From March 1, 2023, do dossiers requesting approval to change the charter capital of a credit institution that is a cooperative have to include content of source used to repay capital contributions to members in Vietnam?

From March 1, 2023, do dossiers requesting approval to change the charter capital of a credit institution that is a cooperative have to include content of source used to repay capital contributions to members in Vietnam?

Pursuant to Clause 1, Article 9 of Circular 05/2018/TT-NHNN amended by Clause 6, Article 1 of Circular 22/2022/TT-NHNN (effective from March 1, 2023) regulating application documents proposal to approve changes in charter capital of credit institutions that are cooperatives as follows:

Change in charter capital level

1. An application for approval of change in the charter capital includes:

a) The application form made according to the form in Appendix No. 05 enclosed herewith;

b) The plan for increase in charter capital which shall, inter alia, include the following contents:

(i) Funding sources for increasing the charter capital;

(ii) Funding sources for refund of contributed capital to its members and level of satisfaction of refund requirements (if any);

c) The plan for decrease in charter capital which shall, inter alia, include the following contents:

(i) Funding sources for making additional contributions to the charter capital (if any);

(ii) Funding sources for refund of contributed capital to its members and level of satisfaction of refund requirements;

(iii) Expected date of completion of decrease in charter capital;

d) The Resolution issued by the general meeting of members which shall, inter alia, include the following contents:

(i) Change in the charter capital;

(ii) Approval of the list of new members or removal of termination of membership at the people’s credit fund; decision on exclusion of a member;

In case of application for approval of decrease in the charter capital, the new charter capital must comply with regulations of law on legal capital and the credit institution that is a cooperative must have a plan for satisfaction of prudential ratio requirements in its operation;

dd) The list of capital contributors to whom their contributed capital will be refunded in the year which is made using the form in Appendix No. 06 enclosed herewith.

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Thus, depending on the increase or decrease in charter capital, the application for approval to change the charter capital of a credit institution that is a cooperative must include the source used to repay capital contributions to members in Vietnam. Specifically:

- The plan for increase in charter capital includes at least the following contents: Funding sources for refund of contributed capital to its members and level of satisfaction of refund requirements (if any).

- The plan for decrease in charter capital includes: Funding sources for refund of contributed capital to its members and level of satisfaction of refund requirements.

What is procedure for approving a change in charter capital of a credit institution that is a cooperative in Vietnam?

According to Clause 2, Article 9 of Circular 05/2018/TT-NHNN amended by Clause 6, Article 1 of Circular 22/2022/TT-NHNN (effective from March 1, 2023) stipulates the implementation procedures for approving changes in charter capital of credit institutions that are cooperatives are as follows:

2. Approval procedures:

a) The credit institution that is a cooperative shall prepare an application as prescribed in Clause 1 of this Article and submit it to the SBV. If an application is inadequate, the SBV shall request the applicant in writing to complete its application within 03 working days from the receipt of the application;

b) Within 20 working days from the receipt of a valid application:

 (i) In case of increase in charter capital, the SBV shall issue a decision to modify the license regarding change in charter capital of the credit institution that is a cooperative;

 (ii) In case decrease in charter capital, the SBV shall issue a written approval of decrease in charter capital of the credit institution that is a cooperative. The credit institution that is a cooperative shall only implement its plan for decrease in charter capital after obtaining the SBV’s approval;

(iii) If an application is refused, the SBV shall give written reasons for refusal.

What are regulations on sample document requesting approval to change charter capital of a credit institution that is a cooperative in Vietnam?

In Appendix No. 05 issued with Circular 22/2022/TT-NHNN (effective from March 1, 2023) stipulates the sample document requesting approval to change the charter capital of a credit institution that is cooperative as follows:

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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APPLICATION FOR APPROVAL TO CHANGE CHARTER CAPITAL

To: State Bank of Vietnam/State Bank branch……….

Cooperative Bank/People's Credit Fund: …………………………………………………

At the General Meeting of Members dated … month … year ……, the change in charter capital was approved. Now request the State Bank of Vietnam/State Bank branch to consider and approve the change in charter capital.

1. Name of credit institution is cooperative:

- Full name in Vietnamese: Abbreviated name:

- Name in English (if any): Abbreviated name (if any):

- Head office at (Head office address):

- Current charter capital:

- Email address:

2. Expected charter capital level requested for approval:

……………………………………………………………………………………………………….

3. Reasons and need for change:

……………………………………………………………………………………………………….

……………………………………………………………………………………………………….

……………………………………………………………………………………………………….

……………………………………………………………………………………………………….

……………………………………………………………………………………………………….

……………………………………………………………………………………………………….

……………………………………………………………………………………………………….

……………………………………………………………………………………………………….

Cooperative Bank/People's Credit Fund: …………………………….. commits:

a) Take full responsibility for the honesty and accuracy of the Application and accompanying documents.

b) After being approved for changes, we will fully implement and strictly comply with relevant legal regulations. If there is a violation, we will be responsible before the law.

Best regards!