The Government would decide on the foreign holding cap in credit institutions that acquire poorly performing banks under restructuring plans at the request of competent authorities which, however, would not exceed 49 percent of charter capital of the acquiring credit institutions.
Such is provided in a recent draft decree prepared by the State Bank of Vietnam (SBV) to revise Decree 01 of 2014 on foreign investors’ purchase of shares of Vietnamese credit institutions.
Under the draft, foreign investors would be allowed to purchase shares from joint-stock credit institutions that offer or issue shares to increase charter capital.
Regarding conditions for a Vietnamese credit institution to sell shares to foreign investors, Article 11.2 of Decree 01 would be revised as follows: “A joint-stock credit institution must have its plan on increase of charter capital, covering the sale of shares to foreign investors, approved by the General Assembly of Shareholders. For a joint-stock credit institution in which the State holds more than 50 percent of charter capital, the plan on increase of charter capital must go through the procedures specified by the regulations on financial management of state enterprises before being submitted to the General Assembly of Shareholders for approval”.
Meanwhile, the draft still retains other regulations on foreign ownership limit in credit institutions as provided in Decree 01. Accordingly, a foreign organization must not hold more than 15 percent of the charter capital of a Vietnamese credit institution. For a foreign strategic investor or a foreign investor and its/his/her affiliated persons, this cap would be 20 percent. The total shareholding rate of foreign investors at a Vietnamese commercial bank must not exceed 30 percent of the charter capital of such bank.- (VLLF)
