Illustrative image (Source: Maritime Bank)
Accordingly, though founding shareholders of a joint stock commercial bank will still have to own at least 50% of the bank’s charter capital, they will no longer need to hold the capital for five years from the date of receiving the license as currently required.
The draft circular also removes regulations that founding shareholders, including both individuals and institutions, must have the financial ability to contribute capital to establish a joint stock commercial bank.
The circular also eliminates the old requirements that founding shareholders take full responsibility for the legality of the contributed capital source; commit to giving financial support to their joint-stock commercial banks to resolve problems in case their banks face difficulties of financing or liquidity; and have at least two institutional founding shareholders.
As for regulations on the issuance of licenses, organisation and operation of non-bank credit institutions, the draft circular also removes three conditions: having at least two institutional founding shareholders, securing sufficient financial resources, and founding shareholders being required to support their non-bank credit institutions through difficulties in capital, solvency and liquidity.
Standards for general directors of cooperative banks are also eased under the draft circular. Now, there is no requirement that people in this position have worked more than five years in the banking industry.
The draft revisions are part of the SBV’s plans to remove or simplify 257 business conditions under its management, which will require the SBV to revise eight decrees and 10 circulars.
According to the SBV, the revisions are aimed to simplify business conditions and administrative procedures in the banking industry according to the Prime Minister’s instructions.
In a recent directive, Prime Minister Nguyen Xuan Phuc noted that the removal of business conditions is one of the key measures for economic growth and efficiency. He instructed relevant ministries and agencies to submit proposals on simplifying business conditions and reforming the specialised inspection process before August 15 this year.
The SBV said that it would further step up scrutiny to enable more revisions and simplification to make doing business easier in the fields under its management.