Circular 28/2021/TT-NHNN amending Circular 40/2011/TT-NHNN providing the licensing, organization and operation of commercial banks, foreign bank branches

Change conditions for granting an establishment and operation license from March 01

The State Bank of Vietnam issues the Circular No. 28/2021/TT-NHNN amending and supplementing a number of articles of the Circular No. 40/2011/TT-NHNN of December 15, 2011, providing the licensing, organization and operation of commercial banks, foreign bank branches, and representative offices of foreign credit institutions and other foreign institutions engaged in banking activities in Vietnam on December 31, 2021.

Accordingly, conditions for granting an establishment and operation license for a joint-venture or wholly foreign-owned bank on founding shareholders or owners being foreign credit institutions that have international operation experience and are ranked by international credit rating agencies as follows:

Firstly, the outlook is stable or better;

Secondly, credit rating of AA- or higher (according to Standard & Poor's or Fitch Ratings) or Aa3 or higher (according to Moody's). In case the international credit rating agency has a different credit rating scale than that of Standard & Poor's or Moody's or Fitch Ratings, such international credit rating agency must convert its credit rating in accordance with the credit rating scale of Standard & Poor's or Moody's or Fitch Ratings.

In addition, the Circular also allows the commercial banks or foreign bank branches to purchase or sell Government bonds on securities market in case their licenses granted by the State Bank contain contents of Government bond purchase or sale.

This Circular takes effect on March 01, 2022.

For further details of the Circular 28/2021/TT-NHNN, Click here