Thông tư 28/2016/TT-NHNN

Circular No. 28/2016/TT-NHNN dated October 05, 2016, amendment and supplement to a number of articles of the Circular No. 21/2014/TT-NHNN providing guideline for scope of foreign exchange operations, licensing procedures and requirements for foreign exchange operations by credit institutions and branches of foreign banks

Nội dung toàn văn Circular No. 28/2016/TT-NHNN amendment 21/2014/TT-NHNN foreign exchange operations


STATE BANK OF VIETNAM
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THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No. 28/2016/TT-NHNN

Hanoi, October 05, 2016

 

CIRCULAR

AMENDMENT AND SUPPLEMENT TO A NUMBER OF ARTICLES OF THE CIRCULAR NO. 21/2014/TT-NHNN DATED AUGUST 14, 2014 BY THE GOVERNOR OF STATE BANK OF VIETNAM PROVIDING GUIDELINE FOR SCOPE OF FOREIGN EXCHANGE OPERATIONS, LICENSING PROCEDURES AND REQUIREMENTS FOR FOREIGN EXCHANGE OPERATIONS BY CREDIT INSTITUTIONS AND BRANCHES OF FOREIGN BANKS

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

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

Pursuant to the Ordinance No. 28/2005/PL-UBTVQH11 dated December 13, 2005 and Ordinance No.06/2013/UBTVQH13 dated March 18, 2013 on amendment to a number of Articles of the Ordinance on Forex;

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

At request of the Director of Forex Administration;

The Governor of the State Bank of Vietnam hereby issues this Circular on amendment to a number of articles of the Circular No. 21/2014/TT-NHNN dated august 14, 2014 by the Governor of State Bank of Vietnam providing guideline for scope of foreign exchange operations, licensing procedures and requirements for foreign exchange (hereinafter referred to as “forex”) operations by credit institutions and branches of foreign banks (hereinafter referred to as “Circular No.21/2014/TT-NHNN “).

Article 1. A number of Articles of the Circular No. 21/2014/TT-NHNN shall be amended and supplemented as follows:

1. Clause 5 shall be added to the Article 1 as follows:

“5. Outward indirect investment by credit institutions or branches of foreign banks shall conform to laws on outward indirect investment".

2. Clause 2 Article 3 shall be amended and supplemented as follows:

“2. Forex operations by authorized credit institutions include forex and service provision activities in current, capital and other transaction between these credit institutions and residents or non-residents including primary types of forex transactions on the domestic market, on the international market and other types of transactions on both domestic and international markets.”

3. Clause 5 Article 3 is abrogated.

4. Article 4 shall be amended and supplemented as follows:

“Article 4. Principles of forex operations

1. With regard to primary types of forex transactions:

a) After being granted a new/replacement License for Establishment and Operation or Decision on amendment to that License in which forex service provision and trading on the domestic and/or international markets within the scope of operations prescribed by the State Bank of Vietnam are included, commercial banks, cooperative banks, general financial corporations, factoring companies, consumer credit companies, financial leasing companies and branches of foreign banks shall be entitled to conduct all primary types of forex transactions on the domestic and/or international markets in accordance with provisions hereof;

b) With regard to forex derivatives and other types of forex transactions other than those specified in point a clauses 1 and 2 of this Article:

(i) Authorized commercial banks and branches of foreign banks shall be entitled to conduct forex derivatives without licensing application for supplement to forex operations provided that the State Bank of Vietnam releases any respective guideline and such authorized commercial banks and branches of foreign banks have obtained the State Bank’s permission to conduct forex derivatives in Vietnam dong.

(ii) Authorized commercial banks and branches of foreign banks shall be entitled to conduct other forex activities without licensing application for supplement to forex operations after the State Bank of Vietnam releases any respective guideline;

c) Vietnam Banks for Social Polices shall be entitled to conduct primary types of forex transactions on the domestic and international markets under provisions hereof.

2. With regard to other types of forex transactions:

a) After obtaining the permission to perform forex transactions within the agreed period of time in respect of specific products and product group (hereinafter referred to as “permit”), the authorized credit institution shall be entitled to perform forex operations of such types on the domestic and international markets;

b) Upon expiration of such period of time stated on the permit, the authorized credit institution may be entitled to continue to perform such forex transaction on the domestic and international market after obtaining the State Bank’s approval in writing for extension of such permit. The extended period shall not exceed the period of time stated in the permit.

3. During the operations on the international market, the authorized credit institution shall regularly review, assess and monitor their foreign partners for appropriate adjustments in order to ensure the safety operation of authorized credit institutions.

4. Authorized credit institutions shall strictly comply with provisions hereof and other relevant regulations of laws when conducting forex operations. Vietnam Banks for Social Policies, in particular, must conform to regulations promulgated by the Government, Prime Minister and other relevant regulations of laws.”

5. Clause 2 Article 5 shall be amended and clauses 15, 16, 17 and 18 shall be added to Article 5 as follows:

“2. Conduct forex forward transactions, swap transactions and option transactions.”

“15. Open current accounts for foreign credit institutions.

16. Take foreign currency deposits from foreign credit institutions.

17. Conduct interest rate derivatives and other forex-related derivatives on the domestic market in accordance with point b(i) clause 1, Article 4 hereof.

18. Provide forex transactions other than those specified from clause 1 through clause 17 of this Article on the international market in accordance with point b (ii) clause 1 Article 4 hereof.”

6. Article 6 is amended as follows:

“Article 6.Primary types of forex transactions provided by commercial banks on the international market

1. Make international payment and money transfer.

2. Sell and buy foreign currencies on the international market under form of spot transactions.

3. Enter into forex swap transactions and forward transactions with foreign financial institutions in order to prevent and mitigate risks arising from concluded forex contracts and swap transactions with domestic clients.

4. Provide foreign currency guarantee and international factoring services

5. Offer outward loans to non-credit institutions.

6. Open foreign currency deposit accounts at overseas banks (including term deposits and demand deposits).

7. Conduct interest rate derivatives and other forex-related derivatives on the international market in accordance with point b(i) clause 1, Article 4 hereof.

8. Provide forex transactions other than those specified from clause 1 through clause 7 of this Article on the international market in accordance with point b (ii) clause 1 Article 4 hereof.”

7. Article 7 is amended and supplemented as follows:

“Article 7. Other types of forex transactions on domestic and international markets

1. The State Bank shall consider giving permission to commercial banks to perform other types of forex transactions in relation to specific products or product groups on the domestic and international markets in a limited period of time (hereinafter referred to as “term transaction”), including other types of forex transactions other than those prescribed in Articles 5 and 6 hereof.

2. Upon expiration of such period of time stated in the permit, the commercial bank may be entitled to continue to perform such forex transaction on the domestic and international market after obtaining the State Bank’s approval in writing for extension of such permit if it meets all requirements and submits an applications as stipulated in clause 2 Article 10 and clause 5 Article 11 hereof and other relevant regulations of laws.”

8. Article 8 is amended and supplemented as follows:

“Article 8. Licensing requirements for provision of primary types of forex transactions on the domestic market

A commercial bank may be given a permission to perform primary types of forex transactions on the domestic market if it:

1. establishes information technology systems that meet requirements concerning processing, risk management, security and safety of forex operations such as machinery, equipment, data storage devices, contingency plans and forex software.

2. has an internal regulation on management of risks related to requested forex transactions”

9. Article 9 is amended as follows:

“Article 9. Licensing requirements for provision of primary types of forex transactions on the international market

A commercial bank may be given permission to perform primary types of forex transactions on the international market if it:

1. meets all requirements set out in Article 8 hereof.

2. has an internal regulation on selection of institutional partners and limits to forex transaction with foreign partners. Authorized credit institutions shall only enter into transactions via deposit accounts (other than current accounts) with foreign financial institutions that are rated at least Baa3/P-3 by Moody’s Investor Service or at least BBB-/A-3 by Standard & Poor’s or at least BBB-/F3 by Fitch Ratings.

3. Clause 2 of this Article shall not apply to commercial banks that open their deposit accounts (not current accounts) at their own overseas branches or subsidiaries.

Total balance of deposit accounts registered at all overseas branches and subsidiaries of a commercial bank shall not exceed 10% of that commercial bank’s charter capital.”

10. Article 10 is amended and supplemented as follows:

“Article 10. Licensing requirements for provision of other types of forex transactions on the domestic and international markets

1. According to objectives of monetary and forex administration policies issued over time periods, commercial banks may be entitled to perform other types of forex transactions on the domestic and international markets within a limited period of time if they:

a) have been authorized to perform primary types of forex transactions on the domestic or international markets;

b) have internal regulations on operating procedures associated with risk management approaches in respect of requested forex transactions ;

c) have internal regulations on selection of institutional partners and limits to forex transaction with foreign partners suitable for specific foreign partner;

d) comply with regulations of laws on prudential ratios in banking during the period from the year immediately preceding the year of application to the date of application;

dd) do not carry any administrative penalty against foreign currency operations in the year immediately preceding the year of application and by the date of application;

e) generate profits in the year immediately preceding the year of application according to the audited financial statement.

2. A commercial bank may be granted an extension for providing other types of forex transactions on the domestic and international markets if it:

a) has been entitled to provide other term transaction by the State Bank;

b) does not carry any administrative penalty against foreign currency operations during the provision of term transaction;

c) complies with regulations of laws on prudential ratios in banking during the period from the year immediately preceding the year of application to the date of application for extension;

d) generates profits in the year immediately preceding the year of application according to the audited financial statement.”

11. Article 11 is amended and supplemented as follows:

“Article 11. Application for licensing to perform forex transactions

1. The application shall meet the following requirements:

a) The application must be made in Vietnamese. Where it includes any document which is translated from any foreign language, the commercial bank can opt to submit a translation certified by the translator's signature in accordance with Vietnam's regulations on authentication or a translation certified by the legal representative of the commercial bank;

b) An application package to be submitted shall include an application form, a copy of internal regulations and reports signed by the legal representative of the commercial bank;

c) The application shall be submitted to the State Bank directly or by post;

d) For photocopied documents included in the application package, the commercial bank shall submit those certified as true copy of the original copy by the legal representative of the commercial bank.

2. The application for licensing provision of primary types of forex transactions on the domestic market includes:

a) An application form made using Annex 1 attached hereto;

b) A set of internal rules and regulations on forex-related risk management which includes identification of risk types and plans to manage such risks;

c) A descriptive report on information technology system, applicable technical solutions and forex transaction processing presented in Annex 3 hereof.

3. The application for licensing provision of primary types of forex transactions on the international market includes:

a) The application package specified in clause 2 of this Article;

b) A set of internal rules and regulations on criteria for selection of institutional partners and limits to forex transaction with partners which specifies procedures for assessing partners periodically and as an unexpected event affects a partner's credit rating.

4. The application for licensing provision of other types of forex transactions on the domestic and international markets includes:

a) An application form made using Annex 1 attached hereto which specifies products or product groups and expected starting date;

b) A report on compliance with regulations of laws on prudential ratios in banking from the year immediately preceding the year of application and by the date of application;

c) A set of internal rules and regulations on management of risks in relation to requested forex transactions which specifies risk identification and risk management approaches;

d) A set of internal rules and regulations on criteria for selection of institutional partners and limits to forex transaction with partner which specifies procedures for assessing partners periodically and as an unexpected event affects partner’s credit rating;

dd) A report on the domestic forex operations during the period from the year immediately preceding the year of application to the date of application, enclosing a statement that the applicant was not under any administrative penalty against forex operations;

e) A copy of the audited financial statement of the year immediately preceding the year of application.

5. The application for extension of duration for provision of other types of forex transactions on the domestic and international markets includes:

a) An application form made using Annex 1 attached hereto which specifies the necessity of extension enclosing a statement that the applicant was not under any administrative penalty against forex operations

b) A report on operation of forex transactions in an agreed period of time;

c) A copy of the audited financial statement of the year immediately preceding the year of application for extension;

d) A report on compliance with regulations of laws on prudential ratios in banking during the period during the period from the year immediately preceding the year of application to the date of application.”

12. Article 12 is amended and supplemented as follows:

“Article 12. Procedure for licensing to perform forex transactions, grant of extension of forex term transactions

1. Where it is needed, the commercial bank shall submit an application as stipulated in Article 11 hereof to the State bank if the application is incomplete, the State Bank, within 10 working days, shall request the applicant to complete the application in writing.

2. Within 40 days from the date of receipt of the valid application, the State Bank shall consider:

a) Giving permission to provide primary types of forex transactions on the domestic and international markets under form of a License for Establishment and Operation or Decision on Amendment to License to the commercial bank;

b) Giving permission to perform other types of forex transactions on the domestic and international markets to the commercial bank.

The State Bank’s permit to perform other types of forex transactions on the domestic and international markets shall specify name of services, products, product groups, duration, limitations and prudential measures (if any) and shall be made using Annex 4 attached hereto

c) In case of rejection, the State bank shall send the commercial bank a written notice in which reasons for rejection shall be specified.

3. The licensing procedure for extension of duration for provision of other types of forex transactions on the domestic and international markets to commercial banks shall conform to clauses 1 and 2 of this Article."

13. Article 14 shall be amended and supplemented as follows:

“Article14. Primary types of forex transactions on the international market”

1. Provide international payment and money transfer services for Vietnamese clients.

2. Conduct forex spot transactions on the international market.

3. Enter into forex forward transactions and swap transactions with foreign financial institutions with the aim of prevention and mitigation of risks arising from forward transactions and swap transactions with domestic clients.

4. Provide foreign currency and factoring services for Vietnamese clients.

5. Make foreign currency deposit accounts at overseas banks (including term deposits and demand deposits).

6. Conduct interest rate derivatives and other forex-related derivatives on the international market in accordance with point b(i) clause 1, Article 4 hereof , application for such additional derivative transactions is not required.

7. Perform other types of forex transactions other than those specified in clause 1 through clause 6 of this Article on the international market in accordance with point b (ii) clause 1 Article 4 hereof. The application for licensing to perform such forex transactions is not required

14. Article 15 is amended and supplemented as follows:

“Article 15. Other types of forex transactions on the domestic and international markets

1. Besides forex transactions specified in Articles 13and 14 hereof, the State Bank will consider giving permission to branches of foreign banks to perform other types of forex transactions in relation to specific products or product groups on:

a) Domestic market;

b) International market for serving Vietnamese clients.

2. Upon expiration of the period of time for provision of other types of forex transactions on the domestic and international markets stated in the permit, where an extension is needed, a branch of foreign banks may be granted an extension by the State Bank in writing if it meets all requirements and submits an application as stipulated in Articles 18 and 20 hereof and other relevant regulations of laws.

15. Title of Article 16 shall be changed into:

“Điều 16. Điều kiện chấp thuận hoạt động ngoại hối cơ bản trên thị trường trong nước (Article 16. Requirements for licensing to perform primary types of forex transactions on the domestic market)”

16. Title of Article 17 shall be changed into:

“Điều 17. Điều kiện chấp thuận hoạt động ngoại hối cơ bản trên thị trường quốc tế (Article 17. Requirements for licensing to perform primary types of forex transactions on the international market)”

17. Title of Article 18 shall be changed into:

“Điều 18. Điều kiện chấp thuận hoạt động ngoại hối khác trên thị trường trong nước và thị trường quốc tế (Article 18. Requirements for licensing to perform other types of forex transactions on the domestic and international markets)”

18. Article 19 shall be amended as follows:

“Article 19. Procedure and application for licensing to perform primary types of forex transactions on the domestic and international markets”

The procedure and application for licensing to perform primary types of forex transactions on the domestic and international markets shall be conformable to clauses 1, 2 and 3 Article 11 and 12 hereof as it is required for a commercial bank.”

19. Article 20 shall be amended as follows:

“Article 20. Procedure and application for licensing to perform other types of forex transactions on the domestic and international markets”

The procedure and application for licensing to perform other types of forex transactions on the domestic and international markets shall be conformable to clauses 1, 4 and 5 Article 11 and 12 hereof as it is required for a commercial bank.”

20. Article 21 is amended as follows:

“Article 21.Scope of forex operations by general financial corporations

1. Forex operations on the domestic market:

a) Conduct forex spot transactions;

b) Conduct forex forward transactions, swap transactions and option transactions;

c) Take deposits from non-credit institutions; grant foreign currency loans to non-credit institutions;

d) Provide factoring and bank guarantee in foreign currencies;

dd) Issue international credit cards;

d) Buy, sell, discount or rediscount negotiable instruments and other financial instruments in foreign currencies;

g) Provide foreign currency payment and receipt services; nominate economic organizations as forex agents;

h) Provide foreign currency asset management and protection services; offer foreign currency loans under entrustment;

i) Perform as issuers of financial instruments in foreign currencies;

k) Provide forex consulting services;

l) Open foreign currency current accounts at authorized commercial banks and branches of foreign banks;

m) Take and grant foreign currency loans from/to other authorized credit institutions and domestic financial institutions;

n) Make and receive deposits in foreign currencies at/from other authorized credit institutions;

o) Take foreign currency deposits from foreign credit institutions.

p) Grant finance lease in foreign currencies.

2. Scope of operation on the international market:

a) Sell and buy foreign currencies on the international market under form of spot transactions;

b) Enter into swap transactions and forward transactions with foreign financial institutions in order to prevent and mitigate risks arising from forex contracts and swap transactions concluded with domestic clients.

c) Offer outward loans to non-credit institutions;

d) Open current accounts at foreign banks to issue credit cards.”

dd) Provide factoring and bank guarantee in foreign currencies.

3. For other types of forex transactions on the domestic and international markets:

a) The State Bank shall consider giving permission to general financial corporations to perform transactions in relation to specific products and product groups in an agreed period of time on the domestic and international markets including forex transactions other than those prescribed in clauses 1 and 2 of this Article provided that such general financial corporation meets all stipulated requirements and submits an application as stipulated in clause 1 Article 26 and clause 3 Article 27 hereof;

b) Upon expiration of such period of time stated on the permit, the general financial corporation may be granted an extension in writing by the State Bank if it satisfies all requirements and applies for extension under clause 2 Article 26, clause 4 Article 27 hereof and other relevant regulations of laws.

21. Article 22 is amended and supplemented as follows:

“Article 22.Scope of forex operations by factoring companies

1. Primary types of forex transactions on the domestic market:

a) Take foreign currency deposits from non-credit institutions.

b) Make and take deposits in foreign currencies at/from other authorized credit institutions.

c) Apply for foreign currency loans to other authorized credit institutions and domestic financial institutions;

d) Buy, sell, discount or rediscount negotiable instruments and other financial instruments in foreign currencies;

dd) Offer foreign currency factoring services;

e) Provide foreign currency asset management and protection services;

g) Provide forex consulting services;

h) Open foreign currency current accounts at authorized commercial banks and branches of foreign banks.

2. Scope of operation on the international market: Internal factoring.”

22. Article 22a shall be added to Article 22 as follows:

“Article 22a.Scope of operation by consumer credit companies

1. Forex operations on the domestic market:

a) Take foreign currency deposits from non-credit institutions.

b) Make and take deposits in foreign currencies to/from other authorized credit institutions.

c) Take foreign currency loans from other authorized credit institutions and domestic financial institutions;

d) Buy, sell, discount or rediscount negotiable instruments and other financial instruments in foreign currencies;

dd) Issue international credit cards;

e) Provide foreign currency asset management and protection services;

g) Provide forex consulting services;

h) Open foreign currency current accounts at authorized commercial banks and branches of foreign banks.

2. Primary types of forex transactions on the international market: Open current accounts at foreign banks to issue credit cards.”

23. Article 23 is amended and supplemented as follows:

“Article 23. Primary types of forex transactions on the domestic market conducted by financial leasing companies

1. Take foreign currency deposits from non-credit institutions.

2. Deposit and take deposits in foreign currency at/from other authorized credit institutions.

3. Apply for foreign currency loans from other authorized credit institutions and domestic financial institutions;

4. Grant finance leases in foreign currencies.

5. Grant foreign currency loans to lessees for working capital raising.

6. Grant finance leases in foreign currencies under entrustment.

7. Provide foreign currency asset management and protection services.

8. Provide forex consulting services.

9. Purchase and sublet in the form of foreign currency finance lease.

10. Open foreign currency current accounts at authorized commercial banks and branches of foreign banks.”

24. Article 24 is amended and supplemented as follows:

“Article 24.Requirements for licensing to perform primary types of forex transactions on the domestic markets by general financial corporations, factoring companies and consumer credit companies and finance leasing companies

1. Every general financial corporation that meet all requirements prescribed in Article 8 hereof may be licensed to perform primary types of forex transactions specified in clause 1 Article 21 hereof on the domestic markets.

2. Every factoring company that meets all requirements prescribed in Article 8 hereof may be licensed to perform primary types of forex transactions specified in clause 1 Article 22 hereof on the domestic markets.

3. Every consumer credit company that meets all requirements prescribed in Article 8 hereof may be licensed to perform primary types of forex transactions specified in clause 1 Article 22a hereof on the domestic markets.

4. Every finance Lease Company that meets all requirements prescribed in Article 8 hereof may be licensed to perform primary types of forex transactions specified in Article 23 hereof on the domestic markets.”

25. Article 25 is amended and supplemented as follows:

“Article 25.Requirements for licensing to perform primary types of forex transactions on the international markets by general financial corporations, factoring companies and consumer credit companies

1. Entities wishing to perform primary types of forex transactions on the international market shall meet all requirements stipulated in Article 9 hereof;

2. Such entities must gain profit in 01 year immediately preceding the year of application according to the audited financial statement.”

26. Article 26 is amended and supplemented as follows:

“Article 26. Requirements for licensing to perform other types of forex transactions on the domestic and international markets by general financial corporations

1. According to objectives of monetary and forex administration policies issued over time periods, a general financial corporation may be licensed to perform other types of forex transaction on the domestic and international markets in an agreed period of time if it:

a) meets all requirements prescribed in point a, b, c, d and dd clause 1 Article 10 hereof; and

b) generates profits in 02 consecutive years immediately preceding the year of application according to the audited financial statement.

2. An extension of duration for provision of other types of forex transaction on the domestic and international markets may be granted if the general financial corporation:

a) meets all requirements prescribed in point a, b and c clause 2 Article 10 hereof; and

b) generates profits in 02 consecutive years immediately preceding the year of application according to the audited financial statement.”

27. Article 27 is amended and supplemented as follows:

“Article 27. Application for licensing to perform foreign currency operations

1. The applications for licensing to perform primary types of forex transactions on the domestic markets by general financial corporations, factoring companies, consumer credit companies and financial leasing companies shall be conformable to clauses 1 and 2 Article 11 hereof.

2. The application for licensing to perform primary types of forex transactions on the international markets by general financial corporations, factoring companies and consumer credit companies includes:

a) An application package prescribed in clause 3 Article 11 hereof;

b) A copy of the audited financial statement of the year immediately preceding the year of application.

3. The application for licensing to perform other types of forex transactions on the domestic and international markets in an agreed period of time by a general financial corporation includes:

a) Documents specified in point a, b, c, d, and dd clause 4, Article 11 hereof;

b) A copy of the audited financial statement of 02 consecutive years immediately preceding the year of application.

4. The application for extension of duration for provision of other types of forex transaction on the domestic and international markets by a general financial corporation includes:

a) An application package prescribed in point a, b, and d clause 5, Article 11 hereof;

b) A copy of the audited financial statement of 02 consecutive years immediately preceding the year of application.

28. Article 29 is amended and supplemented as follows:

“Article 29. Forex operations by Vietnam Bank for Social Policies

1. The Vietnam Bank for Social Policies shall be entitled to conduct the following forex activities on the domestic market without the approval of the State Bank:

a) Conduct forex spot transactions;

b) Enter into forex forward transactions, swap transactions and option transactions;

c) Take deposits and give loans to non-credit institutions;

d) Provide foreign currency payment and money transfer services within the territory of Vietnam; and receipts and payments in foreign currency;

dd) Buy, sell, discount or rediscount negotiable instruments and other financial instrument in foreign currencies;

e) Provide foreign currency asset management and protection services; offer foreign currency loans under entrustment;

g) Provide forex consulting services;

h) Open foreign currency current accounts at authorized commercial banks and branches of foreign banks;

i) Take and grant foreign currency loans from/to other authorized credit institutions;

k) Make and receive deposits in foreign currency at/from other authorized credit institutions.

2. The Vietnam Bank for Social Policies shall be entitled to provide the following forex transactions on the international market without application for approval to the State Bank:

a) Make international payment and money transfer;

b) Sell and buy foreign currencies on the international market in the form of spot transactions;

c) Enter into swap transactions and forward transactions with foreign financial institutions in order to prevent and mitigate risks arising from forex contracts and swap transactions concluded with domestic clients.

3. For other types of forex transactions on the domestic and international markets:

a) According to objectives of monetary and forex administration policies issued over time periods, the State Bank shall consider giving permission to the Vietnam Bank for Social Policies to perform forex transaction in relation to specific products or product groups in an agreed period of time including forex transactions on the domestic and international markets other than those prescribed in clauses 1 and 2 of this Article provided that the Vietnam Bank for Social Policies meets all stipulated requirements and submits an application as it is required for commercial banks prescribed in point a, b, c, dd and e clause 1 Article 10 and point a, c, d, dd and e clause 4 Article 11 hereof;

b) Upon expiration of such period of time stated on the permit, the Vietnam Development Bank may be granted an extension in writing by the State Bank if it satisfies all requirements and submits an application as it is required for commercial banks stipulated in point a, b and d clause 2 Article 10, point a, b and c clause 5 Article 11 hereof and other relevant regulations of laws.

4. Licensing procedure for extension shall conform to Article 12 hereof.”

29. Article 29a shall be added to Article 29 as follows:

“Article 29a.Forex operations by Vietnam Development Bank

1. The Vietnam Development Bank shall be licensed to perform the following primary types of forex transactions on the domestic market:

a) Conduct forex spot transactions;

b) Enter into forex forward transactions, swap transactions and option transactions;

c) Take deposits and give loans to non-credit institutions;

d) Provide foreign currency guarantee and factoring services;

dd) Provide money transfer services and foreign currency payment services within the territory of Vietnam;

e) Buy, sell, discount or rediscount negotiable instruments and other financial instruments in foreign currencies;

g) Offer foreign currency loans under entrustment;

h) Provide forex consulting services;

i) Open foreign currency current accounts at authorized commercial banks and branches of foreign banks;

k) Take and grant foreign currency loans from/to other authorized credit institutions;

l) Make and receive deposits in foreign currency at/from other authorized credit institutions;

m) Open checking account for foreign credit institutions;

n) Take foreign currency deposit from foreign credit institutions.

2. The Vietnam Development Bank shall be licensed to perform the following primary types of forex transactions on the international market:

a) Make international payment and money transfer;

b) Sell and buy foreign currencies on the international market in the form of spot transactions;

c) Enter into swap transactions and forward transactions with foreign financial institutions in order to prevent and mitigate risks arising from concluded forex contracts and swap transactions with domestic clients.

d) Offer international factoring foreign currency guarantee;

dd) Offer outward loans to non-credit institutions;

e) Deposit foreign currency at overseas banks (including term deposits and demand deposits).

3. For other types of forex transactions on the domestic and international markets:

a) According to objectives of monetary and forex administration policies issued over time periods, the State Bank shall consider giving permission to the Vietnam Development Bank to perform forex transactions in relation to specific products and product group on the domestic and international markets in an agreed period of time including forex transactions other than those prescribed in clauses 1 and 2 of this Article provided that the Vietnam Development Bank meets all stipulated requirements and submits an application as it is required for commercial banks prescribed in point a, b, c, dd and e clause 1 Article 10 and point a, c, d, dd and e clause 4 Article 11 hereof;

b) Upon expiration of such period of time stated in the permission, the Vietnam Development Bank may be granted an extension in writing by the State Bank if it satisfies all requirements and submits an applications as it is required for commercial banks stipulated in point a, b and d clause 2 Article 10, point a, b and c clause 5 Article 11 hereof and other relevant regulations of laws.

4. Licensing procedure for extension shall conform to Article 12 hereof.”

30. Article 30 is amended and supplemented as follows:

“Article 30. Forex operations by cooperative banks

1. Every cooperative bank shall be licensed to perform the following primary types of forex transactions on the domestic market:

a) Conduct forex spot transactions;

b) Conduct forward transactions, swap transaction and option transactions;

c) Take deposits and give loans to non-credit institutions;

d) Provide money transfer services and foreign currency payment services within the territory of Vietnam; and receipts and payments in foreign currency;

dd) Buy, sell, discount or rediscount negotiable instruments and other financial instrument in foreign currencies;

e) Provide foreign currency asset management and protection services; offer foreign currency loans under entrustment;

g) Provide forex consulting services;

h) Open foreign currency current accounts at authorized commercial banks and branches of foreign banks;

i) Grant foreign currency loans to other authorized credit institutions and domestic financial institutions;

k) Make and receive deposits in foreign currency at/from other authorized credit institutions.

2. Primary types of forex transactions on the international market include:

a) Make international payment and money transfer;

b) Sell and buy foreign currency on the international market under spot transactions;

c) Enter into swap transactions and forward transactions with foreign financial institutions in order to prevent and mitigate risks arising from forex contracts and swap transactions concluded with domestic clients.

3. Procedures, requirements and applications for licensing to perform primary types of forex transactions on both domestic and international markets shall be conformable to Articles 8 and 9, clauses 1, 2 and 3 Article 11 and 12 hereof.”

31. Article 31 is amended and supplemented as follows:

“Article 31. Rules for replacement

1. The State Bank shall take charge of replacement of specific legal documents in relation to forex operations (hereinafter referred to as “forex legal document”) of commercial banks, general financial corporations, factoring companies, consumer credit companies, financial leasing companies and branches of foreign banks that have been licensed to perform forex transactions on the following principles:

a) Commercial banks, general financial corporations, factoring companies, consumer credit companies, financial leasing companies and branches of foreign banks that were granted permit to perform primary types of forex transactions on the domestic and/or international markets shall apply for the License for Establishment and Operation or Decision on Amendment to the License for Establishment and Operation in forex on the domestic and/or international market in accordance with regulations stipulated by the State bank;

b) A permit to perform other type of forex term transactions is required;

c) Replacement of forex legal documents by credit institutions that are under the control of the State Bank shall be carried out in accordance with provisions hereof. Credit institutions that are under the control of the State Bank shall comply with the Control Decision by the State Bank, approved forex operations and organization methods and other relevant regulations of laws;

d) Entities shall apply for replacement of forex legal documents by October 31, 2017. After the set forth deadline, any authorized branch of foreign banks, commercial bank, general financial corporation, factoring company, consumer credit company or finance leasing company that fails to meet all requirements in Article 32 hereof or fails to apply for above-mentioned documents must cease performing forex transactions which are not declared in new forex legal documents.

2. The State Bank shall consider replacing forex legal documents of the Vietnam Development Bank in accordance with provision hereof. After replacement of such documents, the Vietnam Development Bank shall be entitled to provide all primary types of forex transactions on the domestic and international markets under provision hereof. The new permit to provide forex transactions granted to the Vietnam Development Bank shall be made using the form in Annex 05 hereof.

3. During the replacement, authorized branches of foreign banks, commercial banks, Vietnam Development Bank, general finance corporations, factoring companies, consumer credit companies and finance leasing companies shall be entitled to keep performing forex transactions which are specified in the existing License for or Certificate of Eligibility for forex operations on the domestic market, Certificate of Registration for forex operations on the international market and permits.

4. Credit institutions and branches of foreign banks that are authorized to pilot forex transactions by the State Bank shall be entitle to keep piloting such services until the end date of pilot stated in the permission. After the piloting ended, credit institutions and branches of foreign banks may apply for extension in accordance with provisions hereof, where necessary.

32. Article 32 is amended and supplemented as follows:

“Article 32. Conditions for replacement

1. The State Bank shall consider replacing forex legal documents on primary types of forex transactions on the domestic market of authorized commercial banks, general financial corporations, factoring companies, consumer credit companies, financial leasing companies and branches of foreign banks provided that they satisfy all requirements in Article 8 hereof.

2. The State Bank shall consider replacing forex legal documents on primary types of forex transactions on the international market for authorized commercial banks, general financial corporations, factoring companies, consumer credit companies, financial leasing companies , branches of foreign banks provided that they satisfy all requirements in Article 9 hereof.

3. The State bank shall consider replacing forex legal documents on other types of forex transactions on the domestic and international markets for commercial banks, branches of foreign banks provided that they satisfy all requirements in clause 1 Article 10 hereof.

4. The State Bank shall consider replacing forex legal documents on other types of forex transactions on the domestic and international services for general financial corporation provided that they satisfy all requirements in clause 1 Article 26 hereof.”

33. Article 33 shall be amended and supplemented as follows:

“Article 33. Application for replacement

1. The application for replacement of forex legal documents on primary types of forex transactions on the domestic market includes:

a) An application form using Annex 2 attached hereto;

b) Copies of the License for Establishment and Operation, Certificate of Eligibility, Certificate of Registration and other relevant documents in which forex operations are authorized (if any);

c) A set of rules and regulations on forex-related risk management which specify identification of risk types and plans to manage such risks;

d) A descriptive report on information technology system, applicable technical solutions and forex transaction processing presented in Annex 3 hereof.

2. The application for replacement of forex legal documents on primary types of forex transactions on the international market includes:

a) Documents specified in clause 1 of this Article;

b) Internal regulations on selection of institutional partners and limits to forex transaction with partner which specify procedures for assessing partners periodically and as an unexpected event affects partners' credit rating.

3. The application for replacement of forex legal documents on other forex transactions on the domestic and international markets includes:

a) An application form using Annex 2 attached hereto;

b) Documents specified in point b, c, d, and dd clause 4, Article 11 hereof;

c) Documents specified in point e clause 4 Article 11 hereof (for commercial banks or branches of foreign banks);

d) Documents specified in point b clause 3 Article 27 hereof (for general financial corporation);

dd) A report on forex transactions.”

4. The application for replacement of forex operations by the Vietnam Development Bank includes:

a) An application form made using Annex 2 attached hereto;

b) Copies of the Certificate of Eligibility, Certificate of Registration for Provision of Forex transactions.

34. Clause 3 Article 35 shall be amended and clause 11 shall be added to Article 35 as follows:

“3.Compile internal rules and regulations on foreign currency operations and risk management, and take on responsibilities for such internal rules and regulations; only perform forex transactions for which internal rules and regulations are introduced; comply with published internal rules and regulations. Foreign currency transactions shall be controlled under current regulations of laws on internal supervision, inspection and audit.”

“11.As a deposit is made at a branch or subsidiary of an overseas commercial bank as prescribed in clause 3 Article 9 hereof, the commercial bank shall take on responsibilities for their income statement. The commercial bank shall quarterly submit an account statement of deposit accounts at its overseas branches or subsidiaries to the Bank Inspection and Supervision Agency – State Bank of Vietnam no later than 10th of the immediately succeeding quarter.”

35. Article 36 shall be amended and supplemented as follows:

“Article 36. Responsibilities of affiliates of the State bank

1. Every Bank Supervision and Inspection Agency shall:

a) Take delivery of and verify the completion and validity of application for licensing to perform forex operations and applications for replacement of legal forex documents;

b) Send written requests for opinions of approval and replacement of legal forex documents operations to branches of the State Bank;

c) Aggregate opinions, verify and request the Governor of the State Bank to consider approving;

d) Take charge of addressing issues in connection to approval for forex operations and replacement of legal forex documents in accordance with provisions hereof.

2. The Forex Administration, within 10 working days from the date of receipt of documents from the Bank Supervision and Inspection Agency, shall:

a) Give opinions of approval for forex operations which are relevant to functions and responsibilities of the Forex Administration credit institutions and branches of foreign banks;

b) Give opinions of request for approval for replacement of legal forex documents which are under functions and responsibilities of the Forex Administration of authorized credit institutions and branches of foreign banks;

c) Take charge of settling issues arising from implementation of this Circular.

3. The Monetary Policy Department, within 10 working days from the date of receipt of documents from Bank Inspection and Supervision Agency, shall:

a) Give opinions about reports on compliance with overall foreign currency positions limits according to reports submitted by authorized credit institutions and branches of foreign banks;

b) Give opinions of approval for forex operations which are relevant to functions and responsibilities of the Monetary Policy Administration of credit institutions and branches of foreign banks;

c) Give opinions of request for approval for replacement of legal forex documents which are relevant to functions and responsibilities of the Monetary Policy Administration of authorized credit institutions and branches of foreign banks;

4. Within 10 working days from the date of receipt of documents from the Bank Inspection and Supervision Agency, the Information Technology Administration shall give opinions about descriptive reports on information technology systems, applicable technological solutions and forex transaction processing as credit institutions or branches of foreign banks apply for licensing to perform foreign currency operations or replacement of legal forex documents.

5. Every relevant agencies of the State Bank shall, according to assigned functions and responsibilities, give opinions of issues in connection to approval for forex operations and replacement of legal forex documents upon request of the Bank Inspection and Supervision Agency.”

Article 2. Replacement and addition of Annexes

1. Annex 1 of the Circular No.21/2014/TT-NHNN shall be replaced with Annex 1 attached hereto.

2. Annex 2 of the Circular No.21/2014/TT-NHNN shall be replaced with Annex 2 attached hereto.

3. Annexes 3, 4 and 5 shall be attached hereto.

Article 3. Entry into force

This Circular enters into force from November 18, 2016.

Article 4. Implementation

The Chief of Office, Director of Forex Administration, heads of affiliates to the State Bank of Vietnam, Directors of branches of State Banks of Vietnam in provinces, Presidents of the Board of Directors, Presidents of the Boards of Members, Director General (Directors) of commercial banks and branches of foreign banks shall be responsible for the implementation of this Circular.

 

 

 

PP. GOVERNOR
DEPUTY GOVERNOR




Nguyen Dong Tien

 

 


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          Circular No. 28/2016/TT-NHNN amendment 21/2014/TT-NHNN foreign exchange operations
          Loại văn bảnThông tư
          Số hiệu28/2016/TT-NHNN
          Cơ quan ban hànhNgân hàng Nhà nước
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          Ngày ban hành05/10/2016
          Ngày hiệu lực18/11/2016
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          Lĩnh vựcTiền tệ - Ngân hàng
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