Conditions for founding shareholders as organizations of non-bank credit institutions under Decree 162/2024 in Vietnam

Conditions for founding shareholders as organizations of non-bank credit institutions under Decree 162/2024 in Vietnam​ (Image from the Internet)

On December 20, 2024, the Government of Vietnam issued Decree 162/2024/ND-CP stipulating the conditions for licensing people's credit funds, micro-finance organizations, and conditions for the owners of credit institutions, which include single-member limited liability companies, founding shareholders, and founding members.

Conditions for founding shareholders as organizations of non-bank credit institutions under Decree 162/2024 in Vietnam

According to Clause 4, Article 8 of Decree 162/2024/ND-CP, in addition to the regulations in Clause 1 and Clause 2, Article 8 of Decree 162/2024/ND-CP, founding shareholders of non-banking credit institutions must comply with the following provisions:

+ Established in accordance with the laws of Vietnam;

+ Not allowed to use mobilized capital, borrowed funds from other organizations or individuals to contribute capital, not allowed to use capital obtained from issuing corporate bonds to contribute capital; not allowed to contribute capital under the name of other individuals or legal entities in any form, except for cases of entrusted capital contribution or share purchase;

+ Must have profitable business operations for the 03 consecutive years before the year of application for a License and up to the time of submission of additional documents to be considered for a License;

+ Must fulfill all tax and social insurance obligations up to the time of submitting the application for a License;

+ Must not have been convicted of offenses prescribed in the Criminal Code 2015 for 02 consecutive years before the year of application for a License and up to the time of submitting additional documents to be considered for a License;

+ For organizations that are Vietnamese enterprises (excluding Vietnamese commercial banks):

Must have a minimum owner's equity of 500 billion VND, total assets of at least 1,000 billion VND in the 03 consecutive years before the year of applying for a License. In cases where enterprises operate in business sectors requiring statutory capital levels, the owner's equity according to audited financial statements of the year immediately before the time of application, minus the statutory capital, must be at least equal to the committed contributed capital;

In cases where the enterprise is licensed to establish and operate in the fields of securities, insurance, it must comply with capital contribution regulations under the law on securities, insurance;

+ For Vietnamese commercial banks:

Must have minimum total assets of 100,000 billion VND, fully comply with risk management and provisioning regulations at the time of application for a License and until the submission of additional documents to be considered for a License;

Must not violate safety limits and ratios in operations under regulations of the State Bank in the year immediately before applying for a License and up to the submission of additional documents to be considered for a License;

Ensure a minimum capital adequacy ratio after capital contribution to establish non-banking credit institutions;

Must not incur administrative penalties in the field of currency and banking operations in the 02 years immediately before applying for a License and up until the submission of additional documents to be considered for a License.

Refer to more details in the Decree 162/2024/ND-CP effective from December 20, 2024.

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