Law on Credit Institutions 2010 of Vietnam: Licensing conditions

According to the Law on Credit Institutions 2010 of Vietnam, a credit institution may obtain a license when fully meeting the following conditions:

* Regarding credit institutions:

- Its charter or allocated capital is at least equal to the legal capital;

Its owner is a one-member limited liability company, its founding shareholders or members are legal entities which are lawfully operating and financially capable for capital contribution. Its founding shareholders or members are individuals with full civil act capacity and financially capable of capital contribution.

- The State Bank shall provide the conditions for owners of credit institutions being one-member limited liability companies and founding shareholders and members;

- Its managers, executives and Control Board members fully meet the criteria and conditions under Article 50 of this Law;

- Its charter complies with this Law and other relevant laws;

- It has an establishment plan and a feasible business plan which neither affects the safety and stability of the credit institution system nor creates monopoly or restrict competition or create unfair competition within the credit institution system.

* Regarding joint-venture or wholly foreign-owned credit institutions:

- The foreign credit institution may conduct banking operations under the law of the country in which it is headquartered;

- The operations to be conducted in Vietnam are those the foreign credit institution is licensed to conduct in the country in which it is headquartered;

- The foreign credit institution's operations are healthy and it meets requirements on total assets, financial status and safety ratios under the State Bank's regulations:

- The foreign institution makes a written commitment to provide supports in finance, technology, governance, administration and operation for the joint-venture or wholly foreign owned credit institution- It guarantees that the joint-venture or wholly foreign-owned credit institution preserves the actual value of its charter capital not lower than the legal capital and observes regulations on safety assurance under this Law;

- A competent foreign authority has signed an agreement with the State Bank on inspection and oversight of banking operations and exchange of information on banking safety oversight and made a written commitment on consolidated oversight of the foreign credit institution's operations according to international practices.

View more: The Law on Credit Institutions 2010 of Vietnam was promulgated on June 16, 2010 and officially effective from January 01, 2011.

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