Does a credit institution that wishes to list its shares on a foreign securities market need to send an application for approval to the State Bank of Vietnam?
- What conditions must a credit institution meet to inaugurate its operation?
- Does a credit institution that wishes to list its shares on a foreign securities market need to send an application for approval to the State Bank of Vietnam?
- In what cases does the State Bank of Vietnam revoke the license of a credit institution?
What conditions must a credit institution meet to inaugurate its operation?
Pursuant to Article 26 of the 2010 Law on Credit Institutions in Vietnam, the conditions for inaugurating operation are as follows:
Conditions for inaugurating operation
1. A licensed credit institution, foreign bank branch or representative office of a foreign credit institution or another foreign institution engaged in banking operations may operate only from the date of operation inauguration.
2. To inaugurate its operation, a licensed credit institution or foreign bank branch must fully meet the following conditions:
a/ It has registered its charter with the State Bank:
b/ It possesses a business registration certificate. It has sufficient charter or allocated capital, sufficient cash vaults fully meeting the State Bank's requirements and a head office fully meeting asset safety assurance conditions and banking operation requirements;
c/ It has an organizational structure, managerial and executive apparatus, internal audit and risk management and internal control system relevant to its type under this Law and other relevant laws;
d/ Its information technology system meets managerial and operational requirements;
e/ It has an internal management regulation on the organization and operation of the Board of Directors, Members' Council. Control Board and Director General (Director) and professional divisions at its head office; an internal regulation on risk management; and a regulation on network management;
f/ Its charter or allocated capital in Vietnam dong has been fully deposited at a non-interest bearing blocked account opened at the State Bank at least 30 days before inaugurating its operation. Its charter or allocated capital shall be released after it inaugurates its operation;
g/ It has publicized information on its operation under Article 25 of this Law.
3. A credit institution, foreign bank branch or representative office of a foreign credit institution or another foreign institution engaged in banking operations shall inaugurate its operation within 12 months after obtaining a license. Fast this lime limit, if it fails to do so, the State Bank shall revoke its license.
4. A licensed credit institution or foreign bank branch shall notify the State Bank of its operation inauguration conditions specified in Clause 2 of this Article at least 15 days before the tentative inauguration date. The State Bank shall suspend the operation inauguration when such institution or branch fails to fully meet the conditions under Clause 2 of this Article.
Thus, in order to inaugurate its operation, a credit institution must satisfy the conditions specified above.
Does a credit institution that wishes to list its shares on a foreign securities market need to send an application for approval to the State Bank of Vietnam?
Does a credit institution that wishes to list its shares on a foreign securities market need to send an application for approval to the State Bank of Vietnam?
Pursuant to Point g, Clause 1, Article 29 of the 2010 Law on Credit Institutions in Vietnam (amended by Clause 4, Article 1 of the 2017 Law on Amendments to some articles of the Law on Credit Institutions) stipulating as follows:
Changes subject to the State Bank's approval
1. A credit institution or foreign bank branch must obtain the State Bank's written approval before carrying out procedures to change any of the following contents:
a) Its name or place of its head office;
b) Its charter or allocated capital, except the case specified in Clause 3 of this Article;
c) Location of a branch of the credit institution;
dd) Sale or transfer of the owner’s stakes; sale or transfer of a capital contributor’s stake; sale or transfer of a major shareholder’s shares; sale or transfer of shares that converts a major shareholder into a common shareholder and vice versa.
In case of transfer of stakes of a credit institution that is a limited liability company, the buyer or transferee must satisfy the conditions applied to owners and capital contributors specified in Article 20, Article 70 and Article 71 of this Law;
e) Any business suspension of 05 working days or more, except suspension due to force majeure events;
g) Listing of shares on a foreign securities market.
Thus, a credit institution that wishes to list its shares on a foreign securities market must send an application for approval to the State Bank of Vietnam.
In what cases does the State Bank of Vietnam revoke the license of a credit institution?
Pursuant to Article 28 of the 2010 Law on Credit Institutions in Vietnam (a number of provisions are amended by Clause 3, Article 1 of the 2017 Law on Amendments to some articles of the Law on Credit Institutions) as follows:
Revocation of licenses
1. The State Bank shall revoke a license when:
a/ The license application dossier contains false information in order to be eligible for obtaining a license;
b) The credit institution is divided or acquired; undergoes amalgamation, dissolution, bankruptcy or conversion;
c/ The credit institution, foreign bank branch or representative office of a foreign credit institution or another foreign institution engaged in banking operations operates at variance with its license;
d/ The credit institution or foreign bank branch seriously violates the law on compulsory reserves and operation safety ratios;
e/ The credit institution or foreign bank branch fails to implement or fully implement the State Bank's decisions to assure banking operation safety;
f/ The foreign credit institution or another foreign institution engaged in banking operations is dissolved or bankrupt or has its license revoked by a competent authority of the country in which it is headquartered, for a foreign bank branch, wholly foreign-owned credit institution or representative office of a foreign credit institution or another foreign institution engaged in banking operations.
2. The State Bank shall specify the order and procedures for license revocation in the cases defined in Clause I of this Article.
3. An institution shall terminate its business activities on the effective date of the State Bank's decision to revoke its license.
4. The State Bank shall publicize license revocation decisions in the mass media.
Thus, the State Bank of Vietnam will revoke the license if the credit institution falls into one of the above cases.
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