Changes of credit institutions which must be approved by the State Bank of Vietnam

Changes of credit institutions which must be approved by the State Bank of Vietnam (Internet image)

On January 18, 2024, the National Assembly of Vietnam passed the Law on Credit Institutions 2024.

Changes of credit institutions which must be approved by the State Bank of Vietnam

Article 37 of the Law on Credit Institutions 2024 stipulates the changes of credit institutions which must be approved by the State Bank of Vietnam as follows:

- A credit institution or foreign bank's branch shall obtain written approval from the State Bank before carrying out procedures for change in any of the following contents:

+ Its name or place of its head office;

+ Its charter capital or provided capital, except the case specified in Clause 3 of Article 37 of the Law on Credit Institutions 2024;

+ Location where the credit institution’s branch is headquartered;

+ Contents and duration of operation;

+ Purchase, sale or transfer of the owner’s stake; purchase, sale or transfer of a capital contributor’s stake; purchase or receipt of transfer of shares resulting in a conversion into a major shareholder. The owner, capital contributor, shareholder, purchaser and transferee of shares or stakes of the credit institution shall be responsible for cooperating with the credit institution to carry out procedures for seeking approval for the contents specified at this point.

In case of purchase, sale, receipt of transfer, or transfer of stakes of the credit institution that is a limited liability company, the purchaser or transferee shall satisfy the requirements applied to owners and capital contributors specified in point b Clause 1, Clause 2 Article 29, and Clause 2 Article 78 of the Law on Credit Institutions 2024; the capital contributor shall comply with regulations in Clause 1 Article 77 of the Law on Credit Institutions 2024;

+ Any transaction suspension of 05 working days or more, except suspension due to force majeure events;

+ Listing of shares on a foreign securities market.

- Documents and procedures for making changes specified in Clause 1 of Article 37 of the Law on Credit Institutions 2024 and adjustments to the license shall be specified by the Governor of the State Bank.

- Any change to location of a people’s credit fund, charter capital, transfer of stakes of capital contributors of a cooperative bank or a people's credit fund shall comply with regulations of the Governor of the State Bank.

- When obtaining approval for change to contents specified in Clause 1 of Article 37 of the Law on Credit Institutions 2024, the credit institution or foreign bank’s branch shall carry out the following procedures:

+ Revising the charter of the credit institution according to the approved changes specified in points a,b,d and dd Clause 1 of this Article;

+ Publishing changes defined at points a, b, c and d, Clause 1 of Article 37 of the Law on Credit Institutions 2024 in the media of the State Bank and on a Vietnamese daily newspaper for 3 consecutive issues or in a Vietnamese e-newspaper, within 07 working days from the date on which the State Bank's approval is granted.

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

The Law on Credit Institutions 2010 as amended by the Law amending Law on Credit Institutions 2017 shall cease to be effective from the effective date of the Law on Credit Institutions 2024, except for the provisions in Clauses 1, 2, 3, 4, 8, 9, 12 and 14, Article 210 of the Law on Credit Institutions 2024.

To Quoc Trinh

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