Agreement on Disposal of Financial Institutions in Crisis
关于处置陷入危机的金融机构的协议
ຂໍ້ຕົກລົງ ວ່າດ້ວຍ ການແກ້ໄຂສະຖາບັນການເງິນທີ່ຢູ່ໃນພາວະວິກິດ
Summary
The Bank of the Lao PDR issued regulations stipulating principles and procedures for handling financial institutions in crisis, including establishing a control committee, temporary financial assistance, capital increase, merger and sale, asset-liability transfer, and liquidation, to protect depositors' and creditors' rights and maintain financial system stability.
Articles
Article 1
Purpose. This Agreement stipulates the principles and procedures for the resolution of financial institutions in crisis, aiming to carry out the resolution of crisis financial institutions efficiently and effectively, with the objective of protecting the legitimate rights and interests of depositors and creditors, and contributing to the stability of the financial institution system and the economic and social order.
Article 2
Resolution of Distressed Financial Institutions. Resolution of distressed financial institutions refers to the process by which the Bank of the Lao PDR, in accordance with the Law on Commercial Banks, relevant regulations, and the provisions of this Agreement, employs various tools or measures to resolve a financial institution that has fallen into distress.
Article 3
Interpretation of terms. The terms used in this Agreement shall have the following meanings: 1. Financial institution: means a commercial bank and a microfinance institution that accepts deposits; 2. Commercial bank: means a commercial bank established under the laws of Laos and a branch of a foreign commercial bank; 3. Intra-group financial institution: means a financial institution in which a commercial bank or a microfinance institution that accepts deposits holds more than 55% of the voting shares; 4. Crisis financial institution: means a financial institution whose financial condition is severely weak, lacks stability, or is in another condition specified in this Agreement; 5. Bridge financial institution: means a crisis financial institution that the Bank of the Lao PDR capitalizes to become its owner, takes over its operations until it merges with another financial institution or sells its shares to new investors for the purpose of resolution; 6. Control committee: means a committee appointed by the Bank of the Lao PDR to enter and control a crisis financial institution in accordance with the Law on Commercial Banks, relevant regulations, and this Agreement; 7. Remuneration: means salary or wages, bonuses, and various policy payments; 8. Subordinated creditor: means a creditor who provides unsecured loans to a financial institution and whose repayment priority is after secured creditors and general creditors when the financial institution is dissolved or bankrupt, or is in a priority position "subordinate to unsecured debt repayment" as specified in the Law on Commercial Banks and the Decree on Microfinance Institutions; 9. Liquidation committee: means a committee appointed by the Bank of the Lao PDR responsible for liquidating the assets of a financial institution, composed of representatives from the Bank of the Lao PDR, the Deposit Protection Office, and relevant departments; 10. Liquidator: means an expert in liquidation, recognized as a liquidator by relevant departments, and is an external individual or legal entity hired and appointed by the Bank of the Lao PDR to be responsible for liquidating the assets of a financial institution.
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