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| A transaction office of Agribank__Photo: Vietnam+/VNA |
From May 19, foreign investors may only purchase shares from joint-stock credit institutions that sell shares to increase charter capital or sell treasury stocks they purchased before January 1, 2021.
Such is part of Government Decree 69 dated March 18, which is designated to revise several provisions of Decree 01/2014/ND-CP on foreign investors’ purchase of shares of Vietnamese credit institutions.
According to the revised rule, the total shareholding rate of all foreign investors at a Vietnamese commercial bank must not exceed 30 percent of the bank’s charter capital, while the cap at a Vietnamese non-bank credit institution is 50 percent, except some special cases.
Specifically, to ensure safety of the credit institution system, the Prime Minister may decide to set the shareholding rate of each foreign organization or foreign strategic investor as well as the total shareholding rate of all foreign investors at a poorly performing credit institution higher than the specified limits.
In addition, commercial banks as mandatory transferrees may have the foreign holding rate between over 30 percent and 49 percent of charter capital, except those with more than 50 percent of their charter capital held by the State.
As per Decree 01 of 2014, the total shareholding rate of all foreign investors at a Vietnamese commercial bank must not exceed 30 percent of the bank’s charter capital, while that at a Vietnamese non-bank credit institution must comply with the regulations applicable to public companies and listed companies.
In case foreign investors have the holding rate surpassing the above-said thresholds, they must reduce their holding rate within six months in order to comply with the above-said limits, the new regulation stresses.
When the total foreign holding rate at a local credit institution exceeds the specified limit, foreign investors may not purchase additional shares from such credit institution until the total foreign holding rate falls below the limit.- (VLLF)
