Thông tư 04/2012/TT-NHNN

CIRCULAR

REGULATIONS ON ENTRUSTMENT PROFESSION AND ENTRUSTMENT RECEIVING PROFESSION OF THE FOREIGN CREDIT INSTITUTIONS AND BANK BRANCHES

Pursuant to the Law on State Bank of Vietnam No.46/2010/QH12 dated June 16, 2010;

Pursuant to  to the Law on credit institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Decree No. 96/2008/ND-CP dated August 26, 2008 of the Government regulating the functions, duties, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of Monetary Policy Department;

The Governor of the State Bank of Vietnam has issued the Circular on the entrusted profession and entrusting profession of the foreign credit institutions and bank branches in the areas related to the banking activities in accordance with the Law on the credit institutions,

SECTION 1. GENERAL REGULATION

Article 1. Scope of Adjustment

This Circular specifies in detail the entrustment profession and entrustment receiving profession of the foreign credit institutions and bank branches in the areas related to the banking activities in accordance with the Law on the credit institutions, including: the foreign credit institutions and bank branches entrusted from other foreign credit institutions and bank branches and other organizations that are not the foreign credit institutions and bank branches; the foreign credit institutions and bank branches entrusting the other credit institutions and bank branches.

Article 2. Subject of application

1. The entrusted parties that are the foreign credit institutions and bank branches of foreign are established and operate under the provisions of the Law on credit institutions, including the commercial banks, financial companies, the financial leasing companies, the cooperative banks, people's credit funds, micro financial institutions and foreign bank branches.

2. The entrusting parties including:

a) The foreign credit institutions and bank branches that are established and operate under the provisions of the Law on credit institutions: the commercial banks, financial companies, cooperative banks, micro financial institutions and foreign bank branches.

b) The other domestic organizations that are not the credit institutions and bank branches (hereinafter referred to other organizations) are the legal entity with the legal capacity of the civil law as prescribed by law.

c) The organization in foreign countries is the legal entity that is established and operates under the law of the foreign country where that organization is established and has the civil legal capacity under the provisions of the Civil Code on the civil legal capacity of the foreign legal entity.

Article 3. Explanation of term

In this Circular, the terms below are construed as follows:

1. Entrustment in the areas related to banking activities is that the entrusting party assigns the entrusted party to perform the profession related to banking activities in accordance with the Law on Credit Institutions and other provisions of relevant law; the entrusting party must pay the entrustment fee to the entrusted party.

2. Receiving the entrustment in the areas related to the banking activities is that the entrusted party performs the activities the professions related to banking activities in accordance with the Law on Credit Institutions and provisions of relevant law; the entrusted party is entitled to enjoy the entrustment fees paid by the entrusted party.

3. Loan entrustment is that the entrusting party hands over the capital to the entrusted party to perform the lending to customers in accordance with the Law on Credit Institutions and the provisions of relevant law; the entrusting party must make payment of entrustment fee of the loans to the entrusted foreign credit institutions and branches of foreign banks for the loan.

4. Loan entrustment receiving is that the entrusted party receives the capital of the entrusting party to perform the lending to the customers in accordance with the Law on Credit Institutions and the provisions of relevant law; the entrusted party enjoys the entrustment fee of the loans paid by the entrusting party.

5. Contract of entrustment receiving and entrustment in the areas related to the banking activities is a written agreement between the entrusted party and entrusting party to establish, change or terminate the rights and obligations of the parties concerning the entrustment and entrustment receiving.

6. Contract of entrustment receiving and entrustment for loans is a written agreement between the entrusted party and the entrusting party for the lending to establish, change or terminate the rights and obligations of the parties about the loan entrustment (hereafter referred to as loan entrustment contract).

7. Time limit for entrustment is the period from the time the entrusted party begins the professional implementation related to the banking activities to the end time of the work under the contract of entrustment receiving and entrustment.

8. Time limit for loan entrustment is the period from the time the entrusted party begins to receive the entrusted capital to the time of full payment of the entrusted capital and loan interest to the entrusting party under the loan entrustment contract

9. Entrustment fee is the amount the entrusting party pays to the entrusted party in order to perform the work under the contract of entrustment receiving and entrustment.

10. Customers that are in relation to the entrustment receiving and entrustment of the foreign credit institutions and bank branches are other organizations and individuals

SECTION 2. REGULATIONS ON PROFESSION OF ENTRUSTMENT RECEIVING AND ENTRUSTMENT IN THE AREAS RELATED TO THE BANKING ACTIVITES OF THE FOREIGN CREDIT INSTITUTIONS AND BANK BRANCHES.

Article 4. Scope of operation

1. The foreign credit institutions and bank branches are entitled to perform the entrustment receiving and/or entrustment of a number of professions related to the banking activities in accordance with the Law on Credit Institutions and the contents specified in the License issued by the State Bank of Vietnam to the foreign credit institutions and bank branches.

2. The foreign credit institutions and bank branches are not entitled to receive the entrustment of the individuals.

Article 5. Mechanism of application

1. The entrustment receiving and loan entrustment of the foreign credit institutions and bank branches for customers comply with the provisions as prescribed in Section 3 of this Circular.

2. The entrustment receiving and loan entrustment of the financial companies for the financial leasing comply with the regulations of the State Bank of Vietnam concerning the financial leasing operations of the financial leasing companies.

3. For the receiving of entrustment and entrustment of the foreign credit institutions and bank branches to conduct the professions specified in clause 1 and 2 of this Article and evaluated as efficiency by the foreign credit institutions and bank branches for the business activities of the foreign credit institutions and bank branches and in accordance with the provisions of relevant law, the foreign credit institutions and bank branches shall build the implementation process and submit a written request to the State Bank of Vietnam for consideration and approval. the foreign credit institutions and bank branches only make the performance only when the State Bank of Vietnam approves in writing.

Article 6. Classification of debt and setting up of provision and risk handling

1. The entrusting party is responsible for handling the risks upon performing the entrustment profession in the areas related to the banking activities.

2. The entrusting party is the foreign credit institutions and bank branches performing the debt classification and setting up provision and handling risks upon performance of the entrustment profession in the areas related to the banking activities as prescribed by law and the guided by the State Bank of Vietnam.

Article 7. Accounting record, statistics and report on the profession of entrustment receiving and entrustment of the foreign credit institutions and bank branches.

1. The foreign credit institutions and bank branches perform the accounting record of the profession of entrustment receiving and entrustment under the provisions of the State Bank of Vietnam concerning the regulation on accounting and statistics for the foreign credit institutions and bank branches.

2. Each month, the foreign credit institutions and bank branches shall make the statistics and send the report on the situation of performing the profession of entrustment receiving and entrustment to the State Bank of Vietnam under the annex attached to this Circular and the regulations of relevant law.

SECTION 3. REGULATION ON THE PROFESSION OF ENTRUSTMENT RECEIVING AND ENTRUSTMENT FOR LOAN OF THE FOREIGN CREDIT INSTITUTIONS AND BANK BRANCHES

Article 8. Entrusted party and entrusting party for loan

1. The entrusted party is the foreign credit institutions and bank branches that are established and operate in accordance with the regulation of the Law on credit institutions including: Commercial banks, financial companies, cooperative banks, people’s credit funds, micro financial organization and foreign bank branches.

2. The entrusting party for loan including:

a) The foreign credit institutions and bank branches that are established and operate in accordance with the regulation of the Law on credit institutions including: Commercial banks, financial companies, cooperative banks, people’s credit funds, micro financial organization and foreign bank branches.

b) Other organizations that are domestic legal entity.

c) Foreign organizations

Article 9. Principles of entrustment receiving and entrustment for loan

1. The foreign credit institutions and bank branches are entitled to perform the entrustment receiving and/or entrustment for loan in accordance with the regulation of the Law on credit institutions and the content specified in the License issued by the State Bank of Vietnam to the foreign credit institutions and bank branches

2. The entrustment receiving and entrustment for loan are performed through the loan entrustment contract in conformity with the provisions in this Circular and the regulations of the relevant law.

3. The foreign credit institutions and bank branches receiving the entrustment from other organizations for loan must calculate the business loan from the entrusted capital reresources to the total credit outstanding.

4. The foreign credit institutions and bank branches receiving the entrustment are not entitled to make the re-assignment to the third party for loan making.

5. The foreign credit institutions and bank branches receiving the loan entrustment shall make loan to customers as prescribed by the regulation of the State Bank of Vietnam concerning the loan regulation of the foreign credit institutions and bank branches for customers and the regulations of the relevant law.

Where the foreign credit institutions and bank branches receive the loan entrustment in foreign currency, they must comply with the regulations of the State Bank of Vietnam on loans in foreign currency of the foreign credit institutions and bank branches for customers who are the residents, the provisions of the law on foreign exchange management and the provisions of relevant laws.

Where the foreign credit institutions and bank branches receive the loan entrustment for customers, who are not residents, they must comply with the regulations of the State Bank of Vietnam on loan making and foreign debt recovery of the foreign credit institutions and bank branches, the provisions of the law on foreign exchange management and the provisions of relevant laws.

Where the foreign credit institutions and bank branches receiving the loan entrustment from the foreign orgnizations (including the case the foreign bank branches receive the entrustment from the mother banks) must comply with the regulations of law concerning the loan and repayment of foreign loans, foreign exchange management and other provisions of relevant law.

Where the foreign credit institutions and bank branches receiving the loan entrustment for customers to directly invest abroad, they must comply with regulations of the State Bank of Vietnam concerning the foreign credit institutions and bank branches make loan to customers to directly invest abroad.

6. The entrusting party for loan shall make the payment of entrustment fee to the foreign credit institutions and bank branches receiving the entrustment for loan. The entrustment fee shall be agreed upon and specified in the loan entrustment contract.

Article 10. Conditions for the foreign credit institutions and bank branches receiving the entrustment for loan making.

The foreign credit institutions and bank branches that are entrusted to make loan upon meeting the conditions as follows:

1. There is the content of the operation of entrusment receiving for loan in the License of establishment and operation issued by the State Bank of Vietnam.

2. Promulgation of the process of entrustment receiving for loan in conformity with the regulations in this Circular and the law on the lending activities and the relevant law.

3. Ensuring the safety assurance ratios in the operation of the foreign credit institutions and bank branches under the provisions of the State Bank of Vietnam.

4. Having head offices, networks and personnel to make loan under the loan entrustment contract and ensure the safety and efficiency for the lending activities.

Article 11. Conditions for the entrusting party for loan

The entrusting party is entitled to entrust the foreign credit institutions and bank branches for loan making upon meeting the following conditions:

1. For the foreign credit institutions and bank branches:

a) There is the content of the operation of entrusment for loan in the License of establishment and operation issued by the State Bank of Vietnam.

b) Promulgation of the process of entrustment for loan in conformity with the regulations in this Circular and the law on lending activities and the relevant law.

c) Ensuring the safety assurance ratios in the operation of the foreign credit institutions and bank branches under the provisions of the State Bank of Vietnam.

2. For other domestic organizations:

a) Being the legal entity with the civil legal capacity as prescribed by civil law;

b) Being entitled to entrust the foreign credit institutions and bank branches for loan making as prescribed by the relevant law;

c) Having no credit outstanding debt at the time of entrustment for loan at the foreign credit institutions and bank branches.

3. For the foreign organizations:

a) Being the legal entity with the civil legal capacity as prescribed by the civil Code on the civil capacity of the foreign legal entity

b) Performing the regulations of Vietnamese law concerning the foreign exchange management and the regulations of the relevant law.

Article 12. Currency for the entrustment receiving and enstrustment for loan.

The currency for the entrustment receiving and enstrustment for loan is Vietnam dong and foreign currencies

Article 13. Loan entrustment contract

Loan entrustment contract includes the contents of the agreement of the entrusting party and the entrusted credit institutions: Name and address of the entrusting party, entrusted party for loan; enstrusted amount for loan; customer subjects for loan; loan demands; loan currency, term of entrustment for loan, loan term for customers; loan interest; re-struture of debt repayment term; measure for loan security; entrustment fee, the party responsible for loan assessment and supervision of loan capital use; the responsibility for risk handling of the entrusting party; rights and obligations of the parties, the exemption and reduce of loan interest; the cases of termination of loan entrustment contract before due; handling of contract breach and other contents agreed by the parties in conformity with the regulations of the relevant law

Article 14. Rights and obligations of the entrusted party for loan

1. The entrusted party for loan has the right:

a) To refuse the requirements of the entrusting party contrary to the agreement and commitment specified in the loan entrustment contract.

b) To require the entrusting party to provide necessary information, materials and means for the loan making under the loan entrustment contract.

c) Entitled to receive the entrustment fee for loan

d) To handle under the competence or initiate the suit before law against the entrusting party that breaches the loan entrustment contract.

dd) The rights of the lending party for customers as prescribed by law on the lending activities.

2. The entrusted party for loan has the obligations:

a) To make loan to customers in conformity with regulations of law concerning the lending activities of the foreign credit institutions and bank branches for customers, loan entrustment contract and regulations of the relevant law.

b) To notify the entrusting party on the loan making under the loan entrustment contract, provide information and materials on the financial capacity, customer subject, disbursement situation, debt recovery ability, classification debt and necessary information and materials relating to the lending under the loan entrustment contract; take responsibility for the accuracy of the information and materials provided to the entrusting party.

c) To return the entrusted funds and interest earned from the lending activities for the customers to the entrusting party under the loan entrustment contract.

d) To perform the debt classification for the business loan under the loan entrustment contract in order to correctly assess the financial situation and ability of debt repayment to serve the work of credit risk management.

dd) To implement the inspection and supervision the process of capital borrowing and using of loan capital and debt repayment of the customers under the content agreed with the entrusting party in the loan entrusment contract.

e) To keep the dossier of entrusted loan as prescribed by law on the keeping of credit dossier

3. To perform the other rights and obligations under the contents of the loan entrustment contract in conformity with the regulation of relevant law or upon the requirements from the competent state agencies.

Article 15. Rights and obligations of the entrusting party for loan

1. The entrusting party for loan has the right:

a) To make a decision on the choice of the entrusted party for loan in order to ensure the use of the entrusted capital safely and efficiently in accordance with the regulations of the relevant law.

b) To require the entrusted foreign credit institutions and bank branches to announce the implementation of lending under the loan entrustment contract; to provide the evidencing documents of the financial capacity of the customers, the disbursement situation, debt recovery ability, the necessary information and materials relating to the borrowing customers and the lending and debt recovery under entrustment.

c) To deny the request of entrusted foreign credit institutions and bank branches entrusted contrary to the agreements in the loan entrustment contract.

d) To receive back the entrustment capital and loan interest for the customers from the entrusted foreign credit institutions and bank branches under the loan entrustment contract.

dd) To handle under the authority or initiate the suit agains the entrusted foreign credit institutions and bank branches that breach the loan entrustment contract.

2. The entrusting party for loan has the obligations:

a) To perform the transfer of entrusted capital and make payment of the entrustment fee to the entrusted party and the agreements under the loan entrustment contract.

b) To take responsibilities for the legality of the entrusted capital resources.

c) To perform the debt classification and set up provision and handle risks for the the entrusted business loan as prescribed by law.

d) To keep the dossier of entrusted loan in conformity with the regulations of law.

3. To implement other rights and obligations under the content of the loan entrustment contract in conformity with the regulations of the relevant law or upon having the requirements from the competent state agencies.

SECTION 4. IMPLEMENTATION ORGANIZATION

Article 16. Implementation organization

1. This Circular takes effect on May 02, 2012 and supersedes the Decision No. 742/2002/QD-NHNN dated July 17, 2002 of the Governor of the State Bank of Vietnam on the promulgation of the Regulations on entrustment and entrustment receiving for loan of the credit institutions.

2. For the loan entrustment contracts of the foreign credit institutions and bank branches signed before the effective date of this Circular, the entrusting party and the entrusted foreign credit institutions and bank branches shall keep on performing the contents specified in the loan entrustment contract signed in conformity with the regulation of law coming into force at the time of signing that contract or making agreement on amendment and supplementation of the loan entrustment contract in accordance with regulation in thid Circular.

3. The Chief of office, Director of Monetary Policy Department and the Heads of units under the State Bank of Vietnam, Director of the State Bank of Vietnam of branches in centrally run provinces and cities; Chairmans of the Board, Chairman of the Member Board and General Director (Director) of the foreign credit institutions and bank branches, other organizations and individuals concerned are liable to excute this Circular.

Name of the foreign credit institutions and bank branches:

REPORT ON PROFESSION OF ENTRUSTMENT AND ENTRUSTMENT RECEIVING

Month….year…

(Promulgated together with the Circular No. 04/2012/TT-NHNN dated March 08, 2012)

Note:

1. Target (1) = (1.1) + (1.2) + (1.3)

Target (1.1) = (1.1.a) = (1.1.b)

Target (1.2) = (1.2.a) = (1.2.b)

Target (2) = (2.1) = (2.2)

2. Time limit for report submission: Monthly, on the 12^th date of the month following the reporting month

3. Report receiving unit: The Monetary Policy Department – State Bank of Vietnam 49 LyThai To - Hoan Kiem - Hà Noi (email: [email protected], fax: 04.38246953 - 04.38240132)

4. It is requested that the full name and phone number of the person in charge of answering the report details upon the requirement from the State Bank of Vietnam.