Proposal that subsidiaries of credit institutions are not allowed to contribute capital or buy shares of other enterprises

In this Submission, the Government said that in order to strengthen management and control measures against manipulation, group interests, cross-ownership, and ensure the safety, health and stability of the credit institution system, the draft amended Law will supplement regulations on related persons.

Specifically, the draft Law will amend and supplement regulations on cases where people are not allowed to hold positions. In order to avoid conflicts of interest, the draft Law amends and supplements regulations that managers and operators of credit institutions cannot concurrently be managers and operators of other credit institutions or other enterprises.

The Government has just submitted a Document to the National Assembly on the draft Law on Credit Institutions (amended). (Photo: DMB)

The Draft Law also amends and supplements regulations on the limit on shareholders' share ownership ratio in the direction of reducing the maximum ownership ratio of a shareholder and related persons to increase the popularity of joint stock credit institutions.

The Draft Law also supplements the rights and obligations of managers and operators of credit institutions within the scope of assigned rights and obligations, responsible for implementing the instructions of the State Bank.

This draft Law also adds cases where the State Bank suspends or temporarily suspends the positions of members of the Board of Directors, Board of Members, Board of Supervisors, and General Director (Director) for those who do not meet the standards and conditions for holding the position, violate the implementation of the State Bank's instructions as prescribed,...

Also in this Proposal, the Government proposed to limit risks from credit concentration and cross-ownership, the Law on Credit Institutions will amend and supplement regulations on credit limits in the direction of reducing the credit limit ratio of a customer and related persons.

Reducing the credit limit at this time does not limit the credit capital provided for production and business, on the contrary, it helps many other customers to access more credit capital from the bank.

Besides, if considered in absolute terms, the credit capital granted to a customer at a credit institution calculated according to the credit limit prescribed in the current draft Law is still much larger than the credit capital limit determined at the time of promulgation of the Law on Credit Institutions in 2010.

The draft also amends and supplements regulations on capital contribution and share purchase limits of credit institutions, including regulations that subsidiaries of credit institutions are not allowed to contribute capital or purchase shares of other enterprises or credit institutions that are shareholders or capital contributors of that credit institution, etc.

Source: https://www.congluan.vn/de-xuat-cong-ty-con-cua-to-chuc-tin-dung-khong-duoc-gop-von-mua-co-phan-doanh-nghiep-khac-post278351.html