Press release on the issuance of Circular No.05/2018/TT-NHNN
Hanoi, March 12, 2018 – The Governor of the State Bank of Vietnam (SBV) issued Circular No.05/2018/TT-NHNN stipulating the dossiers, sequences and procedures for approving the changes, the list of candidates to be elected and appointed by a cooperative credit institution. This Circular is aimed at providing guidance for the implementation of the Law on Credit Institutions, establishing a legal basis for the approval of the changes, the list of candidates to be elected and appointed by a cooperative credit institution.
Circular No.05/2018/TT-NHNN takes effect from June 1, 2018, and shall replace the regulations on approving the changes, the list of candidates to be elected and appointed by a cooperative credit institution stated in Decision No.05/2007/QD-NHNN dated January 30, 2007 stipulating the sequences and procedures for the People's Credit Fund to implement the changes approved by the SBV; and Decision No.35/2008/QD-NHNN dated December 16, 2008 amending and supplementing a number of articles of the Regulation on the sequences and procedures for the People's Credit Fund to implement the changes approved by the SBV.
Circular No.05/2018/TT-NHNN is composed of 19 Articles, which are divided into 4 Chapters as follows:
Chapter I: General provisions:
Chapter I consists of 4 Articles (from Article 1 to Article 4) stipulating the scope of regulation, the subjects of application, the authority and the written approval, the principles for making and sending the relevant dossiers
Chapter II: Specific provisions:
Chapter II consists of 9 Articles (Article 5 to Article 13), which are divided into 3 Sections.
Section 1 contains 6 Articles (Article 5 to Article 10) stipulating the changes that have to be approved by the SBV.
Section 2 contains 2 Articles (Article 11 and Article 12) regulating the approval of the list of expected candidates.
Section 3 contains 1 Articles (Article 13) regulating the transfer of the equity capital.
Chapter III: Responsibilities of the related entities
Chapter III consists of 3 Articles (Article 14 to Article 16) regulating the responsibilities of the related entities, including the Banking Supervision Agency, the State Bank branches; and cooperative banks.
Chapter IV: Enforcement
Chapter IV consists of 4 Articles (Article 16 to Article 19) stipulating the terms of enforcement, including the transitional provisions, coming into force and the arrangements for the implementation of the Circular.
Some basic substances of Circular No.05/2018/TT-NHNN are as follows:
Firstly, regarding the scope of regulation, the authority of approval
Secondly, regarding the sequences, the dossiers of application for approval of the changes of a cooperative credit institutions, the transfer of equity capital by equity shareholders of a people's credit fund
The Circular specifies the sequences and dossiers of application for approval of the changes in the name; the address of the head office; the areas and/or the scope of operations, duration of operations; and the charter capital of the cooperative credit institutions. Accordingly, within the time limits stipulated in the Circular, from the date of receipt of a complete and valid set of dossiers, the SBV shall issue a decision amending or supplementing the License with respect to the areas and scope of operations of the cooperative credit institution; In case of disapproval, the SBV shall reply in writing and clearly state the reason(s).
In case of temporary suspension of business activities for 5 days or more, except for suspensions due to force majeure events, after receiving complete and valid dossiers as prescribed, the SBV shall issue a written approval of the business operation suspension request by the cooperative credit institution
Thirdly, regarding the sequences and dossiers of request for approving the proposed personnel list
The Circular specifies the sequences and dossiers for approving the proposed personnel list of a cooperative credit institution. Within 10 days from the date the SBV receives the full set of dossiers, the SBV shall issue a written approval of the list of expected personnel of the cooperative credit institution; In case of disapproval, the SBV shall reply in writing and clearly state the reason(s).
Fourthly, regarding the transfer of equity capital by equity shareholders of the people's credit fund
The Circular stipulates that the transfers of equity capital equity shareholders of the people's credit fund have to comply with the State Bank's regulations on people's credit funds. The people's credit fund shall have to report to the State Bank's branch in the province/city where it is located on the transfer of the equity capital for members with an equity capital ratio of between 5% and 10% of the charter capital of the people's credit fund within 10 days from the completion of the transfer.
Translated by VA