Decision on Placing a Credit Institution Under Special Control

To be specific, Clause 27 Article 1 of the Amended Law on Credit Institutions 2017 amended and supplemented Section I Chapter VIII of the Law on Credit Institutions 2010, adding Articles 145a, 145b after Article 145 of the Law on Credit Institutions 2010.

The State Bank shall consider and decide to place a credit institution under the special control measures as prescribed in Clause 1, Article 145 of the Law on Credit Institutions 2010 and establish a Special Control Board to monitor the activities of that credit institution.

The State Bank stipulates the following contents:

- Forms of special control, the duration of special control, extension of the duration of special control, termination of special control, and disclosure of information regarding the special control of the credit institution;- Composition, quantity, structure, and operating mechanism of the Special Control Board suitable to the form of special control and the actual situation of the credit institution under special control.

From the date the State Bank places the credit institution under special control, the principal and interest loan balance of the refinancing loans granted by the State Bank to that credit institution will be converted into special loan balances.

Additionally, the law also stipulates that the State Bank shall consider and decide to terminate the special control over the credit institution under special control in the following cases:

- The credit institution under special control overcomes the situation that led to it being placed under special control and complies with the safety ratios prescribed in Article 130 of the Law on Credit Institutions 2010;- During the period of special control, the credit institution under special control is merged, consolidated into another credit institution, or dissolved;- After a judge appoints an Administrator or asset management and liquidation enterprise to carry out bankruptcy procedures for the credit institution under special control.

More details can be found in: Amended Law on Credit Institutions 2017, effective from January 15, 2018, amending and supplementing Law on Credit Institutions 2010.

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