The State Bank of Vietnam (SBV) is drafting a circular guiding the reorganisation of credit institutions, creating a legal basis to promote the restructuring process.
When finalised and issued, this will be an important document following the central bank’s Circular No 04/2010/TT-NHNN stipulating the merger, consolidation and acquisition of credit institutions.
The scope of the draft circular will be conditions, dossiers, order and procedures for approving the reorganisation of credit institutions in Vietnam. The reorganisation of credit institutions as provided in the draft circular covers only the merger, consolidation and changes of legal form of credit institutions.
Accordingly, forms for merger and consolidation of credit institutions are determined in five cases including banks, finance company being merged into a bank, finance company being merged into another finance company, financial leasing company to be merged into another financial leasing, people’s credit fund to be merged into another people’s credit fund; microfinance institution to be merged into another microfinance institution.
In addition, the draft circular also specified many cases and gave more detailed guidance on the implementation of the legal forms for the transfer of credit institutions.
As originally drafted, this provision will ensure the legacy of provisions in Circular No. 04/2010/TT-NHNN stipulating the merger, consolidation and acquisition of credit institutions and comply with the contents in the Law on Credit Institutions and Business Law, at the same time avoid legal troubles that may arise from the merger and consolidation amongst credit institutions.