Cases of revocation of people's credit fund license in Vietnam

Cases of revocation of people's credit fund license in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Cases of revocation of people's credit fund license in Vietnam

Cases of revocation of a people's credit fund license under Article 16 of Circular 23/2018/TT-NHNN are as follows:

- The People's Credit Fund voluntarily applies for dissolution when it is able to pay off all debts and other property obligations.

- The application file for a people's credit fund license contains fraudulent information in order to be eligible for a license.

- People's credit funds do not operate in accordance with the contents specified in the License.

- The People's Credit Fund seriously violates the law on safety limits and ratios in operation.

- The People's Credit Fund fails to implement or incompletely implements the handling decision of the State Bank's branch to ensure safety in banking operations.

- People's credit funds are divided, merged, consolidated, or bankrupt.

- The People's Credit Fund has expired its operation term and has not applied for an extension. It has applied for an extension, but it has not been approved in writing by the branch of the State Bank.

2. Acts not to be performed when revoking the License and liquidating the assets of the people's credit fund in Vietnam

The acts not to be performed when revoking the License and liquidating the assets of the people's credit fund according to Article 15 of Circular 23/2018/TT-NHNN are as follows:

From the date on which the general meeting of members of the people's credit fund approves the request to revoke the license of the people's credit fund voluntarily dissolved or the State Bank's branch shall request in writing the people's credit fund to compile a dossier of request for dissolution, People's credit funds, managers, operators, and employees of people's credit funds are not allowed to perform the following acts:

- Concealing or dispersing assets of the people's credit fund, returning capital contributions of members.

- Relinquishing or reducing the right to collect debt.

- Converting unsecured debts into secured debts with assets of people's credit funds.

- Pledging, mortgage, donate and lease assets of people's credit funds.

- Signing new agreements and contracts, except for agreements and contracts aimed at terminating operations.

- Remittance of money and assets from people's credit funds abroad.

3. Disclosure of information on revocation of License and carrying out procedures for termination of legal entity in Vietnam

According to Article 20 of Circular 23/2018/TT-NHNN, the disclosure of information on license revocation and implementation of procedures for termination of legal entities is as follows:

- Within 07 working days from the effective date of the State Bank branch's decision approving the dissolution of the people's credit fund, the people's credit fund must:

Published in a daily newspaper within the province or city directly under the Central Government in 03 consecutive issues, it must post up at the headquarters of the commune-level People's Committee, the head office, and the transaction offices of the People's Credit Fund within 07 working days the following information:

+ Number and date of the decision of the State Bank branch on approval of dissolution;

+ Name and address of the head office;

+ Number and date of establishment and operation license, cooperative registration certificate;

+ Charter capital;

+ Legal representative.

- Within 07 working days from the effective date of the decision on revocation of the License:

+ The People's Credit Fund must publish the decision to revoke the License in a daily printed newspaper within the province or centrally run city for 03 consecutive issues, posted up at the headquarters of the commune-level People's Committee where the people's credit fund is headquartered; listed at the head office, transaction offices, and transaction points of the people's credit fund;

+ The State Bank's branch shall post on the website of the State Bank the revocation of the People's Credit Fund License and
and send the decision to revoke the License to the State Bank of Vietnam, the commune-level People's Committee where the people's credit fund is headquartered, Vietnam Deposit Insurance, Vietnam Cooperative Bank, People's Credit Fund Association.

- In case the license is revoked for the people's credit fund which is reorganized, the people's credit fund is divided, the people's credit fund is merged, People's credit funds participating in consolidation shall disclose information as prescribed in Clause 2, Article 10 of Circular 23/2018/TT-NHNN.

- People's credit funds shall carry out procedures for termination of legal entities in accordance with law.

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