Regulations on application for approval for consolidation of credit institutions in Vietnam

Regulations on application for approval for consolidation of credit institutions in Vietnam (Internet image)

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

1. What is consolidation of credit institutions?

According to Clause 2, Article 3 of Circular 36/2015/TT-NHNN, consolidation of credit institutions means that one or some credit institutions (hereinafter referred to as consolidating credit institutions) transfer all assets, legitimate rights, obligations and interests into another credit institution (hereinafter referred to as the consolidated credit institution); after that, the acquired companies shall cease to exist.

2. Cases of consolidation of credit institutions in Vietnam

Cases of consolidation of credit institutions include:

- Two commercial banks consolidate into another commercial bank;

- A commercial bank and a finance company consolidate into another commercial bank;

- A financial company and a financial company consolidate into another financial company.

(Clause 2, Article 4 of Circular 36/2015/TT-NHNN)

3. Regulations on application for approval for consolidation of credit institutions in Vietnam

3.1. Application for approval for rules of acquisition in Vietnam

Specifically, in Clause 1, Article 12 of Circular 36/2015/TT-NHNN, each application for approval for rules of acquisition shall include:

- An application form for approval for consolidation bearing signatures of legal representatives of consolidating credit institutions using the form prescribed in Appendix 1 issued with Circular 36/2015/TT-NHNN;

Application for approval for rules of acquisition in Vietnam

- A written authorization issued by the consolidating credit institutions to give powers to the representing credit institution to perform the tasks related to the consolidation as prescribed in Circular 36/2015/TT-NHNN;

- Copies of establishment and operation licenses and copies of written approvals for amendments to the license; certificates of enterprise registration and equivalent documents of consolidating credit institutions;

- Reports of consolidating credit institutions on non-violation against regulations on economic concentration; or a rely of a competition management agency in case of economic concentration requiring notification; or a decision granting exemption from banned economic concentration as prescribed in law on competition;

- A project for consolidation prescribed in Article 13 of this Circular;

- Minutes, resolutions or decisions of competent bodies of consolidating credit institutions that approve the project for consolidation, consolidation contract, charter of consolidated credit institutions, list of personnel to be elected or appointed to the Board of Directors, the Board of members or the Control Board of the consolidated credit institutions and other issues related to acquisition of credit institutions;

- Consolidation contracts approved by competent bodies of consolidating credit institutions and bearing signatures of legal representatives of those credit institutions and containing primary contents prescribed in Point a Clause 2 Article 194 of the Law on enterprises;

- Financial statements in 3 years preceding the year of submitting the application for approval for rules of consolidation of consolidating credit institutions that are audited by independent audit organizations without any qualified opinion.

If there is no audited financial statement of the year preceding the year of submitting the application for approval for rules of consolidation, the credit institution may submit the non-audited financial statement, and then submit an audited financial statement as soon as an independent audit organization issues an auditor's report. Each consolidating credit institution must take responsibility for its submitted financial statement.

- Charter draft of the consolidated credit institution approved by competent bodies of consolidating credit institutions;

- A draft of basic internal regulations in terms of organization and operation of the consolidated credit institution, at least containing the internal regulations prescribed in Clause 2 Article 93 of the Law on credit institutions and the following provisions:

(i) Regulations on organization and operation of Board of Directors, Member assembly, the Control Board and executives;

(ii) Regulations on organization and operation of headquarters, branches and other affiliates;

- A list of personnel to be elected or appointed to the Board of Directors, the Board of members or the Control Board, General Director (Director) of the consolidated credit institution;

- Documents proving qualified personnel to be elected or appointed to the Board of Directors, the Board of members or the Control Board, General Director (Director) of the consolidated credit institution;

3.2. Application for approval for consolidation of credit institutions in Vietnam

According to Clause 2, Article 12 of Circular 36/2015/TT-NHNN, each application for approval for consolidation shall include:

- A written document of legal representative of the representing credit institution requesting for:

(i) Approval for consolidation, change of charter capital; certifying registration of charter; or

(ii) Approval for other contents (if any);

- An application for approval by the State Bank prescribed in Point a (ii) of this Clause as prescribed by the State Bank and relevant laws;

- Charter of the consolidated credit institution approved by its competent body;

- Minutes, resolutions or decisions of competent bodies of consolidating credit institutions that approve the modification to the project for consolidation and other issues related to acquisition (if any);

- A document of legal representative of the representing credit institution clarifying the modified contents in comparison with the project for consolidation submitted in order for the Governor of the State Bank to approve the rules of acquisition (if any);

- Minutes, resolutions or decisions of the competent body of consolidated credit institution that approve the charter; election and appointment of positions, members of the Board of Directors, Member assembly or the Control Board; regulations on organization and operation of Board of Directors, Member assembly or the Control Board of the consolidated credit institution and other issues related to the consolidated credit institution;

- Meeting minutes of Board of Directors or Member assembly of the consolidated credit institution in terms of election of the President of Board of Directors or the President of Member assembly; meeting minutes of the Control Board of the consolidated credit institution in terms of election of the Chief of the Control Board;

- Decisions of Board of Directors or Member assembly of the consolidated credit institution in terms of appointment of General Director (Director), Deputy General Director (Deputy Director) and Chief Accountant;

- Internal regulations on organization and operation of the consolidated credit institution in accordance with Point k Clause 1 of this Article that are approved by competent body, ratified by Board of Directors or Member assembly of the consolidated credit institution;

- A commitment of legal representative of the representing credit institution that the consolidated credit institution shall comply with Clause 2 Article 10 of Circular 36/2015/TT-NHNN.

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