Is the State Bank's document on amendments to a license a part of the license for establishment and operation of a credit institution in Vietnam?

Is the State Bank's document on amendments to a license a part of the license for establishment and operation of a credit institution in Vietnam?

Pursuant to Clause 15 Article 4 of the Law on Credit Institutions in 2024:

Definition of terms

In this Law, the terms below are construed as follows:

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14. “Provision of account-to-account (A2A) payment services” means provision of payment instrument; provision of service of payment by check, payment order, collection order, bank card or another payment service for each client via their account.

15. “License” may be a license for establishment and operation of a credit institution, or license for establishment of a foreign bank’s branch or license for establishment of a foreign representative office which is issued by the State Bank of Vietnam. The State Bank's document on amendments to a license is an integral part of the license.

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As regulated above, license includes following types:

- A license for establishment and operation of a credit institution

- A license for establishment of a foreign bank’s branch

- A license for establishment of a foreign representative office which is issued by the State Bank of Vietnam

The State Bank's document on amendments to a license is an integral part of the license. Therefore, the State Bank's document on amendments to a license is a part of the license for establishment and operation of a credit institution in Vietnam.

Is the State Bank's document on amendments to a license a part of the license for establishment and operation of a credit institution in Vietnam? - image from internet

What are requirements for a credit institution to obtain the license in Vietnam?

Pursuant to Clause 1 Article 29 of the Law on Credit Institutions in 2024 stipulating requirements for issuance of licenses:

Requirements for issuance of licenses

1. A credit institution may obtain a license when fully meeting the following requirements:

a) Its charter capital is not smaller than the legal capital;

b) Its owner is a single-member limited liability company and its founding shareholders or members are juridical persons that are legally operating and financially capable for capital contribution. Its founding shareholders or members are individuals that have full legal capacity and are financially capable for capital contribution;

c) Its managers, executives and members of the Board of Controllers fully meet the criteria and requirements under Article 41 of this Law;

d) Its Charter complies with this Law and other relevant laws;

dd) It has an establishment plan and a feasible business plan which neither affect the safety and stability of the credit institution system nor create monopoly or restrict competition or create unfair competition within the credit institution system.

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As regulated above, acredit institution may obtain a license when fully meeting the following requirements:

- Its charter capital is not smaller than the legal capital;

- Its owner is a single-member limited liability company and its founding shareholders or members are juridical persons that are legally operating and financially capable for capital contribution;

- Its founding shareholders or members are individuals that have full legal capacity and are financially capable for capital contribution;

- Its managers, executives and members of the Board of Controllers fully meet the criteria and requirements as prescribed by law;

- Its Charter complies with this Law and other relevant laws;

- It has an establishment plan and a feasible business plan which neither affect the safety and stability of the credit institution system nor create monopoly or restrict competition or create unfair competition within the credit institution system.

In which cases shall the State Bank of Vietnam revoke the license issued to credit institutions?

Pursuant to Article 36 of the Law on Credit Institutions in 2024, the State Bank shall revoke a license when:

- The application for license contains false information in order to be eligible for obtainment of the license;

- The credit institution is divided or acquired; undergoes amalgamation, dissolution, bankruptcy or change in legal forms;

- The credit institution, foreign bank’s branch or foreign representative office operates at variance with its license;

- The credit institution or foreign bank’s branch seriously violates the law on compulsory reserves and safety ratios;

- The credit institution or foreign bank’s branch fails to abide by or fully abide by the State Bank's decisions to assure safety for banking operations;

- The foreign credit institution or another foreign institution which is engaged in banking operations and commercially present in Vietnam is dissolved or goes bankrupt or has its license revoked or has its operation suspended by a competent authority of the country where it is headquartered.

Best regards!