What are the conditions for issuing licenses to credit institutions in Vietnam? What is the deadline for issuing licenses to credit institutions in Vietnam?

What are the conditions for issuing licenses to credit institutions in Vietnam?

Based on Article 29 of the Law on Credit Institutions 2024, which stipulates the conditions for issuing a License in Vietnam:

Article 29. Conditions for Issuing a License

1. A credit institution is granted a License when it fully meets the following conditions:

a) Having a charter capital at least equal to the legal capital level;

b) The owner of the credit institution is a single-member limited liability company, founding shareholders, founding members are legal entities operating legally and having sufficient financial capacity to contribute capital; founding shareholders, founding members who are individuals with full civil act capacity and committed to having sufficient financial capacity to contribute capital;

c) Managers, executives, and members of the Supervisory Board meet the standards and conditions stipulated in Article 41 of this Law;

[...]

According to the above regulations in Vietnam, the conditions for issuing a License to a credit institution are as follows:

[1] Having a charter capital at least equal to the legal capital level

[2] The owner of the credit institution is a single-member limited liability company, founding shareholders, founding members are legal entities operating legally and having sufficient financial capacity to contribute capital; founding shareholders, founding members who are individuals with full civil act capacity and committed to having sufficient financial capacity to contribute capital

[3] Managers, executives, and members of the Supervisory Board meet the standards and conditions as prescribed

[4] The charter is in accordance with legal provisions

[5] A feasible establishment scheme and business plan, ensuring no impact on the safety and stability of the credit institution system, does not create monopoly or limit competition or engage in unfair competition within the credit institution system

What are the conditions for issuing licenses to credit institutions in Vietnam? What is the deadline for issuing licenses to credit institutions in Vietnam? (Internet image)

What are cases of revocation of licenses of credit institutions in Vietnam?

Based on Article 36 of the Law on Credit Institutions 2024, which stipulates the revocation of a License in Vietnam:

Article 36. Revocation of License

1. The State Bank revokes the issued License in the following cases:

a) The application for the License contains fraudulent information to meet the conditions for being granted a License;

b) The credit institution is divided, merged, consolidated, dissolved, bankrupt, or changes its legal form;

c) The credit institution, foreign bank branches, foreign representative offices operate not in accordance with the content specified in the License;

d) The credit institution, foreign bank branches seriously violate the provisions of the law on compulsory reserves and the safety guarantee rates of operation;

dd) The credit institution, foreign bank branches fail to implement or fully implement the State Bank’s handling decisions to ensure safety in banking activities;

[...]

Thus, a credit institution's License is revoked by the State in the following cases:

- The application for the License contains fraudulent information to meet the conditions for being granted a License

- The credit institution is divided, merged, consolidated, dissolved, bankrupt, or changes its legal form

- The credit institution, foreign bank branches, foreign representative offices operate not in accordance with the content specified in the License

- The credit institution, foreign bank branches seriously violate the provisions of the law on compulsory reserves and the safety guarantee rates of operation

- The credit institution, foreign bank branches fail to implement or fully implement the State Bank’s handling decisions to ensure safety in banking activities

- Foreign credit institutions, other foreign organizations with banking activities having a commercial presence in Vietnam are dissolved, bankrupt, or revoked of their licenses or suspended from operations by the competent authority of the country where the organization is headquartered

What is the deadline for issuing licenses to credit institutions in Vietnam?

Based on Article 31 of the Law on Credit Institutions 2024, which stipulates the deadline for issuance of license in Vietnam:

Article 31. Deadline for issuance of license

1. Within 180 days from the date of receiving a complete dossier, the State Bank issues or refuses to issue the License for the establishment and operation of the credit institution, License for the establishment of foreign bank branches.

2. Within 60 days from the date of receiving a complete dossier, the State Bank issues or refuses to issue the License for the establishment of foreign representative offices.

3. In case of refusal to issue a License, the State Bank must give written notice stating the clear reason.

According to the above regulations, the License issuing period for the establishment and operation of a credit institution is 180 days from the date of receiving a complete dossier.