What are procedures for granting approval for establishment of a branch, transaction office, representative office or public service providers of a microfinance institution (MFI) in Vietnam?

Pursuant to Article 15 of the Circular 19/2019/TT-NHNN (takes effect 01/01/2020) stipulating procedures for granting approval for establishment of a branch, transaction office, representative office or public service providers of a microfinance institution (MFI) in Vietnam as follows:

1. The MFI shall prepare an application for the type of its network member unit to be established in accordance with Article14 hereof, and submit it to the State Bank.

2. Within 07 working days from the receipt of the application specified in Clause 1 of this Article, the State Bank shall send a document stating its receipt of satisfactory application; if the application is not satisfactory, the State Bank shall request the MFI in writing to complete it.

The MFI shall complete the application within 60 days from the date on which it receives the written request from the State Bank. By the aforementioned deadline, if the MFI fails to complete the application, it shall submit a new application as prescribed in Clause 1 of this Article to the State Bank for consideration.

3. If the application for approval for establishment of a branch is submitted, within 07 working days from the receipt of the satisfactory application:

a) The State Bank shall send an enquiry about the branch establishment to the People’s Committee of the province or central-affiliated city where the branch is expected to be located;

b) The Banking Supervision Agency shall send an enquiry about the branch establishment to the People’s Committee of the province or central-affiliated city where the branch is expected to be located;

4. If the application for approval for establishment of a transaction office is submitted, within 07 working days from the receipt of the satisfactory application, the Banking Supervision Agency shall send an enquiry about the fulfillment of conditions in this Circular by the branch expected to manage the local transaction office to the State Bank of the area where the transaction office is expected to be located.

5. Within 10 working days from the receipt of the enquiry from the State Bank, the entities mentioned in Clauses 3 and 4 of this Article shall give their written opinions.

6. Within 15 working days from the receipt of the opinions from the entities mentioned in Clause 5 of this Article or from the receipt of the satisfactory application for establishment of the representative office or public service provider, the Banking Supervision Agency shall request the Governor of the State Bank to consider granting approval for establishment of the branch, transaction office, representative office or public service provider.

7. Within 60 days (if the application for approval for establishment of the branch or transaction office is submitted) or 45 days (if the application for approval for establishment of the representative office or public service provider is submitted) from the receipt of the satisfactory application, the State Bank shall give a written approval to the MFI; if the application is rejected, a written explanation shall be provided.

8. Within 12 months from the date on which the State Bank gives a written approval for establishment as prescribed in Clause 7 of this Article, the MFI must inaugurate the established branch, transaction office, representative office or public service provider. By the aforementioned deadline, if the MFI fails to inaugurate its branch, transaction office, representative office or public service provider, the written approval given by the State Bank shall be implicitly invalid.

Above are procedures for granting approval for establishment of a branch, transaction office, representative office or public service providers of a microfinance institution (MFI) in Vietnam.

Best regards!