On June 6, 2025, the Governor of the State Bank issued Circular No. 07/2025/TT-NHNN, amending and supplementing Circular 39/2024/TT-NHNN on special control of credit institutions. A notable point in this Circular is the new regulation on handling charter capital for commercial banks under special control.
Accordingly, in the case of a bank being forced to transfer according to the provisions of Clause 4, Article 179 or Clause 4, Article 180 of the Law on Credit Institutions, if there is an accumulated loss exceeding 100% of charter capital and reserve funds, the State Bank can issue a decision to reduce all charter capital of that bank.
Clear implementation roadmap, specific deadline
The Circular clearly stipulates the handling order as follows:
Firstly, within 10 days from the date the compulsory transfer plan is approved, the commercial bank under special control must determine the consolidated business performance for the accounting period from the time of the most audited financial report to the last day of the month immediately preceding the transfer approval. This result must be sent to the Special Control Board as a basis for handling.
Second, within 20 days from the above date, the Special Control Board is responsible for completing the determination and reporting the consolidated business results of the bank to the State Bank (through the Department of Credit Institution Management and Supervision). In case the bank cannot prepare the report as required, the Control Board must still perform this task in place.
Eliminate charter capital if the loss is too deep
If after the review, the bank has accumulated losses exceeding the entire value of charter capital and reserve funds (recorded in the most recent audited financial report), the Control Board can propose the State Bank to decide to reduce all charter capital to handle this loss. This is the basis for adjusting the charter capital in the Compulsory Transfer Decision.
According to the provisions of Clause 2 and Clause 3, Article 183 of the Law on Credit Institutions, the charter capital after being recorded will replace the capital stated in the establishment and operation license of a commercial bank under special control.
The Circular takes effect from the date of promulgation
Circular 07/2025/TT-NHNN officially took effect from June 6, 2025, adding strong legal tools for the State Bank in the process of restructuring the credit institution system, especially commercial banks with weak financial capacity and prolonged losses.
