocation of
granted License in cases specified in clause 1 of this Article.
14
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
3. Institution whose License has been revoked shall promptly suspend all of its
business operations as soon as the decision of the State Bank on revocation of license comes
into effect.
4. The decision on revocation of license shall be published by the State Bank via
the mass media means.
Article 29.
Changes for which approval of the State Bank must be obtained
1. Credit institution/foreign bank’s branch shall have to obtain written approval
from the State Bank prior to making any changes in respect of the following:
a) Name and address of the headquarter of credit institutions; name and address of
foreign bank’s branches;
b) Level of chartered/injected capital, except for the cases set out in clause 3 of this
Article;
c) Name and address of branches of credit institutions;
d) Contents, scope and duration of operation;
đ) Transfer of capital by capital contributors; transfer of shares by major
shareholders; transfer of shares that changes status of major shareholders that make them
become minor shareholders and vice versa;
e) Temporary discontinuity of operation for more than one working day, except for
the cases of force majeure;
g) Listing of shares on domestic and oversea securities markets.
2. Within 40 days since the receipt date of complete application files, the State
Bank shall issue its decision on the amendment and/or supplement of License in respect of
any changes stipulated in sub-clauses 1(a), 1(b) and 1(d) of this Article; the State Bank shall
approve in writing in respect of any changes stipulated in sub-clauses 1(c), 1(đ), 1(e) and
1(g) of this Article. In cases of rejection, the State Bank shall provide reasons in written
form.
Applications file, order and procedures for approval of changes shall be stipulated by
the State Bank.
3. Any changes to the chartered capital level of a people’s credit fund shall be made
in accordance with stipulations of the State Bank.
4. As soon as approval for any changes stipulated in clause 1 of this Article
obtained, credit institution/foreign bank's branch shall:
a) Amend/supplement the Charter of the credit institution according to approved
changes and register the amended Charter with the State Bank;
15
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
b) Register the changes referred to in clause 1 of this Article with the competent
state authority;
c) Publicize any changes stipulated in sub-clause 1(a), 1(b), 1(c) and 1(d) of this
Article on mass media means of the State Bank and on one daily newspaper of Vietnam in
03 consecutive issues or on one electronic press within 07 working days from the approval
date of change.
CHAPTER III: Organization, Governance and Management of credit institutions
III
Section 1. General Provisions
Article 30.
The establishment of branches, representative offices, non-profit
working units, and commercial presence
1. According to the type of its operations, after obtaining written approval of the
State Bank, a credit institution shall be permitted to establish:
a) Branches, representative offices, non-profit working units throughout the country,
including provinces and cities belong to central authority where its headquarter is located;
b) Branches, representative offices, and other forms of commercial presence
overseas.
2. The State Bank shall stipulate in details conditions, application files and
procedures for establishment, termination and dissolution of units stipulated in clause 1 of
this Article according to the type of credit institutions.
Article 31.
Charter
1. The Charter on organization and operations of joint stock and/or limited liability
credit institution shall be in accordance with provisions of this Law and other applicable
provisions of the laws. The Charter must contain following basic contents:
a) Name and address of the headquarter;
b) Content and scope of operations;
c) Duration of operation;
d) Chartered capital, capital contribution methods, increases and decreases of
chartered capital;
đ) Duties and powers of the Shareholders’ General Meeting, Board of Directors,
Members’ Council, General Director (Director) and Board of Controllers;
e) Formalities for selection, appointment and dismissal of members of the Board of
Directors, members of the Members’ Council, General Director (Director) and Board of
Controllers;
16
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
g) Full name, address, nationality and other basic characteristics of owners, capital
contributors of limited liability credit institution; and of founding shareholders of joint stock
credit institution;
h) Rights and obligations of owners; capital contributors of limited liability credit
institution; rights and obligations of shareholders of joint stock credit institution;
i) Legal representative;
k) Principles on finance, accounting, control and internal audit;
l) Formalities for adoption of credit institution’s resolutions; principles of internal
dispute resolutions;
m) Bases and methods of determination of remunerations, salaries and bonuses for
managers, administrators and members of the Board of Control;
n) Events of dissolution;
o) Procedures for amendment and supplement of the Charter.
2. The Charter of co-operative credit institutions shall comply with provisions of
Article 77 of this Law.
3. Charter of a credit institution and any amendments made to it shall be registered
with the State Bank within 15 days since the date of its adoption.
Article 32.
Managerial organization structure of credit institutions
1. Managerial organization structure of a joint stock credit institution shall contain
Shareholders' General Meeting, Board of Directors, Board of Controllers, and General
Director (Director).
2. Managerial organization structure of a sole member limited liability credit
institution and limited liability credit institution with two or more members shall contain
Members’ Council, Board of Controllers, and General Director (Director).
3. Managerial organization structure of a cooperative bank and people’s credit fund
shall comply with provisions of Article 75 of this Law.
Article 33.
Prohibited cases in regards of taking positions
1. The following individuals shall not be permitted to act as a member of the Board
of Directors, member of Members’ Council, member of Board of Controllers, General
Director (Director), Deputy General Director (Deputy Director) of a credit institution:
a) Individuals as stipulated in clause 2 of this Article;
17
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
b) Individuals that are not allowed to take part in the management and administration
as stipulated by the laws on cadres and civil servants and the laws on corruption prevention;
c) Individuals who have been the owners of private enterprises/partners of a
partnership/General Director (Director), members of the Board of Directors, members of the
Members’ Council, members of the Board of Controllers of an enterprise/Head and
members of the Board of Directors of a co-operative at the time the enterprise or the cooperative went bankrupted; except for the cases the causes of the bankruptcy were force
majeure;
d) Legal representative of an enterprise at the time the operations of that enterprise
had been suspended, or compulsory dissolved due to serious offence of the laws, except for
the cases he/she had been appointed to restructure and strengthen the enterprise by order of
the competent state bodies;
đ) Individuals who had been suspended to act as Chairman and member of the Board
of Directors, Chairman and member of the Members’ Council, Head and member of the
Board of Controllers, General Director (Director) of a credit institution as stipulated in
Article 37 of this Law; or had been proved by competent state authorities to be the offender
who caused the revocation of credit institution’s License;
e) Related parties of members of the Board of Directors, members of the Members’
Council and/or General Director (Director) shall not be permitted to act as a member of the
Board of Controllers of the same credit institution;
g) Related parties of members of the Board of Directors, members of the Members’
Council shall not be permitted to act as General Director (Director) of the same credit
institution.
2. The following individuals shall not be permitted to act as the Chief Accountant,
Branch Director, Director of subsidiary company of a credit institution:
a) Minors; individuals whose capacity acts is restricted or lost;
b) Individuals being in the duration of criminal trials, Court’s verdict or decision;
c) Individuals who have been sentenced with serious offences and up;
d) Individuals who have been sentenced with ownership offences and have not been
absolved;
đ) Cadres, civil servants; managers from division level in enterprises of which the
State owns more than 50% of chartered capital, except for authorized representatives who
have been assigned to manage the portion of state capital in the credit institution;
e) Officers, non-commissioned officers, professional army members, military
workers at bodies, units of the people’s army; officers, professional non-commissioned
officers working in the bodies, units of the people’s police of Vietnam, except for authorized
representatives who have been assigned to manage the portion of state capital in the credit
institution;
18
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
g) Other events as stipulated in the Charter of the credit institution.
3. Parents, spouse, children, and siblings of the members of the Board of Directors,
members of the Members’ Council, General Director and their spouses shall not be allowed
to act as Chief Accountant or Chief Financial Officer of a credit institution.
Article 34.
Prohibited cases in regards of taking concurrent positions
1. Chairman of the Board of Directors, Chairman of the Members’ Council shall not
concurrently act a manager of the same credit institution and other credit institutions, except
for the cases where the Chairman of the Board of Directors of a people's credit fund
concurrently acts as a member of the Board of Directors of a co-operative bank. Members of
the Board of Directors, members of the Member’s Council of a credit institution shall not
concurrently acts as a administrator of another credit institutions, except for the cases the
other institution is the credit institution’s subsidiary or concurrently acts as a member of the
Board of Controllers of the same credit institution.
2. Head of the Board of Controllers shall not concurrently acts as a member of the
Board of Controllers/administrators of another credit institution. Members of the Board of
Controllers shall not concurrently act as one of the followings:
a) Member of the Board of Directors, member of the Members’ Council, manager,
staff of the same credit institution or subsidiary of that credit institution or staff of an
enterprise where member of the Board of Directors or member of the Members’ Council or
General Director (Director) of the credit institution is the member of the Board of Directors,
manager or major shareholder;
b) Member of the Board of Directors or member of the Members’ Council, manager
of an enterprise of which a member of the Board of Controllers is the member of the Board
of Directors or member of the Members’ Council or manager of the credit institution.
3. General Director (Director), Deputy General Director (Deputy Director) and other
equivalent positions shall not concurrently acts as one of the followings:
a) Member of the Board of Directors, member of the Members’ Council, member of
the Board of Controllers of another credit institution, except for the case the other credit
institution is the subsidiary of the credit institution;
b) General Director (Director), Deputy General Director (Deputy Director) of
another enterprises.
Article 35.
Loss of status naturally
1. Followings are cases of natural losses of status of member of the Board of
Directors, member of the Members’ Council, member Board of Controllers and General
Director (Director):
a) Loss of capacity of civil acts, death;
19
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
b) Breaches of provisions of Article 33 of this Law in respect of prohibited cases on
taking positions;
c) Authorized representative of an organization being the shareholder or capital
contributor of the credit institution when legal status of that organization has been ceased;
d) No longer be the authorized representative of an institutional shareholder;
đ) Being deported from the Socialist Republic of Vietnam;
e) Upon the revocation of the credit institution’s License;
g) Upon the expiry of the hiring contract of the General Director (Director);
h) No longer be a member of a co-operative bank or a people’s credit fund.
2. Within five (05) working days since the date of identification of individuals
subject to natural loss of status as stipulated in clause 1 of this Article, the Board of
Directors/the Member’s Council of the credit institution shall submit written report with
evidences on the matter to the State Bank and shall be responsible for the accuracy and
truthfulness of the report. The Board of Directors/the Member’s Council shall carry out the
election and appointment of the vacancies in accordance with provisions of the laws.
3. After the natural loss of status, members of the Board of Directors, members of
the Members’ Council, members of the Board of Controllers, General Director (Director) of
the credit institution shall be responsible for their decisions during their active term.
Article 36.
Dismissal, removal
1. Chairman and members of the Board of Directors, Chairman and members of the
Members’ Council, Head and members of the Board of Controllers, General Director
(Director) of a credit institution shall be dismissed or removed in the following cases:
a) Having limited capacity for civil acts;
b) Having resignation letters submitted to the Board of Directors, the Members’
Council, and the Board of Controllers of the credit institution;
c) Having not involved in activities of the Board of Directors, the Members’
Council, and the Board of Control in 06 consecutive months, except for the case of force
majeure;
d) Failure to meet the conditions and criteria stipulated in Article 50 of this Law;
đ) Failure to meet requirements of the independent member of the Board of Director;
e) Other events as stipulated in the Charter of the credit institution.
2. After the dismissal, removal, Chairman and members of the Board of Directors,
Chairman and members of the Members’ Council, Head and members of the Board of
20
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
Controllers and the General Director (Director) of the credit institution shall be responsible
for their decisions during their active term.
3. Within 10 working days since the date of decision on dismissal or removal of
titles as stipulated in clause 1 of this Article, the Board of Directors, the Members’ Council
of the credit institution shall submit written report with related documents to the State Bank.
Article 37.
Suspension, temporary suspension of titles of the Board of
Directors, the Members’ Council, the Board of Controllers and
General Director (Director)
1. The State Bank shall have the power to suspend or temporary suspend the
administrative authority of the Chairman and members of the Board of Directors, Members’
Council, Head and members of the Board of Controllers or managers of a credit institution if
these people fail to comply with the provisions of Article 333 of this Law and/or other
applicable provisions of the laws during the performance of their assigned rights and
obligations. The State Bank shall request related authorized bodies of the credit institutions
to dismiss, elect, appoint or shall directly designate the replacements, where necessary.
2. The Special Controlling Board shall have the powers to suspend or temporary
suspend the administrative authority of Chairman or member of the Board of
Directors/Members’ Council/ Head or member of the Board of Controllers or managers of
the credit institution being put under special control, where necessary.
3. Individuals who have been suspended or temporary suspended the administrative
authority as stipulated in clauses 1 and 2 of this Article shall be responsible for settling
problems and offences related to his/her personal responsibilities where requested by the
State Bank, the Board of Directors, the Members’ Council, the Board of Controllers of the
credit institution or by the Special Controlling Board.
Article 38.
Rights and obligations of administrators, managers of credit
institutions
1. To exercise their rights and obligations in accordance with provisions of the
laws, the Charter of the credit institution, resolutions and decisions of the Shareholders’
General Meeting or capital-contributors or the owner of the credit institution.
2. To exercise their rights and obligations honestly with due diligence for the best
interests of the credit institution and its shareholders or capital contributors or owners.
3. To be loyal to the credit institution; to not use information, secrets, business
opportunities of the credit institution, or abuse their position, powers and assets of the credit
institution for their own personal benefits or for the benefit of other organizations or
individuals that harms the interest of the credit institution and its shareholders or capital
contributors or owners.
4. To ensure full records and storage of the credit institution’s documents/files in
order to provide reliable data for the management, administration and control of all activities
of the credit institution, and for the supervision, inspection and examination activities of the
State Bank.
21
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
5. To understand various types of risks inherent in daily operations of the credit
institution.
6. To timely, fully and accurately notify the credit institution of their benefits at other
institutions, transactions with other organizations and individuals that can be conflict with
the interests of the credit institution and shall enter in such transactions where approved by
the Board of Directors or the Members’ Council.
7. To not create opportunities/conditions for himself/herself or for his/her related
parties to use services and get loans from the credit institution with more preferential terms
and conditions in comparison with general regulations of the credit institution.
9. To not receive or request the credit institution to pay bonus, increase salary or
remuneration where the credit institution is being in losses.
10. Other obligations as stipulated in the Charter of the credit institution.
Article 39.
Obligations on disclosure of related interests
1. Members of the Board of Directors, members of the Members’ Council,
members of the Board of Controllers, General Director (Director), Deputy General Director
(Deputy Director) and other equivalent positions of the credit institution shall disclose to the
credit institution following information:
a) Name, address of the headquarter, scope of business, number and date of the
business registration, place of business registration of enterprises, economic entities of
which they themselves and/or their related parties own or authorize or entrust other
individuals or organizations nominally own a portion of capital or shares of more than 05
percent of the chartered capital;
b) Name, address of the headquarter, scope of business, number and date of the
business registration, place of business registration of enterprises in which they themselves
and/or their related parties are being the members of the Board of Directors, members of the
Member’s Council, members of the Board of Controllers, General Director (Director).
2. The disclosure of interests stipulated in clause 1 of this Article and any related
changes shall be carried out in writing within 07 days since the date of changes or the date
such interests arise.
3. The disclosures of interests stipulated in clause 1 of this Article shall be reported
annually to the Shareholders’ General Meeting, Members’ Council of the credit institution
and shall be posted and archived at the headquarter of the credit institution.
Article 40.
Internal control system
1. The internal control system is a combination of internal rules, policies, procedures,
regulations and organizational structure of credit institutions and foreign bank’s branches
which are developed pursuant to guidances of the State Bank and implemented in order to
22
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
ensure that all of the risks are prevented, discovered and dealt with promptly and to meet
preset requirements.
2. Credit institutions, foreign bank’s branches shall develop an internal control
system to ensure the followings:
a) The efficiency and safety of operations; the protection, management and use of
properties and other resources being carried out in safe and effective manner;
b) The truthfulness, reasonableness, adequacy and promptness of the financial and
management information systems;
c) The compliance with the laws and other internal regulations, procedures and rules.
3. The operations of the internal control system of a credit institution or a foreign
bank’s branch shall be evaluated periodically by internal audit unit and external auditors.
Article 41.
Internal audit
1. A credit institution shall establish a specialized internal audit unit under the Board
of Control to perform internal audit for the credit institution.
2. Internal audit unit shall conduct objective reviews and independent assessment
versus the internal control system; independently assess the appropriateness and the
compliance with internal rules, policies, procedures and processes established in the credit
institution; propose recommendations on the improvement of the efficiency and
effectiveness of the systems, processes and regulations to ensure the operations of credit
institution being carried out in a safe, effective and lawful manner.
3. The internal audit results shall be timely reported to the Board of Directors, the
Members’ Council, the Board of Controllers and the General Director (Director) of the
credit institution.
Article 42.
External audit
1. Before the fiscal year end, credit institutions and foreign bank’s branches shall
select a qualified independent external audit company in accordance with stipulations of the
State Bank to audit its operations for the next fiscal year.
2. Within 30 days since the date of decision made on selection of independent
external audit company, credit institutions and foreign bank’s branches shall notify the State
Bank their decision.
3. Credit institutions shall be re-audited if the audit report of the external auditor
contains qualified opinions.
4. The independent audit of cooperative credit institutions shall be implemented in
accordance with provisions of clause 3 of Article 75 of this Law.
23
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
Section 2. General provisions for joint stock and limited liabilities credit
institutions
Article 43.
Board of Directors, Members’ Council and the structure of the
Board of Directors, Members’ Council
1. Board of Directors/Members’ Council of credit institutions is the management
body of the credit institutions, which is entitled to act on behalf of credit institutions in
making decisions and exercising all the rights and obligations, except for those fall under the
authority of the Shareholders' General Meeting/owners.
2. The term of the Board of Directors/Members’ Council shall be no more than 05
years. The term of members of the Board of Directors/members of the Members’ Council
shall be the same as that of the Board of Directors/the Members’ Council. Members of the
Board of Directors/Members’ Council can be re-elected or re-appointed with unlimited
number of terms. The term of elected member, either in supplementing or replacing the
member who has been dismissed or exempted, shall be the remaining term of the Board of
Directors/Members’ Council. The Board of Directors/Members’ Council shall continue to
work until the newly elected Board of Directors/Members’ Council takes over the tasks.
3. In case the number of members of the Board of Directors/Members’ Council
does not make enough two third (2/3) of total number of members of that term or the
minimum number of members as stipulated in the Charter of the credit institution, the credit
institution shall carry out the member replenishment for the Board of Directors/Members’
Council to the required quantity within 60 days since the date of deficiency.
4. The Board of Directors/Members’ Council shall use credit institution’s seal to
carry out its duties.
5. The Board of Directors/Members’ Council shall have secretariat to assist the
Board of Directors/Members’ Council. The Board of Directors/Members’ Council shall
stipulate functions and duties of the Board’s/Council’s Secretariat.
6. The Board of Directors/Members’ Council of a credit institution shall establish
Committees to exercise the formers’ rights and obligations. There must be at least two
Committees: Risk Management Committee and Human Resources Committee. The Board of
Directors/Members’ Council shall stipulate rights and obligations of such committees in
accordance with guidances of the State Bank.
Article 44.
The Board of Controllers and the structure of the Board of
Controllers
1. The Board of Controllers shall carry out internal audit, control and assessment of
the compliance of provisions of the laws, internal regulations, Charter and the
implementation of Shareholders’ General Meeting’s/owners’, Board of Directors’/Members’
Council’s resolutions and decisions.
2. The Board of Controllers of a credit institution shall comprise at least of three
members. The exact number of the members of the Board shall be stipulated in the Charter of
the credit institution. At least one half (1/2) of the total Board’s members shall work full-time,
24
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
who must not concurrently hold any positions or do any jobs in other credit institutions or
enterprises.
3. The Board of Controllers shall have a supporting unit and an internal audit
division. The Board of Controllers may use credit institution’s resources or hire external
professionals to fulfill its duties.
4. The term of the Board of Controllers shall be no more than 05 years. The term of
the members of the Board of Controllers shall be the same as that of the Board of
Controllers. Members of the Board of Controllers can be re-elected or re-appointed with
unlimited number of terms. The term of elected member, either in supplementing or
replacing the member who is dismissed or exempted, shall be the remaining term of the
Board of Controllers. The Board of Controllers shall continue to work until the newly
elected Board takes over the tasks.
5. In case the number of members of the Board of Controllers does not make
enough two third (2/3) of the total number of controllers or the minimum number of
members stipulated in the Charter of the credit institution, the credit institution shall carry
out the members replenishment of the Board to the required quantity within 60 days since
the date of deficiency in accordance with the provisions of the laws.
Article 45.
Duties and powers of the Board of Controllers
1. To supervise the compliance with the laws and the Charter of the credit
institution in carrying out the administration and management of the credit institution; to be
responsible before the Shareholders’ General Meeting/owners/capital contributors,
Members’ Council for exercising assigned duties and powers.
2. To issue internal regulations of the Board of Controllers; to review annually such
internal regulations and important policies on accounting and reporting.
3. To perform the function of internal audit; to be entitled to hire external
professionals and to access or to be provided with full, accurate and timely information and
materials related to the administration and management of the credit institution in order to
exercise their assigned duties and powers.
4. To verify annual and semi-annual financial statements of the credit institution; to
report to Shareholders’ General Meeting/owners/capital contributors the verification results,
the assessment of the rationality, legality, accuracy and prudence in accounting, statistics
and the preparation of financial statements. The Board of Controllers may consult with the
Board of Directors/Members’ Council before submitting reports and proposing
recommendations to the Shareholders’ General Meeting/owners or capital contributors.
5. To examine accounting books, other documents and the management of business
operation of the credit institution when necessary or upon the decisions, resolutions of the
Shareholders’ General Meeting or at the request of major shareholders or a group of major
shareholders or the owners or capital contributors or Members’ Council in accordance with
provisions of the laws. The Board of Controllers shall exercise the examination within 07
working days since the receipt date of the request. Within 15 days since the termination date
25
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
of examination, the Board of Controllers shall report and make clarification on the requested
issues to individuals or organizations that made the request.
6. To timely report to the Board of Directors/Members’ Council upon the detection
of any offences from administrators of the credit institution; to request the offenders to
immediately stop their breaches and take recover the consequences, if any.
7. To prepare the list of founding shareholders, major shareholders, capital
contributors and related parties of members of the Board of Directors/Members’
Council/Board of Controllers/General Director of the credit institution; to file and update
changes to this list.
8. To request the Board of Directors/Members’ Council to convene extraordinary
meeting or request the Board of Directors to convene extraordinary Shareholders’ General
Meeting as stipulated in this Law and the Charter of the credit institution.
9. To convene extraordinary Shareholders’ General Meeting in the case where the
decisions of the Board of Directors seriously violate this Law or surpass its scope of
authority or other cases as stipulated in the Charter of the credit institution.
10. Other duties and powers as stipulated in the Charter of the credit institution.
Article 46.
Rights and obligations of the Head of Board of Controllers
1. To organize the execution of the Board of Controllers’ duties and powers as
stipulated in Article 45 of this Law.
2. To prepare agenda for meetings of the Board of Controllers based on its
members’ proposals with regard to scope of its duties and powers; to convene and chair
meetings of the Board of Controllers.
3. To sign on behalf of the Board of Controllers all documents within the scope of
authority of the Board of Controllers.
4. To convene extraordinary Shareholders’ General Meeting on behalf of the Board
of Controllers as stipulated in Article 45 of this Law or request the Board of
Directors/Members’ Council to convene extraordinary meetings.
5. To attend meetings of the Board of Directors/Members’ Council; to give
opinions and recommendations but shall not have the right to vote at such meetings.
6. To request the record of his/her opinions in the minute of the Board of
Directors’/Members’ Council’s meetings in case his/her opinions contrary with the
decision/resolutions of the Board of Directors/Members’ Council; and to report such matters
to the Shareholders’ General Meeting or the Owners or Capital Contributors.
7. To prepare working plans and assign tasks to members of the Board of
Controllers.
26
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
8. To ensure that members of the Board of Controllers receive full, fair, accurate
and timely information on the matters to be considered by the Board of Controllers with
sufficient time for consideration and discussion.
9. To supervise and guide members of the Board of Controllers in exercising their
assigned rights and obligations of the Board of Controllers.
10. To authorize another member of the Board of Controllers to exercise his/her
duties during his/her absence.
11. Other rights and obligations as stipulated in the Charter of the credit institution.
Article 47.
Rights and obligations of members of Board of Controllers
1. To comply with provisions of the laws, the Charter of the credit institution and
internal regulations of the Board of Controllers honestly, prudently for the best interest of
the credit institution and shareholders/capital contributors/owners.
2. To elect one among them to be the Head of the Board of Controllers.
3. To request the Head of the Board of Controllers to convene extraordinary
meetings.
4. To monitor business operations; to check accounting book, assets, financial
statements and recommend remedy actions.
5. To be entitled to request any staff of the credit institution to provide data and to
make clarification on business operations in order to exercise their assigned tasks.
6. To report to the Head of the Board of Controllers in regards of unusual financial
operations and be responsible for his/her assessments.
7. To attend meetings of the Board of Controllers, to discuss and vote on issues
within the scope of duties and powers of the Board of Controllers unless excluded from
doing so as a result of conflict of interest.
8. Other duties and powers as stipulated in the Charter of the credit institution.
Article 48.
The General Director (Director)
1. The Board of Directors/Members’ Council shall appoint one member amongst
itself or hire another person to act as the General Director (Director) of the credit institution,
except for the case stipulated in subclause 1(c) of Article 66 of this Law.
2. The General Director (Director) shall be the highest-level manager of the credit
institution being responsible before the Board of Directors/Members’ Council for carrying
out his/her rights and obligations.
Article 49.
Rights and obligations of the General Director (Director)
27
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
1. To implement decisions and resolutions of the Shareholders’ General Meeting,
Board of Directors/Members’ Council.
2. To make decisions within her/his scope of authority on day-to-day operations of
the credit institution.
3. To establish internal control system and maintain its effectiveness.
4. To prepare and submit financial statements to the Board of Directors/Members’
Council for approval or to report to authorized body for approval. To be responsible for the
accuracy, reliability of financial statements, statistic reports, accounting data and other
financial information.
5. To issue accordingly to the scope of authority internal regulations; processes and
procedures to operate business management and reporting systems.
6. To report to the Board of Directors/Members’ Council, Board of Controllers,
Shareholders’ General Meeting and competent state bodies in regards of the credit
institution’s business performance and outputs.
7. To make decision on taking measures that exceeds his/her scope of authority in
the case of emergency such as natural calamity, war, fire, and failure events. He/she shall be
responsible for these decisions and shall report immediately to the Board of
Directors/Members’ Council.
8. To recommend and propose organizational structure and operations of the credit
institution to the Board of Directors/Members’ Council or Shareholders’ General Meeting
for decision according to their scope of authority.
9. To request the Board of Directors/Members’ Council to convene extraordinary
meetings in accordance with provisions of this Law.
10. To appoint, dismiss, remove administrators, managers of the credit institution,
except for positions fall under the scope of authority of Shareholders’ General
Meeting/owners/capital contributors, Board of Directors/Members’ Council.
11. To sign contracts on behalf of the credit institutions in accordance with internal
regulations and provisions of the Charter of the credit institution.
12. To make proposals on profit distribution and loss settlement.
13. To recruit personnel; to make decisions on salaries and bonuses for staff within
his/her scope of authority.
14. Other rights and obligations as stipulated in the Charter of the credit institution.
Article 50.
Criteria, conditions for administrators, managers and other
positions of the credit institution
28
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
1. Members of the Board of Directors/Members’ Council shall meet in full
following criteria and conditions:
a) To not fall in the scope of provisions of clause 1 of Article 33 of this Law;
b) To have professional ethics;
c) To be the owner or the authorized owner of at least 5% of the chartered capital of
the credit institution, except for the case when she/he is the member of the Members’
Council or independent member of the Board of Directors or having university and/or higher
degree in economics/business administration/law or having at least 03 years of experience as
an administrator in a credit institution or other enterprises operating in the
insurance/securities/accounting/auditing sectors or having at least 05 years of working
experiences directly in an operational division in the banking/finance/auditing/accounting
sectors.
2. The independent member of the Board of Directors shall comply in full with
provisions of clause 1 of this Article and following criteria, conditions:
a) She/he neither is currently working for the credit institution or subsidiaries of the
credit institution, nor worked for the credit institution or subsidiaries of the credit institution
in the last three years;
b) She/he shall not receive any regular salaries or remunerations from the credit
institution, other than allowances for members of the Board of Director in accordance with
regulations;
c) She/he shall not be a person, whose spouse, parents, children, siblings and spouse
of these people are major shareholders of the credit institution or a manager or a member of
the Board of Controllers of the credit institution or of subsidiaries of the credit institution;
d) She/he shall not own directly, indirectly or representatively more than 1% of
chartered capital or voting shares of the credit institution; he/she together with his/her
related parties shall not own more than 5% of chartered capital or voting shares of the credit
institution;
đ) She/he has not been a manager or a member of the Board of Controllers of the
credit institution at any time within the last 05 years.
.
3. Members of the Board of Controllers shall meet in full following criteria and
conditions:
a) To not fall in the scope of provisions of clause 1 of Article 33 of this Law;
b) To have professional ethics;
c) To
have
university or
higher
degree
in
economics/business
administration/law/accounting/auditing or have at least 03 years of working experiences
directly in banking/finance/auditing/accounting sectors;
29
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
d) To not be a related party of the administrator of the credit institution;
đ) Full-time member of the Board of Controllers shall reside in Vietnam during
his/her active term.
4. General Director (Director) shall meet in full following criteria and conditions:
a) To not fall in the scope of provisions of clause 1 of Article 33 of this Law;
b) To have professional ethics;
c) To have university or higher degree in economics/business administration/law;
d) To have at least 05 years of working experiences as a manager of a credit
institution or to have at least 05 years of working experiences as the General Director
(Director) or Deputy General Director (Deputy Director) of enterprises having equity capital
level at least equals the legal capital level applicable to each type of credit institutions in
accordance with provisions of the laws or to have at least 10 years of working experiences
directly in finance/banking/accounting/auditing sectors;
đ) To reside in Vietnam during her/his active term.
5. The Deputy General Director (Deputy Director), Chief Accountant, Manager of
branch, Manager of a subsidiary and other equivalent positions of credit institutions shall
meet in full following criteria and conditions:
a) To not fall in the scope of provisions of clause 2 of Article 33 of this Law;
Deputy General Director (Deputy Director) shall not fall in the scope of provisions of clause
1 of Article 33 of this Law;
b) To have university or higher degree in economics/business administration/law or
in professional field that she/he will take the position; or to have university or higher degree
in any other fields rather than stipulated above in addition to at least 03 years of working
experiences in areas such as banking/finance or in professional field that she/he will take the
position;
c) To reside in Vietnam during her/his active term.
6. The State Bank shall stipulate in details criteria and conditions applicable to
managers, administrators and members of the Board of Control of macro-finance
institutions.
Article 51.
Approval of nominated list of members of the Board of Directors,
members of the Members’ Council, members of the Board of
Controllers, General Director of credit institutions
1. Nominated list of members the Board of Directors, members of the Members’
Council, members of the Board of Controllers and General Director (Director) of a credit
institution shall be subject to written approval by the State Bank before the election,
appointment of such positions. Individuals having been elected, appointed to be members of
30
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
the Board of Directors, members of the Members’ Council, members of Board of
Controllers and General Director (Director) of the credit institution should be those in the
list approved by the State Bank.
2. The State Bank shall stipulate in details procedures and application files for
approval of the nominated list stipulated in clause 1 of this Article.
3. The credit institution shall inform the State Bank the list of elected, appointed
individuals to positions stipulated in clause 1 of this Article within 10 working days since
the date of election, appointment.
Section 3. Joint stock credit institutions
Article 52.
Types of Shares, Shareholders
1. A joint stock credit institution shall have common shares. Owners of common
shares shall be common shareholders.
2. A credit institution may have preference shares. Preference shares of a credit
institution include:
a) Dividend preference shares;
b) Voting preference shares.
3. Dividend preference shares are those of which dividends paid to shareholders is of
higher level than that paid to common shareholders or of a fixed annual rate. Annual paid
dividends include fixed dividends and bonus dividends. Fixed dividends shall not be based
on the business outcome of the credit institution and paid out only when the business
outcome is profitable. In case of loss or profits are not sufficient for dividend distribution,
fixed dividends paid out to dividend preference shareholders shall be aggregated in
following years. The fixed dividends rate and method of bonus dividends determination
shall be decided by Shareholders’ General Meeting and stated on the face of the dividend
preference share certificate. The total face value of dividend preference shares shall not
exceed 20% of the chartered capital of the credit institution.
Members of the Board of Directors, Board of Controllers, General Director and other
administrators, managers of a credit institution shall not be permitted to buy dividend
preference shares issued by that credit institution. Persons eligible for purchasing dividend
preference shares shall be stipulated in the Charter of the credit institution or decided by the
Shareholders’ General Meeting.
Dividend preference shareholders shall have the same rights as common
shareholders, except for voting right, Shareholders’ General Meeting attendance right and
the right to nominate candidate to the Board of Directors and Board of Controllers.
4. Only organizations which had been authorized by the Government and founding
members have the right to own voting preference shares. The validity of voting preference
shares held by founding members shall be 03 years since the date of business registration of
the credit institution. After that time limit, voting preference shares of founding members
31
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
shall be converted into common shares. Voting preference shareholders shall have the same
rights as common shareholders, except for the right of transferring their shares to others.
5. Common shares cannot be converted into preference shares while preference
shares can be converted into common shares according to Shareholders’ General Meeting’s
resolution.
6. A joint stock credit institution shall have at minimum 100 shareholders and
unlimited maximum quantity.
Article 53.
Rights of common shareholders
1. To participate and speak at Shareholders’ General Meetings and exercise their
voting right either directly or through authorized representatives; each common share shall
have one vote.
2. To be entitled to dividends pursuant to Shareholders’ General Meeting’s
resolutions.
3. To be given priority in buying new shares proportionately with each shareholder’s
common shares portioning the credit institution.
4. To freely transfer her/his shares to other shareholders of the credit institution or
other individuals, organizations in accordance with provisions of this Law and the Charter of
the credit institution.
5. To look up, investigate and take excerpts of voting shareholders list and to request
the correction of any inaccurate information in the list.
6. To look up, investigate or make copies of the Charter of the credit institution,
registry book of minutes and resolutions of Shareholders’ General Meetings.
7. To be entitled to a part of the remaining properties of the credit institution
proportionately with their shares portion upon the dissolution or bankruptcy of the credit
institution.
8. To be entitled to authorize other individuals in writing to exercise her/his rights
and obligations; the authorized individuals shall not be allowed to nominate herself/himself
as a candidate.
9. To be entitled to run for, or nominate candidates to the Board of Directors and the
Board of Controllers in accordance with provisions of the Charter of the credit institution or
provisions of the laws if the Charter of the credit institution is silent on this. The list of
candidates shall be submitted to the Board of Directors within the timeline set by the Board
of Directors.
Article 54.
Obligations of common shareholders
1. Shareholders of a credit institution shall have following obligations:
32
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
a) To pay in full for the shares they committed to purchase within the timeline
stipulated by the credit institution; to be liable for debts and other obligations of the credit
institution proportionately with the amount of capital contributed to the credit institution;
b) To not withdraw the capital contributed to the credit institution in any forms that
leads to the decrease of the chartered capital;
c) To be responsible before the laws for the lawfulness of the resources contributed
to the credit institution;
d) To comply with the Charter and other internal regulations of the credit
institution;
đ) To comply with resolutions and decisions of the Shareholders’ General Meeting
and/or of the Board of Directors;
e) To take personal responsibilities when acting on behalf of the credit institution in
any form to offend against provisions of the laws or when conducting business or carrying
out other transactions for personal interests or for interests of other organizations,
individuals.
2. Shareholders who act as trustees of other individuals, organizations shall provide
credit institution information regarding the real owners of the entrusted shares; otherwise,
the credit institution shall have the right to suspend all shareholder’s rights relating to such
shares when the truster is exposed.
Article 55.
Proportion of share ownership
1. An individual shall not own more than 5% of chartered capital of a credit
institution.
2. An organization shall not own more than 15% of chartered capital of a credit
institution, except for the followings:
a) Ownership of shares as stipulated in clause 3 of Article 149 of this Law to deal
with a problem credit institution in order to ensure the safety of the credit institutions
system;
b) Ownership of shares by the State in equitized credit institutions;
c) Ownership of the shares by foreign investors as stipulated in clause 2 of Article 16
of this Law.
3. One shareholder and her/his related parties shall not own more than 20% of
chartered capital of a credit institution.
4. The proportions of shareholding stipulated in clauses 1, 2 and 3 of this Article
shall include the portions of capital entrusted to other individuals, organizations.
33
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
5. Within 05 years since the granted date the License, founding shareholders shall
hold at minimum 50% of the chartered capital of the credit institution and founding
shareholders who are legal entities shall hold at minimum 50% of the total shares held by all
founding shareholders.
Article 56.
Offering and transfer of shares
1. Individual or organizational shareholders having authorized representative who is
a member of the Board of Directors, member of the Board of Controllers, General Director
(Director) of the credit institution shall not be allowed to transfer her/his shares during
her/his active term.
2. During the period of resolving consequences due to personal responsibilities in
accordance with the resolutions of the Shareholders’ General Meeting or decisions of the
State Bank, members of the Board of Directors, members of the Board of Controllers and
General Director (Director) shall not be allowed to transfer their shares, except for following
cases:
a) When they are authorized representatives of an organizational shareholder which
is incorporated, merged, divided, dissolved or went bankrupt in accordance with provisions
of the laws;
b) When they are required to transfer the shares by Court order;
c) When they are required to transfer the shares to other investors in order to
implement mandatory incorporation or merger as stipulated in clause 2 of Article 149 of this
Law.
3. The transfer of listed shares of credit institutions shall be subject to provisions of
the laws on securities.
4. Within 05 years since the granted date of the License, founding shareholders of a
credit institution shall only be permitted to transfer their shares to another founding
shareholders provided that the proportion of shares ownership stipulated in Article 55 of this
Law shall be assured.
Article 57.
Redemption of shares
A credit institution shall be allowed to buy back its shares only if after paying for
redeemed shares, the credit institution still be able to maintain required prudential ratios and
ensure that its chartered capital shall not fall below the legal capital level. The redemption of
shares leads to the decrease of the chartered capital of credit institutions shall be approved
by the State Bank.
Article 58.
Share certificate
In case credit institutions issue shares in the form of certificates, credit institutions
shall issue shares certificates to their shareholders within 30 days since the business
commencement date as for newly established credit institutions or within 30 days since the
34
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
date of full payment by shareholders for the shares they committed to purchase as for ongoing credit institutions increasing its chartered capital.
Article 59.
Shareholders’ General Meeting
1. The annual Shareholders’ General Meeting shall be held within 4 months after the
fiscal year ends. Extraordinary Shareholders’ General Meeting shall be held according to the
decision of the Board of Directors under following circumstances:
a) According to the Board of Directors, the meeting is necessary for the interests of
the credit institution;
b) The number of remaining members of the Board of Directors falls below the
minimum number stipulated in clause 1 of Article 62 of this Law;
c) To meet the request of a shareholder or a group of shareholders who own more
than 10% of common shares at least in 06 consecutive months;
d) To meet the request of the Board of Controllers;
đ) Other cases as stipulated in the Charter of the credit institution.
2. Shareholders’ General Meeting shall be comprised of all voting shareholders,
being the highest-level organ of the credit institution. Shareholders’ General Meeting shall
have following duties and powers:
a) To adopt the development directions of the credit institution;
b) To amend and supplement the Charter of the credit institution;
c) To approve the regulations on the organization and operations of the Board of
Directors and the Board of Controllers;
d) To make decisions on number of members of the Board of Directors, Board of
Controllers in each term; to elect, dismiss, remove, supplement, replace members of the
Board of Directors and members of the Board of Controllers pursuant to criteria and
conditions stipulated in this Law and the Charter of the credit institution;
đ) To make decisions on remuneration, bonus and other benefits for members of the
Board of Directors, members of the Board of Controllers and operation budgets of the Board
of Directors and the Board of Controllers;
e) To review and deal within the scope of authority with breaches of the Board of
Directors/Board of Controllers that cause losses to the credit institution and its shareholders;
g) To make decisions on organizational structure, management apparatus of the
credit institution;
h) To adopt the proposal on the changes of chartered capital level; to adopt the
proposal on share offering, including type of shares and number of new shares to be offered;
35
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
i) To adopt decision on shares redemption;
k) To adopt the proposal on issuance of convertible bonds;
l) To adopt annual reports and proposals on profit distribution after payment of tax
duties and other financial duties of the credit institution;
m) To adopt the report of the Board of Directors/Board of Controllers on their
performance;
n) To make decision on establishment of subsidiaries;
o) To adopt proposals on contribution of capital, purchase of share of other
enterprises or credit institutions with the value of more than 20% of chartered capital of the
credit institution stated in the latest audited financial report;
p) To make decision on investments, purchase, sale of properties of the credit
institution with the value of more than 20% of chartered capital of the credit institution
stated in the latest audited financial report or a lower level as stipulated in the Charter of the
credit institution;
q) To adopt contracts with value of more than 20% of chartered capital of the credit
institution stated in the latest audited financial report or at a lower level as stipulated in the
Charter of the credit institution between credit institution and a member of the Board of
Directors/member of the Board of Controllers/General Director (Director)/major
shareholders/related parties of administrators, members of the Board of Controllers and
major shareholders of the credit institution; subsidiaries and affiliated companies of the
credit institution;
r) To make decision on division, incorporation, merger, legal form transformation,
dissolution or request the Court to initiate bankruptcy proceedings for the credit institution;
s) To make decisions on remedy actions to deal with significant financial
fluctuations of the credit institution.
3. The decision of the Shareholders’ General Meeting shall be adopted as follows:
a) The Shareholders’ General Meeting shall adopt the decisions within its scope of
authority in the forms of voting at the meeting or collecting written opinions;
b) Except for the case stipulated in subclause (c) of this clause, decision of the
Shareholders’ General Meeting shall be adopted at the meeting when it is approved by the
shareholders representing more than 51% of the total votes of attended shareholders or a
higher ratio as stipulated in the Charter of the credit institution;
c) With regards to matters stipulated in subclauses 2(b), 2(h), 2(p) and 2(r) of this
Article, decision of the Shareholders’ General Meeting shall be adopted if more than 65% of
the total voting shares of attended shareholders approved for or a higher ratio as stipulated in
the Charter of the credit institution;
36
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
d) The election of member of the Board of Directors and member of the Board of
Controllers must be carried out in the form of accumulative votes.
5. Other decisions of the Shareholders’ General Meeting with regards to the matters
stipulated in subclauses 2(a), 2(d), 2(e) and 2(r) of this Article must be adopted in the form
of voting at the Shareholders’ General Meeting.
Article 60.
Convention of Shareholders’ General Meeting at request of the
State Bank
In the event the safety and the soundness of operations of a joint stock credit
institution have been affected, the State Bank shall have the right to request the Board of
Directors of joint stock credit institution to convene an extraordinary Shareholders’ General
Meeting to make decisions on matters required by the State Bank.
Article 61.
Submission of the minutes of the Shareholders’ General Meeting
Within 15 days since the closing date of the Shareholders’ General Meeting or the
finished date of counting written opinions, all resolutions and decisions adopted by the
Shareholders’ General Meeting shall be submitted to the State Bank.
Article 62.
The Board of Directors of joint stock credit institutions
1. The Board of Directors of a joint stock credit institution shall consist of at least
05 members and no more than 11 members, of which at least 01 member shall be
independent member. The Board of Directors must have at least one half of its members
being independent members and members who are not managers of the credit institution.
2. Individuals and their related parties or the representatives of capital contribution
of shareholders being legal entities and their related parties may take part in the Board of
Directors but shall not make up more than one third (1/3) of total members of the Board of
Directors of a joint stock credit institution, except for the cases of representatives of the
State capital contribution.
Article 63.
Duties and powers of the Board of Directors
1.
To be responsible for the implementation of the establishment, business
commencement of the credit institution subsequent to the first Shareholders’ General
Meeting.
2.
To be responsible before the Shareholders’ General Meeting for exercising
assigned duties and powers.
3.
To bring forward to the Shareholders’ General Meeting for adoption of
decisions on matters belong to the scope of authority of the Shareholders’ General Meeting
as stipulated in clause 2 of Article 59 of this Law.
4.
To make decisions on the establishment branches, representative offices and
administrative units.
37
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
5.
To appoint, dismiss, remove, apply disciplinary actions, suspend and make
decisions on salaries and other benefits for General Director (Director), Deputy General
Director (Deputy Director), Chief Accountant, Secretariat of the Board of Directors, other
positions in internal audit division and other administrators, managers in accordance with
internal regulations of the Board of Directors.
6.
To adopt projects of capital contribution to or share purchase of other
enterprises or other credit institutions with the value of less than 20% of the chartered
capital of the credit institution as stated in the last audited financial statements.
7.
To appoint the representative of the capital contribution proportion of the credit
institution in other enterprises or credit institutions.
8.
To make decisions on investments, purchase, sale of credit institution’s
properties with value more than 10% of chartered capital of the credit institutions as stated
in the latest audited financial statements, except for the investments and transactions of the
credit institution stipulated in sub-clause 2(p) of Article 59 of this Law.
9.
To make decisions on the provision of credit as stipulated in sub-clause 7 of
Article 128 of this Law, except for transactions falling under the scope of authority of the
Shareholders’ General Meeting as stipulated in sub-clause 2(q) of Article 59 of this Law.
10. To adopt contracts between credit institution and its subsidiaries, affiliated
companies; contracts between credit institution and members of the Board of Directors,
members of the Board of Controllers, General Director (Director), major shareholders
and/or their related parties with value less than 20% of chartered capital of the credit
institution stated in the latest audited financial statements or another lower ratio as stipulated
in the Charter of the credit institution. In this case, the related member shall be excluded
from voting.
11. To examine, supervise and direct General Director (Director) to carry out
assigned tasks; to undertake annual evaluation on performance of the General Director
(Director).
12. To issue internal regulations on the organization, governance and operations of
the credit institution in accordance with provisions of this Law and other applicable laws,
except for the matters falling under the scope of authority of the Board of Controllers or the
Shareholders’ General Meeting.
13. To make decisions on risk management policy and to supervise the
implementation of risk-preventive measures of the credit institution.
14.
To review and approve annual reports.
15. To select professionals to evaluate non-Vietnamese Dong contributed assets,
hard currencies and gold in accordance with provisions of the laws.
16. To request approvals of the Governor of the State Bank on matters as stipulated
by the laws.
38
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
17. To make decisions on the offering of new shares within the permitted number
of shares issuance.
18.
To set offering prices for shares and convertible bonds of the credit institution.
19.
To make decisions on redemption of shares.
20. To recommend on profit distribution plans, the amount of dividend to be paid
out; to make decision on the time and formalities for payment of such dividend or settlement
of losses arose during the course of business.
21. To prepare contents and materials to submit to the Shareholders’ General
Meeting for decisions on the matters falling under the scope of authority of the
Shareholder’s General Meeting, except for matters within the scope of authority of the
Board of Controllers.
22. To approve the working plans and programs of the Board of Directors; to
approve agenda, contents, hand-out materials for Shareholders’ General Meetings; to
convene Shareholders’ General Meetings or consult opinions of shareholders in writing to
process the adoption of resolutions and decisions of the Shareholders’ General Meeting.
23. To organize, examine and supervise the implementation of resolutions and
decisions of the Shareholders’ General Meeting and the Board of Directors.
24. To promptly notify the State Bank of the information that negatively affects the
status of any members of the Board of Directors, Board of Controllers, General Director
(Director).
25.
Other duties and powers as stipulated in the Charter of the credit institution.
Article 64.
Rights and obligations of Chairman of the Board of Directors
1. To develop working plans and programs of the Board of Directors.
2. To prepare programs, contents and materials for meetings; to convene and chair
the meetings of the Board of Directors.
3. To organize the adoption of the decisions of the Board of Directors.
4. To supervise the implementation of the decisions of the Board of Directors.
5. To chair Shareholders’ General Meetings.
6. To ensure that all members of the Board of Directors to be provided with full,
fair, accurate and timely information on the matters to be considered by the Board of
Directors and with sufficient time for consideration and discussion.
7. To assign tasks to members of the Board of Directors.
39
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
8. To supervise members of the Board of Directors in carrying out their assigned
tasks, other general rights and obligations.
9. To evaluate the performance of members and committees of the Board of
Directors at least once a year and report the results to the Shareholders’ General Meeting.
10. Other rights and obligations as stipulated in the Charter of the credit institution.
Article 65.
Rights and obligations of members of the Board of Directors
1. To exercise rights and obligations of members of the Board of Directors in
accordance with internal regulations of the Board of Directors and the assignment of the
Board’s Chairman in good faith and for the interests of the credit institution.
2. To review financial statements prepared by external auditors; to give feedbacks
or request managers of the credit institution and/or external and internal auditors to explain
concerned matters found in the statements.
3. To request Chairman of the Board of Directors to convene an extraordinary
meeting of the Board of Directors.
4. To attend meetings of the Board of Directors, discuss and vote on matters within
the scope of duties and powers of the Board of Directors as stipulated in this Law unless
excluded from doing so as a result of conflict of interest. To be responsible before the
Shareholders’ General Meeting and the Board of Directors for their decisions.
5. To implement resolutions and decisions of Shareholders’ General Meeting and
the Board of Directors.
6. To make clarification in regards of assigned tasks before Shareholders’ General
Meeting and the Board of Directors as requested.
7. Other rights and obligations as stipulated in the Charter of the credit institution.
Section 4. Sole member limited liability credit institution
Article 66.
Duties and powers of the Owner
1. Owner of sole member limited liability credit institutions being shall have
following powers:
a) To make decisions on the number of members of the Members’ Council for each
term which shall consist of at least 05 members and not exceed 11 members;
b) To appoint authorized representative with a term of maximum 05 years to carry
out owner’s duties and powers in accordance with provisions of this Law. The authorized
representatives shall meet in full criteria and conditions stipulated in clause 1 of Article 50
of this Law;
40
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
c) To appoint, dismiss, remove, supplement members of the Members’ Council,
Chairman of the Members’ Council, members of the Board of Controllers, General Director
(Director), Deputy General Director (Deputy Director), Chief Accountant;
d) To make decisions on adjusting chartered capital of the credit institution;
transferring a part of or the whole of chartered capital of the credit institution and
transforming legal form of the credit institution;
đ) To make decisions on establishment of subsidiaries and affiliates;
e) To approve annual financial statements; to make decision on the usage of profits
after fulfillment of tax duties and other financial obligations of the credit institution;
h) To make decisions on reorganization, dissolution and to request the Court to
initiate bankruptcy proceedings for the credit institution;
i) To make decisions on the remuneration, salaries, and other benefits for members
of the Members’ Council, members of the Board of Controllers and General Director
(Director).
2. Owner of sole member limited liability credit institutions shall have following
obligations:
a) To contribute capital in full and on schedule as committed;
b) To comply with the Charter of the credit institution;
c) To classify and separate between properties of the owners and properties of the
credit institution;
d) To comply with the provisions of the laws in regards of selling, purchasing,
borrowing, lending, renting, leasing and other transactions between the owner and the credit
institution;
đ) Other duties as stipulated in this Law and the Charter of the credit institution.
Article 67.
Duties and powers of the Members’ Council
1. The Members’ Council of sole member limited liability credit institutions shall be
comprised of all authorized representatives of the owners, acting on behalf of the owners to
carry out owners’ rights and obligations of the credit institution; shall be responsible before
the owners in carrying out assigned duties and powers in accordance with provisions of this
Law and the Charter of the credit institution.
2. Members’ Council of sole member limited liability credit institutions shall have
the following duties and powers:
a) To make decisions on the contents of the Charter, the amendment and supplement
to the Charter of the credit institution;
41
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
b) To make decisions on the development strategy and annual business plans of the
credit institution;
c) To submit to the owners of the credit institution for decisions on matters falling
under the scope of authority of owners as stipulated in sub-clauses 1(c), 1(d), 1(đ), 1(e) and
1(g) of Article 66 of this Law;
d) To review and approve annual reports;
đ) To make decisions on the selection of external auditor;
e) To examine, supervise and direct General Director (Director) in carrying out
assigned tasks; to annually evaluate the performance of the General Director (Director);
g) To make decisions on settlement of losses arose in the course of business;
h) To make decisions on the provision of credits stipulated in clause 7 of Article 128
of this Law;
i) To make decisions on the plans of capital contribution and share purchase of other
enterprises or credit institutions with value of more than 20% of the chartered capital stated
in the latest audited financial statement of the credit institution or a lower ratio stipulated in
the Charter of the credit institution;
k) To approve decisions on investments, on sale and purchase of assets of the credit
institution with value of more than 20% of total assets stated in the latest audited financial
statement of the credit institution or at lower ratio stipulated in the Charter of the credit
institution;
l) To make decisions on entering into contracts of credit institution with subsidiaries
and affiliated companies of the credit institution; or with members of the Members’ Council,
members of the Board of Controllers, General Director (Director) and/or their related
parties. In this case, the related member shall be excluded from voting;
m) To make decisions on market development plans, marketing and technology
transfer;
n) To issue internal regulations on the organization, governance and operations of
the credit institution in accordance with provisions of the laws;
o) To request approvals of the Governor of the State Bank on matters stipulated by
the laws;
p) To supervise and conduct assessment of business operations of the credit
institution;
q) Other duties and powers as stipulated in the Charter of the credit institution.
Article 68.
Rights and obligations of the Chairman of the Members’ Council
42
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
1. To prepare working plans and programs of the Members’ Council.
2. To prepare agenda, contents and materials for meetings of the Members’ Council
or for seeking opinions of members of the Members’ Council.
3. To convene and chair the meetings of the Members’ Council or to arrange the
collection of opinions from members.
4. To supervise the implementation of decisions of the Members’ Council.
5. To sign on behalf of the Members’ Council the decisions of the Members’
Council.
6. To ensure that all members of the Members’ Council to be provided with full,
fair, accurate information and sufficient time for discussion on matters to be considered by
the Members’ Council.
7. To assign tasks to members of the Members’ Council.
8. To supervise members of the Members’ Council in carrying out their assigned
tasks and other general duties and powers.
9. To evaluate the performance of members of the Members’ Council at least once
a year and report the results to the owner.
10.
Other rights and obligations stipulated in the Charter of the credit institution.
Article 69.
Rights and obligations of members of the Members’ Council
1. To exercise their rights and obligations as stipulated in internal regulations of the
Members’ Council and the assignment of the Council’s Chairman in good faith and for the
interests of the credit institution and the owner.
2. To give feedbacks or request managers of the credit institution, external and
internal auditors to explain concerned matters in financial statements prepared by external
auditors.
3. To request Chairman of the Members’ Council to convene extraordinary
meetings of the Members’ Council.
4. To attend meetings of the Members’ Council, discuss and vote on matters within
the scope of duties and powers of the Members’ Council unless excluded from doing so as a
result of conflict of interest. To be responsible before the owner and the Members’ Council
for their decisions.
5. To implement decisions of owner and resolutions of the Members’ Council.
6. To make clarification in regards of assigned tasks before the owner and the
Members’ Council as requested.
43
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
7. Other rights and obligations stipulated in the Charter of the credit institution.
Section 5: Limited liability credit institution with two or more members
Article 70.
Capital contributors, duties and powers of capital contributors
1. Capital contributors of limited liability credit institutions with two or more
members shall be a legal entity, except for the cases stipulated in Article 88 of this Law.
Total capital contributors shall not exceed 05 members. The maximum ownership
proportion of one member and her/his related parties shall not exceed 50% of the chartered
capital of the credit institution.
2. Capital contributors shall have the following powers:
a) To appoint, dismiss, remove qualified representatives to be members of the
Members’ Council and members of the Board of Controllers based on their portion of
capital contributed to the credit institution or the agreement among capital contributors;
b) To be provided with information and reports on the performance of the Members’
Council and the Board of Controllers, accounting books, annual financial statements and
other documents of the credit institution;
c) To receive profit distributed proportionately with the portion of capital contributed
when the credit institution has fulfilled all of its tax duties and other financial obligations;
d) To receive the residual assets of the credit institution proportionately with the
portion of capital contributed in the credit institution upon the dissolution or bankruptcy of
the credit institution;
đ) To complain or file petition against any members of the Members’ Council, any
members of the Board of Controllers or General Director (Director) who fails to properly
fulfill her/his rights and obligations so as to cause losses and damages to the credit
institution’s or capital contributors’ lawful rights and interests.
3. Capital contributors shall have the following obligations:
a) To not withdraw contributed capital from the credit institution in any forms,
except for the case of transfer capital in accordance with provisions stipulated in Article 71
of this Law;
b) To comply with the Charter of the credit institution;
c) Other obligations stipulated in the Charter of the credit institution.
Article 71.
Transfer of capital, redemption contributed capital
1. Capital contributors shall be allowed to transfer their contributed capital and
shall have the priority to make additional contribution to the capital of the credit institution
when the credit institution raises its chartered capital.
44
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
2. The State Bank shall stipulate in details conditions for the transfer and the
redemption of contributed capital of the credit institution.
Article 72.
Members’ Council
1. The Members’ Council of limited liability credit institution with two members or
more shall have following duties and powers:
a) To carry out duties and powers stipulated in sub-clauses 2(a), 2(b), 2(d), 2(đ),
2(h), 2(i), 2(k), 2(l), 2(m), 2(n) and 2(o) of Article 67 of this Law;
b) To make decision on the increase or decrease of the chartered capital; to make
decision on the time and method of raising additional capital;
c) To reports on financial performance and business outcomes of the credit
institution, the execution of duties and powers assigned to the Members’ Council and its
members as requested by capital contributors or competent state bodies;
d) To make decisions on the redemption of contributed capital of the credit
institution in accordance with provisions of this Law;
đ) To elect, dismiss or remove the Chairman of the Members’ Council; to make
decision on the appointment, dismissal, removal, entry into or termination of the contract
with General Director (Director), Deputy General Director (Deputy Director), Chief
Accountant, other managers, administrators in accordance with internal regulations of the
Members’ Council;
e) To make decisions on salaries, bonuses, remunerations and other benefits for
Chairman and members of the Members’ Council, Head and members of the Board of
Controllers, General Director (Director) in accordance with provisions of this Law, unless
otherwise stipulated in the Charter of the credit institution;
g) To adopt annual financial statements, profits distribution and losses settlement
plans of the credit institution;
h) To make decision on setting up subsidiaries, branches, representative offices and
making capital contributions to set up affiliated companies;
i) To make decision on the reorganization of the credit institution;
k) To make decision on the dissolution of the credit institution or to request the
Court initiate bankruptcy proceedings for the credit institution;
l) Other duties and powers stipulated in Charter of the credit institution.
2. The Chairman of the Members’ Council of limited liability credit institution with
two members or more shall have following rights and obligations:
a) To execute rights and obligations stipulated in clauses 1, 2, 3, 4, 5, 6, 7, and 8 of
Article 68 of this Law;
45
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
b) To evaluate the performance of members and committees of the Members’
Council at least once a year;
c) Other rights and obligations stipulated in the Charter of the credit institution.
3. Members of the Members’ Council of limited liability credit institution with two
members or more shall have following rights and obligations:
a) To execute rights and obligations stipulated in clauses 1, 2 and 3 of Article 69 of
this Law;
b) To attend meetings of the Members’ Council, to discuss and vote on all matters
within the scope of duties and powers of the Members’ Council in accordance with
provisions of this Law unless excluded from doing so as stipulated in clauses 1 and 2 of
Article 67 of this Law; to be responsible before the Members’ Council for their decisions;
c) To implement resolutions and decisions of the Members’ Council;
d) To make clarifications in regards to the carrying out assigned duties before capital
contributors and the Members’ Council as requested;
đ) Other rights and obligations stipulated in the Charter of the credit institution.
Section 6. Co-operative credit institutions
Article 73.
Nature and objectives of operations
Co-operative credit institution is a form of credit institution organized as a cooperative operating in banking area with the main purpose of cooperation among its
members to effectively carry out productions, businesses, services and improve living
standards. Co-operative credit institutions shall include co-operative banks and people’s
credit funds.
Article 74.
Establishment of co-operative credit institutions
1. Members of co-operative banks shall include all people’s credit funds and other
capital contributing legal entities.
2. Members of people’s credit funds shall include individuals, households and other
capital contributing legal entities.
Article 75.
Organizational structure
1. The organizational structure of a cooperative bank or a people’s credit fund
includes Members’ General Meeting, Board of Directors, Board of Control and General
Director (Director).
2. Members of the Board of Directors, members of the Board of Control, General
Director (Director) of a cooperative bank or a people’s credit fund shall meet criteria in
46
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
terms of qualifications, professional ethics and knowledge on banking operations in
accordance with provisions of the State Bank.
3. Cooperative banks, people’s credit funds shall establish internal audit, internal
control system and conduct independent audits in accordance with provisions of the State
Bank.
Article 76.
Chartered Capital
1. Chartered capital of co-operative banks, peoples’ credit funds shall be the total
amount of capital contributed by members and stated in the Charter.
2. The minimum and maximum amount of capital contribution applicable to one
member shall be decided by the Members’ Meeting in accordance with provisions of the
State Bank.
Article 77.
Charter
1. The Charter of co-operative banks, people's credit funds shall be in accordance
with provisions of this Law, Law on co-operatives and other applicable provisions of the
laws. The Charter of co-operative banks, people's credit funds must contain following basic
contents:
a) Name and address of the headquarter;
b) Content and scope of operations;
c) Duration of operation;
d) Chartered capital and capital contribution methods;
đ) Organizational structure, duties and powers of the Board of Directors, Board of
Controllers and rights and obligations of General Director (Director);
e) Formalities for conducting Members’ General Meetings and for the adoption of
decisions of the Members’ General Meeting;
g) Rights and obligations of members;
h) Principles on finance, accounting, internal control and internal audit;
i) Principles of payment of salaries, allowances and remuneration, settlement of
losses, distribution of profits according to the contributed capital and contributed efforts of
each member and depending on the frequencies of use of services of the credit institution;
principles of appropriation for setting up, management and uses of various funds;
k) Formalities for managing, using, preserving and dealing with common properties
and accumulative capital;
47
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
l) Events of and procedures for division, separation, merger, incorporation,
dissolution and bankruptcy;
m) Procedures for amending Charter.
2. The Charter of co-operative banks, people's credit funds and its amendments or
supplements shall be registered with the State Bank within 15 days from the date of its
adoption.
Article 78.
Members’ rights
1. To attend Members’ General Meeting or elect representative to attend Members’
General Meeting; to attend Members’ Meeting and vote for matters in the scope of authority
of the Members’ General Meeting.
2. To self-nominate or nominate others to the Board of Directors, Board of
Controllers and other positions in accordance with provisions of the Charter of co-operative
banks, people's credit funds.
3. To make deposits, get loans, receive profit proportionately with capital contributed
and with the level of services used at co-operative banks, people's credit funds.
4. To be benefited from common social welfare of co-operative banks, people's
credit funds.
5. To be provided with necessary information related to operations of co-operative
banks, people's credit funds.
6. To recommend on matters related to operations of co-operative banks, people's
credit funds to request the response from the co-operative banks, people's credit funds; to
request the Board of Directors, Board of Controllers to convene extraordinary Members’
General Meeting to resolve urgent problems.
7. To transfer the portion of capital contributed and rights, obligations to third party
in accordance with applicable provisions of the laws and the Charter of co-operative banks,
people's credit funds.
8. To be allowed to withdraw from the co-operative banks, people's credit funds in
accordance with provisions of the Charter of co-operative banks, people's credit funds.
9. Other rights as stipulated in the laws and the Charter of co-operative banks,
people's credit funds.
Article 79.
Members’ obligations
1. To comply with the Charter of co-operative banks, people's credit funds and
resolutions of Members’ General Meetings.
2. To contribute capital in accordance with provisions of the Charter of co-operative
banks, people's credit funds and other applicable provisions of the laws.
48
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
3. To mutually cooperate and support amongst members; to take part in building and
promoting the development of co-operative banks, people's credit funds.
4. To be jointly responsible for exposures, losses in the operations of co-operative
banks, people's credit funds proportionately with the amount of capital contributed.
5. To repay principal and interest of the loan granted by co-operative banks, people's
credit funds as pre-agreed.
6. To compensate for losses caused by her/him to co-operative banks, people's credit
funds.
Article 80.
Members’ General Meeting
1. Members’ General Meeting is the highest-level body of a co-operative bank,
people’s credit funds.
2. Members’ General Meeting shall discuss and make decisions on the followings:
a) Report on annual business outcomes, financial reports, accounting books,
estimation of profit distribution and loss settlements (if any); report on activities of the
Board of Directors and Board of Controllers;
b) Business directions in the following year;
c) Raising or decreasing the chartered capital, level of capital contribution of
members;
d) Election, dismissal or removal of the Chairman and members of the Board of
Directors, Head and members of the Board of Controllers;
đ) Adoption of the list of newly admitted or quitting members of co-operative banks,
people’s credit funds; decisions on expelling members;
e) Division, incorporation, merger, dissolution of co-operative banks, people’s credit
funds;
g) Amendment and supplement of the Charter;
h) Other matters as requested by the Board of Directors, Board of Controllers or at
least one third (1/3) of the total members of co-operative banks, people’s credit funds.
Article 81.
Board of Directors
1. Board of Directors is the administrative body of co-operative banks, people’s
credit funds, comprised of the Chairman and other members.
2. The number of members of the Board of Directors shall be decided by the
Members’ General Meeting but not less than 03 members.
49
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
3. The term of the Board of Directors shall be decided by the Members’ General
Meeting and stated in the Charter with the minimum term of 02 years and maximum term of
05 years.
4. Members of the Board of Directors shall be individuals or representatives of
capital contributing legal entities. Members of the Board of Controllers, Chief Accountant,
Treasurer of co-operative banks, people’s credit funds shall not concurrently be members of
the Board of Directors and shall not be related parties of members of the Board of Directors.
5. Chairman and members of the Board of Directors shall not be allowed to authorize
third party who is not a member of the Board of Directors to perform her/his rights and
obligations.
Article 82.
Duties and powers of the Board of Directors
1. To appoint, dismiss, remove, hire or terminate hiring contract with the General
Director (Director) pursuant to the resolutions, decisions of the Members’ General Meeting.
2. To appoint, dismiss Deputy General Directors (Deputy Directors) based on
proposals of the General Director (Director).
3. To implement resolutions, decisions of the Members’ General Meeting.
4. To prepare reports assessing business outcomes; to approve financial statements,
report on business performance and report on the operations of the Board of Directors to
submit to the Members’ General Meeting.
5. To prepare agenda for Members’ General Meetings and convene Members’
General Meetings.
6. To execute rights and obligations of co-operative banks, people’s credit funds as
stipulated by the laws.
7. To review applications of new members and to make decisions on withdrawal of
existing members, except for the case of expelling members and submit to the Members’
General Meeting for approval.
8. To be responsible for their decisions before the Members’ General Meeting.
9. Other duties and powers as stipulated in the Charter of co-operative banks,
people’s credit funds.
Article 83.
Organization and operation of the Board of Controllers
1. The Board of Controllers shall be comprised of at least 03 members, including one
full-time member. The State Bank shall stipulate conditions for people’s credit funds
allowed to have 01 full-time controller.
50
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
2. Head and members of the Board of Controllers shall be directly elected by the
Members’ General Meeting.
3. Members of the Board of Controllers shall be individuals or representatives of
capital contributing legal entities. Members of the Board of Controllers shall not
concurrently be members of the Board of Directors, General Director (Director), Deputy
General Director (Deputy Director), Chief Accountant, Treasurer and functional staff of cooperative banks, people’s credit funds and shall not be related parties of members of the
Board of Directors, General Director (Director), Deputy General Director (Deputy Director),
Chief Accountant, Treasurer.
4. The Board of Controllers shall be responsible before the Members’ General
Meeting for carrying out assigned duties and powers.
5. Term of the Board of Controllers shall be the same as that of the Board of
Directors.
Article 84.
Duties and powers of the Board of Controllers
1. To examine, supervise operations of the co-operative banks, people’s credit funds
in compliance with provisions of the laws.
2. To examine the compliance with provisions of the Charter, resolutions and
decisions of Members’ General Meeting, resolutions and decisions of the Board of
Directors; to supervise operations of the Board of Directors, General Director (Director) and
members of co-operative banks, people’s credit funds.
3. To monitor financial activities, to supervise the compliance with accounting
standards, income distribution, loss settlement, use of funds, use of property and of state’s
subsidy; to supervise the prudence in operations of the co-operative banks, people’s credit
funds.
4. To perform periodically internal audit of various operations to precisely evaluate
the business activities and the financial status of co-operative banks, people’s credit funds.
5. To deal within the scope of authority with complaints, denunciations related to
operations of co-operative banks, people’s credit funds in accordance with provisions of the
laws and Charter of co-operative banks, people's credit funds.
6. To convene extraordinary Members’ General Meetings in following
circumstances:
a) When the Board of Directors, General Director (Director) has offended against the
laws, the Charter of co-operative banks, people's credit funds and resolutions of Members’
General Meeting; when the Board of Directors had not performed or ineffectively performed
preventing measures as requested by the Board of Controllers;
b) When at least one third (1/3) of the total members of the Board of Controllers
have requested the Board of Directors or the Board of Controllers to convene Members’
51
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
General Meeting but the Board of Directors failed to convene extraordinary Members’
General Meeting within 15 days from the receipt date the request.
7. To inform the Board of Directors and report to Members’ General Meeting and
the State Bank in regards of examination results; to recommend the Board of Directors,
General Director (Director) to take corrections for weaknesses and breaches in operations of
cooperative banks, people's credit funds.
Article 85.
General Director (Director) of co-operative banks, people's credit
funds
The Board of Directors shall appoint one amongst its members or hire another
person to act as General Director (Director) of cooperative banks or people’s credit funds.
The General Director (Director) shall be the highest executive manager and be responsible
for carrying out day-to-day operations of co-operative banks, people's credit funds.
Article 86.
Rights and obligations of the General Director (Director)
1. To implement business plans.
2. To execute decisions of the Board of Directors.
3. To propose to the Board of Directors alternatives of organizational structures of
co-operative banks, people's credit funds.
4. To sign contracts on behalf of co-operative banks, people's credit funds.
5. To submit annual financial statements to the Board of Directors.
6. To be responsible before the Board of Directors for assigned tasks.
7. Other rights and obligations as stipulated in the Charter of co-operative banks,
people's credit funds.
Section 7. Microfinance institutions
Article 87.
Types of microfinance institutions
1. Microfinance institutions shall be established in the forms of limited liability
company.
2. Organizational structure, governance and management of microfinance shall
comply with provisions of this Law and other applicable provisions of the laws.
Article 88.
Members, capital contribution, organizational structure and
geographical boundaries of operations of microfinance institutions
The State Banks shall stipulate the capital contributions of foreign individuals and
organizations to set up microfinance institutions; number of capital contributors; ownership
proportions, ownership portions of both domestic and foreign organizations and individuals
52
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
in microfinance institutions; restrictions on network structure and geographical boundaries
of operation of microfinance institutions.
Section 8. Foreign bank’s branches in Vietnam
Article 89.
Governance and management of foreign bank branches
1. The organizational and governance structure of foreign bank’s branches in
Vietnam shall be decided by foreign banks pursuant to the laws of the home country where
their headquarter is located and in accordance with provisions of this Law in regards to
organizational structure, governance, management, internal control and internal audit and
shall be approved in writing by the State Bank.
2. The General Director (Director) of a foreign bank’s branch shall represent the
foreign bank’s branch before the laws and shall be responsible for all operations of the
foreign bank’s branch and the management of the branch’s day-to-day operations in
accordance with duties and powers set out in this Law and other applicable provisions of the
laws.
3. The General Director (Director) of a foreign bank branch shall not be involved in the
management and governance of another credit institution or economic organization and shall
not concurrently act as the Chief representative of the foreign bank’s representative office in
Vietnam.
4. The General Director (Director) of a foreign bank’s branch shall meet in full
criteria and conditions stipulated in clause 4 of Article 50 of this Law. Individuals to be
appointed to General Director (Director) position of the foreign bank’s branch shall be
approved in writing by the State Bank before the appointment takes place. Order and
application files for approval of General Director (Director) of foreign bank’s branches and
report of the appointment shall be subject to provisions of clauses 2 and 3 of Article 51 of
this Law.
5. In case a foreign bank has two or more branches operating in Vietnam applies
consolidated financial, accounting and reporting regime, the foreign bank shall authorize one
General Director (Director) to assume responsibilities before the laws for all of the
operations of the foreign bank’s branches in Vietnam.
CHAPTER IV: OPERATION OF CREDIT INSTITUTIONS
Section 1. General regulations
Article 90.
Scope of permitted activities of credit institutions
1. The State Bank shall stipulate in details the scope, types and contents of banking
activities and other business activities of credit institutions in the License granted to each
credit institution.
2. A credit institution shall not be permitted to carry out any business activities other
than banking activities and other business activities stipulated in the License granted to the
credit institution by the State Bank.
53
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
3. Banking activities and other business activities of credit institutions provided for
in this Law shall be carried out in accordance with guidelines of the State Bank.
Article 91.
Interest rate and fees in credit institution’s business activities
1. Credit institutions shall have the right to fix and shall have to publicize interest
rates and service fees for business activities of credit institutions.
2. Credit institutions and their customers shall have the right to negotiate interest
rates and credit provision fees in the course of banking business of credit institutions as
stipulated by the laws.
3. In cases of occurrence of unusual events in banking activities, in order to ensure
the safety of the whole system of credit institutions, the State Bank shall have the right to
stipulate the determination regime for fees and interest rates for credit institutions’ business
activities.
Article 92.
Issuance of certificates of deposits, bills of exchange, bills of credit
of credit institutions
1. Credit institutions shall be allowed to issue certificates of deposits, bills of
exchange and bills of credit to mobilize funds in accordance with provisions of this Law and
provisions of the State Bank.
2. Based on this Law and the Law on securities, the Government shall stipulate the
issuance of bonds, excluding convertible bonds, to mobilize fund for credit institutions.
Article 93.
Internal regulations
1. Based on provisions of this Law and other applicable provisions of the laws, credit
institutions shall formulate and enforce internal regulations for activities of credit
institutions, ensuring that the internal controlling and internal auditing mechanisms, risk
management mechanism being inbuilt in each of business procedures and internal
regulations for contingency plans.
2. Credit institutions shall issue following internal regulations:
a) Regulations on provision of credit and loans management to ensure the use of
loans in line with its original purpose;
b) Regulations on assets classification, risk provisioning and the use of risk
provisions;
c) Regulations on evaluation of assets quality and compliance of capital adequacy
ratio;
d) Regulations on liquidity management, including procedures and limits of liquidity
management;
54
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
đ) Regulations on internal control system and internal audit regime suitable with the
nature and the scale of operations of the credit institution;
e) Regulations on internal credit rating system;
g) Regulations on risk management for credit institution’s activities;
h) Regulations on formalities and procedures, including know-your-customer
principle to prevent the credit institutions from being abused for money laundering,
terrorism-financing and other criminal offences;
i) Regulations on contingency plans.
3. Credit institutions shall submit to the State Bank their internal regulations
stipulated in clause 2 of this Article immediately after their issuance.
Article 94.
Approval of credit provision, examination of loans use
1. Credit institutions shall request their clients to provide proofs of the feasibility of
their business plans, their financial capacity, lawful purpose of fund employment and
security measures for loans prior to making decisions on provision of credit.
2. Credit institutions shall carry out the evaluation and approval of credit on principle
of segregation of duties between evaluation and decision-making phases.
3. Credit institutions shall have right and obligation to carry out examination and
control of their clients’ fund employment and repayment.
4. Credit institutions shall have the right to request their clients to report on the
borrowed fund employment and prove that the fund is used in compliance with the
borrowing purpose.
Article 95.
Termination and settlement of loans, adjustment of interest rates
1. Credit institutions shall have the right to terminate and collect a loan prior to the
due date in cases when information provided by the clients is identified to be incorrect or
when the clients are identified to have committed a breach of the credit contract.
2. In cases when the clients fail to make repayments on the due date, credit
institutions shall, unless otherwise agreed by the two parties, have the right to settle the loan
or to dispose the pledged assets in accordance with provisions of the credit contract or
contract of security for loan and other applicable provisions of the laws. The State Bank
shall stipulate in details the loan restructuring and loan trading of credit institutions.
3. In cases when a client or her/his guarantor went bankrupted and therefore fails to
make repayment of loans, the loans shall be reclaimed by the credit institution in accordance
with provisions of the laws on bankruptcy.
4. Credit institutions shall have the right to offer their clients exemptions from or
reductions of interest rates and fees in accordance with their internal regulations.
55
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
Article 96.
Storage of credit files
1. Credit institutions shall store credit files, including:
a) Credit contracts and relevant documents clearly specifying the purposes of
borrowed fund employment and security measures for loans;
b) Reports on actual financial status of borrowers;
c) Decisions on provision of credit signed by competent persons; where such
decisions are collectively made, the minutes of the decisions shall be required;
d) Documents arising in the course of fund employment related to the credit
contracts.
2. Storage duration of credit files shall be subject to provisions of the laws.
Article 97.
Electronic banking activities
Credit institutions shall be allowed to provide business activities via electronic
means in accordance with guidance of the State Bank on risk management and provision of
the laws on electronic transactions.
Section 2. Activities of commercial banks
Article 98.
Banking activities of commercial banks
1. To accept demand deposits, term deposits, saving deposits and other types of
deposits.
2. To issue certificates of deposits, bills of exchange, bills of credits and bonds to
mobilize domestic and foreign funds.
3. To provide credits in following forms:
a) Lending;
b) Discounting and rediscounting negotiable instruments and other valuable papers;
c) Providing bank guarantee;
d) Issuing credit cards;
đ) Providing domestic factoring services; international factoring services shall be
provided by commercial banks licensed with international payment services;
e) Other forms of credit provision upon approval of the State Bank.
4. To open payment accounts for customers.
56
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
5. To provide payment instruments.
6. To provide following payment services:
a) Domestic payment services including cheques, payment orders, payment
authorizations, collection orders, collection authorizations, letters of credits, bank cards;
b) International and other payment services upon approval of the State Bank.
Article 99.
Borrowings from the State Bank
Commercial banks shall be allowed to borrow funds from the State Bank in the form
of refinancing in accordance with provisions of the Law on the State Bank of Vietnam.
Article 100. Borrowing from credit institutions and financial institutions
Commercial banks shall be allowed to borrow capital from domestic and foreign
credit and financial institutions in accordance with provisions of the laws.
Article 101. Opening of accounts
1. Commercial banks shall have to open deposit account at the State Bank and
maintain in such account an average balance of no less than the compulsory reserves level.
2. Commercial banks shall be allowed to open payment accounts at other credit
institutions.
3. Commercial banks shall be allowed to open deposit and payment accounts
overseas in accordance with provisions of the laws on foreign exchange.
Article 102. Organization of and participation in payment systems
1. Commercial banks shall be allowed to set up internal payment systems and
participate in the national inter-bank payment system.
2. Commercial banks shall be allowed to participate in international payment
systems upon approval of the State Bank.
Article 103. Capital contribution and shares purchase
1. Commercial banks shall be allowed to use only chartered capital and reserve funds
to make capital contributions and to purchase shares in accordance with provisions of
clauses 2, 3, 4 and 6 of this Article.
2. Commercial banks shall have to establish subsidiaries and affiliates to carry out
following business activities:
57
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
a) Securities underwriting; securities brokerage; management and distribution of
securities investment fund certificates; management of securities portfolio and
buying/selling of stocks;
b) Finance leasing;
c) Insurance.
3. Commercial banks shall be allowed to establish and/or acquire subsidiaries and
affiliates operating in following fields: management of security assets, overseas national
currency exchange, foreign exchange trading, gold, factoring, issuance of credit cards, consumer
credits, payment intermediary services and credit information services.
4. Commercial banks shall be allowed to make capital contributions and purchase shares
of enterprises operating in following fields:
a) Insurance, securities, overseas national currency exchange, foreign exchange trading,
gold, factoring, issuance of credit cards, consumer credits, payment intermediary services and
credit information services;
b) Other fields not stipulated in subclause a of this clause.
5. The establishment, acquisition of subsidiaries, affiliate companies stipulated in clauses
2 and 3 of this Article and the capital contribution, shares purchase stipulated in subclause 4(b)
of this Article shall be approved in advance by the State Bank in writing. The State Bank shall
stipulate in details conditions, application files, formalities and procedures for mentioned above
approvals.
Conditions, formalities and orders of establishment of subsidiaries, affiliate companies
of credit institutions shall be subject to applicable provisions of the laws.
6. Commercial banks and their subsidiaries shall be allowed to purchase/own stocks of
other credit institutions in accordance with conditions and limits of the State Bank’s stipulations.
Article 104. Participation in the monetary market
Commercial banks shall be allowed to participate in the tender of Treasury bills,
buying/selling of negotiable instruments, Government bonds, Treasury bills, State Bank’s
bills and other valuable papers on the market.
Article 105.
Trading and providing services in regards to foreign currencies and
derivatives products
1. Upon approval of the State Bank, commercial banks shall be allowed to carry out
the trading and providing to their domestic and foreign customers following products:
a) Foreign currencies;
b) Exchange rates derivatives; interest rates derivatives; foreign exchange
derivatives; money derivatives and other financial assets derivatives.
58
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
3. The provision of foreign exchange services to customers shall be subject to
provisions of the laws on foreign exchange.
Article 106. Trust business and agent services
Commercial banks shall be allowed to act as the trustor, trustee, principal, agent in
areas relating to banking activities, insurance business, management of assets in accordance
with provisions of the State Bank.
Article 107. Other business activities of commercial banks
1. Cash management services, banking and finance consulting services; assets
management and safeguarding services; leasing of safe and safety boxes.
2. Corporate finance consultancy, merger and acquisition consultancy, investment
consultancy.
3. Buying and selling of Government bonds, corporate bonds.
4. Money brokerage services.
5. Securities depository, trading of gold and other business activities related to
banking activities upon written approval of the State Bank.
Section 3. Operations of finance companies
Article 108. Banking activities of finance companies
1. Finance companies shall be allowed to carry out one or several of following
banking activities:
a) To accept deposits from organizations;
b) To issue certificates of deposits, bills of exchange, bills of credit and bonds to
mobilize funds from organizations;
c) To borrow funds from domestic and foreign credit and financial institutions in
accordance with provisions of the laws; to borrow funds from the State Bank in the form of
refinancing in accordance with provisions of the State Bank;
d) To provide loans, including installment and consumer loans;
đ) To provide guarantees;
e) To discount, rediscount negotiable instruments and other valuable papers;
g) To issue credit cards; to carry out factoring, finance leasing and other types of
credit provisions upon approval of the State Bank.
59
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
2. The State Bank shall stipulate in details conditions for finance companies to carry
out banking activities stipulated in clause 1 of this Article.
Article 109. Opening of accounts by finance companies
1. Deposit-taking finance companies shall have to open deposit accounts with the
State Bank and shall maintain an average balance of such deposit account not lower than the
compulsory reserves level.
2. Finance companies shall be allowed to open payment accounts with commercial
banks and foreign bank’s branches.
3. Finance companies licensed with credit cards issuance activity shall be allowed to
open accounts with foreign banks in accordance with provisions of the laws on foreign
exchange.
4. Finance companies shall be allowed to open deposits accounts and borrowed
funds management accounts for their customers.
Article 110. Capital contribution, shares purchase by finance companies
1. Finance companies shall be allowed to use only their chartered capital and reserve
funds to contribute capital or purchase shares as stipulated in clauses 2 and 3 of this Article.
2. Finance companies shall be allowed to contribute capital and purchase shares of
enterprises and investment funds.
3. Finance companies shall only be permitted to set up, acquire subsidiaries and affiliate
companies operating in the fields of insurance, securities and management of security assets
upon written approval of the State Bank.
4. The State Bank shall stipulate in details conditions, application files, formalities and
procedures for approval of establishment of subsidiaries and affiliate companies of financial
companies stipulated in clause 3 of this Article.
Conditions, formalities and procedures for establishment of subsidiaries, affiliate
companies of finance companies shall be subject to applicable provisions of the laws.
Article 111. Other business activities of finance companies
1. To receive trust funds from Government, organizations and individuals to make
investments in production and business projects and to provide permitted credit; to trust
funds to credit institutions to provide credit. The receipt of trust funds from individuals and
trust funds to credit institutions to provide credit shall be subject to provisions of the State
Bank.
2. To participate in money market as stipulated in Article 104 of this Law.
3. To sell and purchase Government bonds, corporate bonds.
60
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
4. To underwrite Government bonds, corporate bonds; to be agent for bonds, stocks
and other valuable papers issuance.
5. To trade and provide foreign currencies services in accordance with stipulations of
the State Bank.
6. To act as insurance agents.
7. To provide consultancy services in banking, finance and investment areas.
8. To provide assets management and safeguarding services.
Section 4. Operations of finance leasing companies
Article 112. Banking activities of finance-leasing companies
1. To accept deposits from organizations.
2. To issue certificates of deposits, bills of exchange, bills of credit and bonds to
mobilize funds from organizations.
3. To borrow funds from domestic and foreign credit and financial institutions in
accordance with provisions of the laws; to borrow funds from the State Bank in the form of
refinancing in accordance with provisions of the State Bank.
4. To carry out finance-leasing.
5. To provide additional working capital loans to finance lessees.
6. To carry out operational leasing provided that the total value of assets for
operational leasing shall not exceed 30% of the total assets of the finance leasing company.
7. To provide other types of credit provisions upon approval of the State Bank.
Article 113. Finance-leasing activities
Finance-leasing activities shall be a type of medium and long-term credit provisions
based on finance-leasing contracts and shall meet one of the following conditions:
1. Upon expiry of the lease term according to the finance-leasing contract, the lessee
shall be transferred the ownership title over the leased assets or shall be able to continue the
lease as agreed by the two parties.
2. Upon expiry of the lease term according to the finance leasing contract, the lessee
shall have the option to purchase the leased assets at a nominal price that lower than the
actual value of the leased assets at the time of such purchase.
3. The lease term of an asset shall at least be equal to 60% of the necessary term for
depreciation of such leased asset.
61
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
4. The total lease value of an asset stipulated in the finance-leasing contract shall at
least be equal to the value of such asset at the signing point of the contract.
Article 114. Opening of accounts by finance-leasing companies
1. Deposit-taking finance-leasing companies shall have to open deposit accounts
with the State Bank shall maintain an average balance on such deposit accounts not lower
than the compulsory reserves level.
2. Finance-leasing companies shall be allowed to open payment accounts with credit
institutions, foreign bank’s branches.
Article 115. Capital contributions and shares purchase by finance-leasing
companies
Finance-leasing companies shall not be allowed to contribute capital or purchase shares
to set up subsidiaries and/or affiliate companies in any form.
Article 116. Other activities of finance-leasing companies
1. To receive trust funds from the Government, organizations and individuals to
carry out finance-leasing activities. The receipt of trust funds from individuals shall be
subject to provisions of the State Bank.
2. To participate in tender for Treasury’s bills organized by the State Bank.
3. To purchase and sell Government bonds.
4. To trade and provide foreign currencies services and finance-leasing trust in
accordance with provisions of the State Bank.
5. To act as insurance agents.
6. To provide consultancy services in banking, finance and investment areas to
finance lessees.
Section 5. Operations of credit institutions being co-operatives
Article 117. Activities of co-operative banks
1. The main activities of co-operative banks shall be harmonization of funds and
provision of banking activities to their members that are people’s credit funds.
2. Co-operative banks shall be allowed to carry out several banking activities and
other business activities in accordance with provisions of Section 2 of Chapter IV of this
Law upon written approval of the State Bank.
Article 118. Operations of people’s credit funds
1. To accept deposits in VND in following forms:
62
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
a) To accept deposits from members;
b) To accept deposits from non-member organizations, individuals in accordance
with provisions of the State Bank.
2. To provide loans in VND in following forms:
a) Provide loans to customers who are members of people's credit funds;
b) Provide loans to non-member customers in accordance with provisions of the
State Bank.
3. To provide remittance services, carry out collection and payment orders for
members.
4. Other activities, including:
a) To receive trust funds from the Government, organizations and individuals and to
use trusted funds to provide loans;
b) To borrow from other credit institutions and financial organizations;
c) To contribute capital to establish co-operative banks;
d) To open deposit accounts with the State Bank;
đ) To open payment accounts with commercial banks, foreign bank’s branches;
e) To act as trustee and agent in several fields relating to banking activities and
assets management in accordance with provisions of the State Bank;
g) To act as an insurance agent;
h) To provide consultancy services in banking and finance to members.
5. The State Bank shall stipulate in details the geographical boundaries of operations
for each people’s credit fund in the License.
Section 6. Operations of microfinance institutions
Article 119.
Fund mobilization by microfinance institutions
1. To accept deposits in VND in following forms:
a) Compulsory savings pursuant to regulations of microfinance institutions;
b) Deposits from organizations and individuals, including voluntary deposits of
microfinance customers, except for deposits for payment purpose.
63
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
2. To borrow from credit and financial institutions, domestic and foreign individuals
and organizations in accordance with provisions of the laws.
Article 120.
Provision of credit by microfinance institutions
1. Microfinance institutions shall be allowed to provide credit in VND in the forms
of loans. The provision of credit by microfinance institutions might be secured by
compulsory savings or guarantees of a group of savings and borrowing customers.
2. Microfinance institutions shall maintain a ratio between total outstanding credits
provided to low-income individuals and households, super micro enterprises and total
outstanding credit not to be lower than a ratio stipulated by the State Bank.
Article 121. Opening accounts of microfinance institutions
1. Microfinance institutions shall be allowed to open deposit accounts with the
State Bank and commercial banks.
2. Microfinance institutions shall not be allowed to open payment accounts for their
customers.
Article 122. Other activities of microfinance institutions
1. To trust their funds and to use trusted funds to provide loans.
2. To provide financial consultancy services in the field of microfinance.
3. To provide collection, payment orders and remittance services to microfinance
customers.
4. To act as an insurance agent.
Section 7
Operations of foreign bank’s branches in Vietnam
Article 123.
Contents of operations of foreign bank’s branches
1. Foreign bank’s branches shall be allowed to carry out activities stipulated in
Section 2 of Chapter IV of this Law, except for the followings:
a) Activities stipulated in Article 103 of this Law;
b) Activities which the foreign banks are not allowed to carry out in the home
country where their headquarter is located.
2. Foreign bank's branches shall be allowed to provide several foreign currencies
services on international markets to customers in Vietnam in accordance with provisions of
the laws on foreign currencies.
64
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
3. The State Bank shall stipulate in details contents of operations in the License
granted to foreign bank’s branches in accordance with provisions of this Law and in line
with the scale, type and fields of operations of the foreign bank.
Chapter V
REPRESENTATIVE OFFICES OF FOREIGN CREDIT INSTITUTIONS AND/OR
OF OTHER FOREIGN INSTITUTIONS ENGAGING IN BANKING ACTIVITIES
Article 124. Establishment of representative offices
Foreign credit institutions and other foreign institutions engaging in banking
activities shall be allowed to set up representative offices in provinces/cities under the
central management in Vietnam. In each of such provinces/cities, foreign credit institutions
and other foreign institutions engaging in banking activities shall be allowed to set up only
one representative office.
Article 125. Contents of operations of representative offices
Representative offices of foreign credit institutions and/or of other foreign
institutions engaging in banking activities shall be allowed to perform following activities as
stipulated in the License granted by the State Bank:
1. To act as a liaison office.
2. To conduct market survey.
3. To promote the development of investment projects of foreign credit institutions
and/or of other foreign institutions engaging in banking activities in Vietnam.
4. To promote and supervise the implementation and performance of contracts and
agreements signed between foreign credit institutions and/or other foreign institutions
engaging in banking activities and Vietnamese credit institutions and Vietnamese
enterprises, and of projects funded by foreign credit institutions and/or other foreign
institutions engaging in banking activities in Vietnam.
5. Others activities in accordance with provisions of Vietnamese laws.
Chapter VI.
RESTRICTIONS TO ENSURE THE SAFETY AND THE SOUNDNESS OF
OPERATIONS OF CREDIT INSTITUTIONS
Article 126. Cases not eligible for credit provision
1. Credit institutions, foreign bank’s branches shall not be allowed to provide
credits to following organizations or individuals:
a) Members of the Board of Directors, members of the Members’ Council,
members of the Board of Controllers, General Director (Director) and Deputy General
Director (Deputy Director) and other equivalent positions of credit institutions, foreign
bank’s branches; legal entity shareholders whose representatives for their capital
65
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
contribution are members of the Board of Directors, members of the Board of Controllers of
joint stock credit institutions; legal entity capital contributors and/or owners of limited
liability credit institutions;
b) Parents, spouse, children of any members of the Board of Directors, members of
the Members’ Council, members of the Board of Controllers, General Director (Director)
and Deputy General Director (Deputy Director) and other equivalent positions.
2. The stipulations in clause 1 of this Article shall not be applicable to people’s
credit funds and microfinance institutions.
3. Credit institutions, foreign bank’s branches shall not be allowed to provide
credits to customers secured by any individuals stipulated in clause 1 of this Article. Credit
institutions, foreign bank’s branches shall not be allowed to provide security in any forms
for other credit institutions to provide credits to individuals stipulated in clause 1 of this
Article.
4. Credit institutions shall not be allowed to provide credits to securities companies
of which the credit institution holds controlling interest.
5. A credit institution shall not be allowed to provide credits secured by shares
issued by itself or its subsidiaries.
6. Credit institutions shall not be allowed to provide loans secured by shares of
another credit institution so as to use that borrowed fund to make capital contribution to the
latter.
Article 127. Restrictions on credit provision
1. Credit institutions, foreign bank’s branches shall not be allowed to provide
unsecured credits or provide credits with more favorable conditions to following
individuals:
a) Auditing companies or auditors who currently auditing the credit institution or
foreign bank’s branch; inspectors who currently inspecting the credit institution, foreign
bank’s branch;
b) Chief accountant of the credit institution or the foreign bank’s branch;
c) Major shareholders, founding shareholders;
d) Enterprises of which more than 10% of chartered capital is owned by one of those
stipulated in clause 1 of Article 126 of this Law;
đ) Individuals who perform the appraisal and approval of credits provision;
e) Subsidiaries and affiliates of the credit institutions or enterprises of which the
credit institution holds controlling interest.
66
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
2. The total outstanding credits provided to individuals stipulated in subclauses
1(a), 1(b), 1(c), 1(d) and 1(đ) of this Article shall not exceed 05% of own capital of credit
institutions, foreign bank’s branches.
3. The provision of credits to individuals stipulated in clause 1 of this Article shall
be subject to approval of the Board of Directors, Members’ Council and shall be disclosed to
the credit institution.
4. The total outstanding credits provided to an individual stipulated in sub-clause
1(e) of this Article shall not exceed 10% of own capital of the credit institution; the total
outstanding credits provided to all individuals stipulated in sub-clause 1(e) of this Article
shall not exceed 20% of own capital of the credit institution.
Article 128. Limits on credit provision
1. The total outstanding credits provided to a single borrower shall not exceed 15%
of own capital of commercial banks, foreign bank’s branches, people’s credit funds or
microfinance institutions; the total outstanding credits provided to a single borrower and
her/his related parties shall not exceed 25% of own capital of commercial banks, foreign
bank’s branches, people’s credit funds or the microfinance institutions.
2. The total outstanding credits provided to a single borrower shall not exceed 25%
of own capital of non-bank credit institutions; the total outstanding credits provided to a
single borrower and her/his related parties shall not exceed 50% of own capital of non-bank
credit institutions.
3. The total outstanding credits stipulated in clauses 1 and 2 of this Article shall not
include loans provided from trust funds of the Government, organizations and individuals or
loans provided to other credit institutions.
4. The total outstanding credits stipulated in clauses 1 and 2 of this Article shall
include the total investments in bonds issued by customers.
5. The State Bank shall stipulate limits and conditions for commercial banks,
foreign bank’s branches to provide credit for trading and investing in stocks.
6. In cases when the demand for capital of one borrower and her/his related parties
exceeds the limits stipulated in clauses 1 and 2 of this Article, credit institutions and foreign
bank’s branches may provide syndicated loans to the customer in accordance with
provisions of the State Bank.
7. In order to implement socio-economic objectives, under special circumstances in
which syndicated loans provided by credit institutions, foreign bank’s branches not yet meet
the demand for capital of one customer, the Prime Minister shall determine the maximum
limit of loans that exceeds all the limits stipulated in clauses 1 and 2 of this Article on a
case-by-case basis.
8. The total provided credits stipulated in clause 7 of this Article shall not exceed
04 times of the own capital of credit institutions, foreign bank branches.
67
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
Article 129. Limits on capital contributions and share purchases
1. The level of capital contributions and the shares purchase of a commercial bank
and its subsidiaries and affiliates in one enterprise operating in areas stipulated in clause 4 of
Article 103 of this Law shall not exceed 11% of chartered capital of the investee enterprise.
2. The total level of capital contributions and shares purchase of a commercial bank
in various enterprises, including portions of capital contributions and shares purchase in its
subsidiaries and affiliates, shall not exceed 40% of chartered capital and reserve funds of the
commercial bank.
3. The level of capital contributions and shares purchase of a finance company and
its subsidiaries and affiliates in one enterprise stipulated in clause 1 of Article 110 of this
Law shall not exceed eleven 11% of chartered capital of the investee enterprise.
4. The total level of capital contributions and shares purchase of a finance company
stipulated in clause 1 of Article 110 of this Law in various enterprises, including portions of
capital contributions and shares purchase in its subsidiaries and affiliates, shall not exceed
60% of chartered capital and reserve funds of the finance company.
Article 130.
Prudential ratios
1. Credit institutions, foreign bank’s branches shall maintain following prudential
ratios:
a) Liquidity ratio;
b) Capital adequacy ratio of 8% or a higher ratio as stipulated by the State Bank in
certain period of time;
c) Maximum ratio of medium and long-term loans financed by short term funds;
d) Positions of foreign currencies and gold versus own capital;
đ) Ratio of outstanding loans versus total deposits;
e) Ratios of medium and long-term deposits versus total outstanding medium and
long-term loans.
2. Commercial banks and foreign bank’s branches participating in the national interbank payment system shall have to hold a minimum number of permitted valuable papers
as pledges in accordance with provisions of the State Bank in certain period of time.
3. The State Bank shall stipulate in details prudential ratios stipulated in clause 1 of
this Article for each type of credit institutions, foreign bank’s branches.
4. The total investments of a credit institution in other credit institutions and its
subsidiaries in the form of capital contribution or shares purchase and the investments in
the form of capital contribution or shares purchase in order to hold controlling interests in
68
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
enterprises operating in banking, securities or insurance areas shall be excluded from the
credit institution’s own capital when calculating prudential ratios.
5. In cases when a credit institution or a foreign bank’s branch fails to satisfy or is
likely not to satisfy the capital adequacy ratio stipulated in sub-clause 1(b) of this Article,
the credit institution or the foreign bank’s branch shall report to the State Bank its solutions
and remedy plans to meet the capital adequacy ratio as stipulated. The State Bank shall
apply necessary measures in accordance with provisions of Article 149 of this Law to
ensure the capital adequacy ratio of the credit institution, foreign bank's branch meets the
requirements, including such measures as restrictions on the scope of operations and/or
disposal of the assets of the credit institution, foreign bank’s branch.
Article 131.
Risk provisioning
1. Credit institutions, foreign bank’s branches shall make provisions for risks
during their course of business. This risk provisions shall be accounted for as operating
expenses.
2. The assets classification, the provisioning rate, the provisioning method and the
use of the provisions to offset risks arising during the course of business of credit
institutions, foreign bank’s branches shall be stipulated by the State Bank after seeking
agreement of the Ministry of Finance.
3. In the case when credit institutions or foreign bank’s branches reclaim the
funds that have been offset by risk provisions, the reclaimed amount shall be accounted
for as revenue of the credit institutions, foreign bank’s branches.
Article 132. Real estate business
Credit institutions shall not be allowed to engage in real estate business, except for
following cases:
1. Buying, investing and owning real estates as business offices or working premises
or warehouses that directly serving their operations.
2. Renting out part of credit institutions’’ unused business offices.
3. Holding real estates as a result of loan disposal. Within 03 years since the disposal
date of secured assets that are real estates, credit institutions shall have to sell, transfer or
buy such real estates in order to comply with the ratio of investment in fixed assets and the
purposes of fixed assets usage as stipulated in Article 149 of this Law.
Article 133. Requirement for ensuring prudence in electronic banking
Credit institutions, foreign bank’s branches shall ensure the prudence and
security for electronic banking operations in accordance with guidance of the State
Bank.
Article 134. Rights and obligations of controlling companies
69
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
Companies owning, whether directly or indirectly, more than 20% of chartered
capital or voting shares or having controlling interests of a commercial bank before the
effective date of this Law; commercial banks having subsidiaries and affiliates (hereinafter
referred to as controlling companies) shall have following rights and obligations:
1. Depending on legal form of subsidiaries or affiliates, controlling companies shall
exercise their rights and obligations as capital contributors or owners or shareholders in
their relationships with subsidiaries, affiliates in accordance with provisions of this Law
and other applicable provisions of the laws.
2. Contracts, transactions and other relationships between controlling companies
with their subsidiaries, affiliates shall be established and executed fairly and independently
based on the same conditions as those applied to independent legal entities.
3. Controlling companies shall not interfere in the organization and operations of
their subsidiaries, affiliates in excess of their rights as the owner or capital contributors or
shareholders.
Article 135. Capital contribution, share purchase between subsidiaries and
affiliates, controlling companies
1. Subsidiaries and affiliates of the same controlling company shall not be allowed
make capital contribution or purchase shares of each others.
2. Subsidiaries and affiliates of a credit institution shall not be allowed to make
capital contributions or buy shares of that credit institution.
3. A credit institution which currently is a subsidiary or affiliate of a controlling
company shall not be allowed to make capital contributions or purchase shares of the
controlling company.
CHAPTER VII.
FINANCIAL ACCOUNTING AND REPORTING
Article 136. Financial regime
Financial regime of credit institutions and foreign bank branches shall be subject to
provisions of the Government.
Article 137. Fiscal year
Fiscal year of credit institutions, foreign bank's branches shall commence on the 1 st
January and ends on 31st December of the same calendar year.
Article 138. Accounting
Credit institutions and foreign bank’s branches shall carry out their accounting works
in accordance with provisions of the laws on accounting.
70
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
Article 139. Reserve funds
1. Credit institutions, foreign bank’s branches shall annually draw from their aftertax profits to contribute to and maintain following reserve funds:
a) Reserve fund for supplementation of chartered capital or injected capital shall be
annually contributed by 05% of after-tax profits. The maximum level of this fund shall not
exceed the chartered capital level or injected capital level of credit institutions, foreign
bank’s branches;
b) Financial reserve fund;
c) Other reserve funds as stipulated by the laws.
2. Credit institutions shall not be allowed to use the funds stipulated in clause 1 of
this Article to pay dividends to shareholders or to distribute profits to owners or capital
contributors.
Article 140. Purchases of and investments in fixed assets
Credit institutions or foreign bank branches shall be allowed to purchase or invest in
fixed assets provided that the fixed assets shall be directly used for their operations and the
value of such assets shall not exceed 50% of their chartered capital and reserve fund for
supplementation of chartered capital as for credit institutions or 50% of injected capital and
reserve fund for supplementation of injected capital as for foreign bank branches.
Article 141. Reporting
1. Credit institutions, foreign bank’s branches shall implement financial reporting
regimes in accordance with provisions of the laws on accounting, statistics and periodical
operational reports in accordance with provisions of the State Bank.
2. In addition to reports stipulated in clause 1 of this Article, credit institutions or
foreign bank’s branches shall immediately report in writing to the State Bank in following
circumstances:
a) Occurrence of abnormal situations in operations which may cause adverse effect
to business operations of credit institutions, foreign bank’s branches;
b) Major changes in organizational structure, governance, management; major
changes in operation and financial situation of major shareholders; and other changes that
have material impacts on the business activities of credit institutions and foreign bank
branches.
3. Subsidiaries and affiliates of credits institutions shall be responsible to send their
financial reports and performance reports to the State Bank as requested.
4. Credit institutions or foreign bank branches shall, within ninety (90) days of from
the closing date of the fiscal year, submit annual reports to the State Bank in accordance
with provisions of the laws.
71
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
5. Joint-venture credit institutions, 100% foreign-owned credit institutions, foreign
banks’ branches, representative offices of foreign credit institutions or of other foreign
institutions engaging in banking activities shall, within 180 days since the closing date of the
fiscal year, submit annual reports of foreign credit institutions or foreign institutions
engaging in banking activities to the State Bank.
6. Joint venture credit institutions, 100% foreign-owned credit institutions, foreign
bank’s branches shall have to report in writing to the State Bank upon any changes of
foreign credit institutions in one of the following circumstances:
a) Division, merger, incorporation, liquidation, bankruptcy or dissolution;
b) Change of name, change of address of headquarter;
c) Change of major shareholders, Board of Directors, Executive Boards;
d) Any abnormal changes that have material impacts on organization and operations.
Article 142. Reports of controlling companies
1. Within 120 days since the closing date of the fiscal year, in addition to reports and
other documents to be prepared in accordance with provisions of the laws, controlling
companies shall prepare and submit to the State Bank the audited consolidated financial
statements in accordance with provisions of the laws on accounting.
2. With 90 days since the closing date of the fiscal year, controlling companies shall
prepare and submit to the State Bank their consolidated reports on trading and other
transactions executed between controlling companies and their subsidiaries, affiliates.
Article 143. Publication of financial statements
Credit institutions, foreign bank's branches shall, within 120 days from the closing
date of the fiscal year, publicize their financial statements in accordance with provisions of
the laws.
Article 144. Overseas remittance of profits and assets
1. Foreign bank branches, 100% foreign-owned credit institutions operating in
Vietnam shall be allowed to remit overseas their retained profits after contribution to reserve
funds and fulfillment of all financial obligations in accordance with provisions of
Vietnamese laws.
2. The foreign party to a joint-venture credit institution shall be allowed to remit
overseas its distributed profits after contribution to reserve funds and fulfillment of all
financial obligations of joint-venture credit institution in accordance with provisions of
Vietnamese laws.
3. Foreign bank branches, 100% foreign-owned credit institutions and foreign
parties to joint-venture credit institutions operating in Vietnam shall be allowed to transfer
72
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
overseas their residual assets upon liquidation and termination of their operations in
Vietnam.
4. Overseas remittance of money and other assets stipulated in clauses 1, 2 and 3 of
this Article shall be subject to applicable provisions of Vietnamese laws.
CHAPTER VIII.
SPECIAL CONTROL, RE-ORGANISATION, BANKCRUPTCY, DISSOLUTION AND
LIQUIDATION OF CREDIT INSTITUTIONS
Section 1. Special Control
Article 145. Report on insolvency
In cases when a credit institution is likely to become insolvent, it shall promptly
report to the State Bank on its actual financial status, causes of insolvency and measures
taken and planned to be taken to deal with the situation.
Article 146. Application of special control
1. Special control means direct supervision by the State Bank over a credit institution
which is likely to become insolvent and/or illiquid.
2. The State Bank shall be responsible for examining and identifying in a timely
manner situations of likely insolvency and/or illiquid.
3. A credit institution shall be considered and put under special control by the State
Bank if it falls in any of the following circumstances:
a) Being likely to become insolvent;
b) Non-performing loans that are likely not to be recovered cause illiquidity;
c) When total cumulative losses of the credit institution exceeds 50% of actual value
of the chartered capital and other reserve funds stated in the latest financial statements;
d) When the credit institution has been rated at low and weak level in two
consecutive years in accordance with provisions of the State Bank;
đ) When the credit institution has not been able to maintain required capital
adequacy ratio stipulated in subclause 1(b) of Article 130 of this Law consecutively in one
year or when the capital adequacy ratio falls lower 04% consecutively in a period of six
months.
Article 147. Decisions on application of special control
1. The State Bank shall make a decision on application of special control to a credit
institution and on establishment of Board of special control.
2. Contents of the decisions on application of special control shall include:
73
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
a) Name of the credit institution to be put under special control;
b) Reasons for application of special control;
c) Full name of members of the special controlling board and their specific duties;
d) Duration of application of special control.
3. The decision on application of special control to a credit institution shall be
notified by the State Bank to competent state authorities and other relevant competent
bodies for co-operation.
4. The State Bank shall stipulate in details the public disclosure of the decision on
application of special control to a credit institution.
Article 148. Duties and powers of the Board of special control
1. The Board of special control shall have following duties:
a) To instruct the Board of Directors, Members’ Council, Board of Controllers,
General Director (Director) and other equivalent positions of the credit institution subject to
special control to develop solutions for strengthening the organizational structure and
operations of the credit institution;
b) To direct and supervise the implementation of the solutions for strengthening the
organizational structure and operations approved by the Board of special control;
c) To report to the State Bank on operations and results of the implementation of
solutions for strengthening the organizational structure and operations of the credit
institution.
2. The Board of special control shall have following powers:
a) To suspend any operations which are not appropriate with the approved solutions
for strengthening the organizational structure and operations of the credit institution or
breach the prudential regulations on banking operations that may cause damage to the
legitimate interests of depositors;
b) To suspend or temporary suspend any administrative, management and/or
controlling authorities of any members of the Board of Directors, Members’ Council, Board
of Controllers, General Director (Director), Deputy General Director (Deputy Director) of
the credit institution where necessary;
c) To request the Board of Directors, Member’s Council, General Director (Director)
of the credit institution to dismiss, suspend operations of any individuals committing a
breach of provisions of the laws or failing to comply with the approved solutions for
strengthening organizational structure and operations of the credit institution;
74
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
d) To propose the State Bank to make decision on extension or termination of the
application of special control; to provide or suspend the provision of the special loan to the
credit institution; to purchase shares of the credit institution; to apply liquidation or to
revoke the License of the credit institution; to take over the business or to apply compulsory
merger, incorporation or acquisition of the credit institution;
đ) To request the credit institution to file bankruptcy application in accordance with
provisions of the laws on bankruptcy.
3. The Board of special control shall be responsible for its decisions during the
application of special control.
Article 149. The State Bank’s authorities over credit institutions put under
special control
1. The State Bank shall make decision based on the proposal of the Board of special
control stipulated in sub-clause 2(d) of Article 148of this Law.
2. The State Bank shall have the power to request owners to raise capital, to develop
and implement restructuring plan or to request compulsory merger, incorporation or
acquisition of credit institutions being put under special control if the owners are unable or
fail to raise capital.
3. The State Bank shall have the power to directly or appoint another credit
institution contribute capital, purchase shares of the credit institution being put under special
control when this credit institution is unable to perform the State Bank’s requests stipulated
in clause 2 of this Article or when it is identified by the State Bank that the cumulative
losses of the credit institution have exceeded the actual value of chartered capital and
reserve funds of the credit institution stated in its latest audited financial statements and the
termination of operations of the credit institution being put under special control may
threaten the safety of the whole credit institutions system.
4. The capital contribution, shares purchase stipulated in clause 3 of this Article shall
be subject to provisions of the Prime Minister.
Article 150. Responsibilities of the credit institution being put under special
control
Board of Directors, Members’ Council Board of Controllers, General Director
(Director) of the credit institution being put under special control shall have following
responsibilities:
1. To formulate and submit solutions for strengthening organizational structure and
operations of the credit institution to the Board of special control for approval; to organize the
implementation of the approved solutions.
2. To continue to administer, control and manage operations and to ensure the
safety of the credit institution’s assets, except for the cases stipulated in sublause 2(b) of
Article 148 of this Law.
75
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
3. To fulfill requirements of the Board of special control with respect to the
organization, governance, control and management of the credit institution stipulated in
subclauses 2(a), 2(b), 2(c) and 2(d) of Article 148 of this Law.
4. To perform requirements of the State Bank stipulated in Article 149 of this Law.
Article 151. Special loans
1. Credit institutions shall be allowed to borrow special loans from the State Bank
and other credit institutions in following circumstances:
a) When the credit institution becomes insolvent, threatening the safety of the whole
credit institutions system;
b) When the credit institution becomes insolvent due to other severe events.
2. The special loans shall take precedence over any other liabilities, including
secured debts of the credit institution or shall be converted into a portion of capital
contribution or shares of the related credit institution stipulated in Article 149 of this Law.
3. The State Bank shall stipulate in details the provision of special loans to credit
institutions.
Article 152. Termination of special control
1. The State bank shall make decisions on the termination of special control applied
to credit institutions in following circumstances:
a) Operations of the credit institution has been stabilized;
b) During the special control, the credit institution is merged or incorporated into
another credit institution;
c) The credit institution is unable to regain its solvency.
2. The decision on the termination of special control shall be notified to concerned
individuals and organizations.
3. In cases the special control has been terminated as stipulated in subclause 1(c) of
this Article, the State Bank shall inform the Court in writing in regards to the termination of
application of solvency recovery measures.
Section 2. Re-organization, Dissolution, Bankruptcy, Liquidation, Blockage of funds
and assets
Article 153. Re-organization of credit institutions
1. Credit institutions shall be re-organized in the form of split, division,
incorporation, merger and conversion of legal status upon written approval of the State
Bank.
76
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
2. The State Bank shall stipulate in details conditions, application files, order and
procedures for the re-organization of credit institutions.
Article 154. Dissolution of credit institutions
Credit institutions, foreign bank's branches shall be dissolved in following
circumstances:
1. On voluntary basis provided that the credit institution, foreign bank’s branch is
capable of settling all outstanding debts, and is approved by the State Bank in writing.
2. Upon the expiry of the License, credit institution or foreign bank’s branch does
not apply for extension of the License or the application for extension of the License has
been rejected by the State Bank.
3. The License of the credit institution has been revoked.
Article 155. Bankruptcy of credit institutions
1. Upon the decision of the State Bank on the termination of the special control or
the decision on termination of application of solvency recovery measures or the decision on
not to apply solvency recovery measures, and the credit institution still be in bankruptcy
status, the credit institution shall have to file for bankruptcy to request the Court to initiate
the bankruptcy proceedings in accordance with provisions of the laws on bankruptcy.
2. Upon receipt of the bankruptcy request from credit institution stipulated in clause
1 of this Article, the Court shall initiate the bankruptcy proceedings and immediately carry
out the assets liquidation proceedings for the credit institution in accordance with provisions
of the laws on bankruptcy.
Article 156. Liquidation of assets of credit institutions
1. When a credit institution is declared bankrupt, the liquidation of assets of the
credit institution shall be subject to provisions of the laws on bankruptcy.
2. When a credit institution is dissolved as stipulated in Article 154 of this Law, the
credit institution shall carry out the liquidation of its assets under the supervision of the State
Bank and in accordance with provisions of the State Bank on procedures and orders of
assets liquidation.
3. During the supervision of the assets liquidation of credit institution stipulated in
clause 2 of this Article, if the State Bank identifies that the credit institution is unable to pay
all of its debts, it shall make a decision on the termination of the liquidation and request the
credit institution to file for bankruptcy to request the Court to initiate bankruptcy
proceedings as stipulated in Article 1535 of this Law.
4. All costs arising in connection with the liquidation of the credit institution’ s assets
shall be borne by the credit institution.
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This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
Article 157.
Blockage of funds, assets
1. In case of necessity for the purpose of protecting rights of the depositors, the State
Bank may freeze a part or the whole of funds, assets of foreign bank's branches.
2. The State Bank shall stipulate in details cases of funds blockage, termination of
funds and assets blockage of foreign bank’s branches.
CHAPTER IX.
STATE MANAGEMENT AUTHORITY
Article 158. State management authority
1. The Government shall take uniform state management of banking activities
throughout the nation.
2. The State Bank shall be responsible before the Government for the performance of
state management of organization and operations of credit institutions, foreign bank’s
branches.
3. Ministries, ministerial-level agencies within their scopes of duties and powers
shall be responsible to carry out state management of credit institutions, foreign bank's
branches in accordance with provisions of the laws.
4. People’s Committees of all levels shall carry out state management of credit
institutions, foreign bank's branches in their localities in accordance with provisions of the
laws.
Article 159. Power of examination, inspection and supervision
The State Bank shall carry out the examination, inspection and supervision of credit
institutions, foreign bank’s branches, representative offices of foreign credit institutions and
of other foreign institutions engaging in banking activities.
Article 160. Rights and obligations of those subject to inspection and
supervision
1. To provide timely, sufficiently and accurately information and documents as
requested by the State Bank during the process of inspection and supervision; and to be
responsible for the accuracy and truthfulness of the provided information and documents.
2. To report and make clarifications in regards to recommendations and warnings on
risks and safety of the State Bank.
3. To implement recommendations and warnings on risks and safety of the State
Bank.
4. To implement inspection conclusions, management decisions of the State Bank.
5. Other rights and obligations as stipulated by the laws.
78
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
CHAPTER X.
IMPLEMENTING PROVISIONS
Article 161. Transitional provisions
1. Credit institutions, foreign bank's branches, representative offices of foreign
credit institutions and/or of other foreign institutions engaging in banking activities
established and operated pursuant to Licenses granted by the State Bank prior to the
effective date of this Law shall not be required to apply for re-issuance of the Licenses as
stipulated in this Law.
2. Within 02 years from the effective date of this Law, credit institutions, foreign
bank's branches established and operated pursuant to Licenses granted by the State Bank
prior to the effective date of this Law shall complete the adjustment of their organizational
structure as stipulated in this Law, except for cases stipulated in clauses 3, 4 and 5 of this
Article.
3. Since the effective date of this Law, the election or appointment or supplement or
replacement of members of the Board of Directors, members of the Members’ Council,
members of the Board of Controllers, General Director (Director), Deputy General
Director (Deputy Director), Chief Accountant, Directors of Branches, Directors of
subsidiaries and equivalent positions of credit institutions; General Director (Director) of
foreign bank's branches shall comply with provisions of Articles 33, 34, 43, 44, 48, 50, 51,
62, 66, 70 and 89 of this Law.
4. With respect to loan agreements signed before the effective date of this Law,
credit institutions, foreign bank's branches and customers shall be allowed to continue to
execute signed agreements until the expiry of loan agreements. Any amendment of or
supplement to such loan agreements shall not be allowed except for the cases the contents
of such changes comply with the provisions of this Law.
5. The State Bank shall provide detailed guidelines on the transitional timing,
procedures, order for credit institutions, foreign bank's branches which are operating prior
to the effective date of this Law violating the provisions of Articles 55, 103, 110, 115, 129
and 135of this Law.
6. For microfinance programs and projects of political organizations, socio-politic
organizations, NGOs, credit institutions that are being implemented prior to the effective
date of this Law shall not be required to adjust their organization and operations in
accordance with provisions of this Law. The Prime Minister shall stipulate in details
activities of such microfinance programs and projects.
7. From the effective date of this Law, organizations other than credit institutions,
which are currently carrying out one or several banking activities, shall immediately
terminate their banking activities, except for cases stipulated in clause 6 of this Article.
Article 162. Effectiveness
79
This Law was written in Vietnamese language. The Vietnam Microfinance Working Group arranged the translation of this Law into English with
financial support from Cordaid. In the event of inconsistency or discrepancy between the Vietnamese version and the present English translation of
this Law, the Vietnamese language version shall prevail. The Vietnam Microfinance Working Group cannot be held liable for any consequence
resulting of misinterpretation of the Law due to inconsistency or discrepancy between the English version and the Vietnamese version of this Law.
1. This Law shall come into effect as of 01st of January, 2011.
2. Law on credit institutions No. 02/1997/QH10 and Law on amendment,
supplement of Law on credit institutions No. 20/2004/QH11 shall cease to be effective as of
the effective date of this Law.
Article 163. Detailed guidelines and implementation
The Government shall stipulate in details and provide detailed guidelines on the
implementation of the Articles and clauses as assigned in this Law; and provide guidelines
for other necessary contents of this Law in order to meet with State management
requirements.
This Law has been adopted by the 7th Meeting of the XIIth term of the National
Assembly of the Socialist Republic of Vietnam on 16th of June, 2010.
CHAIRMAN OF THE
NATIONAL ASSEMBLY
Nguyen Phu Trong
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