What is the autonomy of a credit institution in Vietnam?

What is the autonomy of a credit institution in Vietnam? (Internet image)

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

1. What is credit institution?

According to Clause 1, Article 4 of the Law on Credit Institutions 2010, credit institution means an enterprise conducting one. some or all banking operations. Credit institutions include banks, non-bank credit institutions, microfinance institutions and people's credit funds.

2. What is the autonomy of a credit institution in Vietnam?

Regulations on autonomy of a credit institution according to Article 3 of Circular 39/2016/TT-NHNN are as follows:

- A credit institution shall have autonomy over its lending operations and assume sole responsibility for its own lending decision. None of entities or individuals shall be allowed to illegally interfere in lending operations performed by a credit institution.

- A credit institution shall be accorded the right to refuse customer’s demands in violation of regulations hereof and loan agreements.

3. Responsibility to protect client interests of a credit institution in Vietnam

According to Article 10 of the Law on Credit Institutions 2010, credit institutions and foreign bank branches shall:

- Preserve and insure deposits at relevant institutions under law and publicize their deposit preservation and insurance in their head offices and branches;

- Create favorable conditions for clients to deposit and withdraw money and guarantee the full and due payment of principals and interests of deposits;

- Refuse the investigation, blocking, seizure or transfer of deposits of clients, unless it is so requested by competent state agencies under law or so consented by clients;

- Publicize deposit interest rates, service charges and rights and obligations of clients for each product and service provided;

- Publicize official transaction time and may not halt transactions during this time. When halting transactions during official transaction time, a credit institution or foreign bank branch shall post up notices of such halt at transaction places at least 24 hours before the halt.

Credit institutions and foreign bank branches may not halt transactions for more than one working day, except the case defined at Point f. Clause 1, Article 29 of the Law on Credit Institutions 2010.

4. Organizational forms of credit institutions in Vietnam

Organizational forms of credit institutions according to Article 6 of the Law on Credit Institutions 2010 is as follows:

- 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.

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