DECREE NO. 86/2019/NĐ-CP REGULATING THE MINIMUM CAPITAL REQUIREMENTS FOR CREDIT ORGANIZATIONS AND FOREIGN BANK BRANCHES

DECREE

REGULATIONS ON THE MINIMUM CAPITAL REQUIREMENTS FOR CREDIT ORGANIZATIONS AND FOREIGN BANK BRANCHES

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

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

Pursuant to the Law on Credit Organizations dated June 16, 2010 and the Law Amending and Supplementing Certain Provisions of the Law on Credit Organizations dated November 20, 2017;

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

The Government promulgates this Decree stipulating the minimum capital requirements for credit organizations and foreign bank branches.

Article 1. Scope of Regulation and Applicability

1. This Decree stipulates the minimum capital requirements for credit organizations and foreign bank branches established and operating in Vietnam.

2. This Decree applies to the following entities:

a) Credit organizations;

b) Branches of foreign banks;

c) Organizations and individuals related to the establishment, organization, and operation of credit organizations and foreign bank branches.

Article 2. Minimum Capital Requirements

1. Commercial banks: 3,000 billion VND.

2. Policy banks: 5,000 billion VND.

3. Cooperative banks: 3,000 billion VND.

4. Foreign bank branches: 15 million USD.

5. Financial companies: 500 billion VND.

6. Leasing companies: 150 billion VND.

7. Microfinance organizations: 5 billion VND.

8. People's Credit Funds operating in one commune or town (hereinafter referred to as commune): 0.5 billion VND.

9. People's Credit Funds operating in one ward; People's Credit Funds operating in multiple communes or wards: 1 billion VND.

Article 3. Transitional Provisions

1. Credit organizations (excluding people's credit funds) and foreign bank branches that have been granted licenses to establish and operate before the effective date of this Decree must ensure their subscribed and paid-in charter capital or authorized capital is at least equal to the minimum capital requirement specified in Article 2 of this Decree from the date this Decree takes effect.

2. People's credit funds that have been granted licenses to establish and operate before the effective date of this Decree must take measures to ensure their charter capital and the actual value of the charter capital is at least equal to the minimum capital requirement specified in Article 2 of this Decree, no later than June 30, 2021.

Article 4. Effective date

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

2. From the date this Decree takes effect, in cases where there are decisions changing administrative boundaries or classifying administrative units made by competent authorities, within a maximum period of 24 months from the effective date of such decisions, people's credit funds must take measures to ensure their charter capital and the actual value of the charter capital is at least equal to the minimum capital requirement specified in Article 2 of this Decree.

3. From the date this Decree takes effect, the provisions on minimum capital requirements for credit organizations and foreign bank branches in the following documents shall cease to be effective:

a) Decree No. 141/2006/NĐ-CP dated November 22, 2006 of the Government on the list of minimum capital requirements for credit organizations and Decree No. 10/2011/NĐ-CP dated January 26, 2011 of the Government amending and supplementing certain articles of Decree No. 141/2006/NĐ-CP dated November 22, 2006 of the Government on the list of minimum capital requirements for credit organizations;

b) Article 3 of Decree No. 28/2005/NĐ-CP dated March 9, 2005 of the Government on the organization and operation of small-scale financial institutions in Vietnam, amended and supplemented by Clause 2, Article 1 of Decree No. 165/2007/NĐ-CP dated November 15, 2007 of the Government amending and supplementing, abolishing certain articles of Decree No. 28/2005/NĐ-CP dated March 9, 2005 of the Government on the organization and operation of small-scale financial institutions in Vietnam.

Article 5. Responsibilities for Implementation

The Governor of the State Bank of Vietnam, Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of provincial and centrally-run city People's Committees are responsible for implementing this Decree./.