On November 22, 2018, the State Bank of Vietnam issued Circular No. 27/2018/TT-NHNN regulating cases of the blockade, termination of a blockade of capital and assets of foreign bank branches. This Circular takes effect from January 10, 2019.
Accordingly, the Circular No. 27/2018 / TT-NHNN has noticeable new provisions as follows:
1. Regarding cases of the blockade of capital and assets
The State Bank considers and decides to blockade the capital and assets of foreign bank branches in the following cases:
– The real value of the allocated capital of a foreign bank branch is lower than the legal capital level which is continuously exceeding 06 months.
– Violation of the safety assurance ratio in banking activities prescribed in Article 130 of the Law on Credit Institutions and the State Bank has issued a written request for remedial action but has no remedial measures or cannot overcome it. within the time limit requested by the State Bank.
– The accumulated loss amount of a foreign bank branch is greater than 50% of the value of the allocated capital and reserve funds recorded in the latest audited financial statement.
– The State Bank has requested but the parent bank does not comply with the committed obligations for the branch operating in Vietnam.
– When there is information about the parent bank showing signs of insolvency, insolvency or being placed under special control by a competent authority of the home country or required to be dissolved, liquidation, bankruptcy, or withdrawal of establishment and operation licenses.
2. Cases of termination of the blockade of capital and assets
The State Bank considers and decides to terminate the blockade of capital and assets of foreign bank branches in the following cases: 1. A foreign bank branch has overcome the violations and exists. 2. The parent bank has correctly performed its committed obligations to the foreign bank branch at the request of the State Bank. 3. The State Bank receives information from the competent authority of the country of origin that the parent bank has overcome problems.
It can be seen that the Circular No. 27/2018/ TT-NHNN is expected to be more detailed on the blockade, termination of the blockade of capital and assets of foreign bank branches, thereby contributing to ensuring It is said that these activities are open, transparent and better protect the interests of depositors.