Credit extension management of non-bank credit institutions in Vietnam

According to Article 13 of the Circular No. 23/2020/TT-NHNN of the State Bank of Vietnam, management of extension of credit is stipulated as follows:

1. Non-bank credit institutions shall manage credit extension in accordance with law their internal rules and regulations on credit extension and loan management to ensure the proper use of loans according to Clause 1 Article 4 of this Circular.

2. Non-bank credit institutions shall keep updating the list of founding shareholders, major shareholders, capital contributors, members of the Governing Board, the Board of Directors, the Board of Controllers, executives and holders of other managerial positions in accordance with laws and charters of non-bank credit institutions and other related persons thereof. This list must be sent directly or by post to SBV (Bank Supervision and Inspection Agency), except positions to which any change is reported in accordance with law.

3. A non-bank credit institution must report to:

- the General Meeting of Shareholders or Board of Directors on credit extended to the entities specified in Clause 1 Article 127 of the Law on credit institutions (amended) of Vietnam by the time of collection of data needed for the general meeting of shareholders or the meeting of the Board of Directors is held;

- the owner, capital contributors, executives on credit extended to the entities specified in Clause 1 Article 127 of the Law on credit institutions (amended) of Vietnam;

- SBV on credit extended to the entities specified in Clause 1 Article 127 of the Law on credit institutions (amended) of Vietnam under SBV’s regulations regarding statistical reporting regime.

4. Extension of credit to subsidiaries, associate companies and the entities mentioned in Clause 2 of this Article (except for the cases in which credit extension is not allowed according to Article 126 of the Law on credit institutions (amended) of Vietnam) is subject to approval by the Governing Board, the Board of Directors, except for credit extension decided by the General Meeting of Shareholders. The Board of Controllers shall monitor the approval of credit extension for the aforementioned entities.

More details at the Circular No. 23/2020/TT-NHNN of the State Bank of Vietnam, effective from February 14, 2021.

Thuy Tram

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