Procedures for replacement of licenses, addition of business lines to licenses of commercial banks, branches of foreign banks in Vietnam from July 1, 2024

Procedures for replacement of licenses, addition of business lines to licenses of commercial banks, branches of foreign banks in Vietnam from July 1, 2024 (Image from the Internet)

On June 30, 2024, the Governor of the State Bank of Vietnam issued Circular 34/2024/TT-NHNN regulating the replacement of licenses, addition of business lines to licenses, and organization and operation of commercial banks, branches of foreign banks, representative offices in Vietnam of foreign credit institutions, and other foreign institutions conducting banking activities in Vietnam.

Procedures for replacement of licenses, addition of business lines to licenses of commercial banks, branches of foreign banks from July 1, 2024

According to Article 7 of Circular 34/2024/TT-NHNN, the procedures for replacement of licenses, addition of business lines to licenses in Vietnam are as follows:

- Commercial banks and branches of foreign banks that need to renew their Licenses or request additions to the operational activities in their Licenses must prepare a dossier as stipulated in Article 9 of Circular 34/2024/TT-NHNN and send it via postal service or submit it directly to the headquarters of the State Bank (One-Stop Department) (for cases specified in Clauses 1 and 2, Article 3 of Circular 34/2024/TT-NHNN) or the headquarters of the State Bank branch (One-Stop Department) (for cases specified in Point a, Clause 3, Article 3 of Circular 34/2024/TT-NHNN).

- Within 40 (forty) days from the date of receipt of a complete and valid dossier from the commercial bank or branch of a foreign bank, the State Bank shall issue a renewal of the License or add new operational activities to the License or do both at the same time as requested by the commercial bank or branch of the foreign bank. In case of refusal, the State Bank shall respond in writing, stating the reasons.

- After the State Bank issues the renewed License or adds activities to the License, the commercial bank or branch of the foreign bank must:+ Announce the change of the License within 07 (seven) working days from the date of renewal or addition of activities by the State Bank on one of the State Bank's media and in a printed newspaper for 03 consecutive issues or on an electronic newspaper in Vietnam;+ The commercial bank must amend and supplement its Charter to match the contents of the renewed or supplemented License.

Principles for replacement of licenses, addition of business lines to licenses in Vietnam from July 1, 2024

According to Article 6 of Circular 34/2024/TT-NHNN, the principles for replacement of licenses, addition of business lines to licenses in Vietnam are as follows:

- The State Bank of Vietnam (hereinafter referred to as the State Bank) shall not carry out licenses renewal for activities that commercial banks or branches of foreign banks are not allowed to perform in accordance with the law at the time of renewal.

- The State Bank shall adjust the names of permissible activities in accordance with the provisions of the Law on Credit Institutions 2024 and Appendix 01, Appendix 02, Appendix 03 issued together with Circular 34/2024/TT-NHNN. The renewed License replaces all Licenses and approval documents (which are an integral part of the License) that the State Bank issued to the commercial bank or branch of the foreign bank prior to the renewal.

	Appendix 01

	Appendix 02

	Appendix 03

- The State Bank of Vietnam shall consider approving the participation of commercial banks and branches of foreign banks in international payment systems on a case-by-case basis.

- For foreign exchange trading, foreign exchange service provision, international payment services, derivatives trading and provision of foreign exchange, monetary, and financial asset products to domestic and foreign customers, gold trading, the addition of activities to the License shall comply with separate regulations of the State Bank and other relevant laws.

- For the activities specified in Clause 25, Article 4 of the Form of License for the establishment and operation of a commercial bank (Appendix 01) and Clause 24, Article 4 of the Form of License for the establishment of a branch of a foreign bank (Appendix 02, Appendix 03), commercial banks and branches of foreign banks may carry out these activities after obtaining the approval of the State Bank; the procedure for adding these activities to the License shall follow the separate regulations of the State Bank and other relevant laws.

- In case a commercial bank or branch of a foreign bank requests to add activities to the License simultaneously with the license renewal, the State Bank shall consider renewing the License, including the requested additional activities, based on the commercial bank or branch of the foreign bank meeting the complete dossier requirements stipulated in Article 9 of Circular 34/2024/TT-NHNN.

More details can be found in Circular 34/2024/TT-NHNN which comes into force in Vietnam from July 1, 2024.

To Quoc Trinh

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