What contents must be included in a scheme for branch establishment of a microfinance institution in Vietnam? What are the procedures for approval for the establishment of a branch of a microfinance institution in Vietnam?
- What are the conditions for establishment of branches of a microfinance institution in Vietnam?
- What are the procedures for approval for the establishment of a branch of a microfinance institution in Vietnam?
- What contents must be included in a scheme for branch establishment of a microfinance institution in Vietnam?
What are the conditions for establishment of branches of a microfinance institution in Vietnam?
Pursuant to Article 11 of Circular No. 19/2019/TT-NHNN stipulating the conditions for establishment of branches of a microfinance institution in Vietnam as follows:
- A microfinance institution that has been operating for more than 12 months (from the date of inauguration to the application date) is entitled to establish no more than 03 branches in the fiscal year if the following conditions are met:
+ The actual value of the charter capital on December 31 of the year preceding the year of submission of the application shall not be lower than the legal capital;
+ It has a profitable business according to its audited financial statement of the year preceding the year of submission of the application and according to the latest financial statement before the application date.
+ It is not prohibited by a competent authority from expanding its operation at the application date;
+ It complies with regulations on safety ratios during its operation in the latest report before the application date.
+ Its non-performing loan ratio on December 31 of the year preceding the year of submission of the application and in the latest report before the application date shall not exceed 3% or another ratio as decided by the State Bank’s Governor in each period;
+ It complies with regulations of law on number and structures of the Board of Members and Board of Controllers. The Director General (or Director) position of the microfinance institution has not been left vacant for more than 06 consecutive months prior to the application date;
+ There should be an establishment scheme that contains the contents specified in Clause 4 Article 14 of Circular No. 19/2019/TT-NHNN;
+ The number of branches complies with Article 8 of Circular No. 19/2019/TT-NHNN.
- A microfinance institution that has been operating for less than 12 months (from the date of inauguration to the application date) is entitled to establish no more than 02 branches in the fiscal year if the following conditions are met:
+ The actual value of the charter capital in the latest report before the application date shall not be lower than the legal capital;
+ Its non-performing loan ratio in the latest report before the application date shall not exceed 3% or another ratio as decided by the State Bank’s Governor in each period;
+ The conditions set forth in Points c, d, e, g and h Clause 1 Article 14 of Circular No. 19/2019/TT-NHNN.
What contents must be included in a scheme for branch establishment of a microfinance institution in Vietnam? What are the procedures for approval for the establishment of a branch of a microfinance institution in Vietnam? (Image from the Internet)
What are the procedures for approval for the establishment of a branch of a microfinance institution in Vietnam?
Pursuant to Clause 3, Article 15 of Circular No. 19/2019/TT-NHNN stipulating the procedures of approval for the establishment of a branch of a microfinance institution as follows:
If the application for approval for establishment of a branch is submitted, within 07 working days from the receipt of the satisfactory application:
- The State Bank of Vietnam shall send an enquiry about the branch establishment to the People’s Committee of the province or central-affiliated city where the branch is expected to be located;
- The Banking Supervision Agency shall send an enquiry about the branch establishment to the People’s Committee of the province or central-affiliated city where the branch is expected to be located.
What contents must be included in a scheme for branch establishment of a microfinance institution in Vietnam?
Pursuant to Clause 3, Article 14 of Circular No. 19/2019/TT-NHNN, a scheme for branch establishment, which includes, inter alia, the following contents:
- Full name and abbreviated name in Vietnamese language; address and operations of the branch of the microfinance institution;
- Organizational structure of the branch; expected key personnel (including Director of the branch, head of the transaction office, accountants and other key personnel according to the microfinance institution's internal regulations);
- Name and address of the branch expected to manage the transaction office (in case of applying for establishment of a transaction office);
- Analysis of business environment (opportunities, challenges, strengths and weaknesses); clients and products to be provided;
- The expected business plan for the first 03 years of operation, which contains at least: Planned balance sheet; income statement; grounds for formulating the business plan and explanations about the capacity to implement the business plan in each year.
Nguyễn Thị Hồng Nhung