On December 31, 2018, the State Bank of Vietnam issued Circular No. 53/2018/TT-NHNN regulating the operation network of non-bank credit institutions. This Circular takes effect from March 1, 2019.
Accordingly, a non-bank credit institution with a period of operation of 12 months or more (from the date of operation opening to the time of proposal) is allowed to establish no more than 3 branches in a financial year when meeting apply the following conditions:
– The actual value of the charter capital as at 31 December of the preceding year is not lower than the legal capital;
– Interest-bearing business activities according to the consolidated financial statements and audited separate financial statements of the previous year preceding the year of the proposal. This condition does not apply to non-bank credit institutions submitting their application for the second year from the date of the opening;
– At the time of the proposal, the competent authority does not apply measures not to expand the area of operation;
– At the time of the proposal does not violate the regulations on the ratio of safety assurance in the operation of non-bank credit institutions;
– The ratio of bad debt to the total outstanding debt as of December 31 of the preceding year preceding the year of a proposal and at the time of the proposal does not exceed 4% or another rate decided by the Governor in each period. ;
– At the time of proposing the Board of Directors, Board of Members, and Supervisory Board to have the number and structure in accordance with the provisions of law, no vacancies of the title of General Director (Director);
– At the time of the proposal does not violate the regulations on the internal control system and internal audit; Asset classification and risk provision.
In addition, this Circular also provides for non-bank credit institutions with an operating time of fewer than 12 months (from the date of opening operation to the time of proposal), it is allowed to establish no more than 2 branches. when meeting the following conditions: The real value of the charter capital at the time of application is not lower than the legal capital; The ratio of bad debt to the total outstanding debt at the latest time of the proposal does not exceed 4% or another rate according to the Governor’s decision in each period; The provisions at Points c, d, e, g, h and i, Clause 1 of this Article.
Thus, through the issuance of Circular No. 53/2018/TT-NHNN, the State Bank of Vietnam has issued Circular No. 53/2018 / TT-NHNN which has detailed and specific regulations on the network. operation net of non-bank credit institutions, thereby creating the basis and conditions for the operation of these organizations to be implemented in the most convenient and accurate way.