Standards and conditions for general director of cooperative bank in Vietnam

Standards and conditions for general director of cooperative bank in Vietnam (Image from the Internet)

On June 28, 2024, the Governor of the State Bank of Vietnam issued Circular 27/2024/TT-NHNN regulating cooperative banks, the deduction and usage of the Safety Assurance Fund for the system of people's credit funds.

Standards and conditions for general director of cooperative bank in Vietnam

According to Clause 1, Article 9 Circular 27/2024/TT-NHNN, the standards and conditions for the General Director of a cooperative bank are as follows:

- Not falling under the cases specified in Clause 1, Article 42, and Article 43 of the Law on Credit Institutions;

- Having professional ethics;

- Having held a management or executive position in an organization operating in the banking sector for 03 years or more;

- Holding a university degree or higher in one of the fields of economics, finance, accounting, auditing, banking, business administration, law;

- Residing in Vietnam during the term of office.

Nature and cbjectives of cooperative bank in Vietnam

A cooperative bank is a type of credit institution organized according to the cooperative model operating in the banking sector, with the primary objective of linking and ensuring the safety of the system through financial support and monitoring the activities in the system of people's credit funds, balancing funds, and conducting banking activities for members who are people's credit funds.

(Article 3 Circular 27/2024/TT-NHNN)

License for establishment and operation of cooperative bank in Vietnam

- The content and duration of activities of the cooperative bank are specified in the License. The License form is provided in Appendix No. 01 issued with Circular 27/2024/TT-NHNN.

- In case the cooperative bank's License is lost, torn, or damaged, the cooperative bank must submit a written explanation directly or via postal service to the State Bank (One-stop Department) requesting the issuance of a copy of the License from the original book according to legal regulations. Within 02 working days from the date of receipt of the request, the State Bank of Vietnam (hereinafter referred to as the State Bank) considers and issues a copy from the original book to the cooperative bank.

(Article 6 Circular 27/2024/TT-NHNN)

Other business activities of cooperative bank in Vietnam

- The cooperative bank is allowed to carry out other business activities as regulated by the Governor of the State Bank:

+ Cash management services; treasury services for credit institutions, branches of foreign banks; asset custody services, safe deposit box rental;

+ Providing non-account payment services including: money transfer services, collection services, disbursement services, and other non-account payment services;

+ Consulting on banking operations and other business activities specified in the License;

+ Trustee, trust acceptance, agency in banking operations, payment agency.

- The cooperative bank is allowed to carry out additional business activities according to relevant laws:

+ Buying and selling bonds from the Government of Vietnam;

+ Issuing bonds.

- Insurance agency according to the following regulations:

+ When the License issued by the State Bank to the cooperative bank includes insurance agency activities, the cooperative bank is allowed to carry out insurance agency activities for types of insurance as regulated by the Law on Insurance Business;

+ When conducting insurance agency activities, the cooperative bank must comply with legal regulations on insurance business and relevant legal regulations.

(Article 21 Circular 27/2024/TT-NHNN)

Le Nguyen Anh Hao

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE