Conditions for inaugurating operation of credit institutions in Vietnam

Conditions for inaugurating operation of credit institutions in Vietnam (Internet image)

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

1. Conditions for inaugurating operation of credit institutions in Vietnam

Specifically, Article 26 of the Law on Credit Institutions 2010 stipulates the conditions for inaugurating operation of credit institutions and foreign bank branches as follows:

- A licensed credit institution, foreign bank branch or representative office of a foreign credit institution or another foreign institution engaged in banking operations may operate only from the date of operation inauguration.

- To inaugurate its operation, a licensed credit institution or foreign bank branch must fully meet the following conditions:

+ It has registered its charter with the State Bank:

+ It possesses a business registration certificate. It has sufficient charter or allocated capital, sufficient cash vaults fully meeting the State Bank's requirements and a head office fully meeting asset safety assurance conditions and banking operation requirements;

+ It has an organizational structure, managerial and executive apparatus, internal audit and risk management and internal control system relevant to its type under the Law on Credit Institutions 2010 and other relevant laws;

+ Its information technology system meets managerial and operational requirements;

+ It has an internal management regulation on the organization and operation of the Board of Directors, Members' Council. Control Board and Director General (Director) and professional divisions at its head office; an internal regulation on risk management; and a regulation on network management;

+ Its charter or allocated capital in Vietnam dong has been fully deposited at a non-interest bearing blocked account opened at the State Bank at least 30 days before inaugurating its operation. Its charter or allocated capital shall be released after it inaugurates its operation;

+ It has publicized information on its operation under Article 25 of the Law on Credit Institutions 2010.

- A credit institution, foreign bank branch or representative office of a foreign credit institution or another foreign institution engaged in banking operations shall inaugurate its operation within 12 months after obtaining a license. Fast this lime limit, if it fails to do so, the State Bank shall revoke its license.

- A licensed credit institution or foreign bank branch shall notify the State Bank of its operation inauguration conditions specified in Clause 2 of Article 26 of the Law on Credit Institutions 2010 at least 15 days before the tentative inauguration date. The State Bank shall suspend the operation inauguration when such institution or branch fails to fully meet the conditions under Clause 2 of Article 26 of the Law on Credit Institutions 2010.

2. Publicity of operation of credit institutions in Vietnam

According to Article 25 of the Law on Credit Institutions 2010, a credit institution, foreign bank branch or representative office of a foreign credit institution or another foreign institution engaged in banking operations shall publicize in the medium of communication of the State Bank and a Vietnamese daily newspaper for three consecutive issues or a Vietnamese e-newspaper for at least 30 days before starting operation the following information:

- Its name and its head office address;

- The numbers and dates of its license and business or operation registration certificate and its licensed business activities;

- Its charter or allocated capital;

- Its representative at law. director general (director) or chief representative;

- The list of its founding shareholders or capital contributors with their respective capital contributions or of its owners;

- The tentative inauguration date.

Ho Quoc Tuan

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