How much legal capital must a cooperative bank have? Which body is the highest decision-making body of a cooperative bank in Vietnam?
Who has the right to the establish a cooperative bank in Vietnam?
Pursuant to Article 4 of the Law on Credit Institutions 2010 explains as follows:
Interpretation of terms
In this Law. the terms below are construed as follows:
...
6. People's credit fund means a credit institution established voluntarily by legal entities, individuals and households as a cooperative to conduct some banking operations under this Law and the Law on Cooperatives for the main purpose of mutual assistance in production and business development and life.
7. Cooperative bank means a bank of all people's credit funds established by people's credit funds and some legal entities by contributing capital under this Law for the main purposes of systematic link, financial support and capital balancing within the system of people's credit funds.
8. Foreign credit institution means a credit institution established overseas under a foreign law.
...
According to the above regulations, a cooperative bank means a bank of all people's credit funds established by people's credit funds and some legal entities by contributing capital under the Law on Credit Institutions
The cooperative bank has main purposes of systematic link, financial support and capital balancing within the system of people's credit funds..
How much legal capital must a cooperative bank have? Which body is the highest decision-making body of a cooperative bank in Vietnam?
Vietnam: How much legal capital must a cooperative bank have?
Article 2 of Decree 86/2019/ND-CP stipulates the legal capital level of credit institutions as follows:
Levels of legal capital
1. Commercial banks: 3,000 billion dong.
2. Policy banks: 5,000 billion dong.
3. Cooperative banks: 3,000 billion dong.
4. Foreign bank branches: 15 million U.S. dollars (USD).
5. Financial companies: 500 billion dong.
6. Financial leasing companies: 150 billion dong.
7. Microfinance institutions: 05 billion dong.
8. People’s credit funds, each of which operates within a commune or town (hereinafter referred to as commune): 0.5 billion dong.
9. People’s credit funds, each of which operates within a ward; people’s credit funds, each of which operates within an inter-commune, commune-ward and inter-ward area: 01 billion dong.
Thus, according to the above regulations, cooperative banks must meet the level of legal capital of VND 3,000 billion.
What is the highest decision-making body of a cooperative bank in Vietnam?
In Article 80 of the Law on Credit Institutions 2010, it is stated as follows:
Members' General Meeting
1. The Members' General Meeting is the highest decision-making body of a cooperative bank or people's credit fund.
2. The Members' General Meeting shall discuss and decide on the following matters:
a/ Reports on business results in a year, financial publicity, accounting, projected distribution of profits and offsetting of losses, if any; and reports on the operation of the Board of Directors and Control Board;
b/ Business orientations for the following year;
c/ Increase or decrease of the charter capital; levels of capital contribution by members:
d/ Election, relief from duty or dismissal of the Chairman and other members of the Board of Directors and the head and other members of the Control Board;
e/ Approval of a list of newly admitted members and exclusion of members from the cooperative bank or people's credit fund at the request of the Board of Directors; decision on the elimination of members;
f/ Division, split-up. consolidation, merger or dissolution of the people's credit fund;
g/ Modification of the charter;
h/ Other matters at the request of the Board of Directors, Control Board or at least one-third of total members.
Accordingly, the Members' General Meeting is the highest decision-making body of a cooperative bank or people's credit fund. Accordingly, The Members' General Meeting shall discuss and decide on the following matters:
- Reports on business results in a year, financial publicity, accounting, projected distribution of profits and offsetting of losses, if any; and reports on the operation of the Board of Directors and Control Board;
- Business orientations for the following year;
- Increase or decrease of the charter capital; levels of capital contribution by members:
- Election, relief from duty or dismissal of the Chairman and other members of the Board of Directors and the head and other members of the Control Board;
- Approval of a list of newly admitted members and exclusion of members from the cooperative bank or people's credit fund at the request of the Board of Directors; decision on the elimination of members;
- Division, split-up. consolidation, merger or dissolution of the people's credit fund;
- Modification of the charter;
- Other matters at the request of the Board of Directors, Control Board or at least one-third of total members.
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