What is a credit institution? Organizational forms of credit institutions in Vietnam

What is a credit institution? Organizational forms of credit institutions in Vietnam (Internet image) 

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

1. What is a credit institution?

Credit institution means an enterprise conducting one, some or all banking operations. Credit institutions include:

- Bank means a type of credit institution which may conduct all banking operations under this Law. Based on their characteristics and operation objectives, banks include commercial banks, policy banks and cooperative banks.

- Commercial bank means a type of bank which may conduct all banking operations and other business activities under this Law for profit.

- Non-bank credit institution means a type of credit institution which may conduct one or some banking operations under this Law, except taking deposits of individuals and providing services of payment via client accounts. Non-bank credit institutions include finance companies, financial leasing companies and other non-bank credit institutions.

Financial leasing company means a type of finance company whose principal operation is financial leasing under this Law.

- Microfinance institution means a type of credit institution which mainly conducts some banking operations to meet the needs of low-income individuals and households and super small-sized enterprises.

- People's credit fund means a credit institution established voluntarily by legal entities, individuals and households as a cooperative to conduct some banking operations under the Law on Credit Institutions 2010 and the Law on Cooperatives for the main purpose of mutual assistance in production and business development and life.

(Clause 1 to 6, Article 4 of the Law on Credit Institutions 2010)

2. Organizational forms of credit institutions in Vietnam

- Domestic commercial banks established and organized as joint-stock companies, except the case defined in Clause 2 of Article 6 of the Law on Credit Institutions 2010.

- State commercial banks established and organized as one-member limited liability companies with wholly stale-owned charter capital.

- Domestic non-bank credit institutions established and organized as joint-stock or limited liability companies.

- Joint-venture or wholly foreign-owned credit institutions established and organized as limited liability companies.

- Cooperative banks and people's credit funds established and organized as cooperatives.

- Microfinance institutions established and organized as limited liability companies.

(Article 6 of the Law on Credit Institutions 2010)

3. Representatives at law of credit institutions in Vietnam 

- The representative at law of a credit institution shall be defined in the charter of that credit institution and must be one of the following persons:

= Chairman of the Board of Directors or Members' Council of the credit institution;

= General Director (Director) of the credit institution.

- The representative at law of a credit institution must reside in Vietnam. When absent from Vietnam, he/she shall authorize in writing another person who must be a manager or an executive of the credit institution currently residing in Vietnam to perform his/her rights and obligations.

(Article 12 of the Law on Credit Institutions 2010)

4. Right to conduct banking operations in Vietnam

- Organizations that fully meet the conditions under the Law on Credit Institutions 2010 and other relevant laws and are licensed by the State Bank may conduct one or some banking operations in Vietnam.

- Individuals and organizations other than credit institutions are prohibited from conducting banking operations, except escrow, purchase and sale of securities by securities companies.

(Article 8 of the Law on Credit Institutions 2010)

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