Vietnam: Credit institution must determine the repayment capacity of the debts before the dissolution

15:22, 10/01/2018

Circular No. 24/2017/TT-NHNN of the State Bank of Vietnam regulates procedures for revocation of licenses and asset liquidation of credit institutions, branches of foreign banks; procedures for revocation of licenses of representative offices of foreign credit institutions, other foreign organizations engaged in banking activities.

Download Circular No. 24/2017/TT-NHNN

According to Circular No. 24/2017/TT-NHNN of the State Bank of Vietnam, rules for revocation of licenses and asset liquidation of credit institutions are as follows:

- The credit institution must determine the repayment capacity of the debts and other liabilities associated with assets before and during the asset liquidation, dissolution, and revocation of licenses.

- The State Bank of Vietnam only approves the dissolution if the credit institution or branch of foreign bank is able to pay off the debts and other liabilities associated with assets.

- In the course of oversight of the asset liquidation, if the credit institution is found insolvent to repay all of the debts, the State Bank shall decide to terminate the liquidation, and then proceed the plan for bankruptcy of the credit institution.

View more details at Circular No. 24/2017/TT-NHNN of the State Bank of Vietnam, effective from February 26, 2018, replacing regulations of Circular No. 34/2011/TT-NHNN and Article 7 of Circular No. 29/2015/TT-NHNN.

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