What operations shall Vietnam's cooperative banks carry out under the Law on Credit Institutions 2024?
- What operations shall Vietnam's cooperative banks carry out under the Law on Credit Institutions 2024?
- What are the regulations on capital contribution and share purchase for commercial banks in Vietnam under the Law on Credit Institutions 2024?
- What are the cases where credit institutions may deal in real estate in Vietnam under the Law on Credit Institutions 2024?
What operations shall Vietnam's cooperative banks carry out under the Law on Credit Institutions 2024?
Pursuant to the provisions of Article 125 of the Law on Credit Institutions 2024, Cooperative banks shall carry out the following operations:
- Regulating capital and carrying out banking operations with respect to people’s credit funds. Capital regulation by a cooperative bank means the lending and receipt of deposits from people's credit funds;
- Conducting some banking operations and other business activities specified in Section 2 of this Chapter 5 of the Law on Credit Institutions 2024;
- Supporting development of products and services and professional training for people’s credit funds;
- Inspecting and supervising people’s credit funds;
- Conducting internal audit of people’s credit funds if necessary;
- Appointing qualified personnel to hold the titles of Chairperson of the Board of Directors, Director and other managerial and executive titles of each people’s credit fund as required by the State Bank.
What operations shall Vietnam's cooperative banks carry out under the Law on Credit Institutions 2024? (Image from the Internet)
What are the regulations on capital contribution and share purchase for commercial banks in Vietnam under the Law on Credit Institutions 2024?
Pursuant to Article 111 of the Law on Credit Institutions 2024, each commercial bank may only use its charter capital and reserve fund to contribute capital or purchase shares in the following specific cases:
Case 1
Commercial banks shall establish or acquire subsidiaries or associate companies to conduct the following business activities:
- Securities underwriting and securities brokerage; management and distribution of securities investment fund certificates; and securities investment portfolio management and stock trade;
- Financial leasing;
- Insurance.
Note:
Commercial banks shall establish or acquire subsidiaries or associate companies after obtaining written approval from the State Bank
Case 2
Commercial banks may establish or acquire subsidiaries or associate companies operating in fields, including management of debts and utilization of assets, remittance, gold trade, factoring, and issuance of credit cards, consumer credit, intermediary payment services and credit information
Note:
Commercial banks shall establish or acquire subsidiaries or associate companies after obtaining written approval from the State Bank
Case 3
Commercial banks may contribute capital to, or purchase shares from, enterprises operating in the following fields:
- Insurance, securities, remittance, gold trade, factoring, issuance of credit cards, consumer credit, intermediary payment services and credit information;
- Other fields other than those specified at Point a of this Clause after obtainment of the written approval from the State Bank.
Case 4
Commercial banks and their subsidiaries may purchase or hold shares of other credit institutions under conditions and within the limits provided by the Governor of State Bank
What are the cases where credit institutions may deal in real estate in Vietnam under the Law on Credit Institutions 2024?
Pursuant to Article 132 of the Law on Credit Institutions 2010 regulates real estate business for credit institutions as follows:
Real estate trading
Credit institutions may not deal in real estate, except in the following cases:
1. They purchase, invest in and own real estates used as their business buildings and offices or warehouses in direct service of then- professional operations;
2. They lease part of their own business buildings which are not yet used;
3. They hold real estate as a result of debt handling. Within 3 years after issuing a decision to handle a security asset being real estate, credit institutions shall sell, transfer or purchase this real estate so as to ensure the ratio of investments in fixed assets and the use purposes of fixed assets specified in Article 140 of this Law.
Pursuant to the latest regulations in the Law on Credit Institutions 2024, specifically in Article 139 of the Law on Credit Institutions 2024, there are 03 cases where a credit institution may deal in real estate:
Case 1
It purchases, invests in and owns real estate to be used as its business building and office or warehouse in direct service of its professional operations;
Case 2
It leases out part of its business building which is not yet used;
Case 3
It holds real estate as a result of debt treatment.
Within 05 years from the date on which a decision to treat collateral that is real estate is issued, the credit institution shall sell, transfer or repurchase this real estate,
In case of repurchase of real estate:
(1) The use purposes shall be maintained: It purchases, invests in and owns real estate to be used as its business building and office or warehouse in direct service of its professional operations;
(2) The ratio of investments in fixed assets is as follows:
- Does not exceed 50% of its charter capital and additional reserve fund of charter capital as recorded in the accounting book with respect to a commercial bank, cooperative bank, non-bank credit institution and microfinance institution;
- Does not exceed 100% of its charter capital and additional reserve fund of charter capital as recorded in the accounting book with respect to a people’s credit fund;
- Does not exceed 50% of its provided capital and additional reserve fund of provided capital as recorded in the accounting book with respect to a foreign bank’s branch;
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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