Is it correct that the maximum interest rate for USD deposits held by organizations and individuals at credit institutions and foreign bank branches in Vietnam is 0% from November 20, 2024?
Is it correct that the maximum interest rate for USD deposits held by organizations and individuals at credit institutions and foreign bank branches in Vietnam is 0% from November 20, 2024?
On November 1, 2024, the Governor of the State Bank of Vietnam issued Decision 2410/QD-NHNN of 2024 on the maximum interest rate for deposits in US dollars by organizations and individuals at credit institutions and foreign bank branches as per the provisions in Circular 46/2024/TT-NHNN.
The maximum interest rate for deposits in US dollars by organizations and individuals at credit institutions and foreign bank branches in Vietnam is as follows:
- The interest rate applicable to deposits of organizations (excluding credit institutions and foreign bank branches) is 0% per annum.
- The interest rate applicable to deposits of individuals is 0% per annum.
Decision 2410/QD-NHNN of 2024 takes effect from November 20, 2024.
Is it correct that the maximum interest rate for USD deposits held by organizations and individuals at credit institutions and foreign bank branches in Vietnam is 0% from November 20, 2024? (Image from the Internet)
When is a credit institution with 100% foreign capital granted a License in Vietnam?
Based on Clause 2, Article 29 of the Law on Credit Institutions 2024 on the conditions for granting a License:
Article 29. Conditions for Granting a License
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- A joint venture credit institution, a credit institution with 100% foreign capital is granted a License when it meets all the following conditions:
a) The conditions specified in Clause 1 of this Article;
b) The foreign credit institution is allowed to carry out banking activities as per the laws of the country where the foreign credit institution has its headquarters;
c) The activities proposed to be carried out in Vietnam must be activities that the foreign credit institution is allowed to conduct in the country where the foreign credit institution has its headquarters;
d) The foreign credit institution meets the asset and financial status conditions according to the regulations of the Governor of the State Bank, complies with the regulations on ensuring safe operation as per the laws of the country where the foreign credit institution has its headquarters;
[...]
According to the above regulation, a credit institution with 100% foreign capital is granted a License when it meets all the following conditions:
- Has charter capital at least equal to the legal capital
- The owner of the credit institution is a one-member limited liability company, founding shareholder, founding member is a legal entity operating legally and having sufficient financial capability to participate in capital contribution; founding shareholder, founding member is an individual with full civil act capacity and committed to having sufficient financial ability to contribute capital
- The managers, executive officers, and members of the Board of Control meet all the standards and conditions as stipulated
- Articles of association comply with regulations
- A feasible establishment scheme and business plan ensure not to affect the safety and stability of the credit institution system, do not create monopolies or restrict competition or engage in unfair competition in the credit institution system
- The foreign credit institution is allowed to perform banking activities according to the law of the country where the foreign credit institution has its headquarters
- The activities proposed to be carried out in Vietnam must be those that the foreign credit institution is allowed to conduct in the country where the foreign credit institution has its headquarters
- The foreign credit institution meets the conditions regarding total assets and financial status as per the regulations of the Governor of the State Bank, complies with the regulations on ensuring safe operations as per the laws of the country where the foreign credit institution has its headquarters
- The foreign credit institution must have a declaration of commitment to provide financial, technology, governance, management, and operational support for the joint venture credit institution, and 100% foreign capital credit institution; ensure that this credit institution maintains the real value of its charter capital no less than the legal capital and complies with the regulations on restrictions to ensure safety in operations as per the regulations
- The competent authority of the country where the foreign credit institution has its headquarters has signed an agreement with the State Bank on the inspection and supervision of banking activities, exchanging safety information on banking supervision and has a declaration of commitment to consolidated supervision according to international practices for the activities of the foreign credit institution.
What is the time limit for issuance of a License for a credit institution with 100% foreign capital in Vietnam?
Based on Article 31 of the Law on Credit Institutions 2024 on the time limit for issuance of a License:
Article 31. Time limit for issuance of a License
- Within 180 days from the date of receiving a complete application, the State Bank shall grant a License or refuse to issue a License for the establishment and operation of a credit institution, a License for the establishment of a foreign bank branch.
- Within 60 days from the date of receiving a complete application, the State Bank shall grant a License or refuse to issue a License for the establishment of a foreign representative office.
- In the case of refusal to grant a License, the State Bank must notify in writing and clearly state the reasons.
Thus, the time limit for issuance of a credit institution with 100% foreign capital is 180 days from the date of receiving a complete application.
