CONDITIONS FOR CONTRIBUTION TO THE CREDIT INSTITUTIONS UNDER SPECIAL CONTRO
On August 01, 2013, the Prime Minister signs the 48/2013/QD-TTg on credit institution’s compulsory share purchases and contribution under special control.
In accordance with this Decision, the credit institution under special control may make compulsory share purchase and contributions if the regulations of the Law on Credit Institutions are not complied with, or when the State Bank finds that the accrued loss of the credit institution has exceeded the actual value of charter capital and the reserve funds of the credit institution under special control written in the latest audited financial statement, and the shutdown of the credit institution under special control may threaten the safety of the whole system of credit institutions. Appointed credit institutions must have healthy financial condition and sufficient capital to make contributions and purchase shares at the request of the State Bank; meet the requirements of safety in banking; have internal control and audit systems that comply with the regulations of the State Bank and be capable of administrating and restructuring the contributed credit institutions.
This Decision also regulates two forms of compulsory share purchase and contribution as appointed credit institutions shall make compulsory share purchase and contributions in cash or by converting part or all the balance of deposits and loans in credit institutions under special control, appointed credit institutions shall use charter capital and reserve funds to purchase shares and make contributions in accordance with law; the State Bank shall make compulsory share purchase and contributions in cash or by converting part or all balance of special loans and refinancing loans (if any).
Based on the condition of the credit institution under special control, the Governor of the State Bank shall consider supporting appointed credit institutions while they are making compulsory share purchase and contributions to the credit institution under special control in the forms such as giving refinancing loans; giving special loans and some criteria for safety in banking at a level other than that of normal credit institutions may be applied for a certain period of time so on.
This Decision takes effect on September 20, 2013 and is not applicable to the credit institution of which 100% charter capital is held by the State.
