Cases of being prohibited from holding certain positions in Vietnam under the Law on Credit Institutions 2024

Cases of being prohibited from holding certain positions in Vietnam under the Law on Credit Institutions 2024 (Internet image) 

On January 18, 2024, at the 5th extraordinary session, the 15th National Assembly of Vietnam passed the Law on Credit Institutions 2024.

Cases of being prohibited from holding certain positions in Vietnam under the Law on Credit Institutions 2024

(1) Any of the following persons must not be a member of the Board of Directors, Board of Members, Board of Controllers, Director General (Director), Deputy Director General (Deputy Director) or a holder of equivalent title according to a credit institution’s Charter:

- One of the persons specified in (2);

- A person prohibited from participating in management and administration of an enterprise or cooperative under the law on officials and public employees and the law on anti-corruption;

- A person who used to be an owner of a private enterprise, a partner of a partnership company, Director General (Director), a member of Board of Directors, Board of Members or a controller or member of Board of Controllers of an enterprise, a member of Board of Directors and Director General (Director) of a cooperative at the time when the enterprise or cooperative is declared bankrupt, except for case where he/she is assigned or appointed to participate in management, administration or control of the enterprise or cooperative that is credit institution declared bankrupt according to task requirements;

- A person who had their title of Chairperson of Board of Directors, member of the Board of Directors, Chairperson of the Board of Members, member of Board of Members, head of the Board of Controllers, member of the Board of Controllers or Director General (Director) of a credit institution terminated under Article 47 of the Law on Credit Institutions 2024 or has committed violations, causing the revocation of the credit institution's license as determined by the competent agency;

- A related person of a member of the Board of Directors or the Board of Members or Director General (Director) of the credit institution, except for cases specified in Clause 3 Article 69, point b clause 1 Article 73 and point a Clause 2 Article 77 of the Law on Credit Institutions 2024;

- A related person of a member of Board of Controllers, Deputy Director of the People's Credit Fund;

- A person responsible for any violation against regulations on licensing, administration, shares, capital contribution, share purchase, credit extension, purchase of corporate bonds, safety ratios that results a fine in the maximum bracket imposed on the credit institution/foreign bank’s branch according to the law on penalties for administrative violations in monetary and banking sector under inspection conclusion.

(2) Any of the following persons must not act as a Chief Accountant or Director of the branch or Director General (Director) of a subsidiary of the credit institution:

- Minor or a person who is legally incapacitated, a person with limited cognition and behavior control, and a person with limited legal capacity;

- Person who is facing criminal prosecution or serving imprisonment sentence; serving an administrative penalty in a correctional institution or rehabilitation center, or is prohibited by the court from holding certain positions or doing certain works;

- Person who has been sentenced for any serious crime or worse;

- Person who has been sentenced for possession charge without having their criminal record expunged;

- Official, public employee or manager of division or higher level of an enterprise in which the State holds 50% or more of the charter capital, except for any person appointed to act as the representative of the State's stakes or stakes of the enterprise in which the State holds 50% or more of the charter capital in the credit institution or appointed or assigned to participate in management, administration or control of the credit institution according to task requirements;

- Officer, non-commissioned officer, professional army man or defense worker/public employee of an agency or unit under the Vietnam People's Army; officer, professional non-commissioned officer, worker/police officer of an agency and unit under the Vietnam People's Police, except for any person appointed to act as the representative of the State's stakes or stakes of the enterprise in which the State holds 50% or more of the charter capital in the credit institution;

- Another person defined in the Charter of the credit institution.

(3) Father/mother, spouse, child or sibling of each member of the Board of Directors and the Board of Members, General Director (Director) of the credit institution and his/her spouse must not act as Chief Accountant or finance manager of the credit institution.

More details can be found in the Law on Credit Institutions 2024, effective from July 1, 2024, except for Clause 3, Article 200 and Clause 15, Article 210 of the Law on Credit Institutions 2024, which takes effect from January 1, 2025.

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