On 18 January 2024, the National Assembly of Vietnam passed a new Law on Credit Institutions, which will take effect from 1 July 2024 (save for certain provisions concerning enforcement of security over real estate, which will take effect from 1 January 2025). The new law replaces the current Law on Credit Institutions which was passed in 2010.
The new law reduces the shareholding limits in a credit institution for (i) corporate shareholders and (ii) shareholders and their related persons. A corporate shareholder cannot hold more than 10% of the charter capital in a credit institution (versus 15% under the current law), while a shareholder and its related persons cannot hold more than 15% (versus 20% under the current law).
Other key changes include (i) the regulation of “early intervention” measures that can be taken by the State Bank of Vietnam to handle weak or distressed credit institutions; (ii) the inclusion of additional business activities that can be undertaken by commercial banks (e.g. issuing letters of credit), and (iii) broader information disclosure requirements on managers of credit institutions.
