Quyết định 40/2007/QD-NHNN

 DECISION

ON THE ISSUANCE OF REGULATION ON THE GRANT OF ESTABLISHMENT AND OPERATION LICENCE TO NON-BANKING JOINT STOCK CREDIT INSTITUTION

GOVERNOR OF THE STATE BANK OF VIETNAM

- Pursuant to the Law on the State Bank of Vietnam in 1997 and the Law on the amendment, supplement of several articles of the Law on the State Bank of Vietnam in 2003;

- Pursuant to the Law on Credit Institutions in 2007 and the Law on the amendment, supplement of several articles of the Law on Credit Institutions in 2004;

- Pursuant to the Law on Enterprises in 2005;

- Pursuant to the Decree No. 52/2003/ND-CP dated May 19^th, 2003 of the Government providing for the function, assignment, authority and organizational structure of the State Bank of Vietnam;

- Pursuant to the Decree No. 79/2002/ND-CP dated 4 October 2002 of the Government on organization and operation of Finance Companies;

- Pursuant to the Decree No. 16/2001/ND-CP dated 2 May 2001 of the Government on organization and operation of Finance Leasing Companies;

- Pursuant to the Decree No. 65/2005/ND-CP dated 19 May 2005 of the Government on amendment, supplement of several articles of the Decree No. 16/2001/ND-CP dated 2 May 2001 of the Government on organization and operation of Finance Leasing Companies;

Upon the proposal of Director of Banks and Non-banking Credit Institutions Department,

DECIDES:

Article 1. To issue in conjunction with this Decision “the Regulation on the grant of establishment and operation Licence to non-banking joint stock credit institution”.

Article 2. This Decision shall be effective after 15 days since its publication on Official Gazette and replace the contents providing for the grant of Licence, form of charter capital contribution for non-banking joint stock credit institution as stipulated in the Circular No. 06/2006/TT-NHNN dated 23 December 2002 of the State Bank of Vietnam providing guidance on the implementation of the Decree No. 79/2002/ND-CP dated 4 October 2002 of the Government on organization and operation of Finance Companies; Circular No. 06/2005/TT-NHNN dated 12 October 2005 of the State Bank providing guidance on the implementation of the Decree No. 16/2001/ND-CP dated 2 May 2001 of the Government on organization and operation of Finance Leasing Companies; and the Decree No. 65/2005/ND-CP dated 19 May 2005 of the Government on amendment, supplement of several articles of the Decree No. 16/2001/ND-CP dated 2 May 2001 of the Government on organization and operation of Finance Leasing Companies;

Article 3. The Director of the Administrative Department, Director of Banks and Non-banking Credit Institutions Department, Head of units of the State Bank of Vietnam, General Manager of the State Bank branches in provinces, cities under the Central Government’s management; Chairman and members of the Board of Directors, Chief and members of Controllers Committee and General Director (Director) of non-banking joint stock credit institutions shall be responsible for the implementation of this Decision./.

REGULATION

on the grant of establishment and operation licence to non-banking joint stock credit institution

(Issued in conjunction with the Decision No. 40/2007/QD-NHNN dated 2 November 2007 of the Governor of the State Bank of Vietnam)

Chapter I

GENERAL PROVISIONS

Article 1. Governing scope

1. This regulation provides for the grant of establishment and operation Licence (hereinafter referred to as Licence) to joint stock finance companies, joint stock finance leasing companies (hereinafter referred to as non-banking joint stock credit institution)

Article 2. Subjects of application

1. Non-banking joint stock credit institutions;

2. Organizations, individuals related to the grant of Licence.

Article 3. Competence to grant the Licence

The Governor of the State Bank of Vietnam decides to grant Licence to a non-banking joint stock credit institution in accordance with provisions in this Regulation and other provisions of related laws on the basis of ensuring the prudence of Vietnam credit institutions system.

Article 4. Interpretation

In this Regulation, following terms shall be construed as follows:

1. Preparatory Committee for the establishment of non-banking joint stock credit institution (hereinafter referred to as Preparatory Committee) is an organization consisting of members elected by founding shareholders to, on their behalf, implement all works related to the application for Licence grant. The Preparatory Committee has at least 5 members, of which 01 member shall be the Committee’s Chief.

2. The first meeting of Shareholders’ General Meeting shall be the first meeting of founding shareholders and other shareholders who take part in capital contribution and decide on the establishment of the non-banking joint stock credit institution. The first meeting of Shareholders’ General Meeting shall be responsible to ratify the Charter on organization and operation, Plan on the establishment of non-banking joint stock credit institution, to elect members of Board of Directors, elect members of Controllers Committee of the first term and to decide on other issues related to the establishment of the non-banking joint stock credit institution.

3. Shareholder means organizations, individuals owning at least an issued share of the non-banking joint stock credit institution.

4. Founding shareholder means shareholders taking part in mobilizing the establishment, building and signing for approval of the first Charter of the non-banking joint stock credit institution. Founding shareholder must ensure criteria in accordance with provisions of the State Bank of Vietnam.

5. Types of share

a. A non-banking joint stock credit institution must issue common shares. Owner of common shares shall be common shareholder and founding shareholder. Common shares shall not be entitled to be converted into preferred shares.

b. Non-banking joint stock credit institution may issue preferred shares. Owner of preferred shares shall be preferred shareholder. Preferred shares can be converted into common shares.

c. Types of preferred share:

(i) Voting preference share: Only founding shareholders shall have the right to hold voting preference shares. Voting preference of founding shareholders shall only take effect within 3 years since non-banking joint stock credit institution receives the Licence from the State Bank of Vietnam;

(ii) Dividend preference share means the one entitled to enjoy dividend at the higher level than the dividend level of a common share or an annual stable level. Dividends allotted annually include fixed dividend and bonus dividend. Fixed dividend shall be independent of business result of the non-banking joint stock credit institution. Specific level of fixed dividends and method to determine bonus dividend are stated on the share certificates of dividend preference share. Shareholders of voting preference shares shall not have the right to vote, attend Shareholders’ General Meeting, and nominate any person to take part in Board of Directors, Controllers Committee.

6. Executive Officer shall be General Director (or Director, in case non-banking joint stock credit institution does not have the title of General Director), Deputy General Directors (Deputy Directors) and other executive titles stipulated in the Charter of the non-banking joint stock credit institution.

7. Managerial officers of non-banking joint stock credit institution shall be Chairman and members of Board of Directors; General Director (Director) and other managerial titles stipulated in the Charter of the non-banking joint stock credit institution.

8. Subsidiary company of a non-banking joint stock credit institution: A company shall be considered as the subsidiary company of a non-banking joint stock credit institution if it belongs to one of following cases:

a. 100% of its charter capital is subject to the ownership of the non-banking joint stock credit institution

b. More than 50% of its charter capital is subject to the ownership of the non-banking joint stock credit institution;

c. The appointment of majority or all of members of Board of Directors and General Director (Director) of the Company is subject to the decision of the non-banking joint stock credit institution;

d. The amendment of, supplement to the Company’s Charter is subject to the decision of non-banking joint stock credit institution.

9. Related persons mean organizations, individuals that have direct or indirect relationship with the non-banking joint stock credit institution, including:

a. Parent company; managerial officer of the parent company and person with competence to appoint the managerial officer thereof for the non-banking joint stock credit institution;

b. Subsidiary company of the non-banking joint stock credit institution;

c. Organization, individual or group of organizations, individuals that are capable of governing the decision making, operation of the non-banking joint stock credit institution through management bodies of the non-banking joint stock credit institution;

d. Managerial officer, member of Controllers Committee of the non-banking joint stock credit institution;

dd. Spouse, father, foster father, mother, foster mother, child, foster child, siblings of managerial officer of the non-banking joint stock credit institution or of shareholder owning over 10% of share capital of the non-banking joint stock credit institution;

e. Individual authorized to represent individuals or organizations as stipulated in point a, b, c, d and dd of this paragraph;

g.  Non-banking joint stock credit institution which organizations or individuals stipulated in point a, b, c, d, dd, e and h of this paragraph are holding the controlling ownership to the decision making of managerial officer, executive officer of that non-banking joint stock credit institution;

h. Group of organizations, individuals agree to jointly coordinate to hold share capital or interests of the non-banking joint stock credit institution or to control the decision making of the non-banking joint stock credit institution;

10. Dividend is an amount of net profits paid in cash or in other asset for each share from retained profit source of the non-banking joint stock credit institution after all its financial obligations have been fulfilled.

11. Authorized representative shall be an individual who is authorized in writing by an  organization shareholder to represent, on its behalf, the contributed capital in the non-banking joint stock credit institution.

Article 5. Charter capital

1. Charter capital shall be contributed in Vietnamese Dong, freely convertible foreign currencies, gold. Freely convertible foreign currencies, gold must be converted into Vietnamese Dong to state in the Licence and Charter of the non-banking joint stock credit institution;

2. Charter capital shall be contributed from legal money source other than borrowings in any form. Corporate shareholders shall only be entitled to use its charter capital and reserve fund to make contribution to charter capital of the non-banking joint stock credit institution without any effect to capital source required for operation of enterprise. That shareholder must commit to take responsibility to applicable laws for the legality of that money amount.

Article 6. Shareholder

1. A non-banking joint stock credit institution must have at least 50 shareholders, of which at least 3 founding shareholders are organizations with legal status, fully satisfying the conditions as stipulated in Point b, Paragraph 3, Article 8 of this Regulation;

2. Shareholder must be organizations established in accordance with provisions of applicable laws of Vietnam, or individuals with Vietnamese nationality; not be one of subjects to be prohibited in accordance with provisions in Paragraph 4, Article 13 of the Law on Enterprises;

3. Organization shareholder must have at least 1 year of operation; For common shareholders contributing from 5% and more of charter capital, they must have at least 2 years of operation and their operation gains profit;

4. Individual or organization and related persons of organization or individual thereof shall not be permitted to take part in capital contribution to more than 2 non-banking joint stock credit institutions for each type of non-banking joint stock credit institution; shall only be permitted to take part in capital contribution to one non-banking joint stock credit institution for each type of non-banking joint stock credit institution, if:

a. The individual himself or that individual with his related person has owned 10% and more of charter capital of one non-banking joint stock credit institution;

b. Organization itself or that organization with its related person has owned 20% and more of charter capital of 01 non-banking joint stock credit institution;

Article 7. Level of share owning

1. An individual shareholder shall be entitled to own 10% of charter capital, at the maximum, of one non-banking joint stock credit institution;

2. An organization shareholder shall be entitled to own 20% of charter capital, at the maximum, of one non-banking joint stock credit institution;

3. A shareholder and his related persons shall be entitled to own 20% of charter capital, at the maximum, of one non-banking joint stock credit institution;

4. A Group or a Corporation (of which charter capital is over 1,000 billion dong) and its related persons shall be entitled to take part in as a founding shareholder and entitled to own 40% of charter capital, at the maximum, of one non-banking joint stock credit institution if the Group or Corporation is permitted by the Prime Minister to take part in capital contribution for the establishment of the non-banking joint stock credit institution and undertakes to wholly support, take joint responsibility with the non-banking joint stock credit institution for risks occurring during the operation after its establishment;

5. Founding shareholders must jointly own at least 50% of charter capital of a non-banking joint stock credit institution, of which founding shareholders being organizations must jointly own at least 50% of total shares of the founding shareholders.

Chapter II

CONDITIONS, PROCEDURES, FILE FOR THE GRANT OF LICENCE

Article 8. Conditions for the grant of Licence

1. Having a demand for establishment and operation of a non-banking joint stock credit institution;

2. Non-banking joint stock credit institution must have minimum charter capital equal to the legal capital provided for by the Government from time to time;

3. Founding shareholder

a. For individual

- Being knowledgeable about banking activity, having professional ethics, not violating provisions of applicable laws;

- Having full financial capacity to make capital contribution and commitment of giving support to the non-banking joint stock credit institution if the non-banking joint stock credit institution encounters difficulties in capital source or lacks payment capacity (level of support shall be decided upon by Board of Directors for each specific case);

b. For organization

- Having to prove that it has enough financial capacity and has committed to support the non-banking joint stock credit institution in case where the non-banking joint stock credit institution encounters difficulties in capital source or lacks payment capacity, lacks liquidity (level of support shall be decided upon by Board of Directors for each specific case);

- Being an enterprise which has at least 200 billion dong of owner’s capital, 500 billion dong of total assets; which gained profits in 5 consecutive years preceding the year applying for establishment of the non-banking joint stock credit institution;

In case of a credit institution, it must ensure that its total assets are at least 3000 billion dong, ratio of bad debt is less than 3% of total outstanding loans by the time applying for capital contribution to establish the non-banking joint stock credit institution; it does not violate provisions on prudence in banking activity in accordance with provisions of the State Bank of Vietnam; its business activity gained profits for 5 consecutive years preceding the year applying for establishment of the non-banking joint stock credit institution.

4. Managerial, executive officer:

a. Having full civil act capacity;

b. Fully satisfying the standards stipulated in Article 12 of this Regulation;

5. Having the Charter on the organization and operation of non-banking joint stock credit institution which is in line with provisions of current laws;

6. Having feasible Plan of establishment and operation.

Article 9. Cases not entitled to take on the position

Following persons shall not be entitled to act as members of the Board of Directors, members of Controllers Committee or act as General Director (Director), Deputy General Director (Deputy Director) of the non-banking joint stock credit institution:

1. Those are under age; who have civil act capacity limited, or lose civil act capacity

2. Those are being prosecuted for criminal liability;

3. Those were sentenced for crimes of violating national security, serious crimes of violating socialist ownership, civil ownership, and serious economic crimes;

4. Those were sentenced for other crimes and their sentence has not yet been abolished;

5. Officers, civil servants in accordance with provisions of applicable laws on officers, civil servants; leaders, managerial officers in charge of operations in 100% state owned enterprise, except for those delegated as representative for the contributed capital of the State at other enterprise;

6. Officers, non-commissioned officers, professional soldiers, national defence workers in agencies, units of Vietnam people army; Officers, professional non-commissioned officers in agencies, units of Vietnam people’s police, except for those delegated as representative for the contributed capital at other enterprise;

7. Those have ever been owner of private enterprises, member of partnership companies, General Director (Director), Chairman and member of the Board of Directors, Members Board or Controllers Committee of an enterprise at the time the enterprise was declared bankruptcy, except for case where the enterprise was declared bankruptcy due to force majeure;

8. Those have ever been legal representative of an enterprise at the time the enterprise was suspended from operation, was forced to dissolve due to its serious law violation, except for case being representative upon request of competent State agencies in order to regulate, reinforce that enterprise;

9. Those have ever been member of Board of Directors, Controllers Committee, General Director (Director) of Credit Institution, which was determined by the state management agency, law authority to commit violation act, resulting in the revocation of its establishment and operation Licence;

10. Parents, spouse, children, siblings of member of Board of Directors, General Director (Director) of the non-banking joint stock credit institution shall not be permitted to act as member of Controllers Committee, chief accountant of that non-banking joint stock credit institution.

Article 10. Those not entitled to concurrently take on several positions

1. Member of Board of Directors

a. Chairman of Board of Directors shall not be entitled to concurrently act as General Director (Director) or Deputy General Director (Deputy Director) of the non-banking joint stock credit institution;

b. Chairman of Board of Directors shall not be entitled to take part in Board of Directors or take part in managing another credit institution, except for case where that credit institution is a subsidiary company of the non-banking joint stock credit institution.

2. Member of Controllers Committee

a. Shall not be entitled to concurrently act as executive officer, staff of the non-banking joint stock credit institution;

b. Chief of Controllers Committee shall not be entitled to concurrently act as a member of Controllers Committee, executive officer of another credit institution;

3. General Director (Director) shall not be entitled to concurrently act as executive officer or Chairman of Board of Directors of another credit institution, except for case where that credit institution is a subsidiary company of the non-banking joint stock credit institution.

Article 11. Obligations of member of Board of Directors, member of Controllers Committee, executive officer

1. To comply with applicable laws, Charter of the non-banking joint stock credit institution while implementing assigned rights and duties;

2. To implement assigned rights and duties in honest, cautious, best manner for the sake of  the non-banking joint stock credit institution;

3. To be faithful to the interests of the non-banking joint stock credit institution; do not use information, know-how, business opportunity of the non-banking joint stock credit institution, do not abuse position, title and assets of the non-banking joint stock credit institution for individual purpose or for the sake of other organizations, individuals or prejudice interests of the non-banking joint stock credit institution;

4. To inform timely, sufficiently, exactly the non-banking joint stock credit institution of rights which can cause conflict and conferred to them by economic organizations, transactions or other individuals and they can use those opportunities only when the Board of Directors has considered and approved;

5. Do not facilitate the third party to prejudice interests of the non-banking joint stock credit institution;

6. Do not facilitate himself or relevant persons to extend credit with more preferential, favorable conditions than provisions at Article 77 and 78 of the Law on Credit institutions;

7. Not entitled to enjoy salary increase, bonus payment and compensation when the Non-banking joint stock credit institution gets losses.

8. Other obligations stipulated in the Charter of the non-banking joint stock credit institution.

Article 12. Standards for managerial officer, executive officer of the non-banking joint stock credit institution

1. The person who is elected as member of Board of Directors has to meet the following standards and requirements:

a) Not being one of subjects stipulated in Article 9 and Paragraph 1 of Article 10 of this Regulation;

b) Ensuring professional ethics on the basis of compliance with provisions at Article 11 of this Regulation;

c) Having competence and being knowledgeable about operation of the non-banking joint stock credit institution:

(i) At least graduating from university, major in economics, business administration; law; or

(ii) Having at least 3 years of experience in managerial position from division level and more in a credit institution or another enterprise; or

(iii) Having at least 5 years of directly working in operational departments in banking, finance,  audit or accounting sector; or

(iv) Being individual shareholder or authorized representative who owns at least 5% of the total share capital of the non-banking joint stock credit institution.

d) The number of members of Board of Directors who does not have a university degree  as mentioned in item (i), point c, paragraph 1 of this Article shall not be permitted to exceed 1/3 of total members of Board of Directors of the non-banking joint stock credit institution;

e) Residing in Vietnam during the time in power (for specialized member of Board of Directors).

2. The person being elected as member of Controllers Committee has to meet the following standards and conditions:

a) Not being one of subjects stipulated in Article 9 and Paragraph 2 of Article 10 of this Regulation;

b) Ensuring professional ethics on the basis of compliance with provisions at Article 11 of this Regulation;

c) At least graduating from university, major in economics, business administration; law; or specialized sector that they will assume; Having at least 3 years of directly working in  banking, finance,  audit or accounting sector;

d) Not being related person of managerial officer of the non-banking joint stock credit institution;

e) Residing in Vietnam during the time in power (for specialized member of Controllers Committee).

3. The person being elected as General Director (Director) has to meet the following standards and conditions:

a) Not being one of subjects stipulated in Article 9 and Paragraph 3 of Article 10 of this Regulation;

b) Ensuring professional ethics on the basis of compliance with provisions at Article 11 of this Regulation;

c) At least graduating from university, major in economics, business administration; law; or specialized sector that they will assume; Having at least 3 years of experience in managerial position from division level and more in a credit institution or another enterprise with total minimum assets of 300 billion dong;

d) Residing in Vietnam during the time in power.

Article 13. Application file for approval, in principle, of the grant of license

1. A written application for the establishment of non-banking joint stock credit institution, which specifies the satisfactions of conditions, standards stipulated in Article 8 and 12 of this Regulation and requests for the approval, in principle, of the grant of License signed by Chief of Preparatory Committee for the establishment of Non-banking joint stock credit institution;

2. Draft Charter on organization and operation of the non-banking joint stock credit institution corresponding with provisions of applicable laws on planned type for the establishment;

3. Draft Plan for the establishment of the non-banking joint stock credit institution which contain the following contents:

a) The necessity of the establishment of the non-banking joint stock credit institution, the explanation of financial capacity of shareholders, the ability to make full capital contribution of shareholders upon the establishment of the non-banking joint stock credit institution and the ability to maintain the ratio of shares owning by founding shareholders in accordance with provisions of Article 7 of this Regulation;

b) Name of the non-banking joint stock credit institution, charter capital at the establishment, estimated location of Head office in line with provisions of applicable laws;

c) Structure of personnel organization:

- The diagram of estimated personnel organization of the non-banking joint stock credit institution;

- The estimated personnel of administrative, controlling, executive apparatus;

- Capacity of administration, management to the non-banking joint stock credit institution of persons planned to participate in Board of Directors, Controllers Committee and Executive Officer.

d) The capacity of risk management: Risks estimated to arise and the capacity of preventing, controlling risks arising during the operation of the non-banking joint stock credit institution;

dd. Information technology: ability to apply information technology, clearly stating time for carrying out technology investment; planned type of information to apply; estimated officers in application of information technology

e) The ability of competitiveness and development of the non-banking joint stock credit institution in the market:

- To analyze and assess banking- finance market (real situation, opportunity, challenge and perspective); The capacity, opportunity of competition and development;

- The estimated development strategy, main operation scope of the non-banking joint stock credit institution after being granted the License.

g) The model of Internal examination, control, audit System of Non-banking joint stock credit institution;

h) Having feasible specific business plan in the first 03 years, which reflects the capacity of capital mobilization, lending, investment and business efficiency; the satisfaction of minimum capital adequacy norms, norms of operation efficiency and explanation of the ability to realize the plan in each year;

h) To mention internal regulations on organization and operation of Non-banking joint stock credit institution, including:

- Regulation on organization and operation of Board of Directors, Controllers Committee and Executive Officer;

- Regulation on operation of internal examination, control and audit system;

- Regulation on risks management.

4. The list of founding shareholders, which contains some following contents:

a) Name and location of Head office of the organization;

b) Full name; permanent address; nationality; number, date of issue, place of issue of people’s identity card or passport for individual, legal entity’s representative, authorized representative of organization; amount of contributed capital, value of contributed capital; quantity of shares; type of share, ratio of share owning, period of capital contribution, and undertaking not to violate paragraph 4, Article 6 of this Regulation.

5. File of shareholder

a) For shareholder being individual

- List and proportion of shares purchase of each shareholder;

- Besides the file as mentioned above, founding shareholder, shareholder owning from 5% and more of charter capital of the non-banking joint stock credit institution has to have additional files as follows:

+ An application for share purchase of shareholder under the form stipulated by the State Bank of Vietnam (Appendix No. 04);

+ Curriculum vitae (Appendix No. 02); judicial curriculum vitae in accordance with provisions of applicable laws;

+ A written commitment of each founding shareholder of supporting the non-banking joint stock credit institution in the event that the non-banking joint stock credit institution encounters difficulties in capital source and payment capacity;

+ A written commitment of taking responsibility for the legality of the origin of contributed capital and not violating paragraph 4, Article 6 of this Regulation. 

b. For shareholder being an organization:

- An application for shares purchase by the shareholder in accordance with the form stipulated by the State Bank (Appendix No. 03);

- Business registration certificate or a similar document of the organization;

- A letter of attorney and curriculum vitae (Appendix No. 02) of the legal entity’s representative and the authorized representative at the non-banking joint stock credit institution in which there is a commitment of not violating paragraph 4, Article 6 of this Regulation;

- Charter on organization and operation;

- People’s identity card or passport of the legal entity’s representative and authorized representative at the Non-banking joint stock credit institution;

- Written approval by competent authority permitting the organization to make capital contribution to establish the non-banking joint stock credit institution (if any);

- Balance sheet and audited profit/loss statement for the latest year (if any) and notes to financial statements which clearly state following contents:

+ Owner’s capital source (charter capital, reserve fund, retained and undistributed profit, etc.);

+ Deposit balance, outstanding loans at credit institutions;

+ Balance of investments in capital contribution, shares purchase. In case of making capital contribution to, buying shares from credit institutions, securities companies, insurance companies, it is required to clearly state: name, address, number of shares being hold; face value of share certificate; estimated market value; etc.

+ Business operation result;

- Besides above-mentioned files, founding shareholder, shareholder owning from 5% and more of charter capital should provide additionally following documents:

+ Written commitment on giving support to non-banking joint stock credit institution in case it encounters difficulties in capital source and payment capacity;

+ Independent auditing report of the year preceding the year applying for establishment of non-banking joint stock credit institution in accordance with provisions of applicable laws on accounting and audit (if any);

6. File of persons who are expected to take part in Board of Directors, Controllers Committee and Executive Officer;

a. Estimated list of persons taking part in Board of Directors, Controllers Committee and Executive Officer;

b. Curriculum vitae (Appendix No. 02); judicial resume in accordance with provisions of applicable laws (if any);

c. Diplomas proving their qualifications;

d. Commitment made by each individual and by Board of Directors about the persons taking part in managing, executing non-banking joint stock credit institution, ensuring requirements of the State Bank;

7. Minutes of founding shareholders’ meeting about the election of Preparatory Committee and Chief of Preparatory Committee in accordance with provisions in paragraph 1, Article 4 of this Regulation.

Article 14. Application file for the grant of Licence

1. An application for the grant of Licence in accordance with the form stipulated by State Bank of Vietnam (Appendix No. 01);

2. Charter on organization and operation of non-banking joint stock credit institution;

3. Plan on the establishment of non-banking joint stock credit institution under the contents stipulated in Paragraph 3, Article 13 of this Regulation;

4. Minutes of the first meeting of Shareholders’ General Meeting to approve the contents relating to the establishment of non-banking joint stock credit institution in accordance with provisions in Paragraph 2, Article 4 of this Regulation;

5. Minutes of meeting of Board of Directors on the election of the title of Chairman of Board of Directors and appointment of General Director (Director); Minutes of the meeting of Controllers Committee on the election of the title of Chief of Controllers Committee and members of the Controllers Committee;

6. Decision of the Board of Directors on the appointment of the title of General Director (Director);

7. File of shareholder:

a. In respect of shareholder being an individual: An application for share purchase by the shareholder in accordance with the form stipulated by State Bank (Appendix No. 04);

b. In respect of founding shareholder, organization shareholder, and individual shareholder owning from 5% of charter capital in accordance with provisions in Paragraph 5, Article 13 (in case of any change);

8. File of persons taking part in Board of Directors, Controllers Committee, executive officer as stipulated in Paragraph 6, Article 13 (in case of any change);

9. List of shareholders and capital contributed by each shareholder which clearly reflects following contents: full name, permanent address, nationality, number of people’s identity card, date of issue, place of issue, or passport or other legal personal identity papers for individuals; name, address of head office, number of establishment decision or number of business registration certificate for organizations; Full name, number of identity card (passport number), address of legal entity’s representative, authorized representative at the non-banking joint stock credit institution; Amount of contributed capital, value of contributed capital, owning ratio, number of shares, types of share; period of capital contribution;

10. Written document of people’s committee in province, city under the central Government’s management permitting the non-banking joint stock credit institution to locate its head office at the local area;

11. Written document confirming the ownership or legal use right for the head office.

Article 15. Principles of file preparation

1. Copies of documents, qualifications must be confirmed by competent agencies in accordance with provisions of applicable laws;

2. The heading on all documents signed by the Preparatory Committee must clearly state “Preparatory Committee for the establishment of …….Non-banking joint stock credit institution”

Article 16. Contents of the Licence

The Licence must contain some of major contents as follows:

1. Number of the Licence, place of issue, time of issue;

2. Name of Non-banking joint stock credit institution: full name in Vietnamese and in English, abbreviated name in Vietnamese and in English; trading name (if any);

3. Location of the head office;

4. Area of operation;

5. Charter capital;

6. Operation content;

7. Operation duration;

Article 17. Fee payment

Non-banking joint stock credit institution to be licenced shall be subject to the payment of licencing fee after 15 days at the latest since the date to be granted the Licence. The fee level shall be in accordance with provisions of Ministry of Finance.

Article 18. Business registration

After being licenced, Non-banking joint stock credit institution must make business registration in accordance with provisions of applicable laws.

Article 19. Operation conditions

1. In order to carry out operation, licenced non-banking joint stock credit institution must fully satisfy following conditions:

a. Availability of a Charter on organization and operation approved by the State Bank of Vietnam;

b. Availability of a Business Registration Certificate;

c. Having made full charter capital contribution under the list of registered shareholders and this charter capital amount must be deposited in an interest free frozen account maintained at the State Bank branch in province, city where head office of the non-banking joint stock credit institution is located at least 30 days prior to commencement of operation. This capital amount shall only be unfrozen after the commencement of operation of the non-banking joint stock credit institution;

d. Its head office is convenient for transaction with customers, ensuring prudence in operation in accordance with provisions of applicable laws and of the State Bank of Vietnam;

dd. To publish in the paper in accordance with provisions of applicable laws on the contents stipulated in the Licence;

2. Within a period of 12 months since the receipt of the Licence from the State Bank of Vietnam, the non-banking joint stock credit institution must open its operation.

3. After the period as stipulated in Paragraph 2 of this Article, if the non-banking joint stock credit institution fails to open operation, the State Bank of Vietnam shall revoke its Licence in accordance with provisions of applicable laws;

Article 20. Use of Licence 

1. Licenced non-banking joint stock credit institution must use the right name and operate in accordance with the contents as stipulated in the Licence.

2. It is strictly forbidden for counterfeiting, erasing, transferring, leasing, lending the Licence issued by the Governor of the State Bank;

3. The Licence which is lost, torn, fired or destructed in different ways shall not be reissued, the State Bank shall only reissue the copy of the Licence to the non-banking joint stock credit institution if having legitimate reasons.

Chapter III

RESPONSIBILITIES OF RELATED ORGANIZATIONS, INDIVIDUALS

Section I. Organizations, individuals making capital contribution to establish non-banking joint stock credit institution

Article 21. Responsibilities of organizations, individuals making capital contribution to establish non-banking joint stock credit institution

1. To be responsible to the law for the origin of the contributed capital for the establishment of the non-banking joint stock credit institution in accordance with provisions in paragraph 2, Article 5 of this Regulation;

2. To perform the shares assignment in accordance with following provisions:

a. Within a period of 3 years since the date the non-banking joint stock credit institution is granted the Licence, its founding shareholders shall not be permitted to assign their voting preference shares to other persons and only be entitled to assign their common shares in the total shares contributed upon establishing the non-banking joint stock credit institution to other founding shareholders provided that provisions in Article 7 of this Regulation are ensured;

b. Within a period of 1 year since the date the non-banking joint stock credit institution is granted the Licence, shareholder not being founding shareholder shall not be entitled to assign the shares contributed upon establishing non-banking joint stock credit institution to any one not being shareholder of the non-banking joint stock credit institution;

3. To be responsible for the honesty, accuracy of the contents of the shareholders’ file in accordance with provisions in this Regulation. After being granted the Licence, if file is detected to be dishonest and inaccurate, the State Bank shall revoke the Licence in accordance with provisions in Article 29 of the Law on Credit Iinstitutions;

4. To correctly implement other provisions related to the establishment and operation of the non-banking joint stock credit institution.

Article 22. Responsibilities of Preparatory Committee

1. To prepare file in accordance with provisions in Article 13 of this Regulation and submit 6 sets in full (including 2 original sets) to the State Bank of Vietnam for approving in principle; 01 set submitted to people’s committee in province, city (where head office of the non-banking joint stock credit institution is to be located) for approval of locating head office of the non-banking joint stock credit institution in the local area;

2. After the State Bank of Vietnam approves in writing in principle, the Preparatory Committee shall be responsible:

a. To organize the first meeting of Shareholders’ General Mmeeting to ratify the contents as stipulated in Paragraph 2, Article 4 of this Regulation;

b. To prepare file in accordance with provisions in Article 14 of this Regulation and submit 3 sets to the State Bank of Vietnam (including 2 original sets);

3. To provide guidance to organizations, individuals on carrying out procedures of capital contribution and completing file in accordance with provisions in Article 13 and Article 14 of this Regulation;

4. To be responsible for the honesty, accuracy of the contents of the file submitted to the State Bank of Vietnam;

5. To be responsible to the law and give notice to organizations, individuals of the plan to establish the non-banking joint stock credit institution, for management, secret keeping of files and registration for capital contribution; for contributed capital amount when the establishment has not been permitted (if any), or to refund in full the money amount received from the capital contribution if operation conditions are not fully satisfied. To give notice to shareholders of the reason for not being granted the Licence in case where the non-banking joint stock credit institution is not been established;

6. To pay fees and open a frozen account at the State Bank branch in province, city where the head office of the non-banking joint stock credit institution is located and give notice to shareholders of depositing money into this account under the registered list.

Article 23. Responsibilities of Chief of Preparatory Committee

1. To convene and preside over the first meeting of Shareholders’ General Meeting in accordance with provisions of applicable laws;

2. To sign documents related to the application for establishment of the non-banking joint stock credit institution till the State Bank of Vietnam grants the Licence to it, to approve the Charter, approve titles of Chairman and members of Board of Directors, Chief and members of Controllers Committee, General Director (Director) of the non-banking joint stock credit institution.

Section II. Responsibilities of the State Bank

Article 24. Banks and Non-banking Credit Institutions Department (hereinafter referred to as Banks Department)

1. To suggest solutions for matters related to the grant of Licence;

2. To act as a coordinator to receive and coordinate with related units to appraise the application file for the grant of Licence.

a. For the file applying for approval in principle: within a period of 45 working days since the full receipt of files in accordance with provisions in Article 13 of this Regulation, Banks Department shall be responsible:

(i) To send a written request for appraisal enclosed with the file to related units;

(ii) To appraise file, summarize opinions of related units and submit to the Governor of the State Bank:

- For written approval in principle of the establishment of non-banking joint stock credit institution if all conditions as stipulated in this Regulation are ensured; or

- For written document which has not yet approved in principle and requesting the Preparatory Committee to supplement the file or explain unclear related issues in the file; or

- For written non-approval of the establishment of non-banking joint stock credit institution if the file does not satisfy full conditions as stipulated in this Regulation.

b. In respect of the application file for the grant of Licence:

Within a period of 30 working days since the full receipt of file in accordance with provisions in Article 14 of this Regulation, Banks Department shall be responsible for appraising the file submitted to the Governor of the State Bank:

- For signing the Decision on the grant of Licence; approving Charter; approving titles of Chairman and members of Board of Directors, Chief and members of Controllers Committee, General Director (Director) of the non-banking joint stock credit institution if the establishment of the non-banking joint stock credit institution fully satisfies the conditions and the file stipulated in this Regulation; or

- For giving out a written request to the Preparatory Committee for supplementing file or explaining unclear related issues in the file; or

- For a written document that does not accept the grant of Licence if all conditions as stipulated in this Regulation are not fully satisfied.

Article 25. State Bank Inspectorate

Within a maximum period of 10 working days since the Banks Department submits a written request, the State Bank Inspectorate shall be responsible:

1. To assess actual situation of operation, financial capacity and the participation in administration, control, management of the credit institution which applies for capital contribution to establish the non-banking joint stock credit institution, provision of information related to organizations and individuals registering for capital contribution to establish the non-banking joint stock credit institution (if any);

2. To appraise the file applying for approval in principle of the establishment of the non-banking joint stock credit institution and send written document to Banks Department.

Article 26. Legislation Department

Within a maximum period of 10 working days since the Banks Department submits a written request, Legislation Department shall appraise the file applying for approval in principle of the establishment of non-banking joint stock credit institution and send a written document to Banks Department.

Article 27. Banking Development and Strategy Department

Within a maximum period of 10 working days since the Banks Department submits a written request, Banking Development and Strategy Department shall be responsible for proposing its opinion of the necessity of establishment of non-banking joint stock credit institution; appraising the file applying for approval in principle of the establishment of non-banking joint stock credit institution and send a written document to Banks Department.

Article 28. State Bank branch in province, city where the non-banking joint stock credit institution, which is applying for establishment, plans to locate its head office

1. Within a maximum period of 10 working days since the Banks Department submits a written request, the State Bank branch in province, city where the non-banking joint stock credit institution which is applying for establishment, plans to locate its head office shall appraise the file applying for approval in principle of the establishment of non-banking joint stock credit institution, assess the demand for, necessity of the establishment of non-banking joint stock credit institution in the local area, ability of management and supervision of the State Bank branch in province, city and send a written document to Banks Department.

2. To act as a coordinator to provide advice to local government to give out opinion of the establishment of non-banking joint stock credit institution in the local area (if any);

3. To confirm the opening of frozen account and the money amount deposited into this account by shareholders of the non-banking joint stock credit institution;

4. To conduct, supervise the non-banking joint stock credit institution to implement and ensure the conditions in accordance with provisions of applicable laws, of the State Bank of Vietnam prior to commencement of operation.

Chapter IV

IMPLEMENTING PROVISIONS

Article 29. Dealing with violation

Any acts of violating provisions of this Regulation shall, depending on the nature, seriousness of violation, be dealt with in accordance with provisions of applicable laws.

APPENDIX No. 01

APPLICATION FOR THE GRANT OF ESTABLISHMENT AND OPERATION LICENSE to NON-BANKING JOINT-STOCK CREDIT INSTITUTION

To: The Governor of the State Bank of Vietnam

Pursuant to the Law on the State Bank of Vietnam issued in 1997 and the Law on the amendment, supplement of several articles of the Law on the State Bank of Vietnam issued in 2003;

Pursuant to the Law on Credit Institutions issued in 1997 and the Law on the amendment, supplement of several articles of the Law on Credit Institutions issued in 2004;

Pursuant to the Decree No. 79/2002/ND-CP dated 4 October 2002 of the Government on organization and operation of the non-banking joint stock credit institution (in case of planning to establish a joint-stock finance company); or,

Pursuant to the Decree No. 16/2001/ND-CP dated 2 May 2001 of the Government on organization and operation of Finance Leasing Companies, Pursuant to the Decree No. 65/2005/ND-CP dated 19 May 2005 of the Government on amendment, supplement of several articles of the Decree No. 16/2001/ND-CP dated 2 May 2001 of the Government on organization and operation of Finance Leasing Companies (in case of planning to establish a joint-stock finance leasing company);

Pursuant to the Regulation on the grant of establishment and operation licence to non-banking joint stock credit institution issued in conjunction with the Decision No. …/2007/QD-NHNN dated …2007 of the Governor of the State bank of Vietnam;

Pursuant to the Minutes of the first meeting of Shareholders’ General Meeting dated …………. on the unanimity to establish the……….. non-banking joint-stock credit institution, ratification of the Charter on organization and operation, election of titles of members of Board of Directors, members of Controllers Committee;

Now, on behalf of shareholders, the Preparatory Committee for the establishment of the …….. non-banking joint-stock credit institution would like to request the Governor of the State Bank of Vietnam:

I. To grant the establishment and operation License to the following non-banking joint-stock credit institution:

1. Name of the non-banking joint-stock credit institution:

- Full name in Vietnamese

- Abbreviated name in Vietnamese

- Full name in English

- Abbreviated name in English

- Trading name (if any)

2. Location of Head office, telephone number, fax number, Email

3. Operation area:

4. Operation content:

5. Duration of operation

6. Charter capital:

7. Frozen account maintained at the State bank of Vietnam, …branch

..............................................................................................................................................

+ Number of account:

+ Deposited capital amount:

..............................................................................................................................................

II. To approve the Charter on organization and operation of the non-banking joint-stock credit institution.

III. To approve titles of Chairman and members of Board of Directors, Chief and members of Controllers Committee and General Director (Director) of the non-banking joint-stock credit institution (clearly state full name and titles requested for approval of each member).

After being granted the establishment and operation License, we shall carry out the business registration, registration of the opening day and publish in the paper in accordance with provisions of applicable laws.

We undertake to satisfy the conditions stipulated in Article 8 and 12 of the Regulation on the grant of establishment and operation licence to non-banking joint stock credit institution issued in conjunction with Decision No. …/2007/QD-NHNN dated …2007

We undertake to strictly comply with provisions of applicable laws, of the State Bank of Vietnam and the Charter on organization and operation of the non-banking joint-stock credit institution; we shall take responsibility to the law for any violation act.

APPENDIX NO. 02

SOCIALIST REPUBLIC OF VIETNAM

Independence – Freedom – Happiness

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CURRICULUM VITAE

1. Personal information

- Birth name

- Generally used name

- Alias

- Date of birth

- Place of birth

- Nationality:

+ Original nationality

+ Current nationalities

- Permanent address stated in family register,

- Address stated in people’s identity card (or passport)

- Current address

- Number of identity card or passport or other identity papers, place of issue, date of issue;

- Name and address of legal entity for which you are a representative; contributed capital amount and proportion (for the legal entity’s representative of legal entity shareholder)

2. Qualifications:

Clearly state schools, granted diplomas, specifically: Name of school, name of city, country where the school is located; name of course; duration of study; name of diploma (enumerate diplomas, training programs relating to standards, conditions of elected, appointed title).

3. Working process:

- Working process, occupations and positions that have been experienced (from the age of 18 until now) do what, where, summarize main features;

- Positions assumed at other organizations other than the non-banking joint-stock credit institution planned to establish.

- Positions to be elected (appointed) at the non-banking joint-stock credit institution.

- Award, discipline (if any).

4. Relationship:

- To fully enumerate relationship with relevant persons including: father, mother, wife (husband), children, brothers, sisters, (clearly state full name, age, resident address, place of work);

- For the related legal entity including: business registration of legal entity, full name, date of birth and number of people’s identity card or passport of individual) in accordance with provisions of Paragraph 9, Article 4 of the Regulation on the grant of establishment and operation License to non-banking joint-stock credit institution issued in conjunction with the Decision No. …/2007/ QD-NHNN dated …/2007 of the Governor of the State Bank of Vietnam.

5. Commitment to the law

- I, …………………, undertake not to violate provisions of applicable laws, of the State Bank of Vietnam and the Charter on organization and operation of the non-banking joint-stock credit institution.

- I, ………………….undertake not to violate provisions at Paragraph 4, Article 6 of this Regulation.

- I, …………………., undertake that the above declarations are true. I shall take full responsibility for any untrue information in this declaration.

6. Signature and full name of declarant

7. Confirmation of People’s committee of competent level where the declarant registers his/her permanent address (in case of individual shareholder) or confirmation of the company for which the declarant is working (in case of legal entity’s representative).

(Apart from above main contents, the declarant can supplement other contents if deemed necessary)