Law on credit institutions takes effect

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According to the revised law on credit institutions approved by the National Assembly last year, leaders at banks are not allowed to hold management positions in enterprises.

Accordingly, chair of board of directors (BoD), chair of the member board, and general director of credit institutions (CIs) cannot be the chair and member of BoD, or chair and member of the board of members, general director, deputy general director, or other equivalent titles in any other enterprises. 

Many business people, who hold leadership positions at both banks and other firms, have decided to give up their positions in enterprises and keep the banking management positions to meet a new Government regulation (Photo: enternews.vn)

The new regulation has taken effect since January 15; however, under the transitional provision of the law, these leaders may continue to concurrently hold the two positions until the end of their term, or the expiry date of the appointment at the bank.

According to the National Assembly Economic Committee, the fact that an individual is holding leadership positions at both a bank and another business has triggered several problems and affected banking operations and safety of the entire banking system. Therefore, the new regulation aims to ensure publicity, transparency and risk prevention for both credit and production activities.

Many business people, therefore, have been forced to give up their current positions in enterprises, where they have gained their reputation and careers, to hold senior leadership at banks.