Thông tư 15/2016/TT-NHNN

CIRCULAR

AMENDMENTS AND SUPPLEMENTS TO A NUMBER OF ARTICLES OF GOVERNOR OF STATE BANK OF VIETNAM’S CIRCULAR No. 30/2015/TT-NHNN DATED DECEMBER 25, 2015 STIPULATING ISSUANCE OF LICENCES, ORGANIZATION AND OPERATION OF NON-BANK 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 June 16, 2010.

Pursuant to the Government’s Decree No. 39/2014/ND-CP dated May 07, 2014 stipulating operation of finance companies and finance leasing companies;

Pursuant to the Government's Decree No. 156/2013/ND-CP dated November 11, 2013 defining the functions, tasks, entitlements and organizational structure of the State bank of Vietnam;

At the request of the Banking Chief Inspector,

The Governor of the State Bank of Vietnam promulgates the Circular on amendments and supplements to a number of articles of the Governor of State Bank of Vietnam’s Circular No. 30/2015/TT-NHNN dated December 25, 2015 stipulating issuance of licences, organization and operation of non-bank credit institutions.

Article 1. Amendments and supplements to a number of articles of the Governor of State Bank of Vietnam’s Circular No. 30/2015/TT-NHNN dated December 25, 2015 stipulating issuance of licences, organization and operation of non-bank credit institutions (hereinafter referred to as “Circular No. 30/2015/TT-NHNN”);

1. Heading of Section 2, Chapter II shall be changed into “REGULATIONS ON FOUNDING SHAREHOLDERS, OWNERS, FOUNDING MEMBERS/PARTNERS”

2. Article 11 is amended as follows:

“Article 11. Regulations on founding shareholders

1. At least two founding shareholders as organizations;

2. Be responsible for legality of contributed capital;

3. Founding shareholders shall provide financial support to non-bank credit institutions for difficulties in capital, solvency and liquidity;

4. Founding shareholders must not join other credit institutions established and operating in Vietnam as a strategic shareholder, founding shareholder, owner or founding member.

5. Founding shareholders’ financial capacity must be sufficient to contribute capital to the establishment of non-bank credit institutions without using capital in trust, raised capital or loans provided by foreign credit institutions, branches of foreign banks, other organizations or individuals as contributed capital.

6. In addition to provisions as set out in Clauses 2, 3, 4, 6 of this Article, a founding shareholder that is an individual must:

a) Have Vietnamese nationality and full legal capacity according to laws;

b) Not banned from establishing enterprises according to the Law on Enterprises, the Law on Cadres and Civil Servants;

7. In addition to provisions as set out in Clauses 2, 3, 4, 5 of this Article, a founding shareholder that is an organization must:

a) Be established according to laws of Vietnam;

b) Have a profitable business for three straight years preceding the year in which the application for the licence is submitted and by the time the complete application for the licence is submitted;

c) Have fulfilled its tax and social insurance obligations according to laws by the time the application for the licence is submitted;

d) If the organization is a Vietnamese enterprise (except Vietnamese commercial bank), it must:

(i) Have at least VND 500 billion in owner’s equity, at least VND 1,000 billion in total assets for three straight years preceding the year in which the application for the licence is submitted. If the enterprise operates in the areas that require a certain level of legal capital, ensure that the amount remaining after the legal capital is subtracted from the owner’s equity according to the audited financial statement of the year preceding the time the application for the licence is submitted is not smaller than the promised capital contribution;

(ii) If the enterprise is licensed to operate in the areas of securities, insurance, the contribution of capital must be compliant with relevant law provisions;

dd) If the organization is a Vietnamese commercial bank, it must:

(i) Have at least VND 100,000 billion in total assets, comply fully with regulations on risk management and establishment of provisions for risks from the time the application for the licence is submitted to the time the complete application for the licence is submitted;

(ii) Not violate the minimum safety limits, ratios for transactions as prescribed by the State Bank conducted in the year preceding the year in which the application for the licence is submitted and by the time the complete application for the licence is submitted;

(iii) Ensure minimum capital adequacy ratio after contribution of capital for the establishment of a non-bank credit institution;

(iv) Not be penalized for administrative violations against regulations on currencies and banking for two straight years preceding the year in which the application for the licence is submitted and by the time the complete application for the licence is submitted."

3. Article 12 is amended as follows:

“Article 12. Regulations on owners, founding members

1. A founding member that is a Vietnamese enterprise (except Vietnamese commercial banks) must:

a) Comply with provisions set out in Clauses 2, 3, 4, 5 and Points a, b, c, Clause 7, Article 11 herein;

b) Have at least VND 1,000 billion in owner’s equity, at least VND 2,000 billion in total assets for three straight fiscal years preceding the year in which the application for the licence is submitted. If the enterprise operates in the areas that require a certain level of legal capital, ensure that the owner’s equity according to the audited financial statement of the year preceding the time the application for the licence is submitted is not smaller than the promised capital contribution;

c) If the enterprise is licensed to operate in the areas of securities, insurance, the contribution of capital must be compliant with relevant law provisions;

2. An owner, founding member as a Vietnamese commercial bank must comply with provisions set out in Clauses 2, 3, 4, 5 and Points b, c, dd, Clause 7, Article 11 herein.

3. The owner, founding member as a foreign credit institution must:

a) Comply with Point b, Clause 7, Article 11 herein;

b) Have at least US$ 10 billion in total assets at the end of the year preceding the year in which the application for the licence is submitted;

c) Not commit serious violations of regulations on banking and other laws of its home country for five straight years preceding the year in which the application for the licence is submitted and by the time the complete application for the licence is submitted;

d) Have experience of international transactions, be rated ‘stable’ or better by international credit rating organizations, be able to fulfill financial commitments and normal activities even under unfavorable economic conditions;

dd) Be evaluated by competent agencies of its home country as able to ensure capital adequacy ratio and other safety ratios, comply fully with regulations of the home country on risk management and establishment of provisions for risks from the year preceding the year in which the application for the licence is submitted and by the time the complete application for the licence is submitted;

e) Not be a strategic shareholder, owner or founding member of other credit institutions established and operating in Vietnam;

g) If the foreign credit institution is a leasing company, the balance for finance lease and provision of loans must account for at least 70% of the company’s total assets.

4. Within five years since the licence is granted, owners and founding members shall own 100 percent of the charter capital of the limited liability non-bank credit institution.”

4. Point b, Clause 3, Article 14 is amended as follows:

“b) Name of the non-bank credit institution applying for establishment, type of business, name of a province/city where it is expected to be headquartered, operation duration, charter capital, scope of activities and capacity to meet requirements for banking activities of a non-bank credit institution as prescribed in the Government's Decree No. 39/2014/ND-CP dated May 07, 2014 on activities of finance companies and finance leasing companies (hereinafter referred to as “Decree No. 39/2014/ND-CP”);

5. Point h, Clause 4, Article 15 is amended as follows:

“h) Reports made by founding shareholders as Vietnamese commercial banks, Vietnamese enterprises on satisfaction of requirements as prescribed in Clause 7, Article 11 herein from the time the application for the licence is submitted to the time the complete application for the licence is submitted;

6. Point dd, e, Clause 7, Article 16 are amended as follows:

“dd) Reports made by Vietnamese commercial banks, Vietnamese enterprises on satisfaction of requirements as prescribed in Clause 7, Article 11 herein from the time the application for the licence is submitted to the time the complete application for the licence is submitted;

e) Evaluation in writing by the home country’s competent agency of satisfaction of requirements as prescribed in Points a, c, dd, Clause 3, Article 12 herein by the foreign credit institution from the time the application for the licence is submitted to the time the complete application for the licence is submitted;”

7. Clause 3, Article 17 is amended as follows:

“3. Any other additional credit activities to be performed by the non-bank credit institution must be approved by the State Bank; procedures and applications for addition of such activities to the licence shall be provided for in a separate document of the State Bank and by other relevant law provisions.”

8. Point c(ii), Clause 2, Article 19 is amended as follows:

“(ii) Reports on staff, facilities, technologies, means, and equipment accompanied by written commitments to meeting requirements for performance of additional banking activities as prescribed in Decree No. 39/2014/ND-CP and other relevant law provisions;”

9. Point d(i), Clause 2, Article 19 shall be amended and supplemented as follows:

“(i) The plan for factoring operation must include at least: A necessity of factoring operations; measures to manage and control risks in factoring operations; plans for effective organization and implementation of factoring operations and measures to ensure compliance with regulations on safety in banking activities after factoring operations are added;”

10. Point dd(i), Clause 2, Article 19 shall be amended and supplemented as follows:

“(i) The plan for credit card and finance lease operations must include at least: A necessity of credit card and finance lease operations; measures to manage and control risks in credit card and finance lease operations; plans for effective organization and implementation of credit card and finance lease activities, and ensure compliance with regulations on safety in banking activities after credit card and finance lease operations are added;"

11. Clause 1a is added to Article 23 as follows:

“1a. The non-bank credit institution that performs finance lease activities shall promulgate internal regulations on finance lease operations throughout the entire system and ensure availability of a mechanism of internal control and audit, risk management in finance lease operations of a finance lease company. Such regulations must include at least:

a) Criteria for determining a customer, a customer and a relevant person as prescribed, policies on finance lease for a customer, a customer and a relevant person, process of appraising and deciding a finance lease, principles of decentralization, authorization and responsibility of individual members, departments for appraising and deciding a finance lease, re-structuring finance lease payment term for the lessee;

b) Conditions for a finance lease, cases in which a finance lease is not granted, restrictions on finance lease according to laws, types of assets ineligible for a finance lease; finance lease interests and method for determination of lease interests; an application for a finance lease and other documents delivered to the lessor by the lessee in accordance with characteristics of the leased asset and the customer; collection of lease payments; requirements for re-structure of a finance lease payment term, transfer of an overdue debt;

c) Regulations on diversification of risks in finance lease activities; methods for monitoring and management; decisions on a finance lease for a customer, a customer and a relevant person from one percent of the lessor's self-financed capital, ensuring transparency from appraising cases for a finance lease to re-structuring a finance lease payment term, prevention of conflict of interests among the appraiser, decider and customer;

d) Principles and norms for assessment and determination of level of risks in finance lease activities for a customer, areas to which the lessor prioritizes or limits extension of credit as foundations for formulation of annual business plans, measures to manage risks in finance lease activities for the lessee;

dd) Process of inspecting and monitoring finance lease activities, use of the leased asset and payment of rentals by the lessee including activities before, during and after the lease; decentralization, authorization and responsibility of individual members, departments for doing so;

e) Decisions on a finance lease and on re-structuring of lease payment term (including extension of payment terms, revision of payment periods) shall be made on the principle that the person who makes decision on the re-structuring of the payment term is not the person who makes decision on the finance lease except in case that the finance lease is passed by Board of Directors, Member Assembly;

g) Termination and settlement of a finance lease contract terminated ahead of time; exemption and reduction of interests, fees;

h) Identification of risks likely to be arising during the lease; process of monitoring, assessing and controlling the risks; risk handling measures.”

12. Clause 4, Article 27 is amended as follows:

“4. Transfer of stakes must ensure the charter capital contribution ratio as prescribed in Clause 3, Article 6 herein and meet following regulations:

a) A transferee as a Vietnamese enterprise shall comply with provisions set out in Clause 1, Article 12 herein;

b) A transferee as a Vietnamese commercial bank shall comply with provisions set out in Clause 2, Article 12 herein;

c) A transferee as a foreign credit institution shall comply with provisions set out in Clause 3, Article 12 herein.”

13. Clause 5, Article 27 is amended as follows:

“5. Re-purchase of stakes:

Re-purchase of stakes of a limited liability non-bank credit institution shall meet following regulations:

a) The request for re-purchase of stakes of capital contributors, payment and settlement of stakes are conformable with the provisions on re-purchase of stakes prescribed in the Law on Enterprises;

b) After all re-purchased stakes are fully paid, the non-bank credit institution shall is still able to fully paid the debts and fulfill other liabilities, maintain adequacy ratio in banking activities, and ensure that actual value of the charter capital is not smaller than level of legal capital.

c) Regulations on risk management and establishment of provisions for risks are fully complied with when the request for re-purchase of stakes is submitted to the State Bank for approval;

d) The business is profitable for five straight years preceding the year in which a request for re-purchase of stakes is made without accumulated loss;

dd) No penalties are imposed by the State bank for administration violations against regulations on currencies and banking for five straight years preceding the year in which a written request for re-purchase of stakes is made and by the time a written request for re-purchase of stakes is submitted to the State Bank for approval.”

14. Article 28 is amended as follows:

“Article 28. Operation of a finance company

1. A finance company may perform activities provided for in Articles from 108 - 111 of the Law on Credit Institutions when meeting conditions as prescribed in Articles 5, 6, 7, 8, 9, 10, 11, 12, 13, 15 of the Decree No. 39/2014/ND-CP.

2. A finance company that is established and put into operation before the effective date of the Decree No. 39/2014/ND-CP may perform additional operations such as factoring, issuance of credit cards, finance lease if bad debt ratio is under 3% continuously throughout the year preceding the year in which a written request for permission for additional operations is submitted.

3. The finance company shall perform finance lease operations according to Article 35 herein.”

15. Clause 7, Article 35 is amended as follows:

“7. Principles of financial leasing in foreign currency:

a) The lessor shall make payment in foreign currency to the supplier for the import of the leased asset; The lessee shall make payment for the debt in foreign currency;

b) The lessee shall use the leased asset to serve his/her business;

c) The lessee shall has sufficient foreign currency from production or business to pay the debt.”

16. Point d is added to Clause 1, Article 36 as follows:

“d) Purchase and sub-lease may be carried out in either domestic or foreign currency. Purchase and sub-lease shall be carried out in foreign currency if:

(i) The sublet asset is the leased asset as prescribed in Clause 12, Article 3 herein, imported and lawfully owned by the seller, operates normally and without disputes;

(ii) The seller still has credit balance in foreign currency at the bank for importation of the asset or still in debt to the foreign supplier in foreign currency;

(iii) The seller shall use the sublet asset to serve his/her business and has sufficient foreign currency from production or business to pay rentals;

(iv) Payment for purchase of the sublet asset in foreign currency:

- The buyer shall purchase and sublet the asset if the seller provides sufficient legal documents concerning the asset. If the bank or the supplier is holding the documents concerning the asset, the buyer shall make the payment after negotiations on provision of such documents with the bank or supplier are completed;

- The buyer shall make direct payment for the purchase of the sublet asset to the bank or foreign supplier in foreign currency in proportion to value of the asset. If the price for purchase of the sublet asset is greater than credit balance at the bank or debt to the foreign supplier, the buyer shall pay the difference in Vietnam dong to the seller according to the exchange rate of the commercial bank agreed by the two parties at the time of payment;

(v) After the buyer makes payment for the purchase of the sublet asset, the seller shall acknowledge receipt of the debt and pay rentals in foreign currency according to applicable regulations on finance lease.

Article 2. Articles 29, 30, 31, 32, 33, Clause 2, Article 34, Clause 5, Clause 6, Article 36 of the Circular No. 30/2015/TT-NHNN are hereby annulled.

Article 3. Implementary provisions

This Circular takes effect from July 01, 2016.

Article 4. Implementation

Chief Officer, Banking Chief Inspector, heads of units affiliated to the State Bank, directors of provincial and municipal branches of the State Bank, president of the Board of Directors, president of Member assembly and general director (director) of non-bank credit institutions shall be responsible for executing this Circular ./.