THE STATE BANK OF VIETNAM
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 01/2008/QD-NHNN
Hanoi, January 09, 2008
 
DECISION
ON THE ISSUANCE OF REGULATION ON THE OPENING  AND TERMINATION OF OPERATION OF BRANCHES, REPRESENTATIVE OFFICES OF NON-BANKING CREDIT INSTITUTIONS
THE GOVERNOR OF THE STATE BANK
- Pursuant to the Law on the State Bank of Vietnam issued in 1997 and the Law on the amendment, supplement of several articles of the Law on the State Bank of Vietnam issued in 2003;
- Pursuant to the Law on Credit Institutions issued in 1997 and the Law on the amendment, supplement of several articles of the Law on Credit Institutions issued in 2004;
- Pursuant to the Law on Enterprises issued in 2005;
-Pursuant to the Decree No.52/2003/ND-CP dated 19/5/2003 of the Government providing for the function, assignment, authority and organizational structure of the State Bank of Vietnam;
- Pursuant to the Decree No. 16/2001/ND-CP dated 2 May 2001 of the Government on the organization and operation of finance leasing companies and the Decree No. 65/2005/ND-CP dated 19 May 2005 of the Government providing for the amendment, supplement of several articles of the Decree No. 16/2001/ND-CP dated 2 May 2001 of the Government on the organization and operation of finance leasing companies;
- Pursuant to the Decree No. 79/2002/ND-CP dated 4 October 2002 of the Government on the organization and operation of finance companies;
Upon the proposal of the Director of Banks and Non-banking Credit Institutions Department,
DECIDES:
Article 1. To issue in conjunction with this Decision the Regulation on the opening and termination of operation of branches, representative offices of non-banking credit institutions.
Article 2. This Decision shall be effective after 15 days since its publication in the Official Gazette and replace the Decision No. 24/2003/QD-NHNN dated 7 January 2003 of the Governor of the State Bank on the issuance of the Regulation on the opening and termination of operation of branches, representative offices of non-banking credit institutions.
Article 3. The Director of Administrative Department, Director of Banks and Non-banking Credit Institutions Department, Heads of units of the State Bank, Managers of the State Bank branches in provinces, cities under the central Government's management, the Chairman and members of the Board of Directors, Chief and members of Controllers Committee and General Directors (Directors) of non-banking credit institutions shall be responsible for the implementation of this Decision.
 
 
FOR THE GOVERNOR OF THE STATE BANK OF VIETNAM
DEPUTY GOVERNOR




Tran Minh Tuan
 
REGULATION
ON THE OPENING AND TERMINATION OF OPERATION OF BRANCHES, REPRESENTATIVE OFFICES OF NON-BANKING CREDIT INSTITUTIONS
(issued in conjunction with the Decision No. 01/2008/QD-NHNN dated 09 January 2008 of the Governor of the State Bank)
Chapter I
GENERAL PROVISIONS
Article 1. Subjects and scope of governing
This Regulation shall govern the opening and termination of operation of branches, representative offices of non-banking credit institutions operating in Vietnam.
Article 2. Interpretation
In this Regulation, following terms shall be construed as follows:
1. Non-banking credit institutions are finance companies, finance leasing companies and other non-banking credit institutions in accordance with provisions of the State Bank of Vietnam.
2. Branch of non-banking credit institution is a dependent unit, which has its own seal, is entitled to perform several functions, assignments of non-banking credit institution in accordance with its authorization.
3. Representative office of non-banking credit institution is a dependent unit, which has its own seal and performs representative duty under the authorization of the respective non-banking credit institution. Representative office shall not perform any business activity.
4. Transaction office is a unit subject to direct management of head office or branch of a non-banking credit institution, performing the dependent accounting and having its own seal.
5. Management system in the information network shall be the connection of information system between the head office and the information system at branches of non-banking credit institutions in order to update daily information, report of the performance by branches at the head office of non-banking credit institutions.
Article 3. Requirements of management and operation
1. Non-banking credit institutions shall be required to issue internal regulations on the management to branches’ activities, including:
a) Regulation on management system in the information network among the head office and branches of the non-banking credit institution;
b) Regulation on prudence in transactions, treasury activity, money transfer, management and keeping of documents, requirements of fire prevention and fighting for branches in accordance with provisions of applicable laws;
c) Regulation on internal inspection, control of branches;
d) Regulation on risk management during the branch’s operation;
e) Regulation on the regime of Liabilities – Assets management for the branch;
f) Regulation on organization model, function, assignment and operating scope of branches, on conditions, standards for Directors, Deputy Directors, leaders of divisions and internal inspection, control apparatus at the branch;
g) Other provisions in accordance with requirements of management, supervision of each non-banking credit institution.
2. Non-banking credit institutions shall be required to issue internal regulations on operation management of their representative offices, including:
a) Regulation on functions, assignments, contents of operation and financial regime of representative offices; authority, standards for chief and managerial officers of representative office;
b) Other provisions in accordance with requirements on operation management for representative offices.
Chapter II
SPECIFIC PROVISIONS
Section 1. OPENING OF DOMESTIC BRANCHES, REPRESENTATIVE OFFICES
Article 4. Conditions for the opening of branches, representative offices by a Non-banking Credit Institution
1. Condition for the opening of a branch:
1.1. Non-banking credit institution may open a branch after 01 (one) year of operation, provided that following conditions are satisfied:
a) Their chapter capital is enough for opening branch in accordance with applicable provisions;
b) Ensuring prudential ratios in operation at the application time for opening of branch and months of the application year for opening of branch;
c) Issuing fully internal regulations on operation management of the branch as stipulated in paragraph 1, Article 3 of this Regulation;
d) Earnings before taxes, resulted from the business operation of the year prior to the year planned to open branch, over the owner’s capital are not less than 20% on an average;
dd) Administration, executive apparatus; internal inspection, control and internal audit system satisfies applicable provisions of the State Bank of Vietnam and does not violate provisions of applicable law on operation;