What are the procedures for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks in Vietnam?
- What is the application for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks in Vietnam?
- What are the procedures for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks in Vietnam?
- What is the number of applications for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks in Vietnam?
What is the application for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks in Vietnam?
Based on Section 4 of the Administrative Procedures accompanying Decision 2183/QD-NHNN in 2023, the application for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks include:
- Application components:
1. Documents for the proposed purchase and transfer of capital contributions by the transferee, who is the current contributing member of the commercial bank, including:
a) Proposal letter from the commercial bank, specifying:
(i) Name and address of the seller, transferor, buyer, and transferee;
(ii) Percentage of the purchase and transfer of capital contributions; Ownership percentage and value of capital contributions before and after the purchase and transfer;
(iii) Estimated date of the purchase and transfer;
(iv) Reason for the purchase and transfer;
b) Resolution or decision of the bank's Board of Members regarding the purchase and transfer of capital contributions;
c) Purchase and transfer agreement between the seller, transferor, and buyer, transferee.
2. Documents for the proposed purchase and transfer of capital contributions by the contributing member to the transferee, who is the new contributing member, including:
a) Documents mentioned in Point 1;
b) Documents and evidence proving that the buyer, transferee meets the conditions for purchasing and receiving the transfer of capital contributions in multi-member limited liability commercial banks, as specified by the law, including:
(i) For foreign credit institutions as buyers, transferees: documents mentioned in subsection c(i) of Point 1, Article 13 of Circular 50/2018/TT-NHNN:
- Audited financial statements for the five consecutive years prior to the submission of the application and the most recent financial statements up to the submission date;
- Certified copies of establishment and operation licenses or equivalent documents;
- Documents from the competent authority of the home country providing information about the foreign credit institution, including at least the following contents: Permitted activities in the home country at the time of submission; Compliance with banking laws and other legal regulations in the five consecutive years prior to the submission and up to the submission date; Capital adequacy ratio and other safety ratios as prescribed by the home country in the year prior to the submission and up to the submission date; Compliance with risk management and provisioning regulations in the year prior to the submission and up to the submission date;
- Documents or materials from international credit rating agencies within six months prior to the submission;
- Organization's statutes and activities;
- Report on the establishment process, activities, and development orientation up to the submission date;
- Planned documents appointing a representative to contribute capital to the bank;
- Commitment letter to provide financial, technological, managerial, operational support to the bank, ensuring the maintenance of the bank's equity value not less than the statutory capital and full compliance with operational safety regulations as prescribed by the State Bank;
- Commitment letter from the competent authority of the home country to ensure the ability to supervise the entire operations of the foreign credit institution (including the operations of the expected contributing limited liability bank) based on consolidated international practices;
- Commitment letter stating that the buyer, transferee is not the founder, owner, founding member, or strategic shareholder of other Vietnamese credit institutions;
(ii) For Vietnamese commercial banks as buyers, transferees: documents mentioned in subsection c(ii) of Point 1, Article 13 of Circular 50/2018/TT-NHNN:
- Planned document appointing a representative to contribute capital to the bank, providing identification information of the representative;
- Audited financial statements for the consecutive year prior to the submission and the most recent financial statements before the submission date;
- Report on compliance with risk management and provisioning regulations of the State Bank at the submission date; safety ratios in banking operations as prescribed by the State Bank in the consecutive year prior to the submission and up to the submission date;
- Report on compliance with limitations on the purchase and holding of shares of credit institutions as prescribed in Clause 6, Article 103 of the Law on Credit Institutions;
- Report on the minimum capital adequacy ratio, capital contributions, and expected shareholding after capital contribution;
- Commitment letter stating that the buyer, transferee is not the founder, owner, founding member, or strategic shareholder of other credit institutions;
Therefore, the documents required for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks include the aforementioned elements.
What are the procedures for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks in Vietnam?
What are the procedures for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks in Vietnam?
According to Section 4 of the Administrative Procedures accompanying Decision 2183/QD-NHNN in 2023, the procedures for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks are as follows:
Step 1: The commercial bank prepares and submits the application to the State Bank.
Step 2: If the application is incomplete or invalid, within 7 working days from the date of receiving the application, the State Bank will request the commercial bank to provide additional or complete documents.
Step 3: Within 75 working days from the date of receiving a complete and valid application, the State Bank will issue a written approval or rejection. If approved, the State Bank's approval is valid for 3 months from the date of signing. If rejected, the State Bank will provide a written response stating the reasons for the rejection.
Step 4: Within 7 working days from the completion of the purchase and transfer, the commercial bank submits a report to the State Bank along with supporting documents to prove the completion of the transaction.
The implementation can be done through either:
- Directly at the headquarters of the State Bank of Vietnam (in the One-stop Department); or
- Postal services.
What is the number of applications for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks in Vietnam?
Based on Section 4 of the Administrative Procedures accompanying Decision 2183/QD-NHNN in 2023, the number of applications for approval of the purchase and transfer of capital contributions in multi-member limited liability commercial banks is as follows:
- The documents must be prepared in one set in Vietnamese. Documents in foreign languages must be legalized by consular authorities in accordance with Vietnamese law (unless exempted from consular legalization as provided by the law on consular legalization) and translated into Vietnamese. Translations from a foreign language into Vietnamese must be notarized or have the translator's signature certified in accordance with the law.
- For copies, commercial banks or branches of foreign banks must submit copies issued from the original register or certified copies, or copies accompanied by the presentation of the original for comparison. In the case of submitting a copy accompanied by the presentation of the original for comparison, the person making the comparison must sign and confirm the accuracy of the copy compared to the original.
- The request documents must be signed by the legal representative of the commercial bank or branch of the foreign bank. In the case of signing on behalf of another person, the documents must include a power of attorney in accordance with the provisions of the law.
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