STATE BANK OF VIETNAM---------
No. 03/2008/TT-NHNN
SOCIALIST REPUBLIC OF VIETNAMIndependence - Freedom - Happiness
--------------Hanoi, April 11th, 2008
CURCILAR OF THE VOVERNOR OF THE STATE BANK OF VIETNAM Providing guidance on foreign exchange service supply by credit institutions
________________
On 28 December 2006, the Government of Vietnam issued the
Decree No. 160/2006/ND-CP providing in details for the
implementation of the Ordinance on foreign exchange (Decree
No. 160/2006/ND-CP). Basing on Chapter VI of the Decree No.
160/2006/ND-CP, the State Bank of Vietnam (State Bank)
provides detailed guidance as follows:
Chapter I
SCOPE OF THE SUPPLY OF FOREIGN EXCHANGE SERVICE
Section 1
THE SUPPLY OF FOREIGN EXCHANGE SERVICE BY BANKS
1. After obtaining the confirmation from the State Bank on
their full satisfaction of conditions, the banks shall be
entitled to supply foreign exchange service to customers in
the domestic market within following scope:
a) To supply foreign exchange transactions in forms of spot,
forward, swap, option transaction, future contract and other
foreign exchange transactions in accordance with
international rules;
b) To mobilize capital, lend and provide guarantee in foreign
currency under the forms as provided for by the State Bank of
Vietnam;
c) To issue, act as an agent of international card issuance;
d) To supply services of money remittance and payment
(domestic and international), to receive and perform payment
in foreign currency;
dd) To discount, rediscount valuable papers denominated in
foreign currency;
e) To entrust other credit institutions and economic
organizations to act as their agent to supply some foreign
exchange services, including service of exchanging foreign
currency, service of receiving and making payment of foreign
currency and other services;
g) To supply services of entrustment and administration of
asset in foreign exchange;
h) To supply investment banking services in foreign exchange
(purchase, sale, mergence, guarantee and acting as an agent
of securities issuance in foreign currency, etc…);
i) To supply advisory services to customers about foreign
exchange;
k) To perform other foreign exchange activities in accordance
with international rules and in line with applicable laws of
Vietnam;
2. After their registration is confirmed by the State Bank,
the banks shall be entitled to supply foreign exchange
service to customers in international market within following
scope:
a) To supply international payment service;
b) To perform transactions of purchase, sale of foreign
exchange and gold in foreign market;
c) To participate in monetary markets and derivative market
in foreign countries;
d) To supply financial asset management services of customers
in foreign countries;
dd) To supply investment banking services (financial
consultancy, purchase, sale, mergence, guarantee, co-
finance…) in international market.
Section 2The supply of Foreign exchange service by non-
banking credit institutions
3. After their registration for operation is confirmed by the
State Bank, the finance companies shall be entitled to supply
several or entire of the foreign exchange services in
domestic and international markets as follows:
3.1. Supply of foreign exchange service in the domestic
market:
a) To supply foreign exchange transactions in form of spot,
forward, swap, options transaction and other foreign exchange
transactions in line with international rules;
b) To receive foreign currency deposit with the term of one
year upwards, to issue bonds, valuable papers in foreign
currency, to borrow foreign currency funds from domestic and
oversea credit institutions;
c) To provide short, medium and long term loans in foreign
currency, to discount, rediscount, mortgage valuable papers
denominated in foreign currency, provide credit guarantee in
foreign currency;
d) To provide services of entrustment and administration of
asset in foreign exchange;
dd) To receive and perform the payment in foreign currency;
to entrust economic organizations to act as agent of foreign
currency exchange, agent of foreign currency payment;
e) To supply advisory services to customers about foreign
exchange.
3.2. Supply of foreign exchange service in international
market:
a) To perform transactions of purchase, sale of foreign
exchange and gold in foreign market;
b) To participate in monetary markets and derivative foreign
currency market in foreign countries;
c) To provide financial asset management services of
customers in foreign countries;
4. After their registration for operation is confirmed by the
State Bank, the finance leasing companies shall be entitled
to provide several or entire of foreign exchange services in
the domestic market as follows:
a) To receive foreign currency deposit with the term of one
year upwards, to issue bonds, valuable papers in foreign
currency, to borrow foreign currency funds from domestic and
oversea credit institutions;
b) To lease finance in foreign currency;
c) To provide credit guarantee in foreign currency;
d) To perform services of entrustment and administration of
asset in foreign currency;
dd) To supply advisory services to customers about foreign
exchange.
5. The supply of foreign exchange service by other non-
banking credit institutions shall be performed in compliance
with particular provisions of the State Bank.
Chapter II
CONDITIONS FOR THE SUPPLY OF FOREIGN EXCHANGE SERVICE
Section 1
CONDITIONS FOR THE SUPPLY OF FOREIGN EXCHANGE SERVICE BY
BANKS
6. Conditions for banks to be considered, confirmed as full
satisfaction of conditions of supplying foreign exchange
service in the domestic market by the State Bank:
a) Availability of operation plan of foreign exchange service
supply in the domestic market, which is approved by the
Shareholders’ General Meeting (in case of being in the
process of application for establishment) or by the Board of
Directors, clearly defines the content, method of foreign
exchange service supply and measures of risk control and
prevention;
b) Availability of equipments and material facilities that
satisfy the requirements of performance of foreign exchange
service in the domestic market;
c) Having enough officers who have a good command of foreign
exchange activity, are trained about foreign exchange
operation and risk management in foreign exchange trading.
7. Conditions so as the registration for foreign exchange
service supply in international market of banks is
considered, confirmed by the State Bank:
a) Availability of operation plan of foreign exchange service
supply in the international market, which is approved by the
Shareholders’ General Meeting (in case of being in the
process of application for establishment) or by the Board of
Directors, clearly defines the content, method of foreign
exchange service supply and measures of risk control and
prevention;
b) Availability of equipments and material facilities that
satisfy the requirements of performance of foreign exchange
service in the domestic market;
c) Having enough qualified officers who have a good command
of the operation of foreign exchange service supply in the
international market;
d) Availability of system of internal inspection, control and
audit which is set up and performs duties in compliance with
provisions of the State Bank;
dd) Complying with provisions of the State Bank on prudential
ratios in operation and debt classification, provisioning and
use of provisions against credit risks; not violating
applicable provisions on foreign exchange control within one
year till the time of requesting the State Bank to consider
as full satisfaction of the conditions;
e) Their business operation has gained profits in the year
preceding the year of registration for foreign exchange
service supply in the international market.
Section 2
Conditions for the supply of foreign exchange service by non-
banking credit institutions
8. Conditions so as the registration for foreign exchange
service supply in the domestic market of non-banking credit
institutions is considered, confirmed the by the State Bank:
a) Satisfying the conditions stipulated in points a, b, c,
paragraph 6 of this Circular;
b) Their business operation has gained profits in the year
preceding the year of registration for foreign exchange
service supply in the domestic market
9. Conditions so as the registration for foreign exchange
service supply in the international market of finance
companies is considered, confirmed by the State Bank:
a) Satisfying the conditions stipulated in points a, b, c, d,
dd, paragraph 7 of this Circular;
b) Their business operation has gained profits in the latest
3 years.
Chapter III
File, procedures for confirmation of full satisfaction of
conditions, confirmation of registration for foreign exchange
service supply
Section 1
APPLICATION FILE FOR CONFIRMATION OF FULL SATISFACTION OF
CONDITIONS, CONFIRMATION OF REGISTRATION FOR FOREIGN EXCHANGE
SERVICE SUPPLY BY BANKS
10. The application file for confirmation of full
satisfaction of conditions of foreign exchange service supply
in the domestic market shall include:
a) An application for confirmation of full satisfaction of
conditions of foreign exchange service supply (in line with
the Form stated in Appendix 1);
b) Operation plan of foreign exchange service supply in the
domestic market, which clearly defines contents, method of
foreign exchange service supply and measures of risk control,
prevention is approved by the Shareholders’ General Meeting
(in case of being in process of application for
establishment) or by the Board of Directors; Minutes and
Resolution of the Board of Directors’ meeting, Shareholder’s
General Meeting in case of being in process of application
for establishment) on the approval of operation plan of
foreign exchange service supply;
c) A summary of the situation of equipments and material
facilities for supply of foreign exchange service and written
evidences about the full satisfaction of conditions of
equipments and material facilities. In the event where there
is not any evidence of equipments and material facilities, it
is required to have a commitment by Chairman of Board of
Directors (or authorized person) on the full satisfaction of
conditions of equipments and material facilities;
d) Qualifications, certificate and information of
professional level, capacity and personnel capacity of
executive officers and implementation capacity of operations
of foreign exchange service supply.
11. The application file for foreign exchange service supply
in the international market shall include:
a) An application for foreign exchange service supply (in
line with the Form stated in Appendix 1);
b) Documents as stipulated in points b, c, d, paragraph 10 of
this Circular, of which the contents are corresponding to the
foreign exchange service supply in the international market
(documents required for the cases being in process of
application for bank establishment are excluded);
c) Financial statements of the year preceding the year of
registration for foreign exchange service supply, already
audited by an independent auditing organization;
d) Report on the situation of foreign exchange service supply
in the domestic market, which affirms the full compliance
with provisions on foreign exchange control.
Section 2
APPLICATION FILE FOR CONFIRMATION OF REGISTRATION FOR FOREIGN
EXCHANGE SERVICE SUPPLY BY NON-BANKING CREDIT INSTITUTIONS
12. The application file for foreign exchange service supply
in the domestic market shall include:
a) An application for foreign exchange service supply (in
line with the form stated in Appendix 1);
b) Documents as stipulated in points b, c, d, paragraph 10 of
this Circular;
c) Financial statements of the year preceding the year of
registration for foreign exchange service supply, already
audited by an independent auditing organization;
13. The application file for foreign exchange service supply
in the international market shall include:
a) An application for foreign exchange service supply (in
line with the form stated in Appendix 1);
b) Documents as stipulated in points b, c, d, paragraph 11 of
this Circular;
c) Financial statements of the 3 years preceding the year of
registration for foreign exchange service supply, already
audited by an independent auditing organization;
Section 3
PROCEDURES FOR CONFIRMATION OF FULL SATISFACTION OF
CONDITIONS, CONFIRMATION OF REGISTRATION FOR FOREIGN EXCHANGE
SERVICE SUPPLY
14. Credit institutions, which have the demand for foreign
exchange service supply in the domestic and international
market, shall be required to send their file to the State
Bank (The Department of Banks and Non-banking Credit
Institutions) for being granted the Confirmation of full
satisfaction of conditions, Confirmation of registration for
foreign exchange service supply. Documents, papers enclosed
in the file must be the originals or notarized copies of
originals or copies confirmed by a competent person of the
credit institution who undertakes to take responsibility for
those documents. In case where the file is made in foreign
language, it is required to have Vietnamese translation of
which the signature of translator is certified in accordance
with provisions of applicable laws.
15. Within a period of 30 working days since the full receipt
of credit institution’s file, the State Bank shall grant the
Confirmation of full satisfaction of conditions, Confirmation
of registration for foreign exchange service supply (in
accordance with the form stipulated in Appendix 2) or reject
to grant the Confirmation. In case of refusal, the State Bank
shall be obliged to clearly state the written reason thereof.
16. The credit institution can request for the grant of
Confirmation of full satisfaction of conditions or
Confirmation of registration for foreign exchange service
supply for a part or all of foreign exchange services. Once
having demand for supplement, adjustment of contents of
foreign exchange service supply, the credit institution shall
request for the supplement, adjustment of Confirmation of
full satisfaction of conditions or Confirmation of
registration for foreign exchange service supply.
It is not permitted to perform the registration for the
supply of foreign exchange service in the international
market before the registration for the supply of foreign
exchange service in the domestic market.
17. The gold trading in the international market shall be
performed in accordance with provisions of the State Bank.
18. Credit institutions that are joint – venture banks, 100%
foreign – owned banks, joint – venture non – banking credit
institutions and 100% foreign – owned non – banking credit
institutions shall be entitled to engage in the foreign
exchange service supply in accordance with the provisions
stated in the establishment and operation licence. Branches
of foreign banks shall be entitled to perform foreign
exchange service supply in accordance with the provisions
stated in the license on the establishment of foreign bank’s
branch.
Chapter IV
RESPONSIBILITIES OF CREDIT INSTITUTIONS FOR THE SUPPLY OF
FOREIGN EXCHANGE SERVICE
19. After being granted the Confirmation of full satisfaction
of conditions, Confirmation of registration for foreign
exchange service supply, the credit institution shall be
obliged to maintain conditions of foreign exchange service
supply. In the event where the credit institution, after
being granted the Confirmation of full satisfaction of
conditions, Confirmation of registration for foreign exchange
service supply, fails to maintain the conditions as provided
for in this Circular, it shall be obliged to suspend the
permitted operation of foreign exchange service supply and
make report to the State Bank within 30 working days since
its unsatisfaction of conditions.
20. Upon carrying out the supply of foreign exchange service,
credit institutions shall be obliged to comply with the
contents stated in the Confirmation of full satisfaction of
conditions, Confirmation of registration for foreign exchange
service supply, provisions stipulated in Section 3, Chapter
VI of the Decree No. 160/2006/ND-CP, provisions in this
Circular and other related provisions of applicable laws.
21. Credit institutions, authorized to perform the foreign
exchange service supply, shall be obliged to comply with the
provisions on foreign exchange position and other provisions
on prudential ratios in business operation in accordance with
provisions of the State Bank.
22. Before the supply of foreign exchange service, credit
institutions shall be obliged to work out transaction
process, strict measures of risk management and internal
control. The transaction process must clearly reflect
contents and steps of transaction implementation, assign
concretely responsibilities and authorities of different
levels in the implementation of transaction; define
concretely transaction limits, loss limits (if any) to ensure
the double control in the transaction process. Officers in
charge of transaction management, supervision shall not be
permitted to directly implement transactions. Transactions
shall be controlled in accordance with applicable provisions
on internal inspection, control;
23. Credit institutions shall be obliged to provide specific
description of supplied services that can cause risks to
customers.
24. Credit institutions, authorized to perform the supply of
foreign exchange service, shall be obliged to list the
selling rate, purchasing rate of foreign currency and to
perform the purchase, sale of foreign currency in accordance
with provisions of the State Bank.
25. Credit institutions, authorized to perform the supply of
foreign exchange service, once performing foreign exchange
transactions to customers, shall be responsible for the
consideration, examination, preservation of valuable papers
and vouchers in line with factual transactions in order to
ensure that the supply of foreign exchange services is
performed in line with set up target and in accordance with
provisions of applicable laws.
26. Credit institutions shall be responsible for providing
guidance on operations and periodically examining operation
of agents upon their entrustment in their implementation of
provisions in this Circular and related provisions of
applicable laws.
27. Credit institutions shall be responsible for making
report on the supply of foreign exchange services in
compliance with provisions on statistic reporting regime of
the State Bank.
28. Credit institutions shall be obliged to prepare
provisions on decentralization, authorization within their
internal system in order to ensure the security of foreign
exchange service supply.
Chapter V
SUSPENSION, REVOCATION OF CONFIRMATION OF FULL SATISFACTION
OF CONDITIONS, CONFIRMATION OF REGISTRATION FOR FOREIGN
EXCHANGE SERVICE SUPPLY
29. The State Bank shall suspend, revoke or abolish some
contents in the Confirmation of full satisfaction of
conditions, Confirmation of registration for the foreign
exchange service supply of banks, non-banking credit
institutions in the following cases where:
a) They are under special control by the State Bank;
b) The State Bank has any evidence proving that their
application file for the grant of confirmation contains
information deliberately distorting the fact;
c) Their establishment and operation licences are revoked or
cease the effectiveness;
d) They are splitted, merged, integrated, bankrupt;
dd) Thy spontaneously terminate the supply of foreign
exchange service;
e) They change the functions, business lines;
g) They change a part or all of registered contents without
notification to the State Bank;
h) They no longer satisfy fully conditions of equipments,
material facilities and officers team for the supply of
foreign exchange services in accordance with applicable
provisions.
Chapter VI
IMPLEMENTING PROVISIONS
30. This Circular shall be effective after 15 days since its
publication in the Official Gazette and replace provisions in
Section 5 of the Circular No. 01/1999/TT-NHNN dated
16/04/1999 providing guidance on the implementation of the
Decree No. 63/1998/ND-CP dated 17/08/1998 of the Government
on foreign exchange control.
31. Credit institutions, already granted the License of
foreign exchange operation before the effective day of this
Circular, must request the State Bank to change the License
of foreign exchange operation into the Confirmation of full
satisfaction of conditions, Confirmation of registration for
the foreign exchange service supply. The time limit for the
change by credit institutions is 12 months since the
effective day of this Circular.
32. Inspectorate of the State Bank and State Bank branches in
provinces, cities under the central Government’s management
in the locality shall examine periodically or unexpectedly
the satisfaction of conditions and the compliance with
provisions of this Circular.
33. Director of Administrative Department, Heads of related
units of the State Bank, Managers of State Bank branches in
provinces, cities under the central Government’s management,
Chairman of the Board of Directors and General Directors
(Directors) of credit institutions shall be responsible for
the implementation of this Circular.
For the Governor of the State
Bank of Vietnam
Deputy Governor
NGUYEN DONG TIEN (Signed and sealed)
Appendix 1
NAME OF CISOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom – Happiness
--------------------
…, date…
APPLICATION FOR CONFIRMATION OF FULL SATISFACTION OF
CONDITIONS (OR REGISTRATION FORM) OF FOREIGN EXCHANGE SERVICE
SUPPLY
To: - The
State Bank of Vietnam
(Department
of Banks and Non-banking credit institutions)
- State Bank branch…
Name of credit institution:
Located at:
Telephone number: Fax
number:
Establishment License No.: issued
on:
Issued by:
We would like to request the State Bank of Vietnam to confirm
the full satisfaction of conditions (or confirm the
registration) of the supply of following foreign exchange
services:
1.
2.
3.
…
We undertake:
- To be fully responsible for the accuracy of the enclosed
files.
- To ensure the full satisfaction of conditions for the
supply of registered foreign exchange service as mentioned
above and to continue to maintain these conditions in
accordance with provisions of the State Bank and related
provisions of applicable laws.
- To comply seriously with applicable provisions on foreign
exchange control of Vietnam and other provisions of
applicable laws relating to the supply of foreign exchange
service.
CHAIRMAN OF THE BOARD OF DIRECTORS
(Sign and seal)
Attached files:
1.
2.
3. …
STATE BANKOF VIETNAM---------
No. …/NHNN-CNH
SOCIALIST REPUBLIC OF VIETNAMIndependence - Freedom - Happiness
--------------Hanoi, date…
CONFIRMATION OF FULL SATISFACTION OF CONDITIONS
(OR CONFIRMATION OF REGISTRATION)
OF THE SUPPLY OF FOREIGN EXCHANGE SERVICE
After considering application file for the confirmation of
full satisfaction of conditions (or registration) of the
supply of foreign exchange service by (name of CI), the State
Bank of Vietnam confirms that (name of CI) has fully
satisfied the conditions (or registered for) of the supply of
following foreign exchange services:
1.
2.
3.
…
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