The State Bank of Vietnam (SBV) recently issued Circular 27/2018/TT-NHNN to specify cases of freezing capital and assets of foreign bank branches, aiming to protect interests of these branches’ clients and prevent them from illegally transferring their assets abroad.
|The office of the RoK Shinhan Bank branch in Vietnam__Photo: Internet|
Accordingly, the SBV will freeze capital and assets of a foreign bank branch in the following cases:
First, the real value of its allocated capital falls to a level lower than the legal capital for more than six months.
Second, it violates the regulation on the prudential ratio for banking activities and fails to take remedies as requested by the SBV.
Third, its accumulated loss exceeds half of its allocated capital and reserve funds stated in the latest audited financial statement.
Fourth, its parent bank fails to fulfill the obligations toward it as requested by the SBV.
Fifth, its parent bank shows signs of insolvency or is placed by a competent authority of the country of origin under special control or is requested to be dissolved or liquidated or falls bankrupt or has its establishment and operation license revoked.
Under the new regulation, the SBV may stop allying the measure of freezing capital and assets of a foreign bank branch if it has remedied its violations or problems or its parent bank has fulfilled the obligations toward it at the SBV’s request.- (VLLF)