DECREE

PRESCRIBING LEGAL CAPITAL OF CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES

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

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

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

Upon the request of the Governor of the State Bank of Vietnam;

The Government hereby promulgates the Decree on legal capital of credit institutions and foreign bank branches.

Article 1. Scope and subjects of application

1. This Decree provides for levels of legal capital of credit institutions and foreign bank branches established and operated within the territory of Vietnam.

2. This Circular shall apply to the following entities and persons:

a) Credit institutions;

b) Foreign bank branches;

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

Article 2. Levels of legal capital

1. Commercial banks: 3,000 billion dong.

2. Policy banks: 5,000 billion dong.

3. Cooperative banks: 3,000 billion dong.

4. Foreign bank branches: 15 million U.S. dollars (USD).

5. Financial companies: 500 billion dong.

6. Financial leasing companies: 150 billion dong.

7. Microfinance institutions: 05 billion dong.

8. People’s credit funds, each of which operates within a commune or town (hereinafter referred to as commune): 0.5 billion dong.

9. People’s credit funds, each of which operates within a ward; people’s credit funds, each of which operates within an inter-commune, commune-ward and inter-ward area: 01 billion dong.

Article 3. Transitional provisions

1. Credit institutions (except people’s credit funds) or foreign bank branches licensed before the entry into force of this Decree must ensure that the minimum amount of their actually contributed or allocated charter capital is at least equal to legal capital levels stated in Article 2 herein from the effective date of this Decree.   

2. Not later than June 30, 2021, people’s credit funds licensed before the entry into force of this Decree shall be obliged to take actions to ensure their charter capital and the actual value of their charter capital are at least equal to levels of legal capital specified in Article 2 herein.

Article 4. Entry into force

1. This Decree shall take effect from January 15, 2020.

2. From the date of entry into force of this Decree, upon receipt of written decisions on changes in administrative divisions or classification of administrative units from competent regulatory authorities, within the 24-month duration from effective dates thereof, people’s credit funds shall be obliged to take proper actions to ensure their charter capital and the actual value of their charter capital are at least equal to the levels of legal capital specified in Article 2 herein. 

3. From the entry into force of this Decree, regulations on the legal capital of credit institutions and foreign bank branches which are laid down in the following instruments shall become defunct:

a) Government’s Decree No. 141/2006/ND-CP dated November 22, 2006 on issuance of the Chart of legal capital levels of credit institutions and Government’s Decree No. 10/2011/ND-CP dated January 26, 2011 on amendments and supplements to the Government’s Decree No. 141/2006/ND-CP dated November 22, 2006 on issuance of the Chart of legal capital levels of credit institutions;

b) Article 3 in the Government’s Decree No. 28/2005/ND-CP dated March 9, 2005 regarding organization and operation of small-sized credit institutions in Vietnam which is amended or supplemented in clause 2 of Article 1 in the Government's Decree No. 165/2007/ND-CP dated November 15, 2007 on amendments, supplements to or replacement of several articles of the Government’s Decree No. 28/2005/ND-CP dated March 9, 2005 on organization and operation of small-sized credit institutions in Vietnam.

Article 5. Implementation responsibilities

Governor of the State Bank of Vietnam, Ministers, Heads of Ministry-level agencies, Heads of Governmental bodies, Chairpersons of People’s Committees of centrally-affiliated cities and provinces shall be responsible for implementing this Decree./.