Regulations on revocation of licenses, liquidation of assets of credit institutions
(Updated at 9:50, 12/1/2018)
The State Bank of Vietnam has issued Circular No. 24/2017/TT-NHNN regulating the procedures for revocation of licenses and liquidation of assets of credit institutions and foreign bank branches; the procedures for revocation of licenses of representative offices of foreign credit institutions and other foreign organizations engaged in banking activities.
Subjects of application include: credit institutions being commercial banks, cooperative banks, non-bank credit institutions and microfinance institutions; branches of foreign banks; representative offices of foreign credit institutions and other foreign organizations engaged in banking activities.
Credit institutions and foreign banks' branches must determine their debt-paying ability before and during the process of liquidation, dissolution and revocation of the license.
 
The State Bank of Vietnam only approves the dissolution when the credit institution or branch of the foreign bank is able to repay all debts and other obligations. The dissolution of credit institutions and foreign bank branches shall comply with the provisions of this Circular and relevant law provisions.
In the course of supervision of asset liquidation, if detecting that the credit institution is incapable of paying all debts, the State Bank shall issue a decision on termination, liquidation and implementation of bankruptcy plan for the credit institution as stipulated in the Law on Credit Institutions (amended and supplemented).
 
The circular also clarifies the prohibited activities in the process of revoking the license, liquidation of assets of credit institutions, branches of foreign banks.
 
Accordingly, from the date the competent body decides to approve the dissolution of the credit institution or branch of the foreign bank or from the date the Governor of the State Bank issues a written request to the credit institution or foreign bank regarding asset liquidation according to regulations, credit institutions, branches of foreign banks, managers, executives, laborers of credit institutions or foreign banks' branches are prohibited from conducting activities and transactions related to their assets and debts of credit institutions and foreign bank branches as follows: hiding and dispersing assets; removing or reducing the right to claim a debt; turning unsecured debts into debts secured by assets of the credit institution or a branch of a foreign bank; making pledge, mortgage, donation and lease of assets; signing new agreements or contracts except for agreements or contracts for the termination of operation; transfer of money and assets abroad.
 
This Circular takes effect on February 26.
 
 
Hong Ngoc
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