The State Bank of Vietnam issued the Circular No. 21/2014/TT-NHNN dated August 14, 2014 guiding the foreign exchange transactions, conditions, process and procedures for accepting the foreign exchange transactions of credit institutions and branches of foreign banks, within that the most important contents are changes on conditions for domestic exchange transactions and foreign exchange transactions.
In particular, commercial banks’ elementary foreign exchange transactions in the domestic market shall conduct foreign exchange spot transactions; conduct foreign exchange forward, foreign exchange swap, foreign exchange options, and interest rate swap; receive deposits from, grant loans in foreign currencies to clients other than credit institutions; factor and issue guarantee in foreign currencies; issue international payment cards, act as an agent issuing international payment cards, pay international payment cards, and accept international payment cards; provide the wire transfer or payment services in foreign currencies within Vietnam’s territory; provide foreign currencies payment services; purchase, sell, discount and rediscount negotiable instruments and other valuable papers in foreign currencies….
Especially, appoint only staff members who have at least a bachelor’s degree in economics, banking, or finance; or those who have bachelor’s degrees in other fields and at least 3 years’ experience of finance and banking sector to hold the positions of department managers or banking officers; all of them must obtain at least C level Degree in English or the equivalent.
Other foreign exchange transactions particularly in the domestic and international market such as outward indirect investments; other derivative foreign exchange transactions on the domestic market except from foreign exchangetransactions; derivative foreign exchange transactions on the international market. In each period, depending on the purposes of monetary policies, foreign exchange control policies, commercial banks shall be permitted to conduct other foreign exchange transactions for a limited period of time on the domestic and international market on condition that some of or all of elementary foreign exchange transactions on the domestic or international market are permitted.
There are plans for conducting foreign exchange transactions for which permission is applied for; there are internal rules for professional processes, risk management process applied to the foreign exchange transactions for which permission is requested; there are internal rules for selecting partner organization, appropriate transaction limits applied to each of partners ; there are internal rules on conditions for selecting permitted investment instruments outward indirect investments activities; regulations on banking prudential ratios must be complied with in the year preceding the year in which the permit is applied for and up to the time of submitting the application….
Also in accordance with this Circular, within 12 (twelve) months from effective date of this Circular, licensed credit institutions, the permitted credit institution shall transfer the permitted foreign exchange transactions from the Permit, Certificate of qualification for foreign exchange transactions on the domestic market, or the Certificate of registration of foreign exchange transactions on the international market, other permits issued by the State Bank before October 15, 2014 to the Permit for establishment and operation or Decision on amendments to Permit for establishment and operation or limited duration permit issued by the State Bank.
This Circular takes effect on October 15, 2014.
