What are the components of the application for increase in provided capital of foreign branch bank in Vietnam?
- What is included in the application for increase in provided capital of foreign branch bank in Vietnam?
- What are the procedures for approval for increase in provided capital of foreign branch bank in Vietnam?
- What are the responsibilities of the State Bank of Vietnam branches of provinces and cities for increase in provided capital of foreign branch bank in Vietnam?
What is included in the application for increase in provided capital of foreign branch bank in Vietnam?
According to the provisions of Article 14 of Circular 50/2018/TT-NHNN of Vietnam, the application for increase in provided capital of foreign branch bank includes:
An application form, which contains at least:
- Current provided capital and provided capital expected to be increased;
- Necessity for increase in provided capital;
- Information about the additional provided capital reserve fund, retained earnings and other funds determined according to the auditing result given by an independent audit firm; information about the amount of money from additional provided capital reserve fund, retained earnings and other funds which is used to increase provided capital (in case the sources of funding for increasing provided capital come from the additional provided capital reserve fund, retained earnings and other funds);
- Capital expected to be additionally provided from the parent bank (in case sources of funding for increasing charter capital comes from the parent bank);
A parent bank’s written approval for the increase in provided capital of foreign branch bank in Vietnam, which contains at least:
- Total provided capital expected to be increased;
- Expected stages of increase in provided capital (if any);
- Sources of money used for increasing provided capital;
- Expected date of completing the increase in provided capital.
What are the components of the application for increase in provided capital of foreign branch bank in Vietnam?
What are the procedures for approval for increase in provided capital of foreign branch bank in Vietnam?
According to the provisions of Clause 2, Article 14 of Circular 50/2018/TT-NHNN of Vietnam on this content as follows:
- Procedures for granting approval for the increase in provided capital from retained earnings and other funds by a foreign branch bank are specified in Clause 2 Article 5 of this Circular. To be specific:
+ The commercial bank or foreign branch bank shall submit an application to the State Bank of Vietnam. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank of Vietnam shall request the commercial bank or foreign branch bank in writing to complete it.
+ Within 40 working days from the receipt of the satisfactory application, the State Bank of Vietnam shall consider amending the license. In case of rejection of the application, the State Bank of Vietnam shall respond and provide explanation in writing.
- Procedures for granting approval for the increase in provided capital in case a foreign branch bank increases its provided capital from additional capital provided by the parent bank in accordance with Clause 2 Article 11 of this Circular. To be specific:
+ The commercial bank shall submit an application to the State Bank of Vietnam. If the application is unsatisfactory, within 07 working days from the receipt of the application, the State Bank of Vietnam shall request the commercial bank in writing to complete it;
+ Within 25 working days from the receipt of the satisfactory application, the State Bank of Vietnam shall grant a written approval for increase in charter capital. In case of rejection of the application, the State Bank of Vietnam shall respond and provide explanation in writing.
The State Bank of Vietnam’s written approval shall be valid for 06 months from the date on which it is signed.
- Amendment to the License after the State Bank of Vietnam grants an approval as prescribed in Clause 3 of this Article shall be amended as follows:
+ Within 15 working days from date of completing the increase in provided capital, the foreign branch bank shall submit an application form for amendment to the License regarding the increase in provided capital to the State Bank of Vietnam;
+ Within 15 working days from the receipt of the application form, the State Bank of Vietnam shall decide to amend the License regarding the increase in provided capital.
What are the responsibilities of the State Bank of Vietnam branches of provinces and cities for increase in provided capital of foreign branch bank in Vietnam?
According to the provisions of Article 19 of Circular 50/2018/TT-NHNN of Vietnam (amended and supplemented by Clause 8 Article 1 of Circular 06/2022/TT-NHNN of Vietnam) on this content as follows:
- Receive applications and grant approval for changes within their power of State Bank of Vietnam branches of provinces and cities.
- Take charge of receiving reports on the changes submitted by commercial banks.
- Within 07 working days from the receipt of the request from the State Bank of Vietnam of Vietnam Banking Supervision Agency, the State Bank of Vietnam of Vietnam’s branch of the province or city to which the commercial bank or foreign branch bank will be relocated shall check and verify the satisfaction of headquarters or office requirements by the commercial bank or foreign branch bank, and give its written opinions to the State Bank of Vietnam of Vietnam Banking Supervision Agency.
- Check and verify the satisfaction of office requirements by foreign branch banks before deciding to modify locations of foreign branch banks in their licenses within its jurisdiction prescribed in Clause 2 Article 4 of this Circular.
In which, the jurisdiction is prescribed in Clause 2 Article 4 of Circular 50/2018/TT-NHNN of Vietnam as follows:
- The Director of State Bank of Vietnam branch of the province or city shall grant approval for changes specified in Clause 1 Article 1 of this Circular, of foreign branch banks that are located within the province or city, except for the case specified in Clause 1 of this Article.
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