Instructions for business registration of transaction offices of Cooperative Bank of Vietnam

The Ministry of Planning and Investment issued Official Dispatch 7461/BKHDT-DKKD dated October 19, 2022 on business registration for transaction offices of Cooperative Bank of Vietnam.

Instructions for business registration of transaction offices of Vietnam Cooperative Bank

Instructions for business registration of transaction offices of Cooperative Bank of Vietnam (Internet image)

Some contents related to the business registration of transaction offices of the Cooperative Bank of Vietnam are guided as follows:

1. Regarding the legal status of the transaction office of the Cooperative Bank of Vietnam

On September 8, 2022, the State Bank of Vietnam issued Official Dispatch 6337/NHNN-PC replying to the Ministry of Planning and Investment on determining the legal status of the transaction office of the Cooperative Bank of Vietnam. Pursuant to the provisions of Clause 4, Article 3 of Circular 09/2018/TT-NHNN, the transaction office of a cooperative bank is a type of branch and a dependent unit of the cooperative bank. (not a branch dependency).

Specifically, the transaction office of a cooperative bank is a type of branch or dependent unit of the cooperative bank, managed by a branch of the cooperative bank; has a seal, has its head office located in the area of operation of the branch under its management, and is responsible for performing one or several functions of the cooperative bank in accordance with internal regulations and provisions of law.

Therefore, the business registration agencies agreed to register the operation of the transaction office of the Cooperative Bank of Vietnam in the form of a branch of the Cooperative Bank of Vietnam.

2. Conditions for establishing transaction offices of the Cooperative Bank of Vietnam

According to Article 10 of Circular 09/2018/TT-NHNN, the conditions for establishing branches and transaction offices of Cooperative Bank of Vietnam are as follows:

- There is a need to establish a branch to serve people's credit funds in the area where the branch is planned to be established.

- Having the actual value of the charter capital as of December 31 of the year preceding the year of the request not lower than the legal capital.

- Profitable business activities according to the independently audited financial statements of the year preceding the year in which the branch is proposed to be established.

- Not violating regulations on safety limits and ratios in operation as prescribed in the Law on Credit Institutions and the guidance of the State Bank for 12 consecutive months up to the time of request.

- Strictly complying with regulations on debt classification, setting up risk provisions according to regulations of the State Bank as of December 31 of the year preceding the year of application and at the nearest time of application; the ratio of bad debts to total outstanding loans as of December 31 of the year preceding the year of application and at the time of request does not exceed 3% or another ratio according to the decision of the Governor of the State Bank from time to time.

- At the time of request, the Board of Directors and Supervisory Board have the number and structure in accordance with the provisions of law, there is no vacant General Director.

- At the time of request, the cooperative bank has an internal audit and internal control system to ensure compliance with the provisions of the Law on Credit Institutions and other relevant laws.

- There are regulations on network management as prescribed in Article 9 of Circular 09/2018/TT-NHNN.

- Not subject to the application of measures not to expand the network according to the law on handling after inspection and supervision of credit institutions.

- Ensuring the number of branches as prescribed at Points a and b, Clause 1, Article 7 of Circular 09/2018/TT-NHNN.

3. Regarding the delay in business registration for transaction offices of the Cooperative Bank of Vietnam after converting from the Central People's Credit Fund in Vietnam

According to Clause 1, Article 48 of Circular 31/2012/TT-NHNN, the cooperative bank inherits and continues to exercise all rights, obligations, and legitimate interests, as well as being responsible for handling all problems arising from the Central People's Credit Fund in accordance with the provisions of the Law on Credit Institutions and relevant laws.

According to the provisions of Clause 5, Article 15 of Circular 09/2018/TT-NHNN, the cooperative bank shall register the operation of transaction offices in accordance with the law.

Thus, after converting from the Central People's Credit Fund into the Cooperative Bank of Vietnam, the Cooperative Bank of Vietnam is responsible for registering the operation of transaction offices in accordance with the law on cooperatives.

More details can be found in Official Dispatch 7461/BKHDT-DKKD, dated October 19, 2022.

Nhu Mai

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