Thông tư 03/2008/TT-NHNN

Circular No. 03/2008/TT-NHNN of April 11, 2008 guiding the provision of foreign exchange services by credit institutions

Circular No. 03/2008/TT-NHNN of April 11, 2008 guiding the provision of foreign exchange services by credit institutions đã được thay thế bởi Circular No. 21/2014/TT-NHNN guidance on scope of foreign exchange transactions of credit institutions và được áp dụng kể từ ngày 15/10/2014.

Nội dung toàn văn Circular No. 03/2008/TT-NHNN of April 11, 2008 guiding the provision of foreign exchange services by credit institutions


THE STATE BANK OF VIETNAM
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 03/2008/TT-NHNN

Hanoi, April 11, 2008

CIRCULAR

GUIDING THE PROVISION OF FOREIGN EXCHANGE SERVICES BY CREDIT INSTITUTIONS

On December 28, 2006, the Government issued Decree No. 160/2006/ND-CP detailing the implementation of the Ordinance on Foreign Exchange (Decree No. 160/2006/ND-CP).
Pursuant to Chapter VI of Decree No. 160/2006/ND-CP the State Bank of Vietnam (the State Bank) provides the following specific guidance:

Chapter I

SCOPE OF PROVISION OF FOREIGN EXCHANGE SERVICES

Section 1. PROVISION OF FOREIGN EXCHANGE SERVICES BY BANKS

I. After being certified as eligible by the State Bank, banks may provide foreign exchange services on the domestic market to their clients within the following scope:

a/ Providing exchange transactions in the form of spot, forward or swap transactions, options, future contracts or other exchange transactions according to international practice;

b/ Raising capital and providing loans and guarantees in foreign currencies in the forms prescribed by the Stale Bank;

c/ Issuing, or acting as agents to issue international cards;

d/ Providing money transfer and payment services (domestically and internationally); receiving and paying foreign currencies;

e/ Discounting or rediscounting foreign-currency negotiable instruments;

f/ Authorizing other credit institutions or economic organizations to act as agents to provide foreign exchange services, including foreign-currency exchange services, foreign-currency receipt and payment services, and other services;

g/ Providing entrustment services and services of managing assets in foreign exchange;

h/ Providing foreign exchange-invested banking services (purchase, sale, merger, guarantee, agency to issue foreign-currency securities, etc.);

i/ Providing foreign-exchange consultancy services to clients;

j/ Carrying out other foreign exchange activities according to international practice and Vietnamese law.

2. After having their registration certified by the State Bank, banks may provide foreign exchange services on the international market to their clients within the following scope:

a/ Providing international payment services;

b/ Carrying out foreign-exchange and gold trading transactions on foreign markets;

c/ Participating in foreign-based monetary and derivative markets;

d/ Providing services of managing clients’ financial assets in foreign countries;

e/ Providing investment banking services (financial consultancy, purchase, sale, merger, guarantee, co-financing, etc.) on the international market.

Section 2. PROVISION OF FOREIGN EXCHANGE SERVICES BY NON-BANK CREDIT INSTITUTIONS

3. After having their operation registration certified by the Stale Bank, financial companies may provide some or all foreign exchange services on domestic and international markets. Specifically:

3.l. Providing foreign exchange services on the domestic market:

a/ Providing exchange transactions in the form of spot, forward or swap transactions, options and other exchange transactions according to international practice;

b/ Receiving foreign-currency deposits of one-year or longer term; issuing foreign-currency bonds or negotiable instruments; borrowing foreign-currency loans from domestic and foreign credit institutions;

c/ Providing short-, medium- and long-term loans in foreign currencies; discounting, rediscounting or pledging foreign-currency negotiable instruments; providing credit guarantees in foreign currencies;

d/ Providing entrustment services and services of managing assets in foreign exchange;

e/ Receiving and paying foreign currencies; authorizing economic organizations to act as foreign-currency exchange agents or foreign-currency payment agents;

f/ Providing foreign-exchange consultancy services to clients.

3.2. Providing foreign exchange services on the international market:

a/ Conducting foreign-exchange and gold trading transactions on foreign markets;

b/ Participating in monetary and foreign-exchange derivative markets in foreign countries;

c/ Providing services of managing clients' financial assets in foreign currencies.

4. After having their operation registration certified by the State Bank, financial leasing companies may provides some or all of the following foreign-exchange services domestically:

a/ Receiving foreign-currency deposits of one-year or longer term; issuing foreign-currency bonds or negotiable instruments; borrowing foreign-currency loans from domestic and foreign credit institutions;

b/ Conducting financial leasing in foreign currencies;

c/ Providing credit guarantees in foreign currencies;

d/ Providing entrustment services and services of managing assets in foreign currencies;

e/ Providing foreign-exchange consultancy services to clients.

5. The provision of foreign exchange services by other non-bank credit institutions complies with separate regulations of the State Bank.

Chapter II

CONDITIONS ON PROVISION OF FOREIGN EXCHANGE SERVICES

Section 1. CONDITIONS ON BANKS TO PROVIDE FOREIGN EXCHANGE SERVICES

6. Conditions on banks to be considered and certified by the State Bank as eligible for providing foreign exchange services on the domestic market:

a/ Having a plan on the provision of foreign exchange services on the domestic market, approved by the Shareholders' General Meeting (in case banks are applying for establishment licenses) or the Board of Directors, which clearly states contents and methods of providing foreign exchange services as well as risk control and prevention measures;

b/ Having equipment and material foundations as required for providing foreign-exchange services domestically;

c/ having staff who are knowledgeable about foreign exchange operations and have been trained in foreign exchange operations and foreign-exchange trading risk management skills.

7. Conditions on banks to obtain the State Bank's consideration and certification of their registration of the provision of foreign exchange services on the international market:

a/ Having a plan on the provision of foreign exchange services on the international market, approved by the Shareholders' General Meeting (in case banks are applying for establishment licenses) or the Board of Directors, which clearly states contents and methods of providing foreign exchange services as well as risk control and prevention measures;

b/ Having equipment and material foundations as required for providing foreign exchange services on the international market;

c/ Having staff who are capable of and knowledgeable about operations of providing foreign-exchange services on the international market;

d/ Having internal inspection, control and audit systems set up and performing their tasks in accordance with the State Bank's regulations;

e/ Observing the State Bank's regulations on safety ratios in operations and classification of debts, setting up and use of credit risk provisions; not violating current regulations on foreign exchange management in the year before the time of application for the State Bank’s consideration;

f/ Doing business at a profit in the year preceding the year of registration.

Section 2. CONDITIONS ON NON-BANK CREDIT INSTITUTIONS TO PROVIDE FOREIGN EXCHANGE SERVICES

8. Conditions on non-bank credit institutions to obtain the State Bank's consideration and certification of registration of the provision of foreign exchange services on the domestic market:

a/ Satisfying the conditions specified at Points a, b, and c, Clause 6 of this Circular;

b/ Doing business at a profit for a year preceding the year of registration.

9. Conditions on financial companies to obtain the State Bank's consideration and certification of registration of the provision of foreign exchange services on the international market:

a/ Satisfying the conditions specified at Points a, b, c, d and e, Clause 7 of this Circular;

b/ Doing business at a profit for last three years.

Chapter III

DOSSIERS AND PROCEDURES FOR ELIGIBILITY OR REGISTRATION CERTIFICATION OF FOREIGN-EXCHANGE SERVICE PROVISION

Section 1. DOSSIERS OF APPLICATION FOR ELIGIBILITY OR REGISTRATION CERTIFICATION OF FOREIGN EXCHANGE SERVICE PROVISION, APPLICABLE TO BANKS

10. A dossier of application for certification of eligibility for providing foreign exchange services on the domestic market comprises:

a/ A certification application (made according to a set form);

b/ A plan on the provision of foreign exchange services on the domestic market, clearly stating contents and methods of provision well as risk control and prevention measures approved by the Shareholders' General Meeting (in case banks are applying for establishment licenses) or the Board of Directors; a minutes and resolution of the meeting of the Board of Directors or Shareholders’ General Meeting (in case banks are applying for establishment licenses) approving this plan;

c/ A written summary of conditions of equipment and material foundations used for providing foreign exchange services, and papers proving the satisfaction of requirements on equipment and material foundations. In case of non-availability of those papers, commitment of the Chairman of the Board of Directors (or an authorized person) on such satisfaction is required;

d/ Diplomas, certificates and information on qualification and capacity of staff in charge of administering and conducting foreign-exchange service provision operations.

11. A dossier of registration of the provision of foreign exchange services on the international market comprises:

a/ A registration application (made according to a set form);

b/ Papers specified at Points b, c and d, Clause 10 of this Circular, with contents relevant to foreign exchange services provided on the international market (excluding papers in case banks are applying for establishment licenses);

c/ The financial statement of the year preceding the year of registration, already audited by an independent audit organization;

d/ A report on the domestic provision of foreign-exchange services affirming the non-violation of regulations on foreign exchange management.

Section 2. DOSSIERS OF APPLICATION FOR REGISTRATION CERTIFICATION OF FOREIGN-EXCHANGE SERVICE PROVISION, APPLICABLE TO NON-BANK CREDIT INSTITUTIONS

12. A dossier of registration of the provision of foreign exchange services on the domestic market comprises:

a/ A registration application (made according to a set form);

b/ Papers specified at Points b, c and d, Clause 10 of this Circular;

c/ The financial statement of the year preceding the year of registration, already audited by an independent audit organization.

13. A dossier of registration of the provision of foreign exchange services on the international market, applicable to financial companies comprises:

a/ A registration application (made according to a set form);

b/ Papers specified at Points b, c and d, Clause 11 of this Circular;

c/ Financial statements of three years preceding the year of registration, already audited by an independent audit organization.

Section 3. PROCEDURES FOR ELIGIBILITY OR REGISTRATION CERTIFICATION OF FOREIGN-EXCHANGE SERVICE PROVISION

14. Credit institutions which wish to provide foreign exchange services on domestic or international market shall send their dossiers to the State Bank (the Department for Banks and Non-Bank Credit Institutions) in order to be granted eligibility or registration certificates of foreign-exchange service provision Documents and papers in the dossiers must be originals or authenticated copies of originals or copies certified by credit institutions' competent persons who commit to be answerable for these papers. In case those documents and papers are in foreign languages, their Vietnamese translations with duly authenticated signatures of translators are required.

15. Within 30 working days after receiving complete dossiers from credit institutions, the State Bank shall grant eligibility certificates or registration certificates of foreign-exchange service provision (made according to a set form) or refuse to grant those certificates. In case of refusal, the State Banks shall clearly state the reason in writing.

16. Credit institutions may apply for eligibility certificates or registration certificates of foreign-exchange service provision for some or all foreign exchange services. If wishing to supplement or modify foreign exchange services, credit institutions shall request the supplementation or modification of eligibility certificates or registration certificates.

Registration of the provision of foreign exchange services on the international market may not be made before registration of the provision of foreign exchange services on the domestic market.

17. Gold trading on the international market complies with the State Bank's regulations.

18. Credit institutions that an joint-venture banks, banks with 100% foreign capital, joint-venture non-bank credit institutions or non-bank credit institutions with 100% foreign capital may provide foreign exchange services under their establishment and operation license. Foreign bank blanches may provide foreign exchange services under their establishment licenses.

Chapter IV

CREDIT INSTITUTIONS RESPONSIBILITIES IN PROVIDING FOREIGN EXCHANGE SERVICES

19. After being granted eligibility certificates or registration certificates of foreign exchange service provision, credit institutions shall maintain their satisfaction of the condition on the provision of foreign exchange services. If, after being granted those certificated, credit institutions fail to maintain their satisfaction of the conditions specified in this Circular, they shall suspend licensed foreign-exchange service provision operations and report it to the State Bank within 30 working days from the date of their failure to satisfy the prescribed conditions.

20. When providing foreign exchange services, credit institutions shall comply with the contents of their eligibility certificates or registration certificates of foreign-exchange service provision, the provisions of Section 3, Chapter VI of Decree No. 160/2006/ND-CP the provisions of this Circular, and relevant provisions of law.

21. Credit institutions licensed to provide foreign exchange services shall observe regulations on foreign exchange status and safety assurance in business operations according to the State Bank’s regulations.

22. Before providing foreign exchange services, credit institutions shall develop strict transaction processes and risk management and internal control measures. A transaction process must clearly state contents and steps of transaction, define responsibilities and powers of different levels in carrying out transactions; specify transaction limits and loss limits (if any) and ensure crosschecks in the transaction process. Transaction managers and supervisors may not personally carry out transactions. Transactions must be controlled according to current regulation internal inspection and control.

23. Credit institutions shall describe in detail services that may pose risks to clients.

24. Credit institutions licensed to provide foreign exchange services shall publicly post up foreign-currency purchase and sale exchange rates and purchase and sell foreign currencies according to the State Bank’s regulations.

25. When carrying out foreign exchange transaction for clients, credit institutions licensed to provide foreign exchange services shall consider, examine and preserve papers and documents of actual transactions in order to ensure that foreign exchange services are provided for proper purposes in accordance with law.

26. Credit institutions shall provide professional guidance and regularly examine their authorized agents in the observance of this Circular and relevant provisions of law.

27. Credit institutions shall report on the provision of foreign exchange services according to the State Bank's statistics and reporting regulations.

28. Credit institutions shall formulate regulations on decentralization and authorization within their own system in order to ensure safety of the provision of foreign exchange services.

Chapter V

TERMINATION AND REVOCATION OF ELIGIBILITY OR REGISTRATION CERTIFICATES OF FOREIGN-EXCHANGE SERVICE PROVISION

29. The State Bank may terminate, revoke or cancel some contents of eligibility certificates or registration certificates of foreign-exchange service provision of banks or non-bank credit institutions in the following cases:

a/ The bank or credit institution is placed under a special control by the State Bank;

b/ There is evidence that certificate application dossiers contain intentionally falsified information;

c/ Establishment and operation licenses are revoked or expire;

d/ Split, merger, consolidation or bankruptcy;

e/ Voluntary termination of the provision of foreign exchange services;

f/ Change of business functions or lines;

g/ Change of some or all registered contents without notification to the State Bank;

h/ The bank or credit institution no longer satisfies all the prescribed conditions on equipment, material foundations and staff for the provision of foreign exchange services.

Chapter VI

ORGANIZATION OF IMPLEMENTATION

30. This Circular takes effect 15 days after its publication in ''CONG BAO'' and replaces the provisions of Part Five of Circular No. 01/1999/TT-NHNN dated April 16, 1999, guiding the implementation of the Government’s Decree No. 63/1998/ND-CP dated August 17, 1998, on foreign exchange management.

31. Credit institutions that have been granted foreign-exchange operation licenses before the effective date of this Circular shall request the State Bank to convert these licenses into eligibility certificates or registration certificates of foreign-exchange service provision. The time limit for such conversion is 12 months after this Circular takes effect.

32. Regularly or irregularly, the State Bank's Inspectorate and branches in provinces or centrally run cities shall examine the satisfaction of the conditions specified in, and the observance of, this Circular.

33. The director of the Office, heads of concerned units under the State Bank, directors of State Bank branches in provinces or centrally run cities, and chairmen of boards of directors and general directors (directors) of credit institutions shall implement this Circular.

FOR THE STATE BANK GOVERNOR
DEPUTY GOVERNOR




Nguyen Dong Tien

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        Circular No. 03/2008/TT-NHNN of April 11, 2008 guiding the provision of foreign exchange services by credit institutions
        Loại văn bảnThông tư
        Số hiệu03/2008/TT-NHNN
        Cơ quan ban hànhNgân hàng Nhà nước
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        Ngày ban hành11/04/2008
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        Lĩnh vựcTiền tệ - Ngân hàng
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