On January 18, 2024, at the 5th extraordinary session, the 15th National Assembly passed the Law on Credit Institutions 2024, regulating cases in which credit will not be granted from July 1, 2024.
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According to the Law on Credit Institutions 2024, regulations on cases of not being granted credit from July 1, 2024 are as follows:
(1) Credit institutions and foreign bank branches are not allowed to grant credit to the following organizations and individuals:
- Member of the Board of Directors, member of the Board of Members, member of the Supervisory Board, General Director, Director, Deputy General Director, Deputy Director and equivalent titles as prescribed in the organization's Charter that credit; General Director, Director, Deputy General Director, Deputy Director of that foreign bank branch; A legal entity is a shareholder whose capital representative is a member of the Board of Directors or a member of the Control Board of a credit institution that is a joint stock company; The legal entity that is the capital contributing member and owner of the credit institution is a limited liability company;
- Wives, husbands, fathers, mothers, children, brothers, sisters of members of the Board of Directors, members of the Board of Members, members of the Supervisory Board, General Director, Director, Deputy General Director, Deputy director and equivalent title as prescribed in the Charter of that credit institution; General Director, Director, Deputy General Director, Deputy Director of that foreign bank branch.
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(2) Regulations in (1) do not apply to people's credit funds and cases of granting credit in the form of issuing credit cards to individuals;
(3) Credit institutions and foreign bank branches are not allowed to grant credit to customers on the basis of guarantees of the subjects specified in (1). Credit institutions and foreign bank branches are not guaranteed in any form to allow other credit institutions and foreign bank branches to grant credit to the subjects specified in (1);
(4) Credit institutions are not allowed to grant credit to businesses operating in the field of securities business that are subsidiaries or affiliated companies of that credit institution;
(5) Credit institutions are not allowed to grant credit on the basis of receiving security by shares of the credit institution or its subsidiaries or affiliated companies;
(6) Credit institutions and foreign bank branches are not allowed to grant credit to contribute capital or buy shares of credit institutions;
(7) Credit granting specified in (1), (2), (3), (4), (5) and (6) includes activities of buying, holding, and investing in corporate bonds.
Thus, the cases that are not granted credit include credit institutions and foreign bank branches specifically stated in (1), showing that the Law on Credit Institutions 2024 has more specific regulations on cases where credit is not granted.
The Law on Credit Institutions 2024 takes effect from July 1, 2024.
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