Procedure for changing the charter capital of a credit institution which is a cooperative from July 01, 2024

Procedures for changing the charter capital of a credit institution that is a cooperative in Vietnam from July 1, 2024 (Internet image)

On June 28, 2024, the Governor of the State Bank of Vietnam issued Circular 28/2024/TT-NHNN regulating dossiers, order, and procedures for approving changes and the expected list of elected or appointed personnel of credit institutions that are cooperatives.

Application for changes in the charter capital of a credit institution that is a cooperative in Vietnam

To be specific, the dossier requesting changes to the charter capital of a credit institution that is a cooperative from July 1, 2024 includes:

• Written request for approval of changes to the charter capital according to the form in Appendix No. 04 issued together with Circular 28/2024/TT-NHNN;

• Resolution of the General Assembly of Members approving the plan to change the charter capital, except in cases of changes to the charter capital due to changes in member contributions;

• Resolution of the Board of Directors on changing the charter capital due to changes in member contributions;

• List of members changing their contributions according to the form in Appendix No. 05 issued together with Circular 28/2024/TT-NHNN;

• The plan to reduce the charter capital must comply with legal provisions on statutory capital and include plans to ensure compliance with safety ratios in the operations of the credit institution that is a cooperative.

(Clause 1, Article 7 of Circular 28/2024/TT-NHNN)

Procedures for approving changes in the charter capital of a credit institution that is a cooperative in Vietnam

The procedures for approving changes in the charter capital of a credit institution that is a cooperative are specified as follows:

• Within 40 days from the date of the General Assembly of Members' conclusion or in cases of returning member contributions leading to the charter capital falling below the charter capital recorded in the license, the credit institution that is a cooperative must prepare and send the dossier to the State Bank. In case the dossier is incomplete, within 03 working days from the date of receipt, the State Bank will issue a written request for dossier supplementation;

• Within 30 days from the date of receipt of a complete dossier:

(i) In case of increasing the charter capital or in case of returning member contributions due to the dissolution or bankruptcy of a people's credit fund leading to the cooperative bank's charter capital falling below the recorded charter capital: the State Bank will issue a decision to amend and supplement the license regarding changes to the charter capital of the credit institution that is a cooperative;

(ii) In case of reducing the charter capital, except for cases specified in point b(i) of this Clause: the State Bank will issue a written approval for the charter capital reduction. The credit institution that is a cooperative may only implement the charter capital reduction plan after obtaining the State Bank's approval;

(iii) In the case of rejection, the State Bank will reply in writing and state the reasons.

• Within 30 days from the date of obtaining the State Bank’s written approval, the credit institution that is a cooperative must implement the charter capital reduction and notify the State Bank of the completion of the reduction. If the credit institution fails to reduce the charter capital within this period, the State Bank's approval will expire.

Within 10 days from the date of receipt of the notification of completion of the charter capital reduction from the credit institution that is a cooperative, the State Bank will issue a decision to amend and supplement the license regarding the charter capital of the credit institution that is a cooperative.

(Clauses 2 and 3, Article 7 of Circular 28/2024/TT-NHNN)

More details can be found in Circular 28/2024/TT-NHNN effective in Vietnam from July 1, 2024.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE