What are the criteria for members of the Board of Directors or Board of Members of credit institutions in Vietnam under the Law on Credit Institutions 2024?

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• What are the criteria and requirements for members of the Board of Directors or Board of Members of credit institutions in Vietnam under the Law on Credit Institutions 2024?
• Vietnam: What are the requirements for credit institutions to obtain licenses for establishment and operation from July 1, 2024?
• When will the latest Law on Credit Institutions 2024 come into force?

What are the criteria and requirements for members of the Board of Directors or Board of Members of credit institutions in Vietnam under the Law on Credit Institutions 2024?

Pursuant to the provisions of Clause 1, Article 41 of the Law on Credit Institutions 2024, a member of the Board of Directors or Board of Members shall fully meet the following criteria and requirements:

- He/she is not prohibited from holding a certain position:

Persons prohibited from holding certain positions

1. Any of the following persons must not be a member of the Board of Directors, Board of Members, Board of Controllers, Director General (Director), Deputy Director General (Deputy Director) or a holder of equivalent title according to a credit institution’s Charter:

a) One of the persons specified in Clause 2 of this Article;

b) A person prohibited from participating in management and administration of an enterprise or cooperative under the law on officials and public employees and the law on anti-corruption;

c) A person who used to be an owner of a private enterprise, a partner of a partnership company, Director General (Director), a member of Board of Directors, Board of Members or a controller or member of Board of Controllers of an enterprise, a member of Board of Directors and Director General (Director) of a cooperative at the time when the enterprise or cooperative is declared bankrupt, except for case where he/she is assigned or appointed to participate in management, administration or control of the enterprise or cooperative that is credit institution declared bankrupt according to task requirements;

d) A person who had their title of Chairperson of Board of Directors, member of the Board of Directors, Chairperson of the Board of Members, member of Board of Members, head of the Board of Controllers, member of the Board of Controllers or Director General (Director) of a credit institution terminated under Article 47 of this Law or has committed violations, causing the revocation of the credit institution's license as determined by the competent agency;

dd) A related person of a member of the Board of Directors or the Board of Members or Director General (Director) of the credit institution, except for cases specified in Clause 3 Article 69, point b clause 1 Article 73 and point a Clause 2 Article 77 of this Law;

e) A related person of a member of Board of Controllers, Deputy Director of the People's Credit Fund;

g) A person responsible for any violation against regulations on licensing, administration, shares, capital contribution, share purchase, credit extension, purchase of corporate bonds, safety ratios that results a fine in the maximum bracket imposed on the credit institution/foreign bank’s branch according to the law on penalties for administrative violations in monetary and banking sector under inspection conclusion.

- He/she possesses professional ethics under regulations of the Governor of the State Bank;

- He/she has at least a bachelor’s degree;

- He/she meets one of the following conditions:

+ at least 03 years’ experience of working as a manager or executive of the credit institution,

+ at least 05 years’ experience of working as a manager of a finance, banking, accounting or audit enterprise or an enterprise whose equity is not smaller than the legal capital of a credit institution,

+ at least 05 years’ experience of working in a professional department of the credit institution or foreign bank’s branch

+ at least 05 years’ experience of working in a finance, banking accounting or audit department.

What are the criteria for members of the Board of Directors or Board of Members of credit institutions in Vietnam under the Law on Credit Institutions 2024?

Vietnam: What are the requirements for credit institutions to obtain licenses for establishment and operation from July 1, 2024?

Pursuant to the provisions of Clause 1, Article 29 of the Law on Credit Institutions 2024, a credit institution may obtain a license when fully meeting the following requirements:

- Its charter capital is not smaller than the legal capital;

- Its owner is a single-member limited liability company and its founding shareholders or members are juridical persons that are legally operating and financially capable for capital contribution. Its founding shareholders or members are individuals that have full legal capacity and are financially capable for capital contribution;

- Its managers, executives and members of the Board of Controllers fully meet the criteria and requirements under Article 41 of the Law on Credit Institutions 2024;

- Its Charter complies with the Law on Credit Institutions 2024 and other relevant laws;

- It has an establishment plan and a feasible business plan which neither affect the safety and stability of the credit institution system nor create monopoly or restrict competition or create unfair competition within the credit institution system.

Note: “Credit institution” means a business organization that has juridical person and conducts one, some or all banking operations according to regulations of this Law. Credit institutions include banks, non-bank credit institutions, microfinance institutions and people's credit funds..

When will the latest Law on Credit Institutions 2024 come into force?

Pursuant to Law on Credit Institutions 2024, specifically Article 209 of the Law on Credit Institutions 2024, it stipulates:

The Law on Credit Institutions 2024 comes into force from July 1, 2024, except for Clause 3, Article 200 and Clause 15, Article 210 of the Law on Credit Institutions 2024, which come into force from January 1, 2025. .