Hanoi-Vietnam: Conditions for capital contribution for establishing or acquiring associate companies by credit institutions

19:57, 10/07/2024

The State Bank of Vietnam signed for promulgating Circular No. 51/2018/TT-NHNN on December 31, 2018 prescribing conditions, necessary documents, order and procedures for approving the contribution of capital to and purchase of shares of credit institutions.

According to the provisions of Circular 51/2018/TT-NHNN, to contribute capital, purchase shares for establishing or acquiring associate companies under points a and c, clause 1, Article 1 of Circular 51/2018/TT-NHNN, credit institutions must meet the following conditions:

- They must meet the requirements stated in Point a, Point d, Point dd, Point e, Point g, and Point h Clause 1 of Article 4 of Circular 51/2018/TT-NHNN;

- They must meet the capital adequacy ratio as regulated in Point b Clause 1 Article 130 of the Law on credit institutions for a period of 12 months preceding the month in which the application is submitted and at the date of completion of the capital contribution or purchase of shares with the SBV’s approval;

- They must meet the capital contribution or share purchase ratio as regulated in Article 129 of the Law on credit institutions for a period of 12 months preceding the month in which the application is submitted and at the date of completion of the capital contribution or purchase of shares with the SBV’s approval.

Circular 51/2018/TT-NHNN is effective from March 1, 2019.

- Thanh Lam -

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