State Bank of Vietnam’s further clarifications on lending regulations

On 8 November 2023, the State Bank of Vietnam (SBV) issued Official Letter 8631 to publish answers to certain questions on lending regulations under Circular 6/2023 of the SBV dated 28 June 2023 (Circular 6/2023) amending Circular 39/2016 of the SBV dated 30 December 2016 on lending activities of credit institutions (CIs) and/or foreign bank branches with customers (Circular 39/2016).

The table below will highlight some notable answers of the SBV.

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Written by Lawyers VNLaw On In

No clear legal basis for controlling annual credit growth by Vietnamese credit institutions

In practice, annually, the State Bank of Vietnam (SBV) allocates annual credit growth limits to each credit institution including the finance company. However, the SBV’s allocation for each credit institution is not publicly available. Each credit institution will be subject to different credit growth limits. Based on newspaper reports, it appears the SBV takes into account the financial status of each credit institution, targeted inflation rate and targeted GDP growth rate to make the decision. In September 2022, it was reported that the SBV should use its ranking system to decide to allocate credit growth limits to each credit institution.

The planned credit growth limit for a year can be adjusted by the SBV during that year based on the assessment of the operation status and liquidity of each credit institution, as well as other development policies.

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Written by Nguyen Quang Vu On In

Difficulties In Dealing with the Administrative Procedures under Personal Data Protection Decree

Decree 13/2023 on Personal Data Protection (PDPD) has stirred a lot of excitement among legal professionals in Vietnam. Recently, such excitement met with the cold hard realities of the difficulties in fulfilling even the basic administrative procedures under PDPD. In particular, in July 2023, the Ministry of Public Security (MPS)  published the required contents of the file for assessment of the impact of personal data processing and the file for assessment of the impact of offshore transferring personal data. The levels of details and analysis required to prepare these files are very demanding. For example, the MPS require these files to include the following information and documents:

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Written by Nguyen Quang Vu On In ,

Re-Authorisation Of Signing Authority By Legal Representative

an the legal representative cum general director re-authorise another person to sign an agreement approved by the Board if he/she is authorised by the Board to sign this agreement?

Though there remain some counter arguments (as discussed below), subject to the provisions of the charter of the relevant company (e.g. there is no specific provision of the charter which prohibits the legal representative from re-authorising his authority to other person), it is arguable that the legal representative can re-authorise his/her signing authority to another person to sign the agreement. This is because:

  • Under Article 138.1 of the Civil Code 2015, an individual or legal entity can authorise other individual and legal entity to establish and perform the civil transaction.

  • Under Article 12.3 of the Enterprise Law 2020, the legal representative must authorise the other person to carry out his/her authorities if he/she is absent from Vietnam. This suggests that the legal representative can re-authority any other person to perform his/her authorities.

  • The representation authority is a default right of the legal representative (Article 12.1 of the Enterprise Law 2020). Therefore, while the Board can approve the agreement, the right to represent the company to sign such agreement should belong to the legal representative.

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Written by Nguyen Quang Vu On In