Press release on the issuance of the Circular No.24/2017/TT-NHNN
A new Circular amends and supplements some articles of Circular No. 34/2011/TT-NHNN issued by the Governor of the State Bank of Vietnam on October 28th, 2011 guiding the order, procedure for revocation of license and liquidation of assets of credit institutions, foreign bank’s branches; order, procedure for revocation of License of representative office of foreign credit institutions, other foreign institutions having banking activity.
Hanoi, December 29, 2017, the Governor of the State Bank of Vietnam (SBV) issued Circular No.24/2017/TT-NHNN regulating the order, procedures for revocation of the licenses and liquidation of assets of credit institutions, foreign bank’s branches; the order, procedures for revocation of the Licenses of the representative offices of foreign credit institution, and other foreign institutions having banking operations.
The Circular No.24/2017/TT-NHNN, which consists of 4 Chapters, 24 Articles and takes effect from February 26, 2018, shall replace Circular No. 34/2011/TT-NHNN dated October 28, 2011 by the Governor of the State Bank of Vietnam regulating the order, procedures for revocation of the licenses and liquidation of assets of credit institutions, foreign bank’s branches; the order, procedures for revocation of the Licenses of representative offices of foreign credit institutions, and other foreign institutions having banking operations.
The Circular stipulates the following main substances:
Firstly, to handle difficulties and obstacles in the implementation of the provisions of Circular No. 34/2011/TT-NHNN, Circular No. 24/2017/TT-NHNN prescribes the process of revocation of the licenses in the direction that credit institutions and foreign banks' branches shall liquidate their assets first, and the SBV shall revoke the license later.
Secondly, Circular No. 24/2017/TT-NHNN supplements the regulations on the principle of revocation of the Licenses and liquidation of assets of credit institutions and foreign banks’ branches, including: (i) the credit institution or foreign bank’s branch must determine the solvency of its debts and other asset retirement obligations before and during the asset liquidation, dissolution and revocation of the license; (ii) The State Bank of Vietnam only accepts the dissolution when the credit institution or the foreign bank’s branch is able to repay all debts and clear other asset retirement obligations.
Thirdly, in accordance with the Law amending and supplementing a number of articles of the Law on Credit Institutions No. 17/2017/QH14 dated November 20, 2017, Circular No. 24/2017/TT-NHNN also amends and supplements the regulation on the order and procedures for revocation of the License of a credit institution or a foreign bank’s branch, which has its license revoked.
The issuance of Circular No. 24/2017/TT-NHNN is to provide guidance for the Law on Credit Institutions, dealing with some difficulties and problems in the process of revoking licenses, dissolving and liquidating assets, termination of operations of credit institutions, foreign banks’ branches and representative offices of foreign credit institutions.
Translated by VA