Law on credit institutions 47

NATIONAL SOCIALIST REPUBLIC OF VIETNAM ASSEMBLY Independence – Freedom – Happiness - Law No 47/2010/QH12 LAW ON CREDIT INSTITUTIONS - Pursuant to the Constitution of the Socialist Republic of Vietnam issued in 1992, of which several articles were amended, supplemented in accordance with the Resolution No.51/2001/QH10; - The National Assembly hereby issues the Law on Credit Institutions Chapter I GENERAL PROVISIONS Article Governing scope This Law provides for the establishment, organization, operation, special control, reorganization, dissolution of a credit institution; the establishment, organization, operation of a foreign bank’s branch, foreign credit institution’s representative office, other foreign organizations engaging in banking activity Article Subjects of application This Law shall be applicable to following subjects: Credit Institutions; Foreign bank’s branches; Foreign credit institution’s representative offices, other foreign organizations engaging in banking activity; Organizations, individuals being involved in the establishment, organization, operation, special control, reorganization, dissolution of a credit institution; the establishment, organization, operation of a foreign bank’s branch; foreign credit institution’s representative office, other foreign organizations engaging in banking activity Article Application of the Law on Credit institutions, international treaties, international commercial practices and related laws The establishment, organization and operation, special control, reorganization, dissolution of a credit institution; the establishment, organization and operation of a foreign bank’s branch, foreign credit institution’s representative office, other foreign organizations engaging in banking activity shall be required to comply with provisions of this Law and other provisions of applicable laws In the event where there is a difference between provisions in this Law and other laws relating to the establishment, organization, operation, special control, reorganization, dissolution of a credit institution; the establishment, organization, operation of a foreign bank’s branch, foreign credit institution’s representative office, other foreign organization engaging in banking activity, provisions of this Law shall prevail In the event where provisions of an international treaty, to which the Socialist Republic of Vietnam has acceded, are different from those of this Law, provisions of that international treaty shall prevail Organizations, individuals engaging in banking activity shall be entitled to make agreement about the application of commercial practices, including: a) International commercial practices issued by the International Chamber of Commerce; b) Other commercial practices which are not contrary to Vietnam’s laws Article Interpretation In this Law, following terms shall be construed as follows: A credit institution shall be an enterprise which performs one or several or all banking activities Credit institution shall include banks, non-banking credit institutions, microfinance institutions and people’s credit funds A bank means a type of credit institution which is possibly entitled to perform all banking activities in accordance with provisions of this Law By operating nature and objectives, types of banks shall include commercial bank, policy bank, cooperative bank A commercial bank shall be a type of bank which is authorized to perform all banking activities and other business activities in accordance with provisions of this Law for the sake of profit A non-banking credit institution shall be a type of credit institution which is authorized to perform one or several banking activities in accordance with provisions of this Law, except for activity of taking deposits from individuals and supply of account payment services to the customers Non-banking credit institution shall include finance companies, finance leasing companies and other non-banking credit institutions A finance leasing company shall be a type of finance company whose major activity is finance leasing in accordance with provisions of this Law A micro-finance institution shall be a type of credit institution which mainly performs some banking activities for the purpose of meeting demand of individuals, households of low income and micro-enterprises A people’s credit fund shall be a credit institution which is established by legal entities, individuals and households on a voluntary basis in the form of a cooperative to perform several banking activities in accordance with provisions of this Law and the Law on cooperatives mainly aiming at seeking mutual assistance in development of production, business and living A cooperative bank shall be the bank of all people’s credit funds which are established from the capital contribution by people’s credit funds and some legal entities in accordance with provisions of this Law for the main purpose of system connection, financial support, capital regulation in the system of people’s credit funds A foreign credit institution shall be the credit institution which is established in a foreign country in accordance with provisions of such country’s laws A foreign credit institution shall be authorized to have commercial presence in Vietnam in the form of a representative office, a joint venture bank, a 100% foreign owned bank, a foreign bank’s branch, a joint venture finance company, a 100% foreign owned finance company, a joint venture finance leasing company, a 100% foreign owned finance leasing company The joint venture bank, 100% foreign owned bank is the type of a commercial bank; a joint venture finance company, 100% foreign owned finance company is the type of a finance company; a joint venture finance leasing company, a 100% foreign owned finance leasing company is the type of a finance leasing company in accordance with provisions of this Law A foreign bank’s branch shall be a subsidiary unit of a foreign bank, which has no legal status, which is guaranteed by the foreign bank to take responsibility for any obligation, commitment of that branch in Vietnam 10 Own capital shall include the fair value of charter capital of a credit institution or the appropriated capital of a foreign bank’s branch and reserve funds, some other liabilities in accordance with provisions of the State Bank of Vietnam (hereinafter referred to as the State Bank) 11 License shall include the Establishment and Operation License of a credit institution, the Establishment License of a foreign bank’s branch, the Establishment License of a representative office of a foreign credit institution, other foreign organizations engaging in banking activity, which is issued by the State Bank The document issued by the State Bank on the amendment of, supplement to the License shall be an integral part of the License 12 Banking activity shall be the permanent trading, supply of one or more of following operations: a) Deposit taking; b) Credit extension; c) Supply of account payment service 13 Deposit taking shall mean the taking of deposit from organizations, individuals in the form of demand deposit, time deposit, savings deposit, issuance of deposit certificate, promissory note, bill and other forms of deposit taking under the principle of full payment of the principal, interest to be made to the depositor in line with the agreement 14 Credit extension shall mean an agreement under which an organization, individual uses an amount of money or a commitment which authorizes the use of an amount of money under the principle of repayment to be made by such operations as loan provision, discount, finance leasing, factoring, bank guarantee and other operations of credit extension 15 Supply of account payment service shall mean the supply of means of payment; supply of payment services in respect of cheque, payment instruction, payment order, collection, collection order, bank card, letter of credit and other payment services to the customer via his/her account 16 Lending shall mean a form of credit extension, under which the lender lends or commits to lend an amount of money to the borrower for a specific purpose in a certain period under the agreement in the principle of principal and interest repayment to be fully made 17 Factoring shall mean a form of extending credit to the seller or buyer through the acquisition with the recourse right to be reserved to receivables and payables arising from the purchase, sale of goods, supply of services under the sales and purchase contract, service contract 18 Bank guarantee shall mean a form of credit extension under which the credit institution commits with the guarantee taking party that the credit institution shall perform the financial obligation in lieu of the customer in the event where the customer fails to perform or insufficiently performs his committed obligations; the customer shall be required to assume the debt and repay to the credit institution in line with the agreement 19 Discount shall mean a term purchase or purchase with the recourse right to be reserved to assignment instruments, other valuable papers of the beneficiary prior to the payment maturity 20 Rediscount shall mean the discount of assignment instruments, other valuable papers which have already been discounted prior to the payment maturity 21 Monetary brokerage shall mean an intermediary work with brokerage fee for performing banking activities and other business activities among credit institutions, other financial institutions 22 Payment account shall mean a demand deposit opened by the customer at the bank for using payment services supplied by the bank 23 Derivative product shall mean a financial instrument which is valuated in correspondence with the expected fluctuation in value of an original financial asset, such as exchange rate, interest rate, foreign exchange, currency or other financial assets 24 Capital contribution, share purchase of a credit institution shall mean the case where the credit institution contributes capital to form charter capital, purchases shares of enterprises, other credit institutions, including the appropriation, contribution of capital to the subsidiary companies, associated companies of that credit institution; contributes capital to investment funds and entrusts capital to other organizations for capital contribution, share purchase under the forms as mentioned above 25 An investment in the form of capital contribution, share purchase for the purpose of taking controlling power to an enterprise shall include the investments accounting for more than 50% of the charter capital or voting share capital of an enterprise or another investment which is qualified for governing the decision of Shareholders’ General Assembly or Board of Members 26 Major shareholder of a joint stock credit institution shall mean the shareholder who holds, directly or indirectly, from 5% of the voting share capital or higher of that joint stock credit institution 27 Indirect ownership shall mean the case where the organization, individual holds charter capital, share capital of a credit institution through a related person or through the investment entrustment 28 Related person shall mean the organization, individual who has a direct or indirect relationship with other organization, individual in one of following cases: a) The parent with subsidiary company and vice versa; credit institution with its subsidiary companies and vice versa; among subsidiary companies of the same parent company or of the same credit institution; managerial officer, member of Controllers Committee of the parent company or of the credit institution, individual, who or organization, which is competent to appoint such persons to the subsidiary company and vice versa; b) The company or credit institution with the managerial officer, member of the Controllers Committee of the very company or credit institution or with the company, credit institution which is competent to appoint such persons and vice versa; c) The company or credit institution with the organization, individual holding from 5% and more of the charter capital or voting share capital of the very company or credit institution and vice versa; d) A person with his/her spouse, father, mother, children, brother, sister; dd) The company or credit institution with the person as stipulated in point d of this paragraph of the managerial officer, member of the Controllers Committee, contributing member or shareholder holding from 5% and more of the charter capital or voting share capital of the very company or credit institution and vice versa; e) The person who is authorized to represent for the organization, individual as stipulated in points a, b, c, d and dd of this paragraph with the authorizing organization, individual; persons who are authorized to represent for the contributed capital of the same organization with one another 29 Associated company of a credit institution shall mean the company in which the credit institution or the credit institution and its related person hold more than 11% of the charter capital or more than 11% of the voting share capital, but it is not a subsidiary company of that credit institution 30 Subsidiary company of a credit institution shall mean a company in one of following cases: a) The credit institution or the credit institution and its related person hold more than 50% of the charter capital or more than 50% of the voting share capital; b) The credit institution is entitled to appoint, either directly or indirectly, a majority of or all members of the Board of Directors, Board of Members or General Director (Director) of the subsidiary company; c) The credit institution is entitled to amend, supplement the charter of the subsidiary company; d) The credit institution and its related person controls, either directly or indirectly, the ratification of resolutions, decisions of the Shareholders’ General Assembly, Board of Directors, Board of Members of the subsidiary company 31 Managerial officer of a credit institution shall include Chairman, members of the Board of Directors; Chairman, members of the Board of Members; General Director (Director) and other managerial titles as provided for in the Charter of the credit institution 32 Executive officer of a credit institution shall include the General Director (Director), Deputy General Director (Deputy Director), Chief Accountant, Manager of branches and equivalent titles as provided for in the Charter of the credit institution Article Use of terms relating to banking activity Any institution which is not a credit institution shall not be permitted to use the phrase or term “credit institution”, “bank”, “finance company”, “finance leasing company” or other phrases, terms in their name, title or supplementary items of the name, title or in trading documents or advertisements, if such use of phrases, terms may make the customer misunderstands that it is a credit institution Article Form of organization of a credit institution A domestic commercial bank shall be established, organized in the form of a joint stock company, except for the case as stated in Paragraph of this Article A State-owned commercial bank shall be established, organized in the form of a limited liability company with one member, whose 100% of the charter capital is held by the State A domestic non-banking credit institution shall be established, organized in the form of a joint stock company, a limited liability company A joint venture credit institution, 100% foreign owned credit institution shall be established, organized in the form of a limited liability company A cooperative bank, people’s credit fund shall be established, organized in the form of a cooperative Micro finance institution shall be established, organized in the form of a limited liability company Article Right of operation autonomy A credit institution, foreign bank’s branch shall have the right of business autonomy and take self responsibility for their business results No organization, individual shall be permitted to interfere illegally in the business activity of the credit institution, foreign bank’s branch A credit institution, foreign bank’s branch shall be entitled to decline a request for credit extension, supply of other services if it deems as unqualified, inefficient, unconformable with provisions of applicable laws Article Right to engage in banking activity An organization that is eligible in accordance with provisions of this Law and other provisions of applicable laws and is granted by the State Bank with a License shall be authorized to perform one or several banking activities in Vietnam Any individual, organization that is not a credit institution shall be strictly prohibited from performing banking activities, except for the transaction of security deposit, securities dealing of a securities company Article Cooperation and competition in banking activity A credit institution, foreign bank’s branch shall be entitled to cooperate and compete in banking activity and other business activities in line with provisions of applicable laws Any act of competition restraint or unhealthy competition, which is likely to compromise or compromises the implementation of the national monetary policies, safety of the credit institutions system, benefit of the State, legal rights and interests of organizations, individuals, shall be strictly prohibited The Government shall specifically provide for acts of unhealthy competition in banking activity and the way to deal with such acts Article 10 Protection of customers’ rights and interests A credit institution, foreign bank’s branch shall have following responsibilities: To participate in deposit insurance, protection organization in accordance with provisions of applicable laws and to publicly announce the said participation in deposit insurance, protection organization at the head office and branches; Any subsidiary company, associated company of the same credit institution shall be prohibited from contributing capital to, purchasing share from the very credit institution A credit institution that is a subsidiary company, associated company, for the time being, of the controlling company shall be prohibited from contributing capital to, purchasing share from the very controlling company Chapter VII FINANCE, ACCOUNTING, REPORTING Article 136 Finance regime The finance regime of a credit institution, foreign bank’s branch shall be implemented in accordance with provisions of the Government Article 137 Fiscal year The fiscal year of a credit institution, foreign bank’s branch shall commence from 01 January and ends on 31 December of the calendar year Article 138 Accounting A credit institution, foreign bank’s branch shall perform its accounting in accordance with provisions of laws on accounting Article 139 Reserve funds Annually, a credit institution, foreign bank’s branch shall deduct from its after tax profits for setting up and maintaining following reserve funds: a) The reserve fund for the supplement of charter capital, appropriated capital shall be annually deducted at the rate of 5% of the after tax profit The maximum amount of this fund shall not exceed the charter capital, appropriated capital of the credit institution, foreign bank’s branch; b) Financial reserve fund; c) Other reserve funds in accordance with provisions of applicable laws A credit institution shall not be authorized to use funds as stated in Paragraph of this Article for paying dividend to shareholders or distributing profits to the owner, capital contributing members Article 140 Buying, investing in fixed asset A credit institution, foreign bank’s branch shall be authorized to buy, make investment in fixed assets that directly serve the operation not in excess of 50% of the charter capital and the reserve funds for charter capital supplement for a credit institution or not in excess of 50% of the appropriated capital and the reserve fund for appropriated capital supplement for a foreign bank’s branch Article 141 Reporting A credit institution, foreign bank’s branch shall perform the reporting regime in compliance with provisions of laws on accounting, statistics and reporting of operational activities on a periodical basis in line with provisions of the State Bank Apart from the reporting as stated in Paragraph of this Article, the credit institution, foreign bank’s branch shall be responsible for timely reporting in writing to the State Bank in following cases: a) There arises an extraordinary evolution in the operational activity that may cause serious impact on the business condition of the credit institution, foreign bank’s branch; b) There is a change in the organization, administration, management, financial condition of the major shareholders and other changes which have serious impact on the business condition of the credit institution, foreign bank’s branch The subsidiary companies, associated companies of a credit institution shall be responsible for sending their financial statements, operating statements to the State Bank upon request Within a period of 90 days since the ending of the fiscal year, the credit institution, foreign bank’s branch shall send the annual reports to the State Bank in accordance with provisions of applicable laws Within a period of 180 days since the ending of the fiscal year, the joint venture credit institution, 100% foreign owned credit institution, foreign bank’s branch, representative office in Vietnam of a foreign credit institution, other foreign organizations engaging in banking activity shall send annual financial statements of the foreign credit institution, other foreign organizations engaging in banking activity to the State Bank The joint venture credit institution, 100% foreign owned credit institution, foreign bank’s branch shall be required to timely report the State Bank in writing where there is a change in the foreign credit institution in one of following cases: a) Division, split, merger, integration, liquidation, bankruptcy, dissolution; b) Renaming, relocation of the head office; c) Change of major shareholders, the Board of Directors, Executive Board; d) Extraordinary change causing serious impact on the organization, operation Article 142 Reporting of a controlling company Within a period of 120 days since the ending of the fiscal year, apart from the reports and documents provided for by the laws, a controlling company shall prepare and send the State Bank its audited consolidated financial statements in accordance with provisions of laws on accounting Within a period of 90 days since the ending of the fiscal year, the controlling company shall prepare and send the State Bank its general report on the purchase, sale and other transactions between the controlling company and its subsidiary companies, associated companies Article 143 Disclosure of financial statements Within a period of 120 days since the ending of the fiscal year, the credit institution, foreign bank’s branch shall disclose their financial statements in accordance with provisions of applicable laws Article 144 Overseas remittance of profits, assets A foreign bank’s branch, 100% foreign owned credit institution in Vietnam shall be authorized to overseas remit the residual profit after the setting up of funds and fulfillment of financial obligations in accordance with provisions of applicable laws of Vietnam The foreign party in a joint venture credit institution shall be authorized to overseas remit the distributed profit amount after the joint venture credit institution has already set up funds and fulfilled its financial obligations in accordance with provisions of applicable laws of Vietnam A foreign bank’s branch, 100% foreign owned credit institution and the foreign party in a joint venture credit institution shall be authorized to overseas remit their residual assets after the liquidation, termination of operation in Vietnam The overseas remittance of money and other assets as stipulated in Paragraphs 1, and of this Article shall be implemented in accordance with provisions of applicable laws of Vietnam Chapter VIII SPECIAL CONTROL, REORGANIZATION, BANKRUPTCY, DISSOLUTION, LIQUIDATION OF A CREDIT INSTITUTION Section SPECIAL CONTROL Article 145 Report on the difficulty in solvency Where there is a possibility of insolvency, a credit institution shall timely report the State Bank on its actual financial condition, the reason and measures already taken and to be taken for overcoming Article 146 Application of special control Special control shall mean the case where a credit institution is put under the direct control of the State Bank because it is in the risk of insolvency, illiquidity The State Bank shall be responsible for verifying, timely detecting cases that are in the risk of insolvency, illiquidity The State Bank shall consider, put a credit institution under special control where the credit institution falls in one of the following cases: a) Being in the risk of insolvency; b) Debts are irrecoverable resulting in the risk of illiquidity; c) Where the accumulated losses of the credit institution exceed 50% of the fair value of the charter capital and reserve funds stated in the latest audited financial statements; d) It is classified poorly in two consecutive years in accordance with provisions of the State Bank; dd) Failure to maintain the minimum capital adequacy ratio as provided for in point b, Paragraph Article 130 of this Law in a constant year or the minimum capital adequacy ratio is lower than 4% in a period of 06 consecutive months Article 147 Decision on the special control The State Bank shall decide to put a credit institution under special control and establish a Special control Committee The decision on putting a credit institution under special control shall consist of following contents: a) Name of the credit institution to be put under special control; b) Reasons for the special control; c) Full name of members and specific responsibilities of the Special control Committee; d) Period of the special control The decision on special control shall be notified by the State Bank to competent state agencies and concerned bodies in the local area for coordination and implementation The State Bank shall provide in details for the disclosure of information about the special control to the credit institution Article 148 Responsibilities, authorities of the Special control Committee The Special control Committee shall have following responsibilities: a) To conduct the Board of Directors, Board of Members, Controllers Committee, General Director (Director) and equivalent titles of the credit institution which is put under special control to prepare a plan on the reinforcement of the organization and operation; b) To conduct and supervise the implementation of solutions mentioned in the plan on the reinforcement of the organization and operation that has already been approved by the Special Control Committee; c) To report the State Bank on the operation situation, result of the realization of the plan on the reinforcement of the organization and operation The Special control Committee shall have following authorities: a) To suspend any activity that is not consistent with the approved plan on the reinforcement of organization and operation, activity that violates provisions on safety in banking activity, which may cause damage to the benefit of the depositors; b) To suspend, temporarily suspend the right to administer, manage, control the credit institution of any member of the Board of Directors, Board of Members, Controllers Committee; General Director (Director), Deputy General Director (Deputy Director) if it deems necessary; c) To ask the Board of Directors, Board of Members, General Director (Director) to remove, suspend from office any person who commits violation of laws, fails to observe the approved plan on the reinforcement of the organization, operation; d) To petition the State Bank for decision on the renewal or termination of the period of special control, special lending or termination of special lending to the credit institution, purchase of shares of the credit institution, liquidation, revocation of operation license of the credit institution, taking over, compulsory merger, integration, acquisition of the credit institution; dd) To require the credit institution to submit an application to the Court for opening bankruptcy procedures in accordance with provisions of laws on bankruptcy The Special control Committee shall be responsible for its decisions in the performance of the special control Article 149 Competence of the State Bank to the credit institution which is put under special control The State Bank shall decide the handling of the petition from the Special control Committee as stated in point d Paragraph Article 148 of this Law The State Bank shall be entitled to require the owner to increase capital, prepare and realize the plan on restructuring or require the compulsory merger, integration, acquisition against the credit institution being under special control, if the owner is unable or fails to perform the capital increase The State Bank shall be entitled to, directly or by nominating another credit institution, contribute capital to, purchase shares from the credit institution being under special control in the event where the credit institution being under special control fails to perform the requirements of the State Bank as stipulated in Paragraph of this Article or where the State Bank determines that the accumulated losses of the credit institution has exceeded the fair value of the charter capital and reserve funds of the credit institution being under special control as stated in the latest audited financial statements and the termination of operation of the credit institution being under special control may harm the credit institution system The capital contribution, share purchase as provided for in Paragraph of this Article shall be implemented in accordance with provisions of the Prime Minister Article 150 Responsibilities of the credit institution being under special control The Board of Directors, Board of Members, Controllers Committee, General Director (Director) of the credit institution being under special control shall have following responsibilities: To prepare a plan on the reinforcement of the organization and operation of the credit institution and submit to the Special Control Committee for approval and realization of that plan; To keep administering, controlling, managing the operation and ensuring the security for the assets of the credit institution, except for the case as stipulated in point b Paragraph Article 148 of this Law; To implement the requirements of the Special control Committee relating to the organization, administration, control, management of the credit institution as stated in points a, b, c and dd Paragraph Article 148 of this Law; To implement the requirements of the State Bank as provided for in Article 149 of this Law Article 151 Special loan A credit institution shall be entitled to a special loan from the State Bank and other credit institutions in following cases: a) The credit institution falls into the risk of insolvency which threatens the stability of the system of credit institutions; b) The credit institution is in the risk of insolvency due to other serious problems The special loan shall be prioritized in repayment to any other loans, including secured loans of the credit institution or shall be transformed as contributed capital, share capital at the relevant credit institution as stipulated in Article 149 of this Law The State Bank shall provide in details for the grant of special loan to the credit institutions Article 152 Termination of special control The State Bank shall decide the termination of special control against the credit institution in following cases: a) Operation of the credit institution resumes normal status; b) During the special control period, the credit institution is merged, integrated into another credit institution; c) The credit institution fails to recover its solvency The decision on the termination of special control shall be notified to the concerned organizations, individuals For the case where the special control is terminated in accordance with provisions in point c Paragraph of this Article, the State Bank shall send a document on terminating the application of measures for recovering the solvency to the Court Section REORGANIZATION, DISSOLUTION, BANKRUPTCY, LIQUIDATION, BLOCKADE OF CAPITAL, ASSET Article 153 Reorganization of a credit institution A credit institution shall be reorganized in the form of division, split, merger, integration, transformation of legal form after obtaining a written approval from the State Bank The State Bank shall provide in details for the condition, application file, sequences, procedures of approving the reorganization of the credit institution Article 154 Dissolution of a credit institution, foreign bank’s branch A credit institution, foreign bank’s branch shall be dissolved in following cases: They apply for dissolution on a voluntary basis if they are capable of making full payment for all the debts and obtain a written approval from the State Bank; They not apply for renewal or apply for renewal but fail to obtain the written approval from the State Bank at the expiry of the operation period; The License is revoked Article 155 Bankruptcy of a credit institution After the State Bank has issued a dispatch on terminating the special control or dispatch on terminating the application of measures or dispatch on not applying measures for recovering solvency, but the credit institution still goes bankrupt, that credit institution shall submit an application to the Court for opening procedures of declaring bankruptcy in accordance with provisions of laws on bankruptcy Upon receipt of the application for opening bankruptcy procedures from the credit institutions as stated in Paragraph of this Article, the Court shall open procedures of declaring bankruptcy and promptly apply procedures of liquidating the credit institution’s assets in accordance with provisions of laws on bankruptcy Article 156 Liquidation of assets of a credit institution In the event where a credit institution declares bankruptcy, the liquidation of assets of that credit institution shall be implemented in accordance with provisions of laws on bankruptcy In the dissolution in accordance with provisions in Article 154 of this Law, the credit institution shall be obliged to perform the liquidation of assets under the supervision of the State Bank and under the sequences, procedures of asset liquidation as provided for by the State Bank During the supervision over the liquidation of assets of the credit institution as stipulated in Paragraph of this Article, if it is found out that the credit institution is unable to make full payment for the debts, the State Bank shall issue a decision on the termination of liquidation and request the credit institution to submit an application for opening bankruptcy procedures for the credit institution as stipulated in Article 155 of this Law The liquidated credit institution shall be responsible for making payment for any expenses relating to the asset liquidation Article 157 Blockade of capital, assets of a foreign bank’s branch Where it is necessary to protect the rights and interests of the depositors, the State Bank shall frozen partial or entire capital, assets of a foreign bank’s branch The State Bank shall provide in details for the cases of blockade, termination of blockade of capital and assets of the foreign bank’s branch Chapter IX STATE MANAGEMENT AGENCY Article 158 State management agency The Government shall unanimously carry out the state management in banking activity in the whole country The State Bank shall be responsible to the Government for performing the State management with regard to the organization, operation of credit institutions, foreign bank’s branches Ministries, ministerial-level agencies shall, within the scope of their responsibilities, authorities, be responsible for the state management to the credit institutions, foreign bank’s branches in accordance with provisions of applicable laws People’s Committee of all levels shall perform the state management to the credit institutions, foreign bank’s branches operating in the local area in line with provisions of applicable laws Article 159 Competence of checking, inspection, supervision The State Bank shall perform the checking, inspection, supervision over the credit institutions, foreign bank’s branches, representative office in Vietnam of foreign credit institutions, other foreign organizations engaging in banking activity Article 160 Rights, obligations of the subjects to be inspected, supervised To supply, on a timely, full and accurate basis, information, materials upon request by the State Bank during the inspection, supervision process, at the same time, to be responsible for the accuracy, truthfulness of the supplied information, materials To report, explain in respect of the petition, recommendation, warning of risk and operating prudence of the State Bank To implement the petition, recommendation, warning of risk and operating prudence of the State Bank To implement the inspecting conclusion, settlement decision of the State Bank Other rights, obligations in accordance with provisions of applicable laws Chapter X IMPLEMENTATION PROVISIONS Article 161 Provisions on the transition A credit institution, a foreign bank’s branch, representative office of a foreign credit institution, other foreign organizations engaging in banking activity which have already been established and operating under the License issued by the State Bank prior to the effectiveness of this Law shall not be required to apply for re-issuance of the License in accordance with provisions of this Law Within a period of 02 years since the effectiveness of this Law, the credit institutions, foreign bank’s branches which have already been established and operating under the License issued by the State Bank prior to the effectiveness of this Law shall be required to complete the adjustment to their organizational structure in conformity with provisions of this Law, except for the case as stipulated in Paragraphs 3, and in this Article Since the effective date of this Law, the election, appointment or supplement, replacement of members of the Board of Directors, members of the Board of Members, members of the Controllers Committee, General Director (Director), Deputy General Director (Deputy Director), Chief Accountant, Branch Manager, Director of subsidiary companies and equivalent titles of a credit institution; the General Director (Director) of a foreign bank’s branch shall be implemented in line with provisions in Articles 33, 34, 43, 44, 48, 50, 51, 62, 66, 70 and 89 of this Law For the credit contracts which were signed before the effectiveness of this Law, the credit institution, foreign bank’s branch and their customers shall be authorized to continue the implementation in accordance with the concluded agreements until the expiry of the credit contract Any amendment, supplement of the said credit contract shall only be implemented if the amended, supplemented content is suitable with provisions of this Law The State Bank shall provide specific guidance on the period, sequences, procedures of transition for credit institutions, foreign bank’s branches which are operating before the effective date of this Law and not conformable to provisions in Articles 55, 103, 110, 115, 129 and 135 of this Law Any micro-finance program, project of politic organizations, socio-politic organizations, non-government organizations, credit institutions which are being implemented before the effective date of this Law shall not be required to adjust the organization and operation in accordance with provisions of this Law The Prime Minister shall provide in details for the operation of micro-finance programs, projects as stated in this Paragraph Since the effectiveness of this Law, any institution which is not a credit institution and is performing one or some banking activities shall be obliged to terminate immediately its banking activities, except for the case as provided for in Paragraph of this Article Article 162 Implementation effectiveness This Law shall be effective from 01 January 2011 The Law on Credit Institutions No.02/1997/QH10 and the Law on the amendment, supplement of several articles of the Law on Credit Institutions No.20/2004/QH10 shall cease their effectiveness since the effective date of this Law Article 163 Detailed provisions and implementation guidance The Government shall stipulate in details and provide guidance on the implementation of articles, paragraphs assigned in the Law; provide guidance on other necessary contents of this Law to satisfy the requirement of state management -This Law has been adopted by the National Assembly of the Socialist Republic of Vietnam, 12th Legislature, 7th Session on 16 June 2010 Chairman of National Assembly of Vietnam NGUYEN PHU TRONG (Signed and sealed) ... Credit institutions, international treaties, international commercial practices and related laws The establishment, organization and operation, special control, reorganization, dissolution of a credit. .. organization, operation, special control, reorganization, dissolution of a credit institution; the establishment, organization, operation of a foreign bank’s branch, foreign credit institution’s representative... construed as follows: A credit institution shall be an enterprise which performs one or several or all banking activities Credit institution shall include banks, non-banking credit institutions,