Decree No. 86/2019/ND-CP levels of legal capital of credit institutions and foreign bank branches

DECREE

Prescribing levels of legal capital of credit institutions and foreign bank branches^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the June 16, 2010 Law on the State Bank of Vietnam;

Pursuant to the June 16, 2010 Law on Credit Institutions and the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

At the proposal of the Governor of the State Bank of Vietnam;

The Government promulgates the Decree prescribing levels of legal capital of credit institutions and foreign bank branches.

Article 1. Scope of regulation and subjects of application

1. This Decree prescribes levels of legal capital of credit institutions and foreign bank branches established and operating in Vietnam.

2. This Decree applies to:

a/ Credit institutions;

b/ Foreign bank branches; and,

c/ Organizations and individuals involved in the establishment, organization and operation of credit institutions and foreign bank branches.

Article 2. Legal capital levels

1. A commercial bank: VND 3 trillion.

2. A policy bank: VND 5 trillion.

3. A cooperative bank: VND 3 trillion.

4. A foreign bank branch: 15 million US dollars (USD).

5. A financial company: VND 500 billion. 

6. A financial leasing company: VND 150 billion

7. A microfinance institution: VND 5 billion

8. A people’s credit fund operating in a commune or township (below collectively referred to as a commune): VND 0.5 billion.

9. A people’s credit fund operating in a ward; or a people’s credit fund operating in an inter-commune locality, inter-commune and ward locality, or inter-ward locality: VND 1 billion.

Article 3. Transitional provisions

1. Credit institutions (except people’s credit funds), and foreign bank branches that are granted establishment and operation licenses before the effective date of this Decree shall ensure that, from the effective date of this Decree, their actually contributed or allocated charter capital is at least equal to the legal capital level prescribed in Article 2 of this Decree.

2. People’s credit funds that are granted establishment and operation licenses before the effective date of this Decree shall take measures to ensure that, no later than June 30, 2021, their charter capital or the real value of their charter capital is at least equal to the legal capital level prescribed in Article 2 of this Decree.

Article 4. Effect

1. This Decree takes effect on January 15, 2020.

2. From the effective date of this Decree, in case a state competent agency promulgates a document on the adjustment of administrative boundaries or classification of administrative units, within 24 months from the effective date of such document, people’s credit funds shall take measures to ensure that their charter capital or the real value of their charter capital is at least equal to the legal capital level prescribed in Article 2 of this Decree.

3. The provisions on legal capital of credit institutions and foreign bank branches in the following documents cease to be effective on the effective date of this Decree:

a/ The Government’s Decree No. 141/2006/ND-CP of November 22, 2006, promulgating the list of levels of legal capital of credit institutions; and the Government’s Decree No. 10/2011/ND-CP of January 26, 2011, amending and supplementing a number of articles of the Government’s Decree No. 141/2006/ND-CP of November 22, 2006, promulgating the list of levels of legal capital of credit institutions;

b/ Article 3 of the Government’s Decree No. 28/2005/ND-CP of March 9, 2005, on the organization and operation of small-sized financial institutions in Vietnam, which was amended and supplemented under Clause 2, Article 1 of the Government’s Decree No. 165/2007/ND-CP of November 15, 2007, amending, supplementing or annulling a number of articles of the Government’s Decree No. 28/2005/ND-CP of March 9, 2005, on the organization and operation of small-sized financial institutions in Vietnam.

Article 5. Implementation responsibility

The Governor of the State Bank of Vietnam, ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC