DFDL Vietnam

The amended Law on Credit Institutions 2024 was approved by Vietnam’s National Assembly on 18 January 2024 and is effective from 1 July 2024. This article highlights the following key provisions of the Amended Law on Credit Institutions.

Recent Amendments to the Credit Institutions Law in Vietnam - Key Updates and Legal Implications

The amended Law on Credit Institutions 2024 was approved by Vietnam’s National Assembly on 18 January 2024 (the "Amended Law on Credit Institutions") and is effective from 1 July 2024. We highlight the following key provisions of the Amended Law on Credit Institutions:

1) Shareholders owning 1% or more of the charter capital of a credit institution are required to provide information about themselves, related persons and their ownership ratios. The credit institution must publicly disclose this information.

2) A reduction in the ownership percentage limitation for shareholders who are entities (including indirect shareholders) from 15% to 10% and for shareholders and related persons from 20% to 15%. This amendment includes a transitional provision, that shareholders and related persons who exceed the prescribed ownership limitations will be allowed to maintain their current shareholding, but will not be permitted to increase their shares until they comply with the ownership limitation requirements.

3) Credit institutions may not sell non-compulsory insurance products in conjunction with providing banking products and services.

4) The Governor of the State Bank of Vietnam has the authority to define the scope of insurance agency activities for credit institutions.

5) Introduction of additional categories of related persons, including “(i) subsidiaries of credit institutions; and (ii) grandparents, great-grandparents, grandchildren, great-grandchildren, aunts, uncles, nephews, nieces, cousins, and vice versa.” The law further defines which individuals are authorized to represent shares/capital contribution in the credit institution.

With these new provisions, the Vietnamese legislators intend that the Amended Law on Credit Institutions will contribute to credit institution transparency, mitigate cross-ownership situations, assist the State Bank of Vietnam in identifying major risks from "behind-the-scenes" transactions, and enhance public participation. The provisions of the Amended Law on Credit Institutions are expected to have a significant impact on the activities and operations of credit institutions. More detailed guidelines are expected to be issued in the near future.
 

The information provided is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

Contact us


Phong Anh Hoang
Partner, Vietnam

phonganh.hoang@dfdl.com


Dave Seibert
Partner, Head of Regional Energy, Natural Resources and Infrastructure

dave.seibert@dfdl.com

Please Login or Register for Free now to view all updates and articles

In addition to free-to-view updates and articles, you can also subscribe to the full Legal Centrix Vietnam Service including access to:

  • Overview notes on the law
  • Thousands of high quality translations of legislation covering all key business areas
  • Legal and tax updates
  • Articles on important legal and tax issues
  • Weekly email alerts
  • Sophisticated web platform and search

Legal Centrix is trusted by top law and accounting firms.

DFDL Vietnam

 

DFDL was established in 1994 and founded on a unique vision: to create an integrated legal, tax and investment advisory firm, with in-depth knowledge of the jurisdictions where we operate to provide tailored, efficient and practical services across our core areas of expertise.

Our integrated and expanding network of 11 offices, including affiliated firms, throughout nine countries in Asia namely:  Bangladesh, Cambodia*, Indonesia*, Lao, Myanmar, Philippines*, Singapore, Thailand and Vietnam. 

DFDL is uniquely positioned to help you access promising international growth opportunities in the world’s most dynamic region.

A team of over 140 advisers provides consulting services in:

  • Banking and Finance
  • Corporate and Mergers and Acquisitions
  • Employment
  • Energy, Mining and Infrastructure
  • Real Estate and Construction
  • Taxation

*DFDL collaborating firms

Click here to view the author's profile

Author

Tags

  • Vietnam
  • Credit, Payment & Fintech Providers
  • General
  • Legal Updates

Related Content

Recent updates

Cookies On
Our Website
We use cookies on our website. To learn more about cookies, how we use them on our site and how to change your cookie settings please click here to view our cookie policy. By continuing to use this site without changing your settings you consent to our use of cookies in accordance with our cookie policy.