Quyết định 492/2000/QD-NHNN5

DECISION

ISSUING THE REGULATION ON CAPITAL CONTRIBUTION AND SHARE PURCHASE BY CREDIT INSTITUTIONS

THE VIETNAM STATE BANK GOVERNOR

Pursuant to December 12, 1997 Law No. 01/1997/QH10 on the State Bank of Vietnam and Law No. 02/1997/QH10 on Credit Institutions;
Pursuant to the Government’s Decree No. 15/CP of March 2, 1993 on the tasks, powers and State management responsibilities of the ministries and ministerial-level agencies;
At the proposal of the director of the Department of Banks and Non-Bank Credit Institutions,

DECIDES:

Article 1.- To issue together with this Decision the Regulation on capital contribution and share purchase by credit institutions.

Article 2.- This Decision takes effect 15 days after its signing. The regulations on capital contribution and share purchase in the following documents now cease to be effective:

1. The Regulation on monetary - credit business safety for credit institutions, issued together with the State Bank Governor’s Decision No. 107/QD-NH5 of June 9, 1992.

2. The State Bank Governor’s Circular No. 10/TT-NH5 of July 6, 1992 guiding the implementation of the Regulation on monetary - credit business safety for credit institutions.

3. The State Bank Governor’s Directive No. 08-CT/NH5 of July 23, 1997 on reorganizing the joint-venture capital contribution and share purchase activities of commercial banks and Vietnam Investment and Development Bank.

4. The Regulation on shareholders, shares, share certificates and charter capital of joint-stock credit institutions, issued together with the State Bank Governor’s Decision No. 275/QD-NH5 of November 7, 1994.

Article 3.- The Office’s director, the director of the Department of Banks and Non-Bank Credit Institutions, the heads of the units under the State Bank, the directors of the State Bank’s branches in the provinces and centrally-run cities, the chairmen of the management boards and the general directors (directors) of credit institutions shall have to implement this Decision.

REGULATION

ON CAPITAL CONTRIBUTION AND SHARE PURCHASE BY CREDIT INSTITUTIONS
(Issued together with the State Bank Governor’s Decision No. 492/2000/QD-NHNN5 of November 28, 2000)

Chapter I

GENERAL PROVISIONS

Article 1.-

1. Credit institutions under the following forms of credit institution may use their charter capitals and reserve funds to contribute capital to and/or purchase shares of enterprises and other credit institutions according to this Regulation and other relevant law provisions:

a/ Banks:

- Commercial banks;

- Development banks;

- Investment banks.

b/ Non-bank credit institutions:

- Financial companies.

2. Cooperative credit institutions’ contribution of capital to and/or purchase of shares of enterprise and other credit institutions shall comply with separate regulations of the State Bank.

Chapter II

SPECIFIC PROVISIONS

Article 2.- Credit institutions may contribute capital to and/or purchase shares of enterprises or other credit institutions as follows:

1. Contributing capital to and/or purchasing shares of enterprises:

a/ Contributing capital together with foreign investors for the establishment of joint-venture enterprises;

b/ Purchasing shares of joint-stock companies.

2. Contributing capital to and/or purchasing shares of other credit institutions:

a/ Contributing capital together with foreign credit institutions for the establishment of joint-venture credit institutions;

c/ Contributing capital to and/or purchasing shares of joint-stock credit institutions.

Article 3.-

1. The ratio of each credit institution’s amount of capital contributed to or shares purchased from an enterprise to such enterprise’s charter capital must not exceed:

a/ 11%, if the credit institution is a bank;

b/ 20%, if the credit institution is a non-bank credit institution (financial companies).

2. Where credit institutions contribute capital together with foreign investors for the establishment of joint-venture enterprises in Vietnam, the capital contribution levels shall comply with the provisions of the Law on Foreign Investment in Vietnam as well as other relevant law provisions, and must be approved in writing by the State Bank Governor.

3. The ratio of each credit institution’s total amount of capital contributed to and shares purchased from all enterprises to its charter capital and reserve fund must not exceed:

a/ 30%, if the credit institution is a bank;

b/ 40%, if the credit institution is a non-bank credit institution (financial companies).

Article 4.- A credit institution’s amount of capital contributed to or shares purchased from another credit institution and a credit institution’s total amount of capital contributed to or shares purchased from all other credit institutions, shall be stipulated by such credit institution itself. A credit institution’s total amount of capital invested in other credit institutions in the forms of capital contribution and share purchase must be exclusive of its own capital when the minimum capital safety percentage is calculated.

Where credit institutions contribute capital together with foreign credit institutions for the establishment of joint-venture credit institutions in Vietnam, the capital contribution levels shall comply with the provisions of the Government’s Decree No. 13/1999/ND-CP of March 17, 1999 on the organization and operation of foreign credit institutions and their representative offices in Vietnam as well as relevant law provisions.

Article 5.- Dossiers to request the State Bank’s approval of capital contribution with foreign investors as prescribed in Clause 2, Article 3 of this Regulation, shall comprise:

1. A written document of the chairman of the management board or an authorized person requesting the State Bank Governor to approve the contribution of joint-venture capital, which briefly states the necessity of the contribution of joint-venture capital; the name and address of the foreign investor; each party’s amount of contributed capital; the joint venture’s activities and the scope thereof.

2. The written authorization of the chairman of the management board (in case of authorization).

3. The draft joint-venture plan, clearly stating the necessity, the economic efficiency of the joint-venture capital contribution; the name and address of the foreign investor; the last three years’ financial status of the foreign investors; each party’s amount of contributed capital; the joint venture’s operation contents and scope; the operation plan for the first three years.

Chapter III

IMPLEMENTATION PROVISIONS

Article 6.- For credit institutions which have contributed capital to or purchased shares of enterprises according to current regulations but now do not fall into the categories that may contribute capital and/or purchase shares, or have had the amounts of capital contributed to and/or shares purchased from enterprises higher than the maximum ratios prescribed in this Regulation, within 2 years from the date this Regulation comes into force they must take measures to adjust such amounts compliant with this Regulation.

Article 7.- Credit institutions shall report their contribution of capital to and/or purchase of shares of enterprises and other credit institutions prescribed in this Regulation according to the State Bank’s regime of accounting information and reporting and banking statistics.

Article 8.- Credit institutions that violate the provisions of this Regulation shall, depending on the nature and seriousness of their violations, be sanctioned according to the Government’s Decree No. 20/2000/ND-CP of June 15, 2000 on sanctioning administrative violations in the domain of monetary and banking activities.

Article 9.- Any amendments and supplements to the provisions of this Regulation shall be decided by the State Bank Governor.