Latest procedures for granting licenses for the establishment and operation of cooperative banks in Vietnam

Latest procedures for granting licenses for the establishment and operation of cooperative banks in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

Procedures for granting licenses for the establishment and operation of cooperative banks in Vietnam

(1) Procedures:

- Step 1. The cooperative bank planning to establish prepares one set of documents according to regulations and sends them directly to the Single-Window Department or postal service to the State Bank of Vietnam.

- Step 2. Within 30 days from the date of receiving the application for a license,
The State Bank (Banking Inspection and Supervision Agency) shall send a document to the proposed cooperative bank confirming receipt of complete and valid documents or a request to supplement and complete documents according to regulations.

- Step 3. Within 180 days from the date of confirmation of receipt of complete and valid documents, the State Bank shall issue a license or issue a written refusal to issue a license, clearly stating the reason.

(2) Submission methods:

- Submit directly to the Single-Window Department of the State Bank of Vietnam;

- Send via postal service.

(3) Document components:

(3.1) Written request for license issued by the Chairman of the Board of Directors of the cooperative bank expected to be established (Appendix No. 03 of Circular 31/2012/TT-NHNN).

(3.2) Cooperative bank charter.

(3.3) Cooperative bank establishment project, which clearly states:

- The need to establish a cooperative bank,

- Cooperative bank name, head office location, operating term, charter capital upon establishment, and operational content in accordance with the provisions of the Law on Credit Institutions and Circular 31/2012/TT-NHNN.

- Capital contribution structure of members, clearly stating that members contribute 05% or more of charter capital;

- Expected organizational structure and personnel:

+ Personnel organization chart,

+ Management, control, and operating apparatus, including:

++ Board of Directors: Chairman, member of the Board of Directors

++ Supervisory Board Head, Supervisory Board member, Supervisory Board member, full-time;

++ General Director, Deputy General Directors, Chief Accountant, Branch Director, and equivalent positions as prescribed in the cooperative bank's charter;

- Risk management capacity: types of risks expected to arise during operations (credit risk, operational risk, market risk, liquidity risk, etc.) and measures to prevent and control these types of risks ,

- Information technology:

+ Expected financial investment in information technology;

+ Ability and application of information technology, clearly stating: time to implement technology investment; type of technology expected to be applied; expected staff and staff's ability to apply information technology; ensure the information system can integrate and connect with the State Bank's management system to provide information according to the State Bank's management requirements;

- Development strategy, expansion of operational network, provision and development of banking services (clear analysis of services expected to be provided, types of customers, etc.);

- Internal control and audit system:

+ Operating principles of internal control and auditing systems;

+ Internal regulations as prescribed in Clause 2, Article 93 of the Law on Credit Institutions

- Expected business plan for the first 3 years must include at least: expected business results, minimum capital spending, performance indicators, and an explanation of the ability to implement the plan each year.

(3.4) Profile of people expected to participate in management, control, and operation:

- List of personnel expected to participate in management, control, and administration;

- Curriculum vitae (Appendix No. 01 of Circular 24/2023/TT-NHNN), judicial record according to the provisions of law;

Confirming the curriculum vitae of organizations and individuals is done on the basis of exploiting citizens' residence data on the National Population Database or checking the VNeID application according to the instructions of the Ministry of Public Security; do not require organizations and individuals to submit and present household registration books and paper temporary residence books in accordance with the provisions of Article 14 of Decree 104/2022/ND-CP.

- Publicly report related interests as prescribed in Article 118 of the Enterprise Law 2020.

- Copies of diplomas proving professional qualifications and skills.

(3.5) Member profile

- List of members contributing capital to the cooperative bank, including the following main contents:

+ Name and location of head office; Number of Establishment License or Business Registration Certificate or equivalent document; capital contribution amount, capital contribution ratio, capital contribution period;

+ Full name; Current residence (in case it is different from the place of permanent or temporary residence); ID card number or personal identification number for individuals who are legal representatives or capital contribution representatives of members

- Application to join cooperative bank membership;

- Establishment license, business registration certificate, or equivalent document (for legal entities that are not credit institutions);

- Document from a competent authority approving organizations (except people's credit funds) to contribute capital to establish Cooperative bank (if any);

- Charter (for legal entities that are not credit institutions)

- Document authorizing the legal entity representative (including a capital contribution representative) to participate as a member at the cooperative bank according to the provisions of law;

- Declaration of related persons of members who are not people's credit funds (Appendix No. 02 Circular 24/2023/TT-NHNN;

- Financial statements for the year immediately preceding the year of request for establishment of cooperative bank and financial statements up to the latest date but not more than 90 days from the date of the written request for capital contribution (for legal entities other than credit institutions);

- The declaration clearly states the capital contribution, number of shares held, and share ratio of each member at another credit institution.

(3.6) Document confirming ownership or legal right to use the location of the head office.

(3.7) Resolution of the first General Assembly of members on the establishment of a cooperative bank.

(3.8) Resolution of the first General Meeting of Members on the election of Chairman and members of the Board of Directors, Head and members of the Supervisory Board.

(3.9) Decision of the Board of Directors on the appointment of the General Director of the cooperative bank.

(4) Number of documents: 01 (one) set.

(5) Processing time: 180 days from the date of written confirmation of receipt of all valid documents.

(6) Fee: 140,000,000 VND.

Legal basis: Decision 218/QD-NHNN in 2024.

Ho Quoc Tuan

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