Dossier of application for a license to establish a foreign bank branch

by DungTran

Dossier of application for a license to establish a foreign bank branch. What is a foreign bank branch? Conditions for licensing the establishment of foreign bank branches. Let us learn about this topic with LSX Law firm below:

– Law on credit institutions 2010, amended and supplemented in 2017

– Circular No. 40/2011/TT-NHNN

– Circular No. 28/2018/TT-NHNN

– Circular No. 25/2019/TT-NHNN 

What is a foreign bank branch?

As can be seen, a foreign bank branch is a dependent unit of a foreign bank; has no legal status, is guaranteed by the foreign bank to be responsible for all obligations; and commitments of the foreign bank branch in Vietnam.

Conditions of application for a license to establish a foreign bank branch

Accordingly, the provisions of Article 11 of Circular No. 40/2011/TT-NHNN (amended in Circular 28/2018/TT-NHNN), regulations on licensing and organization and operation of commercial banks; foreign bank branches, representative offices of foreign credit institutions; other foreign organizations having banking activities in Vietnam; issued by the State Bank of Vietnam; the conditions for granting a license to establish a foreign bank’s branch are specified as follows: 

Condition of application for a license to establish a foreign bank branch 1:

Accordingly, the conditions specified in Clause 3, Article 20 of the Law on Credit Institutions 2010; the 2017 Amendment and Supplementation Law, are:

Firstly, the conditions specified at Points a, b, c, and dd Clause 1; and Points b, c, d and e, Clause 2, Article 20 of the Law on Credit Institutions;

Moreover, the foreign bank must have a written guarantee to take responsibility for all obligations and commitments of the foreign bank’s branch in Vietnam; also ensure to maintain the actual value of the allocated capital not lower than the legal capital level and comply with the provisions on safety assurance of this Law. 

Condition of application for a license to establish a foreign bank branch 2:

Conditions for the parent bank:

Firstly, satisfy the conditions specified at Points a, b, c, dd, Clause 2, Article 10 of Circular No. 40/2011/TT-NHNN, specifically:

Furthermore, no serious violations of regulations on banking activities; and other legal regulations of the country of origin within 05 consecutive years preceding the year of submitting the application for the License and up to the date of issuance of the License;

In addition, having experience in international operations; being rated at a stable level or higher by international credit rating agencies; capable of fulfilling financial commitments and operating normally even when the situation, conditions economic conditions change in an unfavorable direction; 

Dossier of application for a license to establish a foreign bank branch

Article 17 of Circular No. 40/2011/TT-NHNN (amended in Circular 28/2018/TT-NHNN), Dossier of application for a license to establish a foreign bank branch includes:

Application form and attached documents

– Firstly, an application form for a license to establish a foreign bank branch signed by the legal representative of the foreign bank, made according to the form specified in Appendix 02b of this Circular.

– Secondly, the project to establish a foreign bank branch.

– Thirdly, the parent bank’s charter. 

– Moreover, curriculum vitae of the General Director (Director) of the proposed foreign bank’s branch; made according to the form specified in Appendix 03 of this Circular, certified by the parent bank; Judicial record cards as prescribed at Point a, Clause 4, Article 14 of this Circular; Copies of diplomas and certificates evidencing capacity and professional qualifications and documents proving the satisfaction of conditions; and standards as prescribed in the Law on Credit Institutions and other relevant laws of the General Director (Director) is expected.”

-In addition, a copy of the establishment and operation license or equivalent documents issued by the competent authority of the country of origin to the parent bank. 

See more:

Dossier to establish a joint venture bank a bank with 100% foreign capital

Registration of branches, representative offices of enterprises in Vietnam

Related texts

The document of the competent authority of the country of origin providing information about the parent bank;

Also, the document of the competent authority of the country of origin committing to ensure the ability to supervise all activities of the parent bank (including operations of foreign bank branches in Vietnam) on a consolidated basis according to international practice.

Furthermore, the financial statements have been audited for five consecutive years preceding the parent bank’s application for a license is submitted. 

– In addition, a document or document of an international credit rating organization that ranks the parent bank’s credit within 06 months before the time of application submission.

– Moreover, the parent bank has a written guarantee to take full responsibility for all obligations and commitments of the branch in Vietnam; ensure to maintain the actual value of the branch’s allocated capital not lower than the legal capital level and fully meet the regulations on operational safety as prescribed by the State Bank.

-Additionally, report on the establishment, operation, and development orientation of the parent bank until applying for a License.

– Also, the document of the parent bank signed by the legal representative on the appointment of the Preparatory Board and authorization for the Head of the Preparatory Board;

After receiving the written approval in principle, the Preparatory Board must supplement documents as prescribed. 

Finally, hope this article about Dossier of application for a license to establish a foreign bank branch is helpful for you!

If you have any questions; please contact Lawyer X for quick and best legal services: 0833102102.

Related questions

What is a bank with 100% foreign capital ?

A bank with 100% foreign capital is a commercial bank; established in Vietnam; with 100% charter capital owned by foreign credit institutions; it is also a Vietnamese legal entity with its head office in Vietnam. Besides, banks with 100% foreign capital; established and organized in the form of single-member limited liability companies; whose owner is a foreign bank; or a limited liability company with two or more members. Also there must be a foreign bank owning 50% of the charter capital. 

What is a joint venture bank?

A joint venture bank is a commercial bank, established in Vietnam; by a capital contribution of the Vietnamese Party (including one or more Vietnamese banks) and the Foreign Party (including one or more foreign banks); based on a joint venture contract; is a Vietnamese legal entity with its head office in Vietnam. A joint venture bank, established or organized in the form of a limited liability company with two or more members but not more than 05 members, in which a member and a related person may not own more than 50% of the charter capital. 

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