Approval of the plan to cut and simplify regulations related to business activities of the State Bank of Vietnam

Approval of the plan to cut and simplify regulations related to business activities of the State Bank of Vietnam (Internet image)

Regarding this matter, LawNet would like to answer as follows: 

On May 7, 2024, the Prime Minister issued Decision 381/QD-TTg approving the plan to cut and simplify regulations related to business activities within the scope of management functions of the State Bank of Vietnam.

Approval of the plan to cut and simplify regulations related to business activities of the State Bank of Vietnam

Under Decision 381/QD-TTg 2024, 12 administrative procedures in 4 business sectors are cut and simplified as follows:

- Business activities of commercial banks;

- Business activities of non-bank credit institutions;

- Business activities of cooperative banks, People's Credit Funds, and microfinance institutions;

- Outward investment activities.

The implementation of cutting and simplifying is as follows:

(1) Business activities of commercial banks:

- Approval procedures for the purchase, sale, and transfer of shares by major shareholders; purchase, sale, and transfer of shares leading to becoming major shareholders of commercial banks:

Eliminate the requirement for major shareholders to go through approval procedures for the purchase, sale, and transfer of shares.

The reason for elimination is to help reduce time, costs, and facilitate the administrative procedures for major shareholders when conducting share transactions. At the same time, the reduction is also in line with the provisions of Article 37.1 of the Law on Credit Institutions 2024.

- For voluntary procedures to terminate the operations of domestic branches of commercial banks:

Provide online public services for the entire process in electronic form based on the standardized documents of the commercial bank requesting the termination of branch operations. In addition, supplement regulations on online submission of documents and issuance of approval documents for voluntary termination of operations of domestic branches of commercial banks in electronic form.

Reason: Providing online public services for the entire process helps reduce costs, save time, and facilitate the parties involved.

(2) Business activities of non-bank credit institutions:

Eliminate the approval procedures for the purchase, sale, and transfer of shares by major shareholders and the expected buyer or transferee being ordinary shareholders; the purchase, sale, and transfer of shares leading to major shareholders becoming ordinary shareholders of non-bank credit institutions.

Reason: To help reduce administrative procedures, save time and costs, and facilitate the parties involved. In addition, the elimination is in line with the provisions of Article 37.1 of the Law on Credit Institutions 2024 (which has abolished the State Bank of Vietnam's approval for the purchase, sale, and transfer of shares by major shareholders and the expected buyer or transferee being ordinary shareholders; the purchase, sale, and transfer of shares leading to major shareholders becoming ordinary shareholders of credit institutions, branches of foreign banks).

(3) Business activities of cooperative banks, People's Credit Funds, and microfinance institutions:

- Eliminate the procedures for converting the Central People's Credit Fund and issuing licenses to establish cooperative banks.

Reason: Cooperative banks are banks of all People's Credit Funds, established by People's Credit Funds and some other legal entities with the main goal of linking the system, providing financial support, and regulating capital within the People's Credit Fund system.

Until now, cooperative banks have been established based on the conversion from the Central People's Credit Fund and are the only banks for People's Credit Funds.

Therefore, there is only one existing cooperative bank, and no new cooperative banks will be licensed for establishment.

- Eliminate the procedures for issuing licenses to establish and operate cooperative banks.

Reason: Cooperative banks are banks of all People's Credit Funds, established by People's Credit Funds and some other legal entities with the main goal of linking the system, providing financial support, and regulating capital within the People's Credit Fund system.

Until now, cooperative banks have been established based on the conversion from the Central People's Credit Fund and are the only banks for People's Credit Funds.

Therefore, there is only one existing cooperative bank, and no new cooperative banks will be licensed for establishment.

- Regarding the procedures for changing the charter capital of cooperative banks:

Eliminate the following components of the documentation: Proposal to increase charter capital; Proposal to decrease charter capital; List of contributing members and expected capital reimbursement within the year according to the form in Appendix 06 of Circular 05/2018/TT-NHNN.

Reason: According to the regulations in Clause 3, Article 86 and Clause 8, Article 88 of the Law on Credit Institutions 2024: "The admission and dismissal of members are under the jurisdiction of the Board of Directors." Therefore, the contributed capital of members of People's Credit Funds may fluctuate (increase, decrease) regularly. To create favorable conditions for cooperative banks as credit institutions, the State Bank of Vietnam (SBV) regulates that the charter capital can be changed once a year. The simplified documentation, sequence, and procedures for changing the charter capital help reduce printing costs, save time, and facilitate the parties involved.

- The procedures for requesting changes in the charter capital of People's Credit Funds also eliminate the following components of the documentation: Proposal to increase charter capital; Proposal to decrease charter capital; List of contributing members and expected capital reimbursement within the year according to the form in Appendix 06 of Circular 05/2018/TT-NHNN.

Reason: According to the regulations in Clause 3, Article 86 and Clause 8, Article 88 of the Law on Credit Institutions 2024: "The admission and dismissal of members are under the jurisdiction of the Board of Directors." Therefore, the contributed capital of members of People's Credit Funds may fluctuate (increase, decrease) regularly. To create favorable conditions for People's Credit Funds, the SBV regulates that the charter capital can be changed once a year. The simplified documentation, sequence, and procedures for changing the charter capital help reduce printing costs, save time, and facilitate the parties involved.

More details can be found in Decision 381/QD-TTg, dated May 7, 2024.

Nguyen Ngoc Que Anh

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