Newest regulations on notification of special control over credit institutions in Vietnam

Regulations on notification of special control over credit institutions in Vietnam (Image from the internet)

On July 01, 2024, the Governor of the State Bank of Vietnam issued Circular 39/2024/TT-NHNN stipulating the special control over credit institutions in Vietnam.

Regulations on notification of special control over credit institutions in Vietnam

According to Article 6 of Circular 39/2024/TT-NHNN, the notification of special control over credit institutions in Vietnam is as follows:

- Notification of special control includes one or more of the following contents:

+ Decision on special control;

+ Change in the form of special control;

+ Extension or termination of special control;

+ Document of the competent authority approving the restructuring plan;

+ Other contents.

- The State Bank sends a written notification of special control over the specially controlled credit institution stipulated in Clause 1, Article 3 of Circular 39/2024/TT-NHNN to one or more of the following recipients:

+ Board of Directors or Board of Members, Supervisory Board, General Director (Director) of the specially controlled credit institution;

+ The State Bank branch where the specially controlled credit institution's head office is located, the State Bank branch where the specially controlled credit institution has dependent units operating;

+ Vietnam Deposit Insurance;

+ The provincial People’s Committee where the specially controlled credit institution’s head office is located;

+ The Ministry of Finance (in case the specially controlled credit institution is a listed company, a registered trading company, a state-owned enterprise, a subsidiary, an affiliate of an insurer, a financial insurance group; the specially controlled credit institution has subsidiaries, affiliates operating in securities or insurance sectors);

+ Other related agencies and organizations.

- The State Bank branch sends a written notification of special control over the specially controlled credit institution stipulated in Clause 2, Article 3 of Circular 39/2024/TT-NHNN to one or more of the following recipients:

+ Board of Directors, Supervisory Board, General Director (Director) of the specially controlled credit institution;

+ Governor of the State Bank;

+ Vietnam Deposit Insurance;

+ Vietnam Cooperative Bank;

+ Provincial, district, and commune People’s Committees where the specially controlled credit institution’s head office is located;

+ Other related agencies and organizations.

- The Governor of the State Bank specifically decides the scope, contents, and recipients of the notification of special control stipulated in Clauses 1 and 2, Article 6 of Circular 39/2024/TT-NHNN and the timing of the notification of special control over the specially controlled credit institution stipulated in Clause 1, Article 3 of Circular 39/2024/TT-NHNN.

- The Director of the State Bank branch specifically decides the scope, contents, and recipients of the notification of special control stipulated in Clauses 1 and 3, Article 6 of Circular 39/2024/TT-NHNN and the timing of the notification of special control over the specially controlled credit institution stipulated in Clause 2, Article 3 of Circular 39/2024/TT-NHNN.

Forms of special control over credit institutions in Vietnam from July 01, 2024

Based on the actual situation and the level of risk in the operations of credit institutions, the Governor of the State Bank of Vietnam or the Director of the State Bank branch considers and decides to place the credit institution under special control in the form of special supervision or comprehensive control.

Specifically:

- Special supervision is placing the credit institution under direct control of the State Bank through directives and remote direct control, onsite inspection by the Special Supervision Board over the operations of the specially controlled credit institution.

- Comprehensive control is placing the credit institution under direct control of the State Bank through onsite directives and direct control by the Special Supervision Board over the daily operations of the specially controlled credit institution.

(Clauses 1, 2, 3, Article 4 of Circular 39/2024/TT-NHNN)

More details can be found in Circular 39/2024/TT-NHNN, which comes into force in Vietnam from July 01, 2024, and replacing Circular 11/2019/TT-NHNN except for Clause 2, Article 21 of Circular 39/2024/TT-NHNN.

Le Nguyen Anh Hao

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE