Forex operations by Vietnam Bank for Social Policies and cooperative banks in Vietnam

Forex operations by Vietnam Bank for Social Policies

Pursuant to Clause 28 of Article 1 of Circular 28/2016/TT-NHNN and Clause 2 of Article 3 of Circular 15/2019/TT-NHNN, regulations on foreign exchange activities of the Bank for Social Policies are as follows:

(1) The Vietnam Bank for Social Policies shall be entitled to conduct the following forex activities on the domestic market without the approval of the State Bank:

- Conduct forex spot transactions;

- Enter into forex forward transactions, swap transactions and option transactions;

- Take deposits and give loans to non-credit institutions;

 Provide foreign currency payment and money transfer services within the territory of Vietnam; and receipts and payments in foreign currency;

- Buy, sell, discount or rediscount negotiable instruments and other financial instrument in foreign currencies;

- Provide foreign currency asset management and protection services; offer foreign currency loans under entrustment;

- Provide forex consulting services;

- Open foreign currency current accounts at authorized commercial banks and branches of foreign banks;

- Take and grant foreign currency loans from/to other authorized credit institutions;

- Make and receive deposits in foreign currency at/from other authorized credit institutions.

(2) The Vietnam Bank for Social Policies shall be entitled to provide the following forex transactions on the international market without application for approval to the State Bank:

- Make international payment and money transfer;

- Sell and buy foreign currencies on the international market in the form of spot transactions;

- Enter into swap transactions and forward transactions with foreign financial institutions in order to prevent and mitigate risks arising from forex contracts and swap transactions concluded with domestic clients.

(3) For other types of forex transactions on the domestic and international markets:

- According to objectives of monetary and forex administration policies issued over time periods, the State Bank shall consider giving permission to the Vietnam Bank for Social Policies to perform forex transaction in relation to specific products or product groups in an agreed period of time including forex transactions on the domestic and international markets other than those prescribed in clauses (1) and (2) provided that the Vietnam Bank for Social Policies meets all stipulated requirements and submits an application as it is required for commercial banks prescribed in point a, b, c, dd and e clause 1 Article 10 and point a, c, d, dd and e clause 4 Article 11 of Circular 21/2014/TT-NHNN;

- After the expiration of the time limit, you are allowed to carry out other foreign exchange activities on the domestic and international markets with written approval for a fixed term. If there is a need to continue carrying out these activities, on the basis of meeting all conditions and documents as for commercial banks specified in Points b, d, Clause 2, Article 10, and Points a, b, c, Clause 5, Article 11 of Circular 21/2014/TT-NHNN and relevant regulations of the State Bank, the Bank for Social Policies was considered by the State Bank and allowed to extend the implementation of these foreign exchange activities in a document extending the written approval for a limited time.

(4) Licensing procedure for extension shall conform to Article 12 of Circular 21/2014/TT-NHNN.

Forex operations by Vietnam Bank for Social Policies and cooperative banks in Vietnam (Internet image)

Forex operations by cooperative banks in Vietnam

Pursuant to Clause 30, Article 1 of Circular 28/2016/TT-NHNN, forex operations by cooperative banks in Vietnam are as follows:

(i) Every cooperative bank shall be licensed to perform the following primary types of forex transactions on the domestic market:

- Conduct forex spot transactions;

- Conduct forward transactions, swap transaction and option transactions;

- Take deposits and give loans to non-credit institutions;

- Provide money transfer services and foreign currency payment services within the territory of Vietnam; and receipts and payments in foreign currency;

- Buy, sell, discount or rediscount negotiable instruments and other financial instrument in foreign currencies;

- Provide foreign currency asset management and protection services; offer foreign currency loans under entrustment;

- Provide forex consulting services;

- Open foreign currency current accounts at authorized commercial banks and branches of foreign banks;

- Grant foreign currency loans to other authorized credit institutions and domestic financial institutions;

- Make and receive deposits in foreign currency at/from other authorized credit institutions.

(ii) Primary types of forex transactions on the international market include:

- Make international payment and money transfer;

- Sell and buy foreign currency on the international market under spot transactions;

- Enter into swap transactions and forward transactions with foreign financial institutions in order to prevent and mitigate risks arising from forex contracts and swap transactions concluded with domestic clients.

(iii) Procedures, requirements and applications for licensing to perform primary types of forex transactions on both domestic and international markets shall be conformable to Articles 8 and 9, clauses 1, 2 and 3 Article 11 and 12 of Circular 21/2014/TT-NHNN.

Mai Thanh Loi

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