New amendments on under-special control credit institutions and rescheduling under-special control credit institutions
New amendments on under-special control credit institutions and rescheduling under-special control credit institutions
On November 20th, 2017, the National Assembly of Vietnam passed the Law Amending and Supplementing a number of articles of the 2010 Law on Credit Institutions including a number of notable amendments to articles on under-special control and rescheduling under-special control credit institutions.
Clause 43 of Article 4 was added with a new definition: “special control" means a situation in which a credit institution is put under direct control of the State bank as specified in Section 1 Chapter VIII of this Law”.
Six definitions regarding rescheduling under-special control credit institutions were also added to this Article including (i) restructuring plan; (ii) recovery plan; (iii) plan for merger, amalgamation, transfer of 100% shares/capital; (iv) mandatory transfer plan; (v) the transferee; (vi) assisting credit institution.
The most momentous point of Law 2017 is the supplement of a plenty of new articles specifying five restructuring plans in Chapter VIII. While fundamental provisions on special control (such as the solvency ratio; the application, or decision making, or termination of special control; the obligations of the Control Board; the competence of the State Bank; the responsibilities of the under-special control credit institutions; and special loans) were laid down on Section 1, Chapter VIII of Law on Credit Institutions, Section 1, Chapter VIII of the 2017 Law is divided into smaller sections detailing each of the plans for restructuring under-special control credit institutions.
- Section 1a. Assessment and restructuring of under-special control credit institutions
- Section 1b. Plan for recovery of under-special control credit institutions Section 1c. Plans for merger, amalgamation, transfer of 100% of shares/capital of under-special control credit institutions
- Section 1d. Plan for dissolution of under-special control credit institutions
- Section 1e. Plan for bankruptcy of under-special control credit institutions
In terms of bankruptcy, articles specifying conditions, procedures, or fundamental content of a plan for bankruptcy of under-special control credit institutions are newly regulated in Section 1e, which partly reflect the “attitude” of the State bank of Vietnam as well as regulators in accepting bankruptcy of commercial banks in Vietnam.
The 2017 Law Amending and Supplementing a number of articles of the 2010 Law on Credit Institutions takes effect on January 15th.
