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THE STATE BANK OF VIETNAM
Circular No. 07/2013/TT-NHNN dated March 14, 2013
stipulating special control over credit institutions
Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated
June 16, 2010;
Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated November
26, 2011;
Pursuant to the Law No. 18/2003/QH11 dated November 26, 2003 of the
National Assembly on Corporative;
Pursuant to the Law No. 60/2005/QH11 dated December 12, 2005 of the
National Assembly on Enterprise;
Pursuant to the Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the
Government defining the functions, tasks, powers and organizational structure
of the State Bank of Vietnam;
At the request of the Chief banking inspector;
The Governor of the Vietnam State Bank issues the Circular stipulating special
control over credit institutions.
Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation
This Circular regulates on special control over credit institutions that are
established and operated under the Law on Credit Institutions.
Article 2. Subjects of application
1. Credit institutions
2. Organizations, individuals related to the special control on credit institutions.
Article 3. Interpretation of terms
In this Circular, the terms below are construed as follows:
1. Special control means that a credit institution is placed under direct control
by the State Bank of Vietnam (below referred to as the State Bank) for it is in
danger of becoming broke or insolvent.
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2. Special control period means a period from the time of issuance of a decision
to place a credit institution under the state of special control to the time of
issuance of a decision to terminate the special control of such credit institution.
3. Credit institution’s representative means a staff member of a credit institution
or an officer of Deposit Insurance of Vietnam who is designated by the
Governor to act on behalf of the credit institution to govern problems related to
special control over credit institutions in case of vacancy of relevant staffs to be
in charge these problems.
Chapter II
SPECIFIC PROVISIONS
Section I
SPECIAL CONTROL
Article 4. Forms of special control
1. Based on the financial situation, degree of risk and violation of Law of credit
institutions, the State Bank of Vietnam shall consider and decide to place credit
institutions on the special control under the form of special inspection or
general inspection as stipulated under Clause 2, Clause 3 of this Article.
2. Special inspection is the form of special control implemented by the State
Bank via the application of measures to inspect the daily activities of credit
institutions.
3. General inspection is the form of special control implemented by the State
Bank via the application of direct and general inspection measures to inspect
the daily activities of credit institutions.
Article 5. Competence of the State Bank
1. Based on the inspection results of the State Bank and at the request of
Inspector Agency, the banking inspector of the State Bank’s branches in the
provinces and centrally-run cities (State Bank’s branch) or Special Control
Board, the Governor of the State Bank has the competence:
a) To decide to place credit institutions on special control;
b) To decide special control period, extension of the special control period,
termination of special control period and contents of special control, contents of
general control;
c) To decide the establishment of special control board; train the officers
participating in special control board; request relevant authorities to appoint the
officers to join special control board;
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d) To appoint the Credit institution’s representative as stipulated under Clause
3, Article 3 of this Circular;
dd) To deal with the problems requested by the special control board as
stipulated under Clause 2, Article 148 of the Law on Credit Institutions;
e) To request the owner of credit institutions placed under special control to
implement the raising of charter capital to ensure the actual value of charter
capital that is not lower than the legal capital, to ensure the safety ratio for
operation according to the Law in a specific period; or to request the owner of
credit institutions placed under special control to build and report to the State
Bank for approving the restructuring plan or merger and acquisition plan with
other credit institutions in the case that credit institution placed under special
control is incapable of raising the charter capital as requested and in the period
determined by the State Bank;
g) Directly perform or appoint other credit institution to perform the capital
contribution, buying shares of the credit institution placed under special control
in the case that this credit institution fails to comply with the request under
Point e, Clause 1 of this Article or when the State Bank determines that the
accumulated losses of credit institution are over the actual value of charter
capital and reserve fund of the credit institution placed under special control
wrote in the latest financial statement which is audited the termination of
special control period on credit institution placed under special control may
cause unsafe for credit institution placed under special control under Clause 3,
Article 149 of the Law on Credit Institutions.
h) To decide the publication of special control as stipulated under Article 7 of
this Circular;
2. The State Bank Governor shall authorizes the director of State Bank’s branch
to decide the problems as stipulated under Clause 1 of this Article (except Point
g) for People’s Credit Funds.
Article 6. Notifying the decision to place a credit institution under special
control
A special control decision shall be notified to:
1. Board of Management or Board of Members of the credit institution placed
under special control;
2. The Governor of the State Bank in case of the credit institution being
People’s Credit Funds.
3. The State bank’s branch;
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4. Deposit Insurance of Vietnam;
5. Cooperative Bank in case of the credit institution placed under special control
being People’s Credit Funds.
6. The Ministry of Finance in case of the credit institution placed under special
control being the listed company; the credit institution placed under special
control having the sub-company operating in the securities and insurance
sector;
7. Provincial People’s Committees where the head office of the credit
institution is placed; Commune or district People’s Committee (for People’s
Credit Funds).
8. Other relevant agencies and organizations decided by the Governor.
Article 7. Publication of information on special control
1. The information on special control for credit institution shall be published
including information on measures to improve and adjust credit institution
placed under special control which is approved by the relevant authorities.
2. The information on special control for credit institutions shall be published
under the following forms:
a) To publish on the central newspaper or local newspaper at least 3 consecutive
number of newspaper.
b) Press conference;
c) To post it on the website of credit institution placed under special control or
website of the State Bank;
d) To publish at the Shareholder meeting;
3) The State Bank Governor shall decide the time, contents and form of
information publication on special control for credit institutions in each specific
case to create the favorable condition in dealing with measures to handle
weaknesses of credit institution placed special control. Except the case credit
institution placed under special control being People’s Credit Fund shall be
decided by the director of State Bank’s branch.
Article 8. Organization and operation consolidation plan
Organization and operation consolidation plan of the credit institution placed
under special control (referred as consolidation plan) is built by the Board of
Management of the credit institution placed under special control at the request
of the special control board.
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2. In the case that the consolidation plan built by the credit institution placed
under special control doesn’t meet the requirements to deal with the difficulties
and weaknesses of the credit institution placed under special control, the
Governor of the State Bank shall appoint to hire consulting agency and other
banking specialists to build the plan. The credit institution placed under special
control has the responsibility to pay all the expenses related to the consulting
fees and fees to pay for the specialists.
3. An organization and operation consolidation plan must contain at least the
following:
a) Name, address and website of the credit institution;
b) Names, addresses and telephone numbers of members of the Board of
Directors (for credit institution that is established and organized under the form
of Joint Stock Company), Board of Members (for credit institution that is
established and organized under the form of Limited Liability Company),
members of the Control Board, general director (director) or representative of
the credit institution (if any);
c) Summary of the organization and operation situation of the credit institution;
of which it must contain at least the following content:
(i) Organization, management and operation and ownership of the credit
institution;
(ii) The financial situation and operation of the credit institutions; of which, it
must clearly specify the difficulties, weaknesses, risk, violation of Law (if any)
and causes;
d) The reasons why the credit institutions are placed under special control;
dd) Measures to help the credit institution escape from the state of special
control and a plan to implement these measures.
(i) Increasing the ability to pay;
(ii) Mobilizing capital from outside;
(iii) Reducing the expenses;
(iv) Improving the weaknesses and financial loss from the owner’s equity;
(v) Selling assets or the whole equity of credit institutions placed under special
control for another credit institution, potential investors or acquisition and
merge with another credit institution.
(vi) Paying all deposits of customers or transfer to another credit institution or
some credit institutions to make payment and implement other necessary
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measures to deal with debts, assets liquidation revoke the business registration
certificate of this credit institution as stipulated by the Law;
(vii) Enhancing the management, operation capacity of control system and
internal audit system;
(viii) Adjusting business activities;
(ix) Other measures;
Section II
SPECIAL CONTROL BOARD
Article 9. Organizational structure of the Special Control Board
1. The Governor of the State Bank shall decide the composition, number of
members and structure of the Special Control Board in accordance with the
forms of special control regulated under Article 4 of this Circular.
2. The Special Control Board’s members are officers of the State Bank, Deposit
Insurance of Vietnam, Banking Specialists, staff member of credit institution
designated by the Governor.
3. The head of the Special Control Board must be one of the following subjects:
a) The departmental or higher level leader in a specialized department of at
units of the State Bank;
b) The departmental or higher-level leader of banking inspector agency;
c) Leaders of State Bank’s branches;
4. Officers joining the Special Control Board must be other than the affiliated
person of a member of the Board of Directors, member of Board of Members,
member of the Control Board or the director general (director) and the big
shareholder of the credit institution placed under special control.
Article 10. Responsibilities and powers of the Special Control Board
1. The Special Control Board has the following responsibilities:
a) To direct the Board of Management, Board of Members, Board of Control,
General Director (Director) or credit institution’s representative to build the
plan as stipulated under Clause 3, Article 2 of this Circular;
b) To direct, examine and inspect the implementation of special control’s
contents, general control’s contents and measures specified in the approved
organization and operation consolidation plan;
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c) Monthly assess or when necessary report the management, operation and
financial situation of credit institution placed under special control; results,
difficulties in the implementation of the plan and recommendations for
measures to ensure the safety operation of credit institution placed under special
control to the State Bank Governor (through the Inspection and Supervision
Agency) and the director of State Bank’s branch;
d) Examine, inspect and supervise the operation, financial situation,
management, human resource, technology of credit institution placed under
special control;
dd) Promptly report the State Bank on abnormal changes of a credit institution
placed under special control and potential risks, the danger of losing the safety
and the violation of the Law of credit institution when being detected.
e) Direct, inspect the credit institutions placed under special control in
increasing the working capital; build and implement the restructuring plan or
merger and acquisition plan at the request of the State Bank as stipulated under
Clause 2, Article 149 of the Law on credit institution and Point e, Clause 1,
Article 5 of this Law;
g) Build and report to the State Bank Governor (through the Inspection and
Supervision Agency) for approving the measures which the State Bank
implement directly or appoint other credit institutions to participate in
contributing capital, buying shares of credit institution placed under special
control as stipulated under Article 149 of the Law on the Credit Institution and
Point 1, Article 5 of this Circular;
h) Provide related information on credit institutions placed under special control
when receiving the request in writing of the relevant state agencies as stipulated
under the Law;
i) Propose the State Bank Governor to decide the contents as stated at Point e
and Point g, Clause 1, Article 5 of this Circular;
k) Other responsibilities assigned by the State Bank Governor;
2. The Special Control Board has the following powers:
a) Powers regulated under Point 2, Article 148 of the Law on Credit
Institutions;
b) To request the credit institution placed under special control to inventory all
existing assets, or to conduct independent audit for assessing the actual
financial conditions and determining the actual value of the credit institutions at
the time it is placed under special control; and inspect the implementation;
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c) To request the credit institution placed under special control to invite debtors
and creditors for determining the debt recovery and payment capacity; and
inspect the implementation;
d) To request units, individuals of credit institutions to provide related
documents and information fully and promptly;
dd) To make dossiers requesting law enforcement bodies to handle persons who
violate law or intentionally fail to pay debts to the credit institution;
e) To agree before the credit institution implements:
(i) Distribution of benefit;
(ii) Transactions stated in the special control decision;
(iii) Changes on the accounting policy, the financial policy and the customer
policy;
(iv) Other transactions, behaviors with a view to preventing and stopping the
mortgage and transfer of assets that may cause the losses for credit institutions.
g) To propose the State Bank to decide the arising problems in the special
control period not stipulated under the Plan;
h) To use the stamp of the State Bank in the process of implementing the
assigned tasks;
i) Other powers as stipulated by the Law;
Article 11. Responsibilities of the head of the Special Control Board
1) Lead and organize the implementation of tasks, powers of the Special
Control Board as stipulated under Article 10 of this circular.
2) Assign tasks to the Board’s members.
3) Take responsibility for administering the Special Control Board and
managing, monitoring the implementation of assigned tasks of the Special
Control Board.
Article 12. Responsibilities of members of the Special Control Board
1) To performed the tasks assigned by the head of the Special Control Board.
2) To detect and promptly report the abnormal matters, potential risks of credit
institution placed under special control to the head of the Special Control
Board; at the same time, propose the measures to deal with.
3) To take responsibility before the head and before the Law for the
performance of their tasks.
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SECTION 3
SPECIAL CONTROL PERIOD, EXTENSION OF THE SPECIAL
CONTROL PERIOD, TERMINATION OF SPECIAL CONTROL
Article 13. Special control period
1. The special control period is regulated in the special control decision by the
State Bank Governor.
2. The extension decision of the special control period and the termination
decision of special control period on credit institutions shall be notified to
agencies and organizations as regulated under Article 6 of this Circular.
Article 14. Extension of the special control period
1. Extension of the special control period shall be applied for credit institutions
placed under special control having the potentials to recover and operate as
normal or credit institutions should have more time to implement the merger
and acquisition procedures as regulated by the Law. Credit institution that is not
allowed to extend the special control period when the special control period is
over shall have to terminate the special control.
2. Based on the actual situation of the credit situation, at least 30 (thirty) days
before the expiration day of the special control period, the Special Control
Board must have the request in writing to propose the State Bank Governor
(through the Inspection and Supervision Agency) on deciding the extension of
the special control period for credit institution not being People’s Credit Fund
or the Director of State Bank’s branch shall decide the extension of special
control period for People’s Credit Fund.
3. When receiving the request of the Special Control Board:
a) The Inspection and Supervision Agency collects opinions of relevant units,
summarize and report to the State Bank Governor for considering and deciding
the extension of special control period for credit institutions not being People’s
Credit Fund before the expiration day of special control period.
b) The Director of State Bank’s branch shall decide the extension of special
control period for credit institution before the expiration date of special control
period
Article 15. Termination of special control period
1. The credit institution is allowed to terminate special control period in the
cased as stipulated under Clause 1, Article 152 of the Law on Credit Institution.
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2. When the credit institution is terminated special control period by the State
Bank due to be incapable of recovering the ability to pay, the State Bank send
the request in writing to the Court on terminating the application of measures to
recover the ability to pay and ask the credit institution to make the request in
writing to send to the Court on opening the procedures for declaring the
bankruptcy as stipulated under the Law on Bankruptcy.
3. The Special Control Board shall send the request in writing to the State Bank
Governor (through the Inspection and Supervision Agency) or the director of
State Bank’s Governor (for People’s Credit Fund) on the termination of special
control period on credit institutions. When receiving the request in writing on
termination of special control period of the Special Control Board:
a) The Inspection and Supervision Agency collects opinions of relevant
agencies summarize and report to the State Bank Governor for considering and
deciding the termination of special control period on credit institutions not
being the People’s Credit Fund.
b) The director of State Bank’s branch shall decide the termination of special
control period for People’s Credit Fund.
4. The decision of terminating special control period for credit institution shall
be notified to agencies and organizations as stipulated under Article 6 of the
Circular.
Chapter 3
RESPONSIBILITIES OF RELATED RELEVANT AUTHORITIES
Article 16. Responsibilities of the Banking Inspection and Supervision
Agency
1. Based on the result of management, inspection and supervision, the
inspection and supervision agency has the following responsibilities:
a) Examine, detect and promptly report to the Governor when a credit
institution is in danger of becoming insolvent and unable to pay or when
violating the Law seriously which causes the danger of losing the safety of
operation.
b) Recommend the State Bank Governor to decide the special control, form,
content and special control period on credit institution not being People’s Credit
Fund.
c) Recommend the head and member of the Special Control Board for credit
institutions not being People’s
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Credit Fund and submit to the State Bank Governor for decision.
d) Request the State Bank’s branch to place the credit institution under special
control.
2. Support the State Bank Governor in directing the special control over credit
institutions.
3. Act as the focal point in receiving reports and requests from credit
institutions not being People’s Credit Fund, Deposit Insurance of Vietnam,
State Bank branches and the Special Control Board, collect opinions of relevant
units, summarize them and submit to the Governor for decision matters related
to special control of credit institutions not being People’s Credit Fund as
stipulated under this Circular.
4. Inspect the operation of the Special Control Board towards credit institutions
not being People’s Credit Fund.
5. Implement the regulations under Point a, Clause 3, Article 14 and Point a,
Clause 3, Article 15 of this Circular.
6. Take responsibility to manage and preserve dossiers based on their
confidentiality, which are related to special control of credit institutions not
being People’s Credit Fund as regulated by the Law.
Article 17. Responsibilities of related relevant authorities at the State Bank
1. Based on the functions and tasks regulated by the State bank Governor,
related relevant authorities at the State bank shall be responsible for joining
special control over credit institutions and joining to give opinions for all
matters of credit institutions at the request of the Inspection and Supervision
Agency within 7(seven) days since the day of receiving the writing requested
by the Inspection and Supervision Agency.
2. The Office of the State Bank is responsible for publishing the information on
special control as stipulated under Article 7 of this Circular.
Article 18. Responsibilities of State Bank’s branches
1. For credit institutions not being People’s Credit Fund
a) Inspect, supervise and detect and promptly report to the State Bank Governor
through the Inspection and Supervision Agency when credit institution is in
danger of becoming insolvent and unable to pay or seriously violating the Law
which causes the danger of losing the safety of operation.
b) Recommend the State Bank Governor through the Inspection and
Supervision Agency to handle all matters related to special control; To improve,
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adjust, restructure and extend and terminate the special control period over
credit institution placed under special control at the request of credit institution,
the Special Control Board as regulated under this Circular.
c) Appoint the staff to join the Special Control Board at the request of the State
Bank Governor;
d) Cooperate with the Inspection and Supervision Agency, the Special Control
Board and the State Management Agency at the places where the head office of
credit institution is located during the special control period.
2. For People’s Credit Fund
a) Examine, detect and promptly report to the State Bank Governor when
People’s Credit Fund is in one of the cases as stipulated under Clause 3, Article
146 of the Law on credit institutions.
b) Handle the matters related to special control; To improve, adjust, restructure
and extend and terminate the special control period over People’s Credit Fund
at the request of People’s Credit Fund, the Special Control Board as regulated
under this Circular.
c) Decide to place People’s Credit Fund under special control and to establish
the Special Control Board over People’s Credit Fund in accordance with the
regulations under this Circular;
d) Manage and save the document related to the special control over People’s
Credit Fund as stipulated by the Law; report the results, difficulties, changelings
and recommendations for measures to implement the special control over
People’s Credit Fund to the State Bank Governor each month or when
necessary;
dd) Act as the focal point in cooperating with local State Management Agency
to deal with the matters related to special control over People’s Credit Fund.
e) Publish the information on special control as regulated under Article 7 of this
Circular;
Article 19. Vietnam Deposit Insurance’s responsibilities
For cases credit institution placed under special control join deposit insurance,
Deposit Insurance of Vietnam has the responsibilities:
1. To appoint the staff member to join the Special Control Board at the request
of the State Bank.
2. Within 7 (seven) days after receiving the request of the Inspection and
Supervision Agency, State Bank’s branch, the Special Control Board, Deposit
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Insurance of Vietnam must have opinions on the matters related to special
control of credit institutions in writing.
Article 20. Credit institution’s responsibilities
1. When a credit institution is in danger of becoming insolvent and unable to
pay, the Board of Management (Board of Members) or General Director
(Director) of the credit institution must report to the State bank Governor
through the Inspection and Supervision Agency and the director of State Bank’s
branch where the head office is placed.
2. The Board of Management (Board of Members), Control Board, General
Director (Director) and staff member of the credit institution placed under
special control has the responsibilities:
a) Strictly follow the decisions and directives of the State Bank;
b) Work out an organization and operation consolidation plan and submit it to
the Special Control Board for approval and organize the implementation of this
plan after it is approved.
c) Govern, control and administer the operation and assure the safety of assets
of the credit institution in accordance with law and the State Bank’s regulations,
unless they are temporarily deprived of the right govern, administer and control
the credit institution as stipulated under the Point b, Clause 2, Article 148 of the
Law on credit institutions.
d) Strictly observe the Special Control Board’s requests in accordance with the
regulations under Point a, b, c and d of Article 148 of the Law on credit
institutions.
dd) Take responsibility for the transparency of information, documents and
dossiers providing for the Special Control Board.
Chapter 4
IMPLEMENTATION PROVISIONS
Article 21. Effect
1. This Circular takes effect on April 27, 2013.
2. The Circular No. 08/2010/TT-NHNN dated March 22, 2010 of the Governor
of the State Bank of Vietnam providing for special control over credit
institutions and the Decision No. 92/2001/QD-NHNN dated February 08, 2001
of the Governor of the State Bank of Vietnam on promulgating the regulations
on special control over People' s Credit Fund won’t be in effect since the
effective day of this Circular.
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Article 22. Organization of implementation
The Chief of the Office, the Chief of the Inspection and Supervision Agency
and heads of units under the State Bank, directors of State Bank’s branches,
chairman and members of Boards of Directors, the General Director of Deposit
Insurance of Vietnam, the chairman and member of the Board of Management,
Board of Members, heads and members of Control Boards and General Director
(Director) of credit institutions shall implement this Circular.
For the State Bank Governor
Deputy Governor
Dang Thanh Binh