Principles of merger and consolidation of credit institutions in Vietnam from February 17, 2025

Principles of merger and consolidation of credit institutions in Vietnam from February 17, 2025

- Implement according to the agreement; ensure the normal operation of the credit institution; ensure the lawful rights and interests of customers, creditors, and other related parties during the merger, consolidation process.

- Comply with the provisions in Circular 62/2024/TT-NHNN and relevant legal regulations.

- Keep information confidential to ensure the stable operation of the credit institution participating in the merger, consolidation before the merger, consolidation scheme is approved by the competent authority of the credit institution. The documents related to the merger, consolidation of credit institutions must adhere to the principles of prudence, honesty, and accuracy. The concealment of assets in any form is strictly prohibited. The transfer, sale of assets during the merger, consolidation process must be transparent, comply with the law and the agreement of the parties, ensure asset safety and not affect the interests of the credit institution participating in the merger, consolidation, and organizations or individuals related to the merger, consolidation.

- The establishment and operation license of the absorbed credit institution becomes invalid when the consolidated credit institution commences operation. The establishment and operation license of the merged credit institution becomes invalid from the date the State Bank issues an amendment or supplement to the establishment and operation license of the absorbing credit institution.

Conditions for merger, consolidation of credit institutions in Vietnam from February 17, 2025

The credit institution participating in the merger, consolidation must fully meet the following conditions:

- Must not fall under prohibited economic concentration;

- Have a merger, consolidation scheme in accordance with Article 12 of Circular 62/2024/TT-NHNN approved by the competent authority of the credit institutions participating in the merger, consolidation;

- The charter capital of the consolidated credit institution, credit institution after the merger must be at least equal to the legal capital for the type of consolidated credit institution, credit institution after the merger as prescribed by law.

After the merger, consolidation, the credit institution after the merger, consolidated credit institution must ensure compliance with the legal regulations on limits, safety assurance ratios, capital contribution ratios, and share ownership.

Circular 62/2024/TT-NHNN is effective from February 17, 2025.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE