What are the regulations on bankruptcy of credit institutions placed under special control in Vietnam under the Law on Credit Institutions 2024 in 2024?
- What are the regulations on bankruptcy of credit institutions placed under special control in Vietnam in 2024?
- What are the contents of the bankruptcy plan of credit institutions placed under special control in Vietnam?
- Vietnam: How to handle if the technical reserve fund of the deposit insurer is not sufficient to make deposit insurance payouts to depositors of the credit institution placed under special control?
What are the regulations on bankruptcy of credit institutions placed under special control in Vietnam in 2024?
Pursuant to Article 188 of the Law on Credit Institutions 2024, bankruptcy of credit institutions placed under special control is regulated as follows:
(1) A plan for bankruptcy of a credit institution placed under special control shall be formulated in one of the following cases:
- The credit institution placed under special control:
+ Failing to prepare the restructuring plan within the time limit:
++ Within 60 days from the date of receipt of the written request from the special control board specified in Clause 7 Article 167 of the Law on Credit Institutions 2024, the credit institution placed under special control shall complete the remedial plan and submit it to the special control board.
++ Within 60 days from the date of receipt of the written request of the special control board specified in Clause 7 Article 167 of the Law on Credit Institutions 2024, the credit institution placed under special control shall finish developing the plan for merger, amalgamation, transfer of 100% of shares/stakes and submit it to the special control board.
+ Being not eligible for mandatory transfer specified in Clause 1 Article 179, Clause 1 Article 180 of the Law on Credit Institutions 2024.
+ Being not eligible for dissolution specified in Clause 1 Article 187 of the Law on Credit Institutions 2024
++ It is capable of fully paying debts;
++ There is a credit institution that assumes all debt obligations.
- The commercial bank falls into the case specified in Clause 7 Article 179, Clause 5 Article 180, Clause 9 Article 193 of the Law on Credit Institutions 2024.
- During the supervision of the liquidation of assets of the dissolved credit institution, if it is detected that the credit institution is not capable of paying all debts, the State Bank shall decide to terminate the liquidation of assets and implement the plan for bankruptcy of the credit institution.
- The credit institution placed under special control proposes the bankruptcy plan within 60 days from the date of receipt of the written request from the special control board specified in Clause 7 Article 167 or Clause 5 Article 172 or Clause 6 Article 178 of the Law on Credit Institutions 2024
(2) The special control board shall cooperate with the credit institution placed under special control and a deposit insurer in formulating the plan for bankruptcy of the credit institution placed under special control and requesting the State Bank to submit the plan to the Government for approval, except for the case specified in Clause 3 of Article 188 of the Law on Credit Institutions 2024.
After the bankruptcy plan is approved, the State Bank shall request the Prime Minister to decide the limits on deposit insurance payouts for depositors, which do not exceed their deposits at the credit institution.
(3) The special control board shall cooperate with a people's credit fund placed under special control, the deposit insurer and the cooperative bank in developing a plan for bankruptcy of the people's credit fund placed under special control and requesting the State Bank to submit the plan to the Prime Minister for decision on the limits on deposit insurance payouts for depositors, which do not exceed their deposits at the people's credit fund.
After the Prime Minister decides the limits on deposit insurance payouts, the special control board shall be responsible for cooperating with the people's credit fund placed under special control, the deposit insurer and the cooperative bank to complete the plan for bankruptcy of the people's credit fund placed under special control and submit it to the State Bank for approval.
What are the regulations on bankruptcy of credit institutions placed under special control in Vietnam under the Law on Credit Institutions 2024 in 2024? (Image from the Internet)
What are the contents of the bankruptcy plan of credit institutions placed under special control in Vietnam?
Pursuant to Article 189 of the Law on Credit Institutions 2024, a bankruptcy plan shall contain:
- Situation of the credit institution placed under special control;
- Assessment of impact of the bankruptcy plan on safety of the credit institution system;
- Expected limits on deposit insurance payouts for depositors that are individuals; roadmap and period of payment;
- Roadmap and responsibilities for implementation of the bankruptcy plan.
Vietnam: How to handle if the technical reserve fund of the deposit insurer is not sufficient to make deposit insurance payouts to depositors of the credit institution placed under special control?
Pursuant to Article 190 of the Law on Credit Institutions 2024, the implementation of bankruptcy plan regarding to deposit insurers is as follows:
Implementation of bankruptcy plan
1. After the bankruptcy plan is approved, the deposit insurer shall be responsible for cooperating with the credit institution placed under special control in making deposit insurance payouts to depositors under the bankruptcy plan.
2. If the technical reserve fund of the deposit insurer is not sufficient to make deposit insurance payouts to depositors according to regulations in Clause 1 of this Article, the State Bank shall allow the deposit insurer to take special loans.
The deposit insurer shall formulate a plan for increase in deposit insurance premiums to offset special loans; use the special loan repayment from the credit institution, revenue from sale of valuable papers held by the deposit insurer, revenue from liquidation of assets of the credit institution that took the special loans, and deposit insurance premiums to prioritize repayment of special loans to the State Bank.
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Thus, If the technical reserve fund of the deposit insurer is not sufficient to make deposit insurance payouts to depositors, the State Bank shall allow the deposit insurer to take special loans.
The deposit insurer shall formulate a plan for increase in deposit insurance premiums to offset special loans; use the special loan repayment from the credit institution, revenue from sale of valuable papers held by the deposit insurer, revenue from liquidation of assets of the credit institution that took the special loans, and deposit insurance premiums to prioritize repayment of special loans to the State Bank.
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.
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