Thông tư 21/2014/TT-NHNN

Circular No. 21/2014/TT-NHNN dated August 14, 2014, providing guidance on scope of foreign exchange transactions, requirements and procedures for permitting foreign exchange transactions of credit institutions, branches of foreign banks

Nội dung toàn văn Circular No. 21/2014/TT-NHNN guidance on scope of foreign exchange transactions of credit institutions


THE STATE BANK OF
VIET NAM
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SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No: 21/2014/TT-NHNN

Ha Noi, August 14, 2014

 

CIRCULAR

PROVIDING GUIDANCE ON SCOPE OF FOREIGN EXCHANGE TRANSACTIONS, REQUIREMENTS AND PROCEDURES FOR PERMITTING FOREIGN EXCHANGE TRANSACTIONS OF CREDIT INSTITUTIONS, BRANCHES OF FOREIGN BANKS

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

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

Pursuant to Ordinance on Foreign Exchange Control No. 28/2005/PL-UBTVQH11 dated December 13, 2005 and Ordinance No. 06/2013/UBTVQH13 dated March 18, 2013 on amendments to Ordinance on Foreign Exchange Control;

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

At the request of Director of Foreign exchange Management Department,

The Governor of the State bank of Viet Nam issued the Circular providing guidance on scope of the foreign exchange operations, requirements and procedures for permitting foreign exchange operations of credit institutions, branches of foreign banks.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

1. This Circular stipulates scope of the foreign exchange operations, requirements and procedures for permitting foreign exchange operations of credit institutions, branches of foreign banks.

2. Gold trading activity of credit institutions, branches of foreign banks must conform to other relevant regulations.

3. Foreign loans taken by credit institutions and branches of foreign banks must conform to regulations on taking and repaying foreign loans.

4. Commercial banks, co-operative banks, banks for social policies, general finance corporations, factoring companies, consumer credit companies, financial leasing companies, branches of foreign banks, microfinance institutions may use foreign exchange services provided by credit institutions permitted to conduct foreign exchange transactions similarly to businesses in accordance with relevant regulations.

Article 2. Regulated entities

1. Commercial banks

2. Co-operative banks

3. Banks for social policies

4. General finance corporations, factoring companies, consumer credit companies, financial leasing companies.

5. Branches of foreign banks

Article 3. Interpretation of terms

For the purposes of this Circular, these terms below shall be construed as follows:

1. A permitted credit institution means any commercial bank, co-operative bank, bank for social policies, general finance operation, factoring company, consumer credit company, financial leasing company or branch of foreign bank that is permitted to conduct foreign exchange trading and provide foreign exchange services.

2. Foreign exchange transaction of a permitted credit institution means foreign exchange trading or the provision of foreign exchange services of that permitted credit institution for residents, non-residents during current transaction, capital transaction and other transactions relating to foreign exchange on the domestic and international market.

3. Foreign exchange trading means a permitted credit institution conducting foreign exchange transactions with an aim of making profits, avoiding risks, ensuring the security and liquidity of operations of such permitted credit institution.

4. Provision of foreign exchange services means a permitted credit institution providing services relating to foreign exchange transactions that satisfy customers’ demand.

5. Outward indirect investment means trading, holding bonds or other valuable papers on the international market.

Article 4. Principle of foreign exchange transactions

1. Commercial banks, general finance corporations, factoring companies, consumer credit companies, financial leasing companies, branches of foreign banks may conduct elementary foreign exchange transactions on the domestic and international market for the purposes of this Circular if the State bank of Vietnam (hereinafter referred to as the State bank) grants an permission on the Establishment and Operation License or Decision on License adjustments. 0}

2. Co-operative banks may conduct elementary foreign exchange transactions on the domestic and international market for the purposes of this Circular if the State bank grants an permission on the Establishment and Operation License and Decision on License adjustments.

3. Banks for social policies may conduct elementary foreign exchange transactions on the domestic and international market by the State bank within the scope of foreign exchange transaction as prescribed in Decision of the Prime Minister on establishing and ratifying the Charter of banks for social policies.

4. Commercial banks, general finance corporations, branches of foreign banks may conduct other foreign exchange transactions on the domestic and international market when the State bank grants a permit with limited duration for each specific product or group of products (hereinafter referred to as limited duration permit).

5. When the limited duration permit expires, the commercial bank, general finance corporation, or branch of foreign bank which is permitted to conduct other foreign exchange transactions on the domestic or international market may have its limited duration permit extended by the State bank.

6. For the purposes of ensuring the security of permitted credit institution's operations, credit institution must regularly check, follow, evaluate the permitted investment instruments (including bonds and other valuable papers) and foreign partners (if applicable) in order to make appropriate adjustments while conducting foreign exchange transactions on the international market.

7. The credit institution, branch of foreign bank which is undergoing restructuring shall be permitted to conduct foreign exchange transactions by the State bank in accordance with the ratified restructuring plan. Procedures for applying for foreign exchange transactions permit must conform to this Circular.

8. While conducting foreign exchange transactions, permitted credit institutions must conform to corresponding regulations of law on foreign exchange transactions (if applicable).

Chapter II

SCOPE, REQUIREMENTS, PROCEDURES FOR FOREIGN EXCHANGE TRANSACTIONS PERMIT ISSUANCE

Section 1. COMMERCIAL BANKS

Article 5. The scope of commercial banks’ elementary foreign exchange transactions on the domestic market

1. Conduct foreign exchange spot transactions.

2. Conduct foreign exchange forward, foreign exchange swap, foreign exchange options, and interest rate swap.

3. Receive deposits from, grant loans in foreign currencies to clients other than credit institutions.

4. Factoring and issuing guarantee in foreign currencies.

5. Issue international payment cards, act as an agent issuing international payment cards, pay international payment cards, and accept international payment cards.

6. Provide the wire transfer or payment services in foreign currencies within Vietnam’s territory; provide foreign currencies payment services.

7. Purchase, sell, discount and rediscount negotiable instruments and other valuable papers in foreign currencies.

8. Authorize other credit institutions, branches of foreign banks or business organizations to act as agents to provide foreign exchange services, including foreign exchange and foreign currencies payment services.

9. Provide asset management and preservation services in foreign currencies; grant loans in foreign currencies by delegation.

10. Broker issuance of valuable papers in foreign currencies.

11. Provide consultancy on foreign exchange to clients.

12. Open payment accounts in foreign currencies at other commercial banks and branches of foreign banks that are permitted to conduct foreign exchange transactions.

13. Take and grant loans in foreign currencies to other permitted credit institutions and domestic financial institutions.

14. Make deposits and receive deposits in foreign currencies to other permitted credit institutions.

Article 6. The scope of commercial banks’ elementary foreign exchange transactions on the international market

1. Open payment accounts overseas to provide international payment services.

2. Make foreign exchange spot transactions on the international market.

3. Provide international factoring services and issue guarantee in foreign currencies.

4. Grant loans overseas.

5. Issue bonds overseas.

6. Make foreign currencies deposit overseas (including term deposits and demand deposits).

Article 7. Other foreign exchange transactions on the domestic and international market

1. The State bank shall consider permitting commercial banks to conduct other foreign exchange transactions on the domestic or international market for a limited period of time, including:

a) Outward indirect investments;

b) Other derivative foreign exchange transactions on the domestic market except from foreign exchange transactions prescribed in Clause 2 Article 5 of this Circular;

c) Derivative foreign exchange transactions on the international market.

d) Other foreign exchange transactions on the domestic and international market except from foreign exchange transactions prescribed in Point a, b and c of this Article , Article 5 and Article 6 of this Circular.

2. In case the commercial bank wishes to keep conducting permitted foreign exchange transactions after the limited duration permit expires, the State bank shall renew the limited duration permit in writing provided the commercial bank conforms to requirements prescribed in Clause 2 Article 10 and Clause 5 Article 11 of this Circular as well as relevant regulations of the State bank.

Article 8. Requirements for conducting elementary foreign exchange transactions on the domestic market

To obtain the permission for elementary foreign exchange transactions on the domestic market, the commercial bank must satisfy the requirements below:

1. There is a plan for foreign exchange transactions on the domestic market.

2. There are adequate equipment , facilities, and information technology system that comply with requirements for administration, risk management, safety and security of foreign exchange transactions such as: machinery and equipment system serving foreign exchange transactions, storage devices; disaster recovery plan; software programs supporting transactions relating to foreign exchange such as payment, risk control; offices with adequate equipment such as: computers, telephones, fax machines…

3. Appoint only staff members who have at least a bachelor's degree in economics, banking, or finance; or those who have bachelor’s degrees in other fields and at least 3 years’ experience of finance and banking sector to hold the positions of department managers or banking officers; all of them must obtain at least C level Degree in English or the equivalent.

4. There are internal rules on professional procedures and risk management process applied to each foreign exchange transaction conducted on demand.

5. Conform to regulations on banking prudential ratios in the year preceding the year in which the permit is applied for and up to the time the permit is applied for.

6. The requirements prescribed in Clause 5 of this Article is not required if the commercial bank that applies for permission for foreign exchange transactions also applies for the Operating License.

Article 9. Requirements for elementary foreign exchange transactions on the international market

To obtain the permission for elementary foreign exchange transactions on the domestic market, the commercial bank must satisfy the requirements below:

1. Requirements must be complied with prescribed in Clause 2, 3, 4, 5 Article 8 of this Circular.

2. There is a plan for foreign exchange transactions on the international market.

3. There are internal rules for selecting partners and appropriate transaction limits applied to each of the partners, the partners with whom the permitted credit institution enters into foreign exchange transactions (other than payment deposits) must be overseas financial institutions that are rated Baa3/P-3 or above by Moody’s Investor Service, BBB-/A-3 or above by Standard & Poor’s, or BBB-/F3 or above by Fitch Ratings.

4. No penalties for administrative violations against regulations on foreign exchange transactions are incurred in the year preceding the year in which the permit is applied for and up to the time of submitting the application.

5. The business operation of the commercial banks has been profitable in the year preceding the year in which the permit is applied for according to an audited financial statement.

Article 10. Requirements for conducting other foreign exchange transactions on the domestic and international market

1. In each period, depending on the purposes of monetary policies, foreign exchange control policies, commercial banks shall be permitted to conduct other foreign exchange transactions for a limited period of time on the domestic and international market on condition that:

a) Some of or all of elementary foreign exchange transactions on the domestic or international market are permitted.

b) There are plans for conducting foreign exchange transactions for which permission is applied for; there are internal rules for professional processes, risk management process applied to the foreign exchange transactions for which permission is requested; 0}c) c) There are internal rules for selecting partner organization, appropriate transaction limits applied to each of partners ; there are internal rules on requirements for selecting permitted investment instruments (including bonds or other valuable papers) for outward indirect investments activities;

d) Regulations on banking prudential ratios must be complied with in the year preceding the year in which the permit is applied for and up to the time of submitting the application.

dd) There is no penalties for administrative violations against regulations on foreign exchange transactions in the year preceding the year in which the permit is applied for and up to the time of submitting the application.

e) The business operation of the commercial banks has been profitable for 02 (two) years preceding the year in which the permit is applied for according to audited financial statement.

2. 2. The commercial bank shall have the permit extended if the requirements below are satisfied:

a) The permit with limited duration is issued by the State bank;

b) No penalties for administrative violations on foreign exchange transactions are incurred while conducting foreign exchange transactions with limited duration;

c) Regulations on banking prudential ratios are complied with in the year preceding the year in which permit extension is applied for and up to the time of submitting the application extension.

d) The business operation of the commercial banks has been profitable for 2 years preceding the year in which permit extension is applied for according to audited financial statement.

Article 11. Application for foreign exchange transactions permit

1. Principles of making and submitting application for foreign exchange transactions permit (hereinafter referred to as application):

a) The application must be in Vietnamese. Every Vietnamese translation must be notarized by competent agencies in accordance with regulations and law;

b) The application form for foreign exchange transactions, business project, and provision of foreign exchange service project, internal process, and risk management process with regard to each of foreign exchange transactions of commercial banks shall be signed by the legal representative of such commercial bank.

c) The application shall be sent to the State bank directly or by post

2. The application for the permit for elementary foreign exchange transactions on the domestic market shall include:

a) An application form for foreign exchange transactions permit as prescribed in the form of Annex 1 of this Circular;

b) A plan for foreign exchange transactions on the domestic market, which contains at least the descriptions of the operations and business plan;

c) The internal rules on professional procedures, risk management process with regard to each of foreign exchange transactions for which permission is requested. The risk management process must contain at least/Required contents of the risk management process: possible risks to each of foreign exchange transactions; risk management process and solutions for avoiding such risks;

d) A report on equipment and facilities enclosed with a declaration that equipment and facilities are satisfactory;

dd) A report on conformity with regulations on banking prudential ratios in the year preceding the year in which the permit is applied for and up to the time of submitting the application.

e) A list of department managers and banking officers enclosed with their degrees, certificates and information about their competence as prescribed in Clause 3 Article 8 of this Circular.

g) A description of information technology system, applied technical solutions and the processing of foreign exchange transactions in the information technology system;

h) The documents mentioned in Point dd of this Clause is not required if the commercial bank that applies for permission for foreign exchange transactions also applies for the Operating License.

3. The application for elementary foreign exchange transactions permit on the international market shall contain:

a) The documents prescribed in Point a, c, d, dd, e, g Clause 2 of this Article;

b) A plan for foreign exchange transactions services on the international market, which contains at least at least: description of operations, business plan;

c) The internal rules on requirements for selecting partners and transaction limits applied to each of the partners; which must have regulations on checking and revaluing that partners periodically and when the partners’ ratings are changed;

d) A report on domestic foreign exchange transactions in the year preceding the year in which the permit is applied for and up to the time of submitting the application, enclosed with a commitment that faces no penalties for administrative violations on foreign exchange transactions

e) A copy of in the audited financial statement of the year preceding the year in which the permit is applied for, which is confirmed by commercial bank.

4. The application for other foreign exchange transactions permit on the domestic and international market shall contain:

a) Application form provided in (using the form provided in) Annex 1 of this Circular;

b) A copy of Establishment and operation license and documents on adjustment (if applicable) which specifies whether the commercial bank is permitted to conduct elementary foreign exchange transactions on the domestic or international market;

c) A report on conformity with regulations on banking prudential ratios in the year preceding the year in which the permit is applied for and up to the time of submitting the application;

d) The internal rules on professional procedures, risk management process with regard to each of foreign exchange transactions which is proposed to be conducted. The risk management process must contain at least: possible risks to each of foreign exchange transactions; management process and solutions for avoiding such risks;

dd) The internal rules on requirement for selecting partners, appropriate transaction limits applied to each of the partners; the internal rules on requirements for selecting permitted investment instruments (including bonds or other valuable papers) with regard to outward indirect investments activities;

e) A report on domestic foreign exchange transactions in the year preceding the year in which the permit is applied for and up to the time of submitting the application, enclosed with a commitment that faces no penalties for administrative violations on foreign exchange transactions

g) Copies of audited financial statements of 02 (two) years preceding the year in which the permit is applied for, which are confirmed by commercial bank.

h) A foreign exchange transactions plan, which contains at least: market analysis, objectives and plan for conducting foreign exchange transactions, criteria for resources allocation and expected result (including presentation of feasibility)

With regard to outward indirect investment, the plan contains at least: the necessity of operations; description of operations and investments; intended scale, limit and time of outward direct investment; analysis of the international financial market, relevant opportunities and challenges, evaluation of the feasibility of the outward indirect investment; assessment of the possible risks of the outward indirect investment; method of managing, preventing and repairing the relevant risks; analysis of impacts of outward indirect investment on the maintenance of prudential ratios applied to banking; plan for balancing foreign capital to make the outward indirect investments.

5. The application for renewing the permit for other foreign exchange transactions on the domestic and international market shall contain:

a) Application form provided in (using the form provided in) Annex 1 of this Circular, which contains explanation for the necessity of extension and a commitment not to violate regulations on foreign exchange transactions over the effective period of the permit for foreign exchange transactions;

b) A copy of the limited duration permit issued by the State bank;

c) A report on assessment of results of foreign exchange transactions;

d) Copies of audited financial statement in 02 (two) years preceding the year in which permit extension is applied for, which is confirmed by commercial banks.

dd) A report on conformity with regulations on banking prudential ratios in the year preceding the year in which permit extension is applied for and up to the time of submitting the application extension.

Article 12. Procedures for issuing foreign exchange transactions permit

1. The commercial bank wishes to conduct foreign exchange transactions on the domestic or international market, shall compile 01 (one) application as prescribed in Article 11 of this Circular and send to the State bank (Bank Supervision and Inspection Agency). In case the application is not satisfactory, within 05 (five) working days since receipt of that application, the State bank must request the commercial bank in writing to complete the application.

2. Within 40 (forty) days since the receipt of the satisfactory application as prescribed in this Circular, the State bank shall consider:

a) Issuing the Establishment and operation license (with regard to new issuance or replacing issuance of License) or Decision on License adjustment in case elementary foreign exchange transactions on the domestic and international market are permitted;

b) Issuing the permit to commercial bank in case other foreign exchange transactions on the domestic or international market are permitted.

The permit issued by the State bank for the commercial bank to conduct other foreign exchange transactions on the domestic and international market shall include: operations, products, groups of products; time limits; quantities, limitations and requirements for ensuring safety (if applicable);

c) If the application is rejected, the State Bank shall notify the commercial bank and provide explanation.

Section 2. BRANCHES OF FOREIGN BANKS

Article 13. The scope of elementary foreign exchange transactions on the domestic market

Branches of foreign banks shall be permitted to conduct elementary foreign exchange transactions on domestic market for the purposes of Clause 5 of this Circular.

Article 14. The scope of elementary foreign exchange transactions on the international market

1. Open payment accounts overseas to provide international payment services for clients in Viet Nam.

2. Make foreign exchange spot transactions on the international market.

3. Provide international factoring services and issue guarantee in foreign currencies.

4. Make foreign currency deposits overseas (including term deposits and demand deposits).

Article 15. Other foreign exchange transactions on the domestic and international market

1. The State bank shall consider permitting branches of foreign banks to conduct other foreign exchange transaction on the domestic or international market for a limited period of time, including:

a) Other derivative foreign exchange transactions on the domestic except from foreign exchange transactions as prescribed in Clause 2 Article 5 of this Circular;

b) Derivative foreign exchange transactions on the international market.

c) Other foreign exchange transactions on the domestic and international market except from foreign exchange transactions prescribed in Point a, b of this Article as provided for in Article 13 and Article 14 of this Circular.

2. In case the branch of foreign bank wishes to keep conducting permitted foreign exchange transactions after the limited duration permit expires, the State bank shall renew the limited duration permit in writing provided the branch of foreign bank conforms to requirements prescribed in Article 18 and Article 20 of this Circular as well as relevant regulations of the State bank

Article 16. Requirements for conducting elementary foreign exchange transactions on the domestic market

The branches of foreign banks which satisfy requirements similarly to commercial banks as prescribed in the Article 8 of this Circular shall be permitted to conduct elementary foreign exchange transactions on domestic market by the State bank.

Article 17. Requirements for conducting elementary foreign exchange transactions on the international market

The branches of foreign banks which satisfy requirements similarly to commercial banks as prescribed in the Article 9 of this Circular shall be permitted to conduct elementary foreign exchange transactions on the international market by the State bank.

Article 18. Requirements for conducting foreign exchange transactions on the domestic and international market

The branches of foreign banks which satisfy requirements similarly to commercial banks as prescribed in the Article 10 of this Circular shall be permitted to conduct other foreign exchange transactions on the domestic and international market by the State bank.

Article 19. Procedures for elementary foreign exchange transactions permit on the domestic and international market

Procedures for elementary foreign exchange transactions permit on the domestic and international market shall be the same as those applied to commercial banks as prescribed in the Clause 2, 3 of Article 11 and Article 12 of this Circular

Article 20. Application and procedure for other foreign exchange transactions permit on the domestic and international market

Procedures for other foreign exchange transactions permit on the domestic and international market shall be the same as those applied to commercial banks as prescribed in the Clause 4, 5 of Article 11 and Article 12 of this Circular

Section 3. GENERAL FINANCE CORPORATIONS, FACTORING COMPANIES, CONSUMER CREDIT COMPANIES, FINANCIAL LEASING COMPANIES.

Article 21. The scope of foreign exchange transactions of general finance corporations

1. The scope of elementary foreign exchange transactions on the domestic market

a) Conduct foreign exchange spot transactions.

b) Conduct foreign exchange forward, foreign exchange swap, foreign exchange options;

c) Accept deposit in foreign currencies, grant loans in foreign currencies to clients other than credit institutions.

d) Factoring and issuing guarantee in foreign currencies.

dd) Take and grant loans in foreign currencies to other permitted credit institutions and domestic financial institutions.

e) Make deposits and accept deposits in foreign currencies to other permitted credit institutions.

g) Purchase, sell, discount and rediscount negotiable instruments and other valuable papers in foreign currencies.

h) Provide the asset management and preservation services in foreign currencies; grant loans in foreign currencies by delegation.

i) Exchange foreign currencies; authorize foreign exchange agents;

k) Provide consultancy on foreign exchange to clients.

l) Open payment accounts in foreign currencies at the commercial banks, branches of foreign banks that are permitted to conduct foreign exchange transactions.

m) Broker issuance of valuable papers in foreign currencies.

2. The scope of elementary foreign exchange transactions on the international market

a) Make foreign exchange spot transactions on the international market.

b) Grant loans overseas.

3. The scope of other foreign exchange transactions on the domestic and international market

a) The State bank consider permitting general finance corporations to conduct other foreign exchange transaction for a limited period of time, including:

(i) Other derivative foreign exchange transactions on the domestic market except from foreign exchange transactions as prescribed in Clause 2 Article 5 of this Circular;

(ii) Derivative foreign exchange transactions on the international market.

(iii) Other foreign exchange transactions on the domestic and international market except from foreign exchange transactions as prescribed in Point a (i), (ii) and Article 1 and Article 2 of this Circular.

b) In case the general finance corporations wish to keep conducting permitted foreign exchange transactions after the limited duration permit expires, the State bank shall renew the limited duration permit in writing provided the general finance corporations conform to requirements prescribed in Article 26 and Clause 4 Article 27 of this Circular as well as relevant regulations of the State bank.

Article 22. The scope of foreign exchange transactions of factoring companies, consumer credit companies

The scope of foreign exchange transactions of factoring companies, consumer credit companies on the domestic and international market conforms to scope of companies and regulations of law.

Article 23. The scope of elementary foreign exchange transactions of financial leasing companies on the domestic market

1. Receive deposits in foreign currencies from other organizations.

2. Take loans in foreign currencies from other permitted credit institutions and domestic financial institutions.

3. Grant finance lease in foreign currencies

4. Grant an additional loan on working capital in foreign currencies to financial lessees

5. Provide the asset management and preservation services in foreign currencies; grant finance lease in foreign currencies by delegation.

6. Provide consultancy on foreign exchange to clients.

7. Open payment accounts in foreign currencies at other commercial banks, branches of foreign banks that are permitted to conduct foreign exchange transactions

Article 24. Requirements for conducting elementary foreign exchange transactions of general finance corporations, factoring companies, consumer credit companies, financial leasing companies on the domestic market

1. General finance corporations which satisfy requirements similarly to commercial banks as prescribed in the Article 8 of this Circular shall be permitted to conduct elementary foreign exchange transactions on domestic market as prescribed in Clause 1 Article 21 of this Circular by the State bank.

2. Factoring companies or consumer credit companies which satisfy requirements similarly to commercial banks as prescribed in the Article 8 of this Circular shall be permitted to conduct elementary foreign exchange transactions on domestic market as prescribed in Article 22 of this Circular by the State bank.

3. Financial leasing companies which satisfy requirements similarly to commercial banks as prescribed in the Article 8 of this Circular shall be permitted to conduct elementary foreign exchange transactions on domestic market as prescribed in Article 23 of this Circular by the State bank.

Article 25. Requirements for conducting elementary foreign exchange transactions of general finance corporations, factoring companies, consumer credit companies on the international market

1. Conform to requirements as prescribed in Clause 1, 2, 3, 4 Article 9 of this Circular;

2. The business operation of the finance company has been profitable for 3 years preceding the year in which the permit is applied for according to an audited financial statement.

Article 26. Requirements for implementation of other foreign exchange transactions of general finance corporation on the international market

1. In each period, depending on the purposes of monetary policies, foreign exchange control policies, general finance corporations shall be permitted to conduct other foreign exchange transactions for a limited period of time on the domestic and international market provided that they satisfy the requirements below:

a) Requirements must be complied with similarly to commercial banks as prescribed in Point a, b, c, d and dd Point 1 Article 9 of this Circular;

b) The business operation of the general finance corporations has been profitable for 5 years preceding the year in which the permit is applied for according to an audited financial statement

2. The general finance corporations shall have the permit extended if the requirements below are satisfied:

a) The limited duration permit has been issued by the State bank;

b) No penalties for administrative violations on foreign exchange transactions are incurred while conducting foreign exchange transactions with limited duration;

c) Conform to regulations on banking prudential ratios in the year preceding the year in which permit extension is applied for and up to the time of submitting the application extension;

d) The business operation of the general finance corporations has been profitable for 5 years preceding the year in which the permit extension is applied for according to an audited financial statement

Article 27. Application for foreign exchange transactions permit

1. An application for elementary foreign exchange transactions permit submitted by general finance corporations, factoring companies, consumer credit companies, financial leasing companies on the domestic market is the same as that prescribed in the Clause 2 Article 11 of this Circular:

a) An application for elementary foreign exchange transactions permit submitted by a general finance corporation, factoring company, consumer credit company, or financial leasing company on the domestic market shall contain: a) The documents mentioned in Points a, b, c, and d Clause 3 Article 11 of this Circular;

b) Copies of financial statement which is audited in 03 (three) years preceding the year in which permit is applied for, is confirmed by the finance company.

3. An application for other foreign exchange transactions permit submitted by a general finance corporation on the domestic and international market shall include:

a) The documents mentioned in Point a, b, c, d, dd, e and h Clause 4 Article 11 of this Circular;

b) Copies of financial statement which is audited in 05 (five) years preceding the year in which permit is applied for, is confirmed by general finance corporation.

4. An application for other foreign exchange transactions permit extension submitted by a general finance corporation on the domestic and international market shall include:

a) Application form provided in the Annex 1 of this Circular, which contains explanation for the necessity of extension and a commitment not to violate regulations on foreign exchange transactions over the effective period of the permit for foreign exchange transactions;

b) A copy of the limited duration permit issued by the State bank;

c) A report on assessment of results of foreign exchange transactions;

d) Copies of audited financial statement in 05 (two) years preceding the year in which permit extension is applied for, which is confirmed by commercial banks.

dd) A report on conformity with regulations on banking prudential ratios in the year preceding the year in which permit extension is applied for and up to the time of submitting the application extension.

Article 28. Procedures

Procedures for foreign exchange transactions permit of general finance corporations, factoring companies, consumer credit companies, financial leasing companies on the domestic and international market shall be the same as those applied to commercial banks as prescribed in the Article 12 of this Circular.

Section 4. BANKS FOR SOCIAL POLICIES AND CO-OPERATIVE BANKS

Article 29. Foreign exchange transactions of banks for social policies

1. The scope of foreign exchange transactions:

Banks for social policies may conduct elementary foreign exchange transactions on the domestic and international market as prescribed in the Article 5, Article 6 of this Circular and in accordance with Decision of the Prime Minister on establishment and approval for Charter of bank for social policies.

2. Requirements:

a) Banks for social policies which satisfy requirements similarly to commercial banks as prescribed in the Article 8 of this Circular shall be permitted to conduct elementary foreign exchange transactions on domestic market by the State bank.

b) Banks for social policies which satisfy requirements similarly to commercial banks as prescribed in the Article 9 of this Circular shall be permitted to conduct elementary foreign exchange transactions on domestic market by the State bank.

3. Application:

a) A copy of Decision of the Prime Minister on establishing banks for social policies and a copy of the Charter for banks for social policies’ operation;

b) The documents as prescribed in the Clause 2 of Article 11 of (with regard to application for conducting elementary foreign exchange transactions on the domestic market);

c) The documents as prescribed in the Clause 3 of Article 11 (with regard to application for conducting elementary foreign exchange transactions on the international market);

4. Procedures:

Procedures for elementary foreign exchange transactions permit of banks for social policies on the domestic and international market shall be the same as those applied to commercial banks as prescribed in the Article 12 of this Circular<}0{>

Article 30. Foreign exchange transactions of co-operative banks

1. The State bank shall consider permitting banks for social policies to conduct elementary foreign exchange transactions on the domestic and international market in accordance with particular of co-operative banks’ operation and the aim of monetary policies, foreign exchange control policies in every period.

2. Requirements and procedures for foreign exchange transactions permit shall be the same as those applied to commercial banks as prescribed in the Article 8, Article 9, Clause 1, 2, 3 of Article 11 and Article 12 of this Circular.

Chapter III

REGULATIONS ON TRANSFER

Article 31. Rules for transferring

1. Within 12 (twelve) months from effective date of this Circular, licensed credit institutions, the permitted credit institution shall transfer the permitted foreign exchange transactions from the Permit, Certificate of qualification for foreign exchange transactions on the domestic market, or the Certificate of registration of foreign exchange transactions on the international market, other permits issued by the State bank before the effective date of this Circular to the Permit for establishment and operation or Decision on amendments to Permit for establishment and operation or limited duration permit issued by the State bank. After the said deadline, permitted credit institutions must terminate foreign exchange transactions that are not transferred or are not permitted to be transferred because requirements in the Article 32 of this Circular are not satisfied.

2. During the transfer period, permitted credit institutions shall be permitted to conduct the foreign exchange transactions in the Permit or Certificate of qualification for foreign exchange transactions on the domestic market, or the Certificate of registration of foreign exchange transactions on the international market, other permits issued by the State bank before the effective date of this Circular.

3. Permitted credit institutions shall be permitted to perform agreements or contract, which is signed before the deadline for transferring law when such agreement or contract is signed as prescribed in Clause 1 of this Article, in accordance with the scope of permitted foreign exchange transactions provided for in the regulations. From the expired date of transferring, the amendments and extension of above agreements of contracts shall only be conducted if the amendments and extension in accordance with regulations of this Circular.

Article 32. Requirements and scope of transferring

1. The State bank shall consider transferring elementary foreign exchange transactions on the domestic market regulated by this Circular with Establishment and operation license or Decision on adjustments to Establishment and operation license where permitted credit institutions conform to requirements as prescribed in Clause 2, 3, 4 Article 8 of this Circular.

2. The State bank shall consider transferring elementary foreign exchange transactions on the international market regulated by this Circular with Establishment and operation license or Decision on adjustments to Establishment and operation license where permitted credit institutions conform to requirements as prescribed in Clause 2, 3, 4 Article 8 and Clause 3 Article 9 of this Circular.

3. The State bank shall consider transferring elementary foreign exchange transactions on the domestic and international market regulated by this Circular with limited duration permit where permitted credit institutions conform to requirements as prescribed in Clause 1 Article 10 of this Circular.

Article 33. Application for transferring

1. Application for transferring of elementary foreign exchange transactions on the domestic market as prescribed in the Clause 1 Article 32 of this Circular shall include:

a) Application form for transferring provided in (using the form provided in) Annex 2 of this Circular;

b) A copy of Establishment and operation license, Certificate of qualification for foreign exchange transactions, Certificate of registration of foreign exchange transactions and other permits (if applicable);

c) The internal rules on professional procedures, risk management process applied to each of foreign exchange operations which is proposed to be transferred. The risk management process must contain at least: possible risks to each of foreign exchange transactions; management process and solutions for avoiding such risks;

d) A report on equipment and facilities enclosed with commitment to satisfying requirements for equipment and facilities;

dd) A list of department managers and banking officers enclosed with their degrees, certificates and information of qualification and competence comply with requirements as prescribed in Clause 3 Article 8 of this Circular;

e) A description of information technology system, applied technical solutions and processing of foreign exchange transactions by the information technology system;

2. An application for transferring of elementary foreign exchange transactions on the international market as prescribed in the Clause 2 Article 32 of this Circular shall include:

a) The documents as prescribed in the Clause 1 of this Article;

b) The internal rules on requirements for selecting partners and transaction limit applied to the partners; which must have regulations on checking and revaluing that partners periodically and when the partners’ ratings are changed.

3. An application for transferring of other foreign exchange transactions on the domestic and international market as prescribed in the Clause 3 Article 32 of this Circular shall include:

a) Application form for transferring provided in (using the form provided in) Annex 2 of this Circular;

b) The documents as prescribed in the Point b, c, d, dd, e, g, h Clause 4 Article 11 of this Circular;

c) A report on conducting foreign exchange transactions from the State bank issued the permit/.

Article 34. Procedures for transferring

1. Permitted credit institutions shall compile 01 (one) application as prescribed in Article 33 of this Circular and send to the State bank (Bank Supervision and Inspection Agency) directly or by post.

2. Permitted credit institutions shall compile 01 (one) application as prescribed in Article 33 of this Circular and send to the State bank (Bank Supervision and Inspection Agency) directly or by post.

Within 40 (forty) days since acceptance of valid and complete application as prescribed in this Circular, the State bank shall consider transferring the Establishment and operation license or Decision on adjustments to Establishment and operation license or limited duration permit with regard to each of circumstance as prescribed in this Circular. If the application is rejected, the State Bank shall notify the commercial bank and provide explanation.

Chapter IV

RESPONSIBILITY OF ORGANIZATIONS RELATING TO FOREIGN EXCHANGE TRANSACTIONS OF CREDIT INSTITUTIONS, BRANCHES OF FOREIGN BANKS

Article 35. Responsibility of permitted credit institutions

1. While conducting foreign exchange transactions, permitted credit institutions must conform to contents in the Establishment and operation license, Decision on amendments to such license, limited duration permits (if applicable), regulations of this Circular, regulations on foreign exchange control and other relevant regulations of law.

2. Comply with regulations on security in operations of banks in accordance with regulations of the State bank.

3. Conduct foreign exchange transactions in accordance with internal rules. The transactions must be controlled in accordance with current regulations on internal checking and control.

4. Post buy rate, sell rate and buy and sell foreign currencies in accordance with regulations of the State bank.

5. While conducting foreign exchange transaction to clients, permitted credit institutions must consider, check and keep documents in accordance with actual transactions to ensure the provision of foreign exchange to be conducted in conformity with their purposes and regulations; Provide information of possible risks towards clients who are provided foreign exchange services.

6. Provide guidance on operation and periodically check the operation of agents, which are mandated by credit institutions in the implementation of regulations of this Circular and relevant law provisions.

7. Make regulations on internal division of authorization in order to ensure the security of foreign exchange transactions.

8. Organize the database and clients’ information management systems to ensure the statistical report of the State bank’s requirements and other relevant units on request.

9. While conducting foreign exchange transactions, permitted credit institutions must report the foreign exchange transactions in accordance with regulations on statistical reports and other reports under the State bank’s regulations.

Irregular reports shall be submitted where necessary or at the request of the State bank.

10. Ensure the requirements as prescribed in this Circular must be satisfied.

Article 36. Responsibility of units affiliated to the State bank

1. Bank Supervision and Inspection Agency shall:

a) Be responsible for accepting and examining the validity of application for the permit or application for transferring of foreign exchange transactions;

b) Send the document to relevant units affiliated to the State Bank in order to collect suggestions of credit institutions, branches of foreign banks on application for permit or application for transferring of foreign exchange transactions

c) Collect opinions from units, conduct the final assessment, and submit the application to Governor of the State bank in order for the Governor of the State bank to consider whether to permit....;

d) Take charge of handling difficulties relating to permit issuance in the implementation of this Circular.

2. Foreign exchange Administration Department: Within 10 (ten) working days since the accepting date of Bank Supervision and Inspection Agency, pursuant to its function and tasks, Foreign exchange Administration Department shall:

a) Make remarks about application for foreign exchange transactions permit of credit institutions, branches of foreign banks;

b) Make remarks about application for transferring of foreign exchange transactions permit of permitted credit institutions, branches of foreign banks;

c) Cooperate with other authorities in handling the difficulties in the implementation of this Circular.

3. Financial policy department: Within 10 (ten) working days from the receipt of opinions from Bank Supervision and Inspection Agency, pursuant to its function and tasks, the Financial policy department shall:

a) Make remarks about reports on foreign exchange positions of permitted credit institutions, branches of foreign banks;

b) Make remarks about application foreign exchange transactions permit of permitted credit institutions, branches of foreign banks;

c) Make remarks about application for transferring foreign exchange transactions permit of permitted credit institutions, branches of foreign banks;

4. Informatics Technology Department: Within 10 (ten) working days since the accepting date of Bank Supervision and Inspection Agency, pursuant to its function and tasks, the Information Technology Administration shall:

a) Make remarks about the conformity of equipments, material conditions and information technology system that comply with requirements for executive management, risk management of foreign exchange transactions

b) Make remarks about application for transferring of foreign exchange transactions permit of permitted credit institutions, branches of foreign banks;

5. Other relevant units affiliated to the State bank:

Pursuant to its function and tasks, other relevant units affiliated to the State bank must make remarks about relevant matter relating to application for permit or application for transferring of foreign exchange transactions of credit institutions, branches of foreign banks at the request of Bank Supervision and Inspection Agency.

Chapter V

IMPLEMENTING PROVISIONS

Article 37. Effect

1. This Circular shall take effects from October 15, 2014.

2. From the effective date of this Circular, the Circular No. 03/2008/TT-NHNN dated April 11, 2008 of the State bank providing guidance on provision of foreign exchange service of credit institutions and the Article 3 of Circular No. 25/2011/TT-NHNN dated August 31, 2011 of the State bank on simplifying administrative procedures applied to foreign exchange transactions in accordance with the Resolution of the Government on simplifying administrative procedure, which is under the State bank’s management, shall be annulled.

Article 38. Effect

The Chief officers, the Chief Inspectors or Chief Supervisors of bank, The Head of units affiliated to the State bank of Vietnam, Directors of the State bank of the branches in the central-affiliated cities and provinces, Presidents of the Board of Directors, Presidents of the Member assembly, General directors (Directors) of credit institutions, branches of foreign banks are responsible for implementation of this Circular./.

 

 

PP. GOVERNOR
DEPUTY OF GOVERNOR




Nguyen Phuoc Thanh

 

 

 

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This translation is made by LawSoft and for reference purposes only. Its copyright is owned by LawSoft and protected under Clause 2, Article 14 of the Law on Intellectual Property.Your comments are always welcomed


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This translation is made by LawSoft and for reference purposes only. Its copyright is owned by LawSoft and protected under Clause 2, Article 14 of the Law on Intellectual Property.Your comments are always welcomed

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Loại văn bảnThông tư
Số hiệu21/2014/TT-NHNN
Cơ quan ban hành
Người ký
Ngày ban hành14/08/2014
Ngày hiệu lực15/10/2014
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Lược đồ Circular No. 21/2014/TT-NHNN guidance on scope of foreign exchange transactions of credit institutions


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Circular No. 21/2014/TT-NHNN guidance on scope of foreign exchange transactions of credit institutions
Loại văn bảnThông tư
Số hiệu21/2014/TT-NHNN
Cơ quan ban hànhNgân hàng Nhà nước
Người kýNguyễn Phước Thanh
Ngày ban hành14/08/2014
Ngày hiệu lực15/10/2014
Ngày công báo...
Số công báo
Lĩnh vựcTiền tệ - Ngân hàng
Tình trạng hiệu lựcCòn hiệu lực
Cập nhật6 năm trước

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          Văn bản gốc Circular No. 21/2014/TT-NHNN guidance on scope of foreign exchange transactions of credit institutions

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