1. Regulations on operating network of non-bank credit institutions
On December 31, 2018, the State Bank of Vietnam has promulgated the Circular No. 53/2018/TT-NHNN on operating network of non-bank credit institutions.
According to the Circular, the non-bank credit institution is required to formulate the Regulations on operating network management which must, inter alia, include:
- Organizational and personnel structure;
- Operations, scope of operation, accounting mechanism;
- Risk limit for each business activity or operation imposed on a customer, a group of customers, and all customers of the branch;
- The headquarters’ mechanism for management and supervision of its network members for ensuring safe and effective operations;
- Standards and eligibility requirements to be satisfied by Directors and Deputy Directors of branches, heads of professional divisions/ departments, and heads of representative offices and administrative units.
The Circular No.53/2018/TT-NHNN comes into force from March 01, 2019.
2. Share ownership limits of banks
The State Bank of Vietnam has promulgated the Circular No. 46/2018/TT-NHNN providing regulations on time limits, processes and procedures for transition applied to cases in which major shareholders of a credit institution and related persons thereof own shares equaling at least 5% of charter capital of another credit institution.
According to the Circular, the credit institution shall cooperate with its major shareholders in reviewing and determining the list of major shareholders and related persons thereof that own shares making up at least 5% of charter capital of another credit institution.
The presiding credit institution in collaboration with another credit institution and the group of related major shareholders shall work out the plan for remedy for the ownership of shares beyond allowed limits.
By December 31, 2020 at the latest, the percentage of ownership of shares by the group of related major shareholders must conform to provisions of the Law on Credit Institution.
The Circular No. 46/2018/TT-NHNN comes into force from March 01, 2019.
3. Order and procedures for approving contribution of capital to and purchase of shares of credit institutions
On December 31, 2018, the State Bank of Vietnam has promulgated the Circular No. 51/2018/TT-NHNN prescribing conditions, necessary documents, order and procedures for approving the contribution of capital to and purchase of shares of credit institutions.
According to the Circular, giving approval for the contribution of capital to or purchase of shares of a credit institution must comply with the following order and procedures:
- The credit institution shall prepare and submit 02 sets of application to the State Bank of Vietnam (SBV) via the Bank Supervision and Inspection Agency.
- Within 07 business days from the receipt of the sufficient and valid application, the Bank Supervision and Inspection Agency shall send written request, accompanied by the application, to:
+ The SBV’s branch in the province or city where the headquarters of the credit institution is located for opinions about the credit institution's satisfaction of conditions;
+ The SBV’s affiliates for opinions about the capital contribution, purchase of shares, or conversion of debts into contributed capital of the credit institution (if necessary).
Within 10 business days from the receipt of the written request for opinions, requested agencies must provide their written opinions about the requested contents.
Within 14 business days from the receipt of opinions from relevant agencies, the Bank Supervision and Inspection Agency shall consider and appraise the application, and then submit a report thereof to the SBV's Governor for giving approval or refusing the application of the credit institution.
Within 45 business days from the receipt of sufficient and valid application, the SBV shall give written approval or refuse the application of the credit institution.
Within 12 months from the date on which the SBV’s written approval is given, the related credit institution must complete the capital contribution, purchase of shares or conversion of debts into contributed capital as approved.
The Circular No.51/2018/TT-NHNN comes into force from March 01, 2019.
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