Circular No. 02/2008/TT-NHNN guiding the implementation of Decree No. 28/2005/NĐ-CP dated March 9, 2005 of the Government on the organization and operation of small-scale financial organizations in Vietnam and Decree No. 165/2007/NĐ-CP dated November 15, 2007 of the Government amending, supplementing, and abolishing certain articles of Decree No. 28/2005/NĐ-CP dated March 9, 2005 of the Government on the organization and operation of small-scale financial organizations in Vietnam.

CIRCULAR

Guidelines for Implementing Decree No. 28/2005/NĐ-CP dated March 9, 2005 of the Government on the Organization and Operation of Small-Scale Financial Institutions in Vietnam and Decree No. 165/2007/NĐ-CP dated November 15, 2007 of the Government amending, supplementing, and abolishing certain provisions of Decree No. 28/2005/NĐ-CP dated March 9, 2005 of the Government on the organization and operation of small-scale financial institutions in Vietnam

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On March 9, 2005, the Government issued Decree No. 28/2005/NĐ-CP on the organization and operation of small-scale financial institutions in Vietnam, and on November 15, 2007, the Government issued Decree No. 165/2007/NĐ-CP amending, supplementing, and abolishing certain provisions of Decree No. 28/2005/NĐ-CP. The Governor of the State Bank of Vietnam hereby provides guidelines for implementing certain specific contents as follows:

I. GENERAL PROVISIONS

This Circular applies to units under the Ministry of Education and Training; departments of education and training, education and training divisions; preschool education institutions, general education institutions, regular education institutions, teacher training colleges, college of education, universities, universities, academies, other educational institutions, and related organizations and individuals (hereinafter referred to collectively as agencies and units).

1.1. These Circulars provide guidance on implementing certain provisions stipulated in Decree No. 28/2005/NĐ-CP dated March 9, 2005 on the organization and operation of small-scale financial institutions in Vietnam (hereinafter referred to as Decree No. 28/2005/NĐ-CP) and Decree No. 165/2007/NĐ-CP dated November 15, 2007 amending, supplementing, and abolishing certain provisions of Decree No. 28/2005/NĐ-CP (hereinafter referred to as Decree No. 165/2007/NĐ-CP).

1.2. Except for cases provided otherwise in these Circulars and relevant special legal regulations, provisions of the Enterprise Law and the Law on Credit Institutions shall apply to the organization and operation of small-scale financial institutions.

2. Explanation of terms

In this Circular, the following terms shall be understood as follows:

2.1. Small-scale credit: refers to a loan with a small value, secured or unsecured, granted to individuals and households with low income for use in income-generating activities and improving living conditions. A loan to a customer is considered small-scale credit when the total outstanding loan balance of the small-scale financial institution to that customer does not exceed thirty million Vietnamese dong. This lending amount may be adjusted by the Governor of the State Bank of Vietnam for each period.

2.2. Manager: includes General Director (Director), Deputy General Directors (Deputy Directors), Chief Accountant, Internal Audit Head (if any), and other managerial positions as stipulated in the Charter of the small-scale financial institution.

2.3. Administrator: includes owner, member of the Member Assembly, Chairman and members of the Board of Management, General Director (Director), and other administrative positions as stipulated in the Charter of the small-scale financial institution.

2.4. Direct relative of a person means spouse, parent, adoptive parent, child, adopted child, brother, sister, and half-sibling of that person.

2.5. Non-Governmental Organization of Vietnam: refers to organizations established and operating under Decree No. 88/2003/NĐ-CP dated July 30, 2003 of the Government on the organization, operation, and management of associations.

2.6. Country of origin for foreign capital contributors: refers to the country where the foreign organization was established or registered its main office, or the country where the foreign individual has registered their nationality.

2.7. Foreign organizations and individuals: refer to organizations established under foreign laws or registered their main office abroad, foreign individuals, and Vietnamese individuals residing abroad.

2.8. Authorized representative: refers to an individual authorized in writing by the capital contributors to act on their behalf in exercising their rights at the small-scale financial institution.

2.9. Founding member: refers to a member (individual or organization) who contributes capital, participates in establishing, approving, and signing the first Charter of the small-scale financial institution.

2.10. Reorganization: refers to the division, separation, merger, consolidation, acquisition, or conversion from a single-member limited liability company to a multi-member limited liability company and vice versa.

Types of small-scale financial institutions

Small-scale financial institutions are established in the form of a limited liability company and are liable for the debts and other property obligations of the small-scale financial institution within the scope of the charter capital of the small-scale financial institution, specifically as follows:

3.1. Small-scale financial institution in the form of a single-member limited liability company: refers to a small-scale financial institution owned by a Vietnamese social-political organization.

3.2. Small-scale financial institution in the form of a multi-member limited liability company: refers to a small-scale financial institution established with the capital contribution of two or more organizations as specified in Clause 2, Article 1 of Decree No. 28/2005/NĐ-CP, or with the capital contribution of one or more of such organizations together with one or more domestic and foreign individuals and organizations; the small-scale financial institution has no more than five capital-contributing members, except in cases approved by the Governor of the State Bank of Vietnam.

4. Use of the term "small-scale financial institution"

Only small-scale financial institutions licensed by the State Bank of Vietnam to establish and operate are permitted to use the term "small-scale financial institution" in any language in the name of the organization, title, or as an additional part of the name, title, or presented in invoice headings, documents, notifications, advertisements, or descriptions of business operations.

5. Charter Capital

5.1. The charter capital of a small-scale financial institution can be contributed in cash or in kind.

a) Cash contribution:

- For contributing members who are Vietnamese organizations or individuals: the charter capital must be contributed in Vietnamese dong;

- For contributing members who are foreign organizations or individuals: the charter capital can be contributed in freely convertible foreign currency or in Vietnamese dong. In the case of foreign organizations or individuals contributing capital in freely convertible foreign currency, the amount of capital contribution must be converted into Vietnamese dong according to the exchange rate published by the State Bank of Vietnam at the time of conversion.

b) Contributing capital through assets: The assets must be property with legal documents proving ownership rights or usage rights (for land) and must be assets directly serving the operations of small-scale financial organizations. The valuation and transfer of ownership of contributed assets shall be carried out in accordance with current Vietnamese laws. The amount of registered capital contributed in the form of assets shall not exceed 5% of the total registered capital of the small-scale financial organization.

5. 2. For organizations that have been operating small-scale financial activities before this Circular takes effect, their own capital will be determined to be included in the registered capital of the small-scale financial organization. The organization's own capital includes: capital that has been issued, sponsored, contributed, donated or has a similar nature, funds (supplementary capital reserve fund, financial provision fund, business development investment fund), and undistributed profits, after deducting losses, including cumulative losses. The State Bank of Vietnam will determine the organization's own capital based on the following documents:

a) Documents and papers proving the receipt of capital, contributions, and/or equivalent documents;

b) Audited financial statements by an independent auditing organization listed in the Ministry of Finance’s announcement of qualified auditing firms within six months prior to submitting the application and documents for establishing a small-scale financial organization;

c) Commitment from the applicant(s) regarding the amount of own capital of the organization at the time of application and commitment to promptly notify the State Bank of Vietnam about any changes affecting the value of such own capital until the establishment permit is granted;

d) Opinion of the State Bank of Vietnam Inspectorate on the situation of the organization's capital sources.

6. Proportion and method of contributing registered capital

The proportion and method of contributing registered capital by members in small-scale financial organizations in the form of limited liability companies with two or more members shall be agreed upon by the parties and must be clearly stated in the Articles of Association. The contribution ratio must ensure compliance with the following provisions:

6. 1. The total amount of capital contributed by foreign organizations and individuals must be less than 50% of the registered capital of the small-scale financial organization, except in special cases as provided for;

6. 2. The total amount of capital contributed by organizations specified in Clause 2, Article 1 of Decree No. 28/2005/NĐ-CP must reach a minimum of 25% of the registered capital and must have the highest contribution ratio compared to each remaining contributing member.

7. Transfer of contributed capital

7. 1. For small-scale financial organizations in the form of a single-member limited liability company: The owner may transfer all or part of his/her contributed capital to another organization or individual or transfer all of his/her contributed capital to a Vietnamese political-social organization, subject to complying with the conditions stipulated in Clause 7, Article 8 of Decree No. 28/2005/NĐ-CP (amended and supplemented according to Clause 5, Article 1 of Decree No. 165/2007/NĐ-CP).

In case, after the transfer, the contributed capital of the small-scale financial organization is owned by two or more contributing members, then the small-scale financial organization must convert into a small-scale financial organization in the form of a limited liability company with two or more members and comply with the regulations applicable to this type of organization.

7. 2. For small-scale financial organizations in the form of a limited liability company with two or more members: Contributing members in the small-scale financial organization have the right to transfer part or all of their contributed capital according to the following provisions:

a) Must transfer that portion of the capital to the remaining contributing parties in the small-scale financial organization in proportion to their respective capital contributions under the same conditions;

b) May only transfer to other organizations or individuals if the remaining contributing parties in the small-scale financial organization do not purchase or do not purchase entirely within thirty days from the date of offering. Transfers to organizations or individuals who are not the remaining contributing parties of the small-scale financial organization must be conducted under conditions that are less favorable than those stipulated in point 7.2, subpoint a of this clause.

7. 3. The transfer of capital must be approved by the State Bank of Vietnam before implementation.

8. Profit distribution

8. 1. Contributing members in small-scale financial organizations distribute profits according to the proportion of each member's capital contribution, unless the members agree otherwise in writing.

8. 2. The members' meeting (owner) may agree in writing to not distribute profits but to use a portion or all of the profits to increase own capital.

8. 3. The principle of profit distribution must be stipulated in the Articles of Association of the small-scale financial organization.

II. REGULATIONS ON GRANTING LICENSE FOR ESTABLISHMENT AND OPERATION OF SMALL-SCALE FINANCIAL ORGANIZATIONS

9. Conditions for obtaining a license for establishment and operation (referred to as License)

9. 1. Need for small-scale financial activities.

9. 2. Opinion of the People's Committee of the province or centrally governed city where the main office of the small-scale financial organization is planned to be located on the necessity of establishing the organization in that area.

9. 3. Minimum registered capital as prescribed in Clause 2, Article 1 of Decree No. 165/2007/NĐ-CP.

9. 4. Office premises and material facilities, technological and information systems ensuring the operation of the small-scale financial organization.

9. 5. Management, supervisory, and operational personnel with full civil capacity and appropriate professional qualifications for the operation of the small-scale financial organization.

9. 6. A feasible business plan for the first three years of operation.

9. 7. For small-scale financial organizations established in the form of a limited liability company with two or more members: At least one of the contributing members must be an organization specified in Clause 2, Article 1 of Decree No. 28/2005/NĐ-CP of the Government, meeting the following conditions:

a) Directly participating in the management and/or operation of one or more organizations, programs, or projects providing mandatory savings services and small-scale credit in Vietnam for three consecutive years prior to the date of submitting the application for the License;

b) Demonstrating sound and sustainable governance, control, and safe operation of small-scale financial activities for at least one year immediately preceding the date of submitting the application for the License, specifically:

- The ratio of total overdue loan balances of customers to the total loan balance of the small-scale financial organization (PAR) must be below five percent (5%);

- Total income from small-scale financial activities must be sufficient to cover costs, including funding costs, administrative expenses, and provisions for credit risk;

c) Not being an entity currently under administrative violation investigation in the financial or monetary sector, or having been administratively penalized in the financial or monetary sector but has corrected the violation before submitting the application for the License for at least one year;

d) The share capital contribution to the small-scale financial organization must meet the ratio specified in Clause 6, Point 6.2 of this Circular;

9. 8. For small-scale financial organizations established in the form of a limited liability company with one member: the owner must be a political-social organization legally established and operating in Vietnam that meets the conditions stipulated in Points 9.7(a), (b), and (c) of this Clause, except in special cases permitted;

9. 9. For small-scale financial organizations with foreign investment: In addition to the conditions stipulated in Points 9.1 through 9.7 of this Clause, the foreign capital contributor must be authorized by the competent authority of their home country to contribute capital to establish a small-scale financial organization in Vietnam;

10. Application Documents

10. 1. Application Form for the License (Annex 1):

a) For small-scale financial organizations established in the form of a limited liability company with one member: signed by the legal representative or authorized representative of the political-social organization;

b) For small-scale financial organizations established in the form of a limited liability company with two or more members: signed by the founders or authorized representatives of the founders;

10. 2. Draft Articles of Association: The Articles of Association of the small-scale financial organization is a document precisely defining the organizational structure, governance, and operation of the small-scale financial organization. The first set of Articles of Association of the small-scale financial organization must be approved and jointly signed by the owner or the founders. The content of the Articles of Association must comply with the laws and must include the following main elements:

a) Name of the small-scale financial organization;

b) Address of the main office;

c) Content and scope of primary activities;

d) Registered capital and method of capital contribution;

d) Rights and obligations of the owner or contributing members;

e) Procedures for electing, appointing, and dismissing members of the Board of Directors, General Director (Director), and Supervisory Board;

g) Duties and powers of the Members' Meeting, Board of Directors, Supervisory Board, and General Director (Director);

h) Legal representative of the small-scale financial organization;

i) Financial, accounting, auditing, internal control, internal audit, risk management, reporting, and information disclosure principles;

k) Profit distribution and loss handling methods of the small-scale financial organization;

l) Internal dispute resolution procedures;

m) Procedures for amending and supplementing the Articles of Association;

n) Circumstances and procedures for dissolution;

o) Signature of the owner (for a single-member small-scale financial organization) or all founding members (for a multi-member small-scale financial organization);

10. 3. Business Plan for the First Three Years, including:

a) Objectives of the small-scale financial organization's operations;

b) Anticipated operational territory; anticipated locations for branches (including new branches and/or existing branches for organizations already engaged in small-scale financial activities);

c) Criteria for small-scale financial customers and the expected number of individuals and households meeting these criteria in the anticipated operational territory;

d) Anticipated products and services to be provided to small-scale financial customers and other customers, along with the regulations and conditions for each product and service;

e) Organizational structure and personnel plan;

g) Information and communication technology to be utilized;

h) Risk management system, including internal audit and internal control systems;

i) Balance sheet, profit and loss statement, and forecasted lending portfolio for the next three fiscal years;

j) Expected social impact of the small-scale financial organization in the operational area;

10. 4. Opinion of the People's Committee of the province or centrally administered city where the headquarters of the small-scale financial organization is planned to be located regarding the necessity of establishing such an organization in the area;

10. 5. a) For small-scale financial organizations established in the form of a limited liability company with two or more members: List of founders, amount of capital contribution (specifying the amount in Vietnamese dong, foreign currency, other assets, and the contribution ratio of each founder), capital contribution plan (detailing the method, progress of contributions...), commitment to implementation by the founders, and the following accompanying documents:

- For individual founders:

+ Copy of Identity Card, Passport, or other lawful personal identification;

+ Curriculum vitae (Annex 2 attached);

- For founders who are organizations established and operating in Vietnam:

+ Copy of decision or license for establishment and operation or equivalent document proving lawful establishment and operation in Vietnam;

+ Business registration certificate (for enterprises);

+ Power of attorney, Identity Card, Passport, or other lawful personal identification of the authorized representative;

+ Current Articles of Association or equivalent document;

+ Report on the organization's operational status over the last three years;

+ Other necessary related information: the purpose of capital contribution to establish a small financial organization; management system, operation system, internal inspection and control system, and internal audit system;

+ A detailed declaration regarding all investigative or prosecution activities against the organization or stating that it has not been investigated or prosecuted in the last ten years;

+ A declaration detailing the capital contributions or shareholdings of the founding members in credit institutions and other enterprises;

In case the founding member is a unit under a group, information on the main scope of operations of the group accompanied by a group organizational chart must be provided, and details must be specified if the group has contributed capital and/or holds shares in other credit institutions;

- For foreign founding organizations:

In addition to the documents prescribed for founding organizations established and operating in Vietnam as stipulated in Point 10.5 Subsection a Clause of this Article, foreign organizations must submit:

+ A certificate of business registration or equivalent document certified by the authority where the organization registered no more than three months before the date of submitting the application for establishment and operation of a small financial organization;

+ A document from the foreign authority with the authority to permit foreign organizations or individuals to contribute capital to establish a small financial organization in Vietnam. If the laws of the home country do not require such approval, the organization or individual must provide a clear explanation and commit to the authenticity of this explanation;

b) For small financial organizations established in the form of a limited liability company with one member:

- A copy of the decision or license for establishment and operation or equivalent document proving lawful establishment and operation in Vietnam;

- Power of attorney, Identity Card, Passport, or other valid personal identification of the authorized representative;

- The current articles of association or equivalent document;

- Other necessary related information: the purpose of capital contribution to establish a small financial organization; management system, operation system, internal inspection and control system, and internal audit system;

10. 6. List, curriculum vitae (Annex 2), and copies of certificates and diplomas proving the qualifications and professional expertise of the Board of Directors, Supervisory Board, General Director (Director) of the small financial organization;

10. 7. In addition to the documents prescribed in Points 10.1 to 10.6 of this Clause, the organization applying for establishment of a small financial organization must supplement reports and relevant documents concerning the provision of small financial services to customers as follows:

a) A summary report on organizational structure, branch network, financial situation, and services currently provided to customers;

b) Audited financial statements for the two most recent fiscal years conducted by an independent auditing organization;

c) Report on the operational status and effectiveness of each branch proposed for continued operation after obtaining the License;

d) Documents and papers proving the own capital as stipulated in Clause 5 Point 5.2 Subsection a, b, c of this Circular;

10. 8. The State Bank may request additional information when deemed necessary to clarify issues related to the conditions for obtaining the License;

11. Provisions on the Application for License

11. 1. The application for License for a small financial organization whose founding members are Vietnamese organizations or individuals must be prepared in two sets in Vietnamese;

11. 2. The application for License for a small financial organization with foreign founding members must be prepared in three sets, including two sets in Vietnamese and one set in English;

11. 3. The documents in the application prescribed in Points 11.1 and 11.2 of this Clause must be original or certified copies as follows:

- Certified copies of documents and papers issued abroad must be certified by the competent authority or person authorized according to the regulations of that country;

- Translations of documents and papers from English to Vietnamese must be notarized;

- Copies of Vietnamese documents and papers must be certified copies from the original register or certified copies from the original;

- Documents issued abroad must be legalized, including: documents issued by the competent authority in the home country certifying the legal status of foreign organizations or individuals participating in the capital contribution to establish a small financial organization (license for establishment, business registration certificate, personal certification or equivalent documents); documents from the foreign authority permitting foreign organizations or individuals to participate in the capital contribution to establish a small financial organization in Vietnam or a commitment that the home country of the foreign organization or individual does not prohibit or restrict capital contribution to establish a small financial organization in Vietnam;

12. Procedure and Time Limit for Issuing the License

12. 1. Within thirty working days from the date of receipt of the application for the License as prescribed in Articles 10 and 11 of this Circular, the State Bank shall confirm in writing to the applicant about the validity of the application or notify the required supplementary documents and papers;

12. 2. Within sixty days from the date of receipt of the complete and valid application, the State Bank shall examine and decide to issue or refuse the License. In case of refusal, the State Bank shall provide a written statement of reasons;

13. Content of the License and Amendments to the Content of the License

13. 1. The content and format of the License according to the model attached in Annex 3;

13. 2. Any amendments to the content of the License shall be decided in writing by the State Bank. The State Bank's decision on amending the content of the License is an integral part of the License;

14. Business Registration

After obtaining the License, the small-scale financial organization must register its business operations in accordance with the current laws on business registration. The small-scale financial organization shall have legal personality from the date it receives the business registration certificate.

15. Conditions for Commencing Operations

15.1. Within twelve months from the date of issuance of the License, the small-scale financial organization that has been granted the License must complete all necessary procedures to meet the following conditions for commencing operations:

a) Have articles approved by the State Bank of Vietnam;

b) Have a business registration certificate;

c) Having sufficient registered capital as stipulated at Point 9.3 Clause 9 of this Circular and having an appropriate office in accordance with operational requirements;

d) Paying the full license fee as prescribed by the Ministry of Finance;

đ) Depositing the registered capital contributed in cash into a blocked account without interest at the State Bank branch in the province or centrally-administered city where the small-scale financial organization's main office is located at least thirty days before commencing operations. This capital can only be released after the small-scale financial organization officially commences operations.

This provision does not apply to the portion of capital contributed by an organization that has already provided small-scale financial services in Vietnam.

e) Transferring ownership of other contributed assets or land use rights (if any) to the small-scale financial organization.

g) At least thirty days prior to the planned date of commencing operations, the small-scale financial organization must notify in writing the official date of commencing operations to the State Bank, the business registration authority, and the People's Committee of the province or centrally-administered city where the small-scale financial organization's main office is located.

h) At least twenty days prior to the planned date of commencing operations, the small-scale financial organization must publish in local newspapers where its main office is located or in central newspapers in three consecutive issues the following key contents:

- Full name and trading name of the small-scale financial organization;

- Main office address; telephone number and other means of communication;

- Registered capital;

- Content, scope, area, and duration of operation;

- Number and date of the License; number and date of the business registration certificate; issuing authority;

- Names of the Chairman and members of the Board of Directors, Head and members of the Supervisory Board, General Director (Director);

- Planned date of commencing operations;

- Other contents deemed necessary by the small-scale financial organization.

15.2. At least fifteen days before commencing operations, the small-scale financial organization must submit to the State Bank the following documents:

a) A confirmation document regarding the deposited registered capital contributed in cash into the blocked account and legal documentation confirming the transfer of ownership of other contributed assets or land use rights (for land assets) to the small-scale financial organization in accordance with Vietnamese law.

This provision does not apply to the portion of capital contributed by an organization that has already provided small-scale financial services in Vietnam. The small-scale financial organization must submit to the State Bank a report on the situation of the founding member's capital sources and usage at the end of the most recent month; a report on the self-owned capital and commitments of the Chairman of the Board of Directors and the General Director (Director) of the small-scale financial organization regarding the authenticity of these reports.

b) Payment receipts for the license fee;

c) Business registration certificate;

d) Documents proving ownership or right to use the main office;

đ) Copies of newspapers announcing the establishment of the small-scale financial organization. These documents must be originals or certified copies in accordance with Decree No. 79/2007/ND-CP dated May 18, 2007, on issuing certified copies from original books, certifying copies from originals, and certifying signatures.

15.3. Upon expiration of the twelve-month period specified in Point 15.1 of this Clause, if the small-scale financial organization does not commence operations, the License will automatically become invalid. The State Bank will proceed to revoke the issued License and process the refund of the deposited capital in the blocked account (if any) after deducting the relevant fees as prescribed.

16. Extension of the License

16.1. At least sixty days before the expiry date of the License, the small-scale financial organization must submit to the State Bank a request for extension of the License. The request for extension includes:

a) An application for extension sent to the Governor of the State Bank signed by the Chairman of the Board of Directors;

b) A document from the Member Meeting (owner) agreeing to the request for extension of the License;

c) A resolution of the Board of Directors on the extension of the License;

d) A report on the operating situation over the last three years signed by the Chairman of the Board of Directors, detailing the results of operations, implementation of safety indicators as prescribed by the State Bank, network activities, primary customer types, number of member customers, social impact assessment of the organization's activities, summary of achieved and unachieved goals compared to plans, and future strategic operation plans;

đ) A proposed operational plan for the first three years after extending the License, clearly stating the issues as stipulated in Clause 10 Point 10.3 of this Circular.

e) Other documents (if necessary) to clarify the contents of Points 16.1 items a, b, c, d, đ above.

16.2. Within thirty days from the date of receiving the complete request for extension as stipulated in Point 16.1 of this Clause, the State Bank will review and decide whether to approve or reject the extension of the License for the small-scale financial organization. In case of rejection, the State Bank will issue a document explaining the reasons.

16.3. The extension of the operating period will be reviewed individually each time. Each extension period may not exceed the duration specified in the License previously.

16.4. Within fifteen working days from the date of extension of the License, the small-scale financial organization must publish in central or local newspapers in three consecutive issues the contents as stipulated in Clause 15 Point 15.1 Item h of this Circular.

17. Fees for Issuing the License and Fees for Extending the Operating Period

17. 1. The level of fee for each issuance of the License and the fee level for extending the operating period for small-scale financial organizations shall be implemented in accordance with the regulations of the Ministry of Finance.

17. 2. Within fifteen days from the date of issuance of the License, the small-scale financial organization must pay the fee at the State Bank's trading office.

17. 3. The amount of fee prescribed in Point 17.1 of this Clause shall not be deducted from the registered capital and shall not be refunded under any circumstances.

III. ORGANIZATIONAL STRUCTURE, MANAGEMENT, OPERATIONS AND SUPERVISION

18. The organizational structure of small-scale financial organizations with two members or more

18. 1. The Members' Meeting consists of all contributing members and is the highest authority to make decisions for the small-scale financial organization.

18. 2. Small-scale financial organizations are managed by the Board of Directors. The Board of Directors has full power to act on behalf of the small-scale financial organization to make decisions and perform the rights and obligations of the small-scale financial organization, except for matters within the authority of the Members' Meeting of the small-scale financial organization. The Board of Directors includes the Chairman, Vice-Chairman, and members. The term of the Board of Directors is a maximum of five years.

18. 3. The Board of Directors of the small-scale financial organization must have at least three members. The number of members of the Board of Directors will be decided by the Members' Meeting and recorded in the Charter of the small-scale financial organization.

18. 4. The Board of Directors of the small-scale financial organization must report and be responsible to the Members' Meeting regarding the business results of the small-scale financial organization.

18. 5. The Supervisory Board is tasked with checking financial activities, monitoring compliance with accounting systems, ensuring safety in operations of the small-scale financial organization, conducting internal audits to assess the current business operation and financial status of the small-scale financial organization. The term of the Supervisory Board is a maximum of five years.

18. 6. The Supervisory Board must have at least three members, including one Chairperson and at least half of the members being full-time. In case the Supervisory Board only has three members, there must be at least one full-time member. The number of members of the Supervisory Board is decided by the Members' Meeting and stipulated in the Charter of the small-scale financial organization. The Chairperson of the Supervisory Board must reside in Vietnam throughout their tenure.

18. 7. The Supervisory Board must report to the Board of Directors of the small-scale financial organization and be responsible to the Board of Directors and contributing members for the performance of its rights and duties.

18. 8. The General Director (Director) is responsible for managing the daily business operations of the small-scale financial organization. The General Director (Director) must report and be accountable to the law and the Board of Directors of the small-scale financial organization. The General Director (Director) must reside in Vietnam throughout their tenure.

18. 9. One or more Deputy General Directors (Deputy Directors) assist the General Director (Director) in managing the daily operations of the small-scale financial organization and must report and be accountable to the General Director (Director) for assigned tasks. The Deputy General Director (Deputy Director) must reside in Vietnam throughout their tenure.

18. 10. The Chief Accountant assists the General Director (Director) in accounting, bookkeeping, maintaining accounting records, and is responsible according to relevant laws. The Chief Accountant must reside in Vietnam throughout their tenure.

18. 11. Small-scale financial organizations must establish an internal inspection and control system and implement internal inspection and control provisions as set out in Section 4, Chapter II of the Law on Credit Institutions.

19. Organizational structure of small-scale financial organizations with limited liability of one member

19. 1. The owner of the small-scale financial organization appoints one or several authorized representatives to exercise rights and obligations as prescribed by law. The owner has the right to replace the authorized representative. If at least two people are appointed as authorized representatives, then the Members' Meeting consists of all authorized representatives.

19. 2. The provisions from Point 18.2 to Point 18.11 of Clause 18 of this Circular apply to small-scale financial organizations with limited liability of one member. In case the owner appoints one authorized representative, this representative has full authority to exercise all powers prescribed in Point 18.1 of Clause 18 of this Circular and other common rights and obligations of contributing members in small-scale financial organizations with two members or more.

20. Legal representative

The Chairman of the Board of Directors or the General Director (Director) is the legal representative of the small-scale financial organization as stipulated in the Charter of the small-scale financial organization. The legal representative of the small-scale financial organization must be a resident in Vietnam; if absent from Vietnam for more than fifteen days, they must delegate by written authorization to another person as stipulated in the Charter of the small-scale financial organization to perform the rights and obligations of the legal representative of the small-scale financial organization.

21. Situations where concurrent positions are not allowed

21. 1. The Chairman of the Board of Directors of a small-scale financial organization:

a) Shall not participate in the Board of Directors, the Supervisory Board, or join the management machinery of the small-scale financial organization or other credit institutions;

b) Shall not concurrently hold the position of Chairperson or member of the Supervisory Board of the small-scale financial organization;

c) Shall not concurrently serve as the manager of the small-scale financial organization.

21. 2. The Chairperson of the Supervisory Board of a small-scale financial organization:

a) Shall not concurrently be a manager of the small-scale financial organization;

b) Shall not be a direct relative of the manager of the small-scale financial organization.

21. 3. The General Director (Director) of a small-scale financial organization shall not concurrently serve as the General Director (Director) or Chairman of the Board of Management of another small-scale financial organization or other credit institution.

22. Professional qualifications of members of the Board of Management, Supervisory Board, and managerial staff

22. 1. Members of the Board of Management and the Supervisory Board of a small-scale financial organization must possess the necessary skills, knowledge, capabilities, or experience to effectively exercise their powers and fulfill their duties.

22. 2. At least one member of the Supervisory Board of a small-scale financial organization must be an accounting and/or finance specialist with good understanding of relevant auditing, accounting, and financial standards and regulations; hold a bachelor's degree in auditing and/or accounting and/or finance, and have at least two years of work experience in a related field in positions such as auditor, accountant, or financial specialist (in cases without a bachelor's degree, they must have at least five years of work experience in a management position related to small-scale financial operations).

22. 3. The General Director (Director), Deputy General Directors (Deputy Directors), Internal Auditor (if any), and Chief Accountant must possess the necessary skills, knowledge, capabilities, or experience to effectively exercise their powers and fulfill their duties. The General Director (Director) must hold a bachelor's degree or equivalent qualification and have at least three years of work experience in a management position within the small-scale financial sector.

23. Situations where individuals are not eligible to serve as managers in small-scale financial organizations

The following individuals are not eligible to assume positions in small-scale financial organizations:

23. 1. Individuals subject to the Civil Servants Law and Article 18 of Decree No. 28/2005/NĐ-CP;

23. 2. Borrowers, guarantors, or re-guarantors for loans from the small-scale financial organization and their direct relatives;

23. 3. Investors who own or whose direct relatives own, or jointly with one or more direct relatives own more than 10% of the charter capital of a borrowing enterprise that guarantees or re-guarantees a loan from the small-scale financial organization;

23. 4. Failure to meet the professional ethics, expertise, and skill standards set forth by the State Bank of Vietnam as stipulated in Clause 22 of this Circular;

23. 5. Non-compliance with provisions in the Charter of the small-scale financial organization.

24. Automatic loss of eligibility

24. 1. The Chairman, members of the Board of Management, Heads of Departments, members of the Supervisory Board, or the General Director (Director) shall automatically lose their eligibility in the following circumstances:

a) Loss of civil capacity, death;

b) Prohibited from being a member of the Board of Management or Supervisory Board according to the provisions of Clause 23 of this Circular;

c) Expelled from the territory of the Socialist Republic of Vietnam by a competent court;

d) The establishment and operation permit of the small-scale financial organization is revoked;

đ) The employment contract of the General Director (Director) expires; or

e) Other situations prescribed in the Charter of the small-scale financial organization.

24. 2. Upon identifying individuals who automatically lose their eligibility as provided for in point 24.1 of this clause, the Board of Management must submit a report accompanied by specific evidence to the State Bank and bear responsibility for the accuracy and truthfulness of the report under the law, while also implementing procedures to elect and appoint replacements for vacant positions in accordance with the law.

25. Term of office of members of the Board of Management and Supervisory Board

25. 1. The term of office of members of the Board of Management shall not exceed five years. The term of office of members of the Supervisory Board shall not exceed five years based on the decision of the Member Assembly (owner) and the provisions of the Charter of the small-scale financial organization. New members of the Board of Management or Supervisory Board must be evaluated by the Member Assembly (owner) regarding their performance twelve months after appointment.

25. 2. Members of the Board of Management or Supervisory Board may be reappointed by the Member Assembly (owner).

25. 3. The appointment terms of members of the Board of Management and Supervisory Board must be arranged to ensure continuity and succession in the composition of the Board of Management and Supervisory Board.

26. Election and Appointment, Removal

26. 1. The Member Assembly (owner) appoints and removes members of the Board of Management and Supervisory Board.

26. 2. The Board of Management appoints and removes, signs and terminates contracts for the employment of the General Director (Director) and other important managerial positions as prescribed in the Charter.

26. 3. Members of the Board of Management elect one among themselves to serve as the Chairman of the Board of Management.

26. 4. In the absence of the Chairman of the Board of Management, they must authorize in writing another member of the Board of Management to perform the rights and duties of the Chairman of the Board of Management according to the principles stipulated in the Charter of the small-scale financial organization. If there is no authorized person or if the Chairman of the Board of Management cannot work, the remaining members will elect one among themselves temporarily to hold the position of Chairman of the Board of Management according to the principle of majority vote.

26. 5. Members of the Supervisory Board elect one among themselves to serve as the Head of the Supervisory Board.

26. 6. In the absence of the Head of the Supervisory Board, they must authorize in writing another member of the Supervisory Board to perform the rights and duties of the Head of the Supervisory Board according to the principles stipulated in the Charter of the small-scale financial organization. If there is no authorized person or if the Head of the Supervisory Board cannot work, the remaining members will elect one among themselves temporarily to hold the position of Head of the Supervisory Board according to the principle of majority vote.

26. 7. The election and appointment of members of the Board of Management, members of the Supervisory Board, and the General Director (Director) of a small-scale financial organization must be approved by the Governor of the State Bank of Vietnam.

26. 8. The Chairman and members of the Board of Directors, Heads and members of the Supervisory Board shall be removed, dismissed, or have their employment contracts terminated by the Members' Meeting (shareholders) or by the General Director (Director) by the Board of Directors in the following cases:

a) Limited capacity for civil conduct;

b) Submitting a resignation letter;

c) Not attending meetings of the Board of Directors or the Supervisory Board for six consecutive months without permission from the Board of Directors or the Supervisory Board, and the Board of Directors or the Supervisory Board, of which they are members, passes a resolution declaring them to have lost their status as members;

d) Seriously violating laws or the Charter of the small financial organization;

đ) Other cases prescribed in the Charter of the small financial organization.

26. 9. For those elected or appointed to positions as Chairman and members of the Board of Directors, Heads and members of the Supervisory Board, General Director (Director), and other important management positions in the small financial organization:

a) Shall be granted necessary powers to perform assigned tasks;

b) After being removed, dismissed, or having their employment contracts terminated (for the General Director or Director), they must still bear personal responsibility for decisions that contravene the law and the Charter, or decisions made intentionally in violation of regulations during their tenure.

26. 10. In the event that the General Director (Director) of a small financial organization is removed, dismissed, has their employment contract terminated, or loses their status automatically, the small financial organization must immediately appoint another qualified and capable executive to assume the duties of the General Director (Director) and must appoint or hire a new General Director (Director) within a maximum of six months from the date of removal, dismissal, or termination of the previous General Director (Director), while simultaneously preparing a file according to this Circular to request approval from the Governor of the State Bank of Vietnam.

27. Suspension of duties

27. 1. If the Chairman and members of the Board of Directors, Heads and members of the Supervisory Board, and the General Director (Director) of a small financial organization violate the provisions of this Circular, laws, and the Charter of the small financial organization, the State Bank of Vietnam has the right to suspend or temporarily suspend the duties of the violator.

27. 2. Persons suspended or temporarily suspended from their duties as provided for in point 27.1 of this Clause must take responsibility for participating in resolving issues and violations related to their personal responsibility when requested by the small financial organization or competent state authorities.

27. 3. In the case where the General Director (Director) of a small financial organization is suspended or temporarily suspended from work, the small financial organization must immediately appoint another qualified and capable leader to assume the duties of the General Director (Director) and notify the State Bank of Vietnam immediately, while also considering and deciding on the appointment (hiring) or removal (termination of employment contract) of the General Director (Director) within a maximum period of six months from the date of suspension or temporary suspension of the General Director (Director).

28. Remuneration

The remuneration of the Chairman and members of the Board of Directors, Heads and members of the Supervisory Board shall be approved by the Members' Meeting (shareholders).

A small financial organization may not grant any personal loans or similar amounts to the Chairman and members of the Board of Directors or Heads and members of the Supervisory Board.

29. Disclosure of Personal Interests

29. 1. After being appointed, members of the Board of Directors, members of the Supervisory Board, and the General Director (Director) must disclose in detail to the small financial organization if:

a) They directly hold or authorize others to hold shares or equity stakes of at least 5% of the charter capital of another enterprise (including the right to obtain such ownership);

b) They are members of the Board of Directors, Supervisory Board, or General Director (Director) of another enterprise.

29. 2. The disclosure required under point 29.1 of this Clause must be completed within seven working days from the date of formal appointment; in cases of changes or additions, it must be disclosed to the small financial organization within seven working days from the date of change or addition.

29. 3. The disclosures required under points 29.1 and 29.2 of this Clause must be submitted to the State Bank of Vietnam and kept at the headquarters of the small financial organization. Shareholders, members of the Board of Directors, members of the Supervisory Board, and the General Director (Director) have the right to review the disclosure contents at any time if deemed necessary.

29. 4. In the case where members of the Board of Directors or members of the Supervisory Board invest through legally established and operating investment funds, they are exempted from complying with the provisions of points 29.1 and 29.2 of this Clause.

30. Rights and Obligations of Shareholders

30. 1. Each shareholder of a small financial organization shall have the following rights:

a) To participate and vote on matters within the jurisdiction of the Members' Meeting;

b) To have priority in increasing their capital contribution to the small financial organization corresponding to their current shareholding when the small financial organization increases its capital by increasing the contributions of shareholders;

c) To transfer their capital contribution according to the law and the Charter of the small financial organization;

d) To receive information about the operational situation, financial condition, and business results of the small financial organization;

đ) To view the shareholder register, accounting books, annual financial reports, and other documents of the small financial organization and to receive copies or extracts of these documents;

e) To designate a representative to exercise any shareholder rights, including direct participation in Members' Meeting meetings as stipulated in this Circular. The representative may not delegate authority to another person to exercise shareholder rights.

g) Be entitled to receive the remaining portion of the assets of the small-scale financial organization corresponding to their shareholding ratio in the event that the small-scale financial organization is dissolved or declared bankrupt, except where the Articles of Association of the small-scale financial organization provide otherwise;

h) Other rights as provided for by law and the Articles of Association of the small-scale financial organization.

30. 2. Shareholders of the small-scale financial organization shall have the following obligations:

a) Contribute the committed capital amount fully and on time, and be responsible for the debts and other property obligations of the small-scale financial organization within the scope of the contributed and committed capital;

b) Comply with the Articles of Association of the small-scale financial organization;

c) Implement decisions made by the Members' Meeting;

d) Fulfill other obligations as prescribed by law and the Articles of Association of the small-scale financial organization.

30. 3. The rights and obligations mentioned above shall arise from the date when the member's name is recorded in the members' register.

30. 4. Shareholders shall have voting rights corresponding to their shareholding ratio and must exercise the powers stipulated in Point 30.1 of this Clause based on specific provisions in the Articles of Association of the small-scale financial organization.

31. Rights and Obligations of the Members' Meeting (Owners)

31. 1. Approve proposals of the Board of Directors regarding amendments to the Articles of Association of the small-scale financial organization;

31. 2. Decide on the initial capital contribution or initial charter capital and approve proposals of the Board of Directors regarding changes to the initial capital contribution (or initial charter capital);

31. 3. Decide on restructuring and dissolution of the small-scale financial organization;

31. 4. Approve proposals of the Board of Directors regarding restructuring and ownership transfer of the small-scale financial organization;

31. 5. Appoint, dismiss, and remove members of the Board of Directors and Supervisory Board of the small-scale financial organization in accordance with standards and conditions specified in this Circular; designate the Chairman of the Board of Directors and the Head of the Supervisory Board as necessary according to the Articles of Association of the small-scale financial organization;

31. 6. Approve internal regulations of the Board of Directors and Supervisory Board;

31. 7. Approve salaries, bonuses, remuneration, and benefits for members of the Board of Directors and Supervisory Board;

31. 8. Monitor and evaluate the activities of the Board of Directors and Supervisory Board, including the activities of the Chairman of the Board of Directors and the Head of the Supervisory Board before reappointment as members of the Board of Directors or Supervisory Board;

31. 9. Decide on measures to be taken against members of the Board of Directors and Supervisory Board who violate their powers and duties;

31. 10. Approve proposals of the Board of Directors regarding the selection of independent auditors;

31. 11. Approve annual reports of the Board of Directors and annual financial reports;

31. 12. Approve proposals of the Board of Directors regarding the distribution of remaining profits after fulfilling financial obligations as prescribed by law;

31. 13. Other duties and powers as prescribed by law and the Articles of Association of the small-scale financial organization.

32. General Obligations of the Chairman, Members of the Board of Directors, Head, Members of the Supervisory Board, and Managers

32. 1. Comply with laws, the Articles of Association of the small-scale financial organization, and decisions of the Members' Meeting (owners) of the small-scale financial organization in performing assigned rights and duties.

32. 2. Exercise granted rights honestly, carefully, and in the best interest of the small-scale financial organization and its owners.

32. 3. The Chairman and members of the Board of Directors, the Head and members of the Supervisory Board, and managers of the small-scale financial organization shall not:

a) Compete with the small-scale financial organization;

b) Facilitate third parties causing damage to the small-scale financial organization;

c) Exploit information or business opportunities obtained from the small-scale financial organization for themselves or their relatives.

32. 4. The Chairman, members of the Board of Directors, the Head, and members of the Supervisory Board, and managers of the small-scale financial organization must promptly, fully, and accurately report any actual or potential conflicts of interest and related information significantly affecting the small-scale financial organization. The Board of Directors must decide on the existence of a conflict of interest without the presence of the relevant individual.

32. 5. The Chairman, members of the Board of Directors, the Head, members of the Supervisory Board, and managers of the small-scale financial organization shall not participate in discussions or decisions on matters or transactions in which they have a conflict of interest with the small-scale financial organization.

33. Rights and Obligations of the Board of Directors

The Board of Directors of the small-scale financial organization is accountable to shareholders for the business performance of the small-scale financial organization and has the following rights and obligations:

33. 1. Manage the small-scale financial organization in accordance with laws and the Articles of Association of the small-scale financial organization; manage the small-scale financial organization in the best interests of the small-scale financial organization and its shareholders;

33. 2. Decide on issues related to objectives, strategies, and business plans of the small-scale financial organization within the scope of operations defined in the Articles of Association;

33. 3. Approve the business plan, operating capital, and annual expenses proposed by the General Director (Director);

33. 4. Decide on expanding the network and scope of operations;

33. 5. Approve the organizational structure of trading offices, branches, representative offices, and other units of the small-scale financial organization;

33. 6. Appoint, dismiss, hire or terminate contracts, discipline, and determine salary levels and other benefits for positions such as General Director (Director) and Deputy General Director (Deputy Director) based on recommendations by the General Director (Director) and other managerial positions within the authority of the Board of Directors as specified in the Articles of Association.

33. 7. Annually prepare a report evaluating the effectiveness of the Board of Directors' operations, each committee of the Board of Directors (if any), each member of the Board of Directors, and the General Director (Director).

33. 8. At least once a year review and re-evaluate the internal inspection and control system; be responsible for the reasonableness and effectiveness of the internal inspection and control system.

33. 9. Approve and issue internal regulations related to the organization and activities of small financial organizations in accordance with the provisions of the law and the Charter of the small financial organization.

33. 10. Examine, approve, and publish the annual report and financial statements of the small financial organization in accordance with the provisions of the law.

33. 11. Decide on the selection of an independent auditing organization based on the proposal of the General Director (Director) and the approval of the Shareholders' Meeting (owners).

33. 12. Report, propose, and recommend to the Shareholders' Meeting (owners) issues within the authority of the Shareholders' Meeting (owners).

33. 13. Submit to the Governor of the State Bank for approval or endorsement matters as prescribed by law.

33. 14. Other duties and powers as prescribed by law and the Charter of the small financial organization.

34. Rights and obligations of the Chairman of the Board of Directors

34. 1 Prepare or organize the preparation of the program and plan of activities of the Board of Directors; organize the implementation of the Board of Directors' tasks as stipulated in this Circular, relevant regulations, and the Charter of the small financial organization.

34. 2 Prepare or organize the preparation of the agenda, content, and meeting materials of the Board of Directors or to solicit opinions from members.

34. 3 Convene and chair meetings of the Board of Directors or organize the solicitation of opinions from members.

34. 4 Represent the Board of Directors to sign decisions, resolutions, and reports of the Board of Directors; supervise or organize supervision over the implementation of decisions, resolutions, and reports of the Board of Directors.

34. 5 Ensure that Board of Directors members receive full, objective, accurate, and understandable information regarding issues that the Board of Directors must consider; ensure sufficient time before and during Board of Directors meetings to discuss complex or controversial issues.

34. 6 Assign tasks to members in writing and supervise members in performing assigned work and common duties and powers of the Board of Directors.

34. 7 Supervise the General Director (Director) in implementing Board of Directors resolutions.

34. 8 Ensure that employees in the small financial organization can report irregularities related to financial conditions, operations, and other issues, including violations of professional principles in the small financial organization to the Chairman of the Board of Directors or another member of the Board of Directors.

34. 9 Ensure effective communication of information between Board of Directors members and the Shareholders' Meeting (Owners).

34. 10 Ensure that new Board of Directors members participate in formal and comprehensive introduction programs designed to suit their knowledge, skills, experience, and internal regulations for Board of Directors members so they become familiar with governance, organization, and operations of the small financial organization.

34. 11 Evaluate the performance of each member and the Board of Directors at least once a year.

34. 12 Confirm with the Shareholders' Meeting (owners) about the evaluation results of the level of achievement for each member before that member is reappointed.

34. 13 Delegate one of the Board of Directors members to perform their duties in their absence in accordance with the internal delegation mechanism of the small financial organization.

34. 14 Other duties and powers as prescribed by law and the Charter of the small financial organization.

35. Rights and obligations of Board of Directors members

35. 1 Together with other Board of Directors members manage the small financial organization in accordance with the law and the Charter of the small financial organization.

35. 2 Perform the duties and powers of Board of Directors members in accordance with the internal regulations of the Board of Directors and the assignment of the Chairman of the Board of Directors honestly, fairly, impartially, and in the best interest of the small financial organization.

35. 3 Nominate, propose to the Shareholders' Meeting to remove or dismiss the Chairman of the Board of Directors.

35. 4 Request the Chairman to convene extraordinary meetings of the Board of Directors in accordance with the law and the Charter of the small financial organization.

35. 5 Request the leadership of the small financial organization to provide information and documents about the organization, operations, and financial status of the small financial organization.

35. 6 Attend Board of Directors meetings, discuss, and vote on all issues stipulated in this Circular within the scope of the Board of Directors' authority, except in cases of conflict of interest where voting will not be participated.

35. 7 Be responsible for explaining to the Shareholders' Meeting (owners), the Audit Committee, and the Board of Directors about the execution of assigned tasks when requested.

35. 8 Implement decisions of the Shareholders' Meeting (owners) and resolutions of the Board of Directors.

35. 9 Be personally responsible to the Shareholders' Meeting (owners) and the Board of Directors for their activities.

35. 10 Other duties and powers as prescribed by law and the Charter of the small financial organization.

36. Rights and obligations of the Audit Committee

36. 1 Supervise the General Director (Director) in managing the small financial organization.

36. 2 Directly lead, manage, and supervise the operation of the internal audit department (if any).

36. 3 Check the reasonableness, legality, honesty, and prudence in management and operation; in accounting, statistics, and financial reporting work.

36. 4. Review, audit, and evaluate the rationality, effectiveness, and compliance with legal regulations regarding organizational structure and the operation of internal inspection and control systems;

36. 5. Examine and approve annual and periodic business results reports and financial statements of small-scale financial organizations, management work reports of the Board of Directors; submit the examined reports to the Members' Meeting (shareholders);

36. 6. Approve the internal audit process; Approve and adjust the annual internal audit plan;

36. 7. Review accounting books and other documents of small-scale financial organizations, management and operational activities of small-scale financial organizations whenever deemed necessary or upon request of the Board of Directors;

36. 8. Conduct periodic internal audits in various fields to comprehensively and accurately assess business operations and financial status of small-scale financial organizations; be responsible for ensuring the quality of internal audit activities and the accuracy of internal audit reports;

36. 9. When performing their duties and powers, the Supervisory Board shall not disrupt the operation of small-scale financial organizations;

36. 10. Propose and recommend to the Board of Directors measures to amend, supplement, and improve the organizational structure and management of business operations of small-scale financial organizations;

36. 11. Upon discovering violations or actions exceeding the authority and responsibilities of Board members, General Managers (Directors) according to the law and the Charter of small-scale financial organizations, report immediately in writing to the Members' Meeting, the Board of Directors, and simultaneously require the violator to cease the violation and take corrective actions;

36. 12. Annually review the Internal Regulations of the Supervisory Board, internal audit policies;

36. 13. Audit important accounting and reporting policies;

36. 14 Review all transactions of small-scale financial organizations if deemed necessary;

36. 15. Audit periodic financial reports of small-scale financial organizations;

36. 16. Audit annual financial reports conducted by independent auditors;

36. 17. Independently review and evaluate the entire internal inspection and control system within the management structure; examine the organization of the internal inspection and control system;

36. 18. Monitor the process of hiring independent auditors; monitor the performance of independent auditors; evaluate the effectiveness of independent auditors' work;

36. 19. Ensure the effectiveness of processes of small-scale financial organizations in monitoring legal compliance and ethical rules; examine the organization, policies, procedures, and systems for monitoring legal compliance and ethical rules;

36. 20. Report, propose, and recommend to the Members' Meeting (shareholders) issues within the decision-making authority of the Members' Meeting (shareholders) to enhance the efficiency of organization and operations of small-scale financial organizations;

36. 21. Have access to files and documents of small-scale financial organizations stored at headquarters, branches, and other locations; visit places where managers and employees of small-scale financial organizations work to perform their duties;

36. 22. Request the Board of Directors, Board members, General Managers (Directors), and other managers/executives to provide full, accurate, and timely information and documents on management, operation, and business activities of small-scale financial organizations;

36. 23. Prepare annual internal audit reports, including the following main contents:

a) Explanation of how internal auditing was carried out during the current fiscal year and significant changes in internal audit policies compared to the previous fiscal year (if any);

b) Summary of accounting and reporting policies of small-scale financial organizations for the current fiscal year and significant changes compared to the previous fiscal year;

c) Details of unusual transactions during the current fiscal year;

d) Details of special investigations;

đ) Description of the process of hiring, supervising, and evaluating independent auditors;

e) Details of legal violations and ethical breaches; measures taken to ensure compliance;

g) Level and participation of members in Supervisory Board meetings;

h) Issues, recommendations, and proposals to enhance the efficiency of organization and operations of small-scale financial organizations;

36. 24. Other powers and obligations as prescribed by law and the Charter of small-scale financial organizations;

37. Powers and Obligations of the Chairman of the Supervisory Board

37. 1. Prepare agendas for Supervisory Board meetings based on reviewing issues and concerns of all Supervisory Board members related to the provisions of Clause 36 of this Circular;

37. 2. Convene and chair Supervisory Board meetings;

37. 3. On behalf of the Supervisory Board, convene and preside over extraordinary meetings of the Board of Directors when the Board of Directors violates the law or the Charter of small-scale financial organizations;

37. 4. On behalf of the Supervisory Board, sign documents within the Supervisory Board's authority;

37. 5. Prepare work plans and assign tasks within the Internal Regulations for Supervisory Board members;

37. 6. Ensure that Supervisory Board members receive full, objective, accurate, and understandable information related to issues the Supervisory Board must consider;

37. 7. Ensure sufficient time before and during Supervisory Board meetings to discuss complex or controversial issues;

37. 8. Supervise Supervisory Board members in performing assigned tasks and common duties and powers;

37. 9. Delegate another Supervisory Board member to perform their duties in their absence;

37. 10. Other tasks and powers as prescribed by law and the Charter of small-scale financial organizations;

38. Powers and Obligations of Supervisory Board Members

38. 1. Act together with other members of the Supervisory Board in accordance with the laws and Charter of the small financial organization;

38. 2. Perform the duties and powers of a member of the Supervisory Board in accordance with the internal regulations honestly and prudently for the benefit of the small financial organization;

38. 3. Elect the Chairperson of the Supervisory Board, propose to the Members' Meeting to remove or dismiss the Chairperson of the Supervisory Board;

38. 4. Request the Chairperson of the Supervisory Board to convene an extraordinary meeting of the Supervisory Board;

38. 5. Supervise business activities, audit accounting books, assets, reports, annual financial statements, and recommend corrective measures for any violations if they exist;

38. 6. Be entitled to request employees of the small financial organization to provide data and explain business activities to fulfill assigned tasks;

38. 7. Report to the Chairperson of the Supervisory Board on unusual financial events and be personally responsible for their assessments and conclusions before the Board of Directors and shareholders;

38. 8. Submit a written report to the Chairperson of the Supervisory Board at least once a month on the situation and results of supervision within the assigned scope;

38. 9. Attend meetings of the Supervisory Board, participate in discussions and vote on issues specified in Clause 36 of this Circular; a person entitled to vote shall not vote when there is a conflict of interest;

38. 10. Attend meetings of the Board of Directors, participate in discussions and make recommendations, but shall not vote unless they are members of the Board of Directors;

38. 11. Be entitled to request that their opinions be recorded in the minutes of the Board of Directors' meetings if their opinions differ from the resolutions of the Board of Directors and report directly to the Members' Meeting;

38. 12. Propose the Board of Directors to convene an extraordinary meeting in case a member of the Board of Directors or the Board of Directors violates the law or the Charter of the small financial organization;

38. 13. Be liable under the law, before the Board of Directors and shareholders for determining the accuracy and honesty of data and documents related to the financial activities of the small financial organization;

38. 14. Other duties and powers as prescribed in the Charter of the small financial organization.

39. Rights and obligations of the General Director (Director)

39. 1 Direct and decide on all matters related to work and daily business operations of the small financial organization in accordance with the law, the Charter of the small financial organization, resolutions of the Board of Directors, and decisions of the Members' Meeting;

39. 2. Organize the implementation of decisions and resolutions of the Board of Directors;

39. 3. Organize the implementation of business plans and investment proposals of the small financial organization after receiving approval from the Board of Directors;

39. 4. Establish, maintain, and develop a reasonable internal inspection and control system that operates effectively;

39. 5. Establish procedures and operational processes to operate the business management system and reporting information system;

39. 6. Hire labor;

39. 7. Appoint, dismiss, and relieve from duty managerial positions of the small financial organization, except those positions within the authority of the Board of Directors or Members' Council (owners); Determine salary and allowances (if any) for those within the authority to appoint or hire;

39. 8. Represent the small financial organization to sign contracts, except cases within the authority of the Board of Directors;

39. 9. Be subject to the direction and control of the Board of Directors in performing management tasks;

39. 10. Report to the Board of Directors, Supervisory Board, Members' Meeting, State Bank, and competent State agencies on the activities, effectiveness, and business results of the small financial organization in accordance with the law and the Charter of the small financial organization;

39. 11 Prepare internal inspection and control reports on self-inspection results and evaluation of the internal inspection and control system;

39. 12. Fulfill the rights and obligations entrusted honestly and diligently for the benefit of the small financial organization and its members;

39. 13. In case the small financial organization cannot pay all debts, property obligations, and other payment obligations due:

a) Notify all creditors about the financial situation of the small financial organization;

b) Not increase salaries or bonuses for employees of the small financial organization;

c) Propose measures to overcome financial difficulties of the small financial organization;

d) Personally bear responsibility for damages suffered by creditors due to failure to perform the obligations mentioned above;

39. 14. Recommend and propose for the Board of Directors to approve or submit to the Members' Meeting for approval:

a) Amendments to the Charter of the small financial organization;

b) Business plans, budget forecasts, and annual capital usage plans and any significant changes related to these forecasts and plans;

c) Implementation status of the organization's business objectives and strategies and adjustment measures already implemented or proposed;

d) Organizational structure of headquarters, branches, representative offices, and affiliated units of the small financial organization;

đ) Restructuring or changing the form of ownership of the small financial organization;

e) Appointment, relief from duty, or dismissal of Deputy General Directors, Branch Directors (Deputy Directors), and representatives of affiliated units in accordance with the Charter;

g) Apply and implement laws related to the activities of the small financial organization;

h) Internal regulations concerning: internal control, risk management, organization and operation of branches, interest rates; commissions, fees, and penalties applied to customers, appointment, transfer, or termination of employment of employees, and other necessary internal regulations;

i) Selection of independent auditors.

39. 15. Other tasks and powers as prescribed by law, the Charter of the small financial organization, and the resolutions of the Board of Directors.

40. General Meeting of Members

40. 1. The General Meeting of Members includes all contributing members. Contributing members may designate a representative to participate in the General Meeting of Members.

40. 2. The General Meeting of Members convenes annually or extraordinary; at least once a year. The location of the General Meeting of Members must be within the territory of Vietnam.

41. Authority to Convene the General Meeting of Members

41. 1. The annual meeting of the General Meeting of Members is organized upon the proposal of the Board of Directors and not later than two months from the date the Board of Directors approved the audited financial reports conducted by an independent auditing organization.

41. 2. The General Meeting of Members may be convened for an extraordinary meeting in the following cases:

a) When the Board of Directors deems it necessary for the benefit of the small financial organization;

b) Upon a lawful and reasonable request from contributing members;

c) Upon a request from the Supervisory Board;

d) Upon a request from the State Bank;

đ) Other cases as prescribed by law and the Charter of the small financial organization.

41. 3. In case the Charter of the small financial organization does not provide otherwise, the Board of Directors must convene the General Meeting of Members within thirty days from the date of receipt of the request as stipulated in Point 41.2 of this Clause. If the Board of Directors fails to convene the General Meeting of Members as prescribed, the Chairman and members of the Board of Directors shall bear legal responsibility and compensate for any damage incurred by the small financial organization.

41. 4. In case the Board of Directors fails to convene the meeting as prescribed in Point 41.3 of this Clause within thirty days, the Supervisory Board shall replace the Board of Directors to convene the General Meeting of Members as prescribed in this Circular. If the Supervisory Board fails to convene the General Meeting of Members as prescribed, the Head of the Supervisory Board and members of the Supervisory Board shall bear legal responsibility and compensate for any damage incurred by the small financial organization.

41. 5. In case the Supervisory Board fails to convene the meeting as prescribed in Point 41.4 of this Clause, the organization or individual requesting the convening of the General Meeting of Members as prescribed in Point 41.2 of this Clause has the right to replace the Board of Directors and the Supervisory Board to convene the General Meeting of Members as prescribed in this Circular and may request the State Bank to supervise the convening and conduct of the General Meeting of Members if deemed necessary.

41. 6. Reasonable costs for convening and conducting the General Meeting of Members shall be included in the operating expenses of the small financial organization.

42. Agenda and Content of the General Meeting of Members

42. 1. The convener must prepare the agenda and content of the meeting, prepare documents, determine the time and place of the meeting, and send invitations to each member according to this Circular.

42. 2. Members have the right to propose items for the agenda. Proposals must be in writing and must be sent to the main office of the small financial organization at least one working day before the General Meeting of Members. Proposals must clearly state the name of the member, the issues proposed for inclusion in the agenda, and the reasons for the proposal.

42. 3. The convener of the General Meeting of Members has the right to reject proposals as stipulated in Point 42.2 of this Clause if:

a) The proposal is submitted out of time or lacks sufficient content;

b) The issue proposed is not within the authority of the General Meeting of Members to decide;

c) Other cases as prescribed by the Charter of the small financial organization.

42. 4. Inviting the General Meeting of Members

The convener of the General Meeting of Members must send the invitation to attend the meeting, the proxy form for attending the meeting, the agenda, voting ballots, and discussion documents serving as the basis for decision-making to members at least seven working days before the opening of the meeting, unless the Charter of the small financial organization provides for an earlier deadline. The notice must be sent to the contact address of the member through a secure method, specifying the time and place of the meeting.

42. 5. Rights to Attend the General Meeting of Members

a) Members may attend the meeting directly or authorize a representative in writing to attend on their behalf.

b) Members must notify the small financial organization in writing about the authorization to attend the meeting according to the manner and time specified by the Board of Directors. The authorized representative has full rights of the member, except as otherwise provided in the authorization document. One authorized representative may represent multiple members in one General Meeting of Members and has the right to vote separately for each member corresponding to their shareholding ratio. The designation (or revocation of designation) of an individual as an authorized representative only becomes effective after written notification to the small financial organization according to the manner and time determined by the Board of Directors.

42. 6. Conditions and Procedures for Conducting the General Meeting of Members

a) The General Meeting of Members is held when there are representatives present representing at least 75% of the registered capital; the specific ratio is prescribed by the Charter of the small financial organization.

b) In case the required number of representatives is not present within thirty minutes from the scheduled start time of the meeting as stated in the invitation, the General Meeting of Members will not be held, unless otherwise prescribed by the Charter of the small financial organization. The second call for the meeting must be made within fifteen working days from the date of the first planned meeting. The second General Meeting of Members is held when there are representatives present representing at least 50% of the registered capital or a higher ratio as prescribed in the Charter of the small financial organization.

c) In case the second meeting does not meet the conditions specified in point 42.6, subclauses b of this Clause, it shall be convened for a third time within ten working days from the date planned for the second meeting. In this case, the General Meeting of Members shall be held regardless of the number of members present and the amount of charter capital represented by those members.

d) Only the General Meeting of Members has the right to change the agenda sent along with the meeting invitation as prescribed in this Circular.

43. Procedures for passing decisions at the General Meeting of Members

43.1. The General Meeting of Members passes decisions within its authority through voting at the meeting or by written ballot.

43.2. Decisions of the General Meeting of Members on the following matters must be passed through voting at the General Meeting of Members:

a) Amending and supplementing the Charter of the small financial organization;

b) Approving the development orientation of the small financial organization;

c) Appointing, dismissing, or removing members of the Board of Directors and Supervisory Board;

d) Deciding on investment or sale of assets valued at 50% or more of the organization's own capital, unless the Charter specifies a lower ratio;

đ) Approving the annual financial report;

e) Reorganizing or dissolving the small financial organization.

43.3. A decision of the General Meeting of Members is considered adopted when the following conditions are met:

a) It is approved by at least 75% of the shares representing the total contributed capital of the attending members for the decisions mentioned in point 43.2, subclauses a, b, d, e of this Clause; the specific ratio is stipulated in the Charter of the small financial organization;

b) Voting for appointing members of the Board of Directors and Supervisory Board is conducted through majority voting, or according to the proportionate contribution of capital, or through cumulative voting, whereby each member has a total number of votes corresponding to the total capital owned multiplied by the number of directors or supervisors appointed, and the member has the right to allocate all their total votes to one or several candidates;

c) Other decisions are adopted when they are approved by at least 65% of the shares representing the total contributed capital of the attending members; the specific ratio is stipulated in the Charter of the small financial organization;

d) A decision of the General Meeting of Members adopted through written ballot form is valid if it is approved by at least 75% of the shares representing the total contributed capital of the attending members; the specific ratio is stipulated in the Charter of the small financial organization.

43.4. Any member who is a party or whose immediate relative is a party in a major transaction or restricted transaction under consideration at the General Meeting of Members will not have the right to vote on issues related to that transaction.

44. Authority and procedure for passing decisions of the General Meeting of Members through written ballot form

44.1. The Board of Directors may act on behalf of the General Meeting of Members to seek opinions from contributing members in writing to pass decisions of the General Meeting of Members at any time if deemed necessary for the benefit of the small financial organization;

44.2. The Board of Directors must prepare ballots for seeking opinions, draft decisions of the General Meeting of Members, and explanatory documents for the draft decisions. The ballots attached with the draft decisions and explanatory documents must be sent via a secure method to the contact address of each member.

44.3. The ballots must include the following main contents:

a) Purpose of seeking opinions;

b) Name, surname, and contact address of the member or authorized representative of the member;

c) Issues requiring opinions to pass the decision;

d) Voting options including approval, disapproval, and abstention;

đ) Deadline for sending replies to the small financial organization;

e) Name, signature of the Chairman of the Board of Directors and the legal representative of the small financial organization.

44.4. Ballots that have been answered must bear the signature of the member or authorized representative or the legal representative of the member. The ballots must be enclosed in sealed envelopes and no one is allowed to open them before counting. Ballots returned to the small financial organization after the deadline specified on the ballot or which have been opened are invalid.

44.5. The Board of Directors counts the ballots and prepares a record of the ballot count under the supervision of the Supervisory Board. The record of the ballot count must include the following main contents:

a) Purpose and issues requiring opinions to pass the decision;

b) Number of members with the total number of votes participating in the voting, clearly stating the number of valid and invalid votes;

c) Total number of votes approving, disapproving, and abstaining for each issue;

d) Decisions that have been passed;

đ) Name, signature of the Chairman of the Board of Directors or person authorized by the Chairman and the supervisor of the ballot count.

44.6. The record of the ballot results must be sent to the members within fifteen days from the date of the ballot results;

44.7. Answered ballots, records of the ballot count, full text of the resolutions passed, and related documents must be kept at the headquarters of the small financial organization.

45. Minutes of the General Meeting of Members

45.1. The General Meeting of Members must be recorded in the minutes book of the small financial organization. The minutes must be prepared in Vietnamese and must include the following main contents:

a) Time and place of the meeting;

b) List of names and the proportion of contributed capital represented by each contributing member present at the meeting (in person or by proxy);

c) List of full names of members of the Board of Directors and Supervisory Board present at the meeting, specifying the level of ownership of capital by Board of Directors and Supervisory Board members;

d) List of full names and positions of management staff of the small financial organization present at the meeting;

đ) Agenda and content of the meeting;

e) Chairperson and secretary.

g) Summary of the meeting proceedings and opinions expressed on each issue and content discussed during the meeting;

h) Total number of votes cast for each issue, including the total number of votes in favor, against, and abstentions; corresponding percentages relative to the total number of votes cast by attending members; voting process and results;

i) Decisions that have been adopted;

k) Names and signatures of the chairperson and secretary of the meeting.

45. 2. The minutes of the General Meeting must be completed and approved before the conclusion of the meeting.

45. 3. The chairperson and secretary of the meeting shall jointly bear responsibility for the truthfulness and accuracy of the content of the minutes.

46. Request to revoke decisions made at the General Meeting

Within thirty days from the date of the conclusion of the General Meeting or from the date of receipt of the voting result record as stipulated in Point 44.6 Clause 44 of this Circular, shareholders of the General Meeting, members of the Board of Directors, members of the Supervisory Board, General Manager (Director) have the right to request the Court or Arbitration to review and revoke decisions made at the General Meeting in the following cases:

a) The procedure and method of convening the General Meeting were not carried out in accordance with this Circular and/or the Charter of the small-scale financial organization;

b) The procedure, method of making decisions, and content of decisions adopted at the meeting violated the provisions of the law and/or the Charter of the small-scale financial organization.

47. Meetings of the Board of Directors

47. 1. The Board of Directors may hold regular meetings or extraordinary meetings. The location of the Board of Directors' meetings must be within the territory of Vietnam;

47. 2. The Board of Directors' meetings shall be convened by the Chairman and must be held at least once every quarter;

47. 3. The Chairman of the Board of Directors must convene a meeting of the Board of Directors upon request of:

a) Shareholders of the General Meeting;

b) Members of the Board of Directors;

c) The Head of the Supervisory Board or at least two-thirds of the members of the Supervisory Board;

d) The General Manager (Director) or at least five other managers;

đ) The State Bank; or

e) Other cases as provided for in the Charter of the small-scale financial organization.

Requests for convening meetings by the entities specified in Points 47.3(a), (b), (c), (d), (đ), and (e) of this Clause must be in writing, specifying the purpose, issues to be discussed, and decisions within the authority of the Board of Directors.

47. 4. The Chairman of the Board of Directors has the responsibility to convene a meeting of the Board of Directors within fifteen days from the date of receipt of the request as stipulated in Point 47.3 of this Clause. In case the Chairman does not convene a meeting of the Board of Directors according to the request, the Chairman shall be responsible for any losses incurred by the small-scale financial organization; in such a case, the requester has the right to convene a meeting of the Board of Directors according to the procedures stipulated in Point 47.5 of this Clause.

47. 5. The Chairman of the Board of Directors must send a notice of invitation to attend the meeting and materials to be used at the meeting, along with ballots for members, at least five working days before the meeting date, unless otherwise provided for in the Charter of the small-scale financial organization. The notice of invitation must specify the time and place of the meeting, agenda, and issues to be discussed and decided. The notice of invitation can be sent by mail, fax, email, or other means, but must ensure delivery to the registered address of each member of the Board of Directors of the small-scale financial organization.

47. 6. The Board of Directors' meeting can only proceed when at least three-quarters of the total number of members of the Board of Directors are present. Members who are not directly present may vote through written ballots. Ballots must be enclosed in sealed envelopes and must be delivered to the Chairman of the Board of Directors at least one hour before the start of the meeting. Ballots can only be opened in the presence of all attendees.

47. 7. In case there are not enough members to conduct the Board of Directors' meeting, the Chairman of the Board of Directors must reconvene the meeting within ten working days thereafter. If the second meeting still lacks the required number of members, the Chairman of the Board of Directors must convene an extraordinary meeting of the General Meeting within thirty (30) working days from the date of the scheduled second meeting so that members can reconsider the rules and qualifications of the Board of Directors' members.

47. 8. The Board of Directors must invite members of the Supervisory Board, management staff, auditors, and others to attend the meeting when necessary to provide information related to the issues being discussed by the Board of Directors; those invited have the right to discuss but cannot vote unless they are members of the Board of Directors.

48. Resolutions of the Board of Directors

48. 1. The Board of Directors will adopt resolutions through public voting at the meeting.

48. 2. A decision of the Board of Directors is adopted when it is approved by a majority of the attending members. The Charter of the small-scale financial organization may provide for certain issues to be adopted with a higher percentage of approval votes. In case the number of votes in favor and against are equal, the final decision will belong to the side with the opinion of the Chairman of the Board of Directors or the person authorized by the Chairman of the Board of Directors to chair the meeting (in case the Chairman of the Board of Directors is absent).

48. 3. The Board of Directors may use the seal of the small-scale financial organization to perform its duties.

49. Minutes of the Board of Directors' Meeting

49. 1. The Board of Directors' meeting must be recorded in the minutes book. The minutes must be prepared in Vietnamese and may also be in another language, and must include the following main contents:

a) Purpose, agenda, and content of the meeting;

b) Time and place of the meeting;

c) Name of each attending member or proxy; name of non-attending members and reasons;

d) Issues discussed and voted on at the meeting;

đ) Summary of the opinions expressed by each attending member in the order of the meeting proceedings;

e) Voting results, specifying members who agree, disagree, and abstain;

g) Resolutions that have been adopted;

h) Full name, signature of all members or authorized representatives attending the meeting;

49. 2. The chairperson and secretary shall be responsible for the truthfulness and accuracy of the content of the board of directors' meeting minutes.

49. 3. Meeting minutes and documents used during the board of directors' meeting must be kept at the main office of the small financial organization.

49. 4. Meeting minutes written in Vietnamese and another language have equal legal validity.

50. Supervisory Board Meetings

50. 1. The supervisory board must organize meetings at least once every quarter and may convene extraordinary meetings upon request of:

a) Shareholders of the General Meeting;

b) Members of the supervisory board;

c) Chairman of the board of directors or at least two-thirds of the total number of board of directors' members;

d) State Bank;

d) Other cases as stipulated in the Charter of the small financial organization.

50. 2. The head of the supervisory board is responsible for convening supervisory board meetings. Procedures for convening and organizing supervisory board meetings are regulated by the internal regulations of the supervisory board of the small financial organization.

50. 3. A supervisory board meeting can only be held when at least two-thirds of the total number of supervisory board members attend.

50. 4. In case there are not enough members to hold a supervisory board meeting, the head of the supervisory board must reconvene the meeting within ten working days. If the second meeting still does not have the required number of members, the head of the supervisory board must report to the chairman of the board of directors, and the chairman of the board of directors must convene an extraordinary general meeting within thirty working days for members to review the regulations and qualifications of supervisory board members.

50. 5. The supervisory board will invite board of directors' members, management staff, auditors, and other relevant persons to attend meetings when necessary to provide information related to issues discussed by the supervisory board.

51. Resolutions of the Supervisory Board

51. 1. The supervisory board will adopt resolutions through public voting at meetings.

51. 2. Decisions of the supervisory board are adopted when approved by more than half of the attending members. The charter of the small financial organization may specify issues that require a higher approval ratio. In case the number of votes for and against an issue is equal, the final decision will belong to the side with the opinion of the head of the supervisory board or the person authorized by the head of the supervisory board to chair the meeting (in case the head of the supervisory board is absent).

52. Minutes of the Supervisory Board Meeting

The supervisory board meeting must be recorded in the minutes book. The chairperson and secretary of the meeting are responsible for the truthfulness and accuracy of the content of the supervisory board meeting minutes.

IV. ACTIVITIES OF SMALL FINANCIAL ORGANIZATIONS

53. General Provisions on Activities of Small Financial Organizations

53. 1. Small financial organizations are only allowed to conduct activities in Vietnamese currency. For borrowing and receiving foreign funding from foreign organizations and individuals in foreign currencies, they must comply with the laws on foreign exchange management.

53. 2. Small financial organizations must maintain total small credit loan balances accounting for at least 65% of their total credit balances.

53. 3. The content and scope of activities of small financial organizations are defined in the license issued by the State Bank, Decree No. 28/2005/ND-CP, Decree No. 165/2007/ND-CP, and guiding documents of the State Bank.

54. Fund Raising and Credit Granting

Small financial organizations raise funds and grant credits according to Article 22 (amended pursuant to Clause 9, Article 1, Decree No. 165/2007/ND-CP) and Article 23 of Decree No. 28/2005/ND-CP of the Government and guiding documents of the State Bank for these activities.

55. Other Activities

55. 1. Small financial organizations are permitted to open accounts and deposit money at the State Bank, commercial banks, and other credit institutions.

55. 2. Small financial organizations are allowed to provide certain payment services as follows:

a) Transfer funds to small financial customers;

b) Collect and pay on behalf of small financial customers. These payment services must be carried out in accordance with the regulations of the small financial organization and comply with the regulations of the State Bank.

55. 3. Small financial organizations have the right to accept mandates for lending; mandate and accept mandates for other activities related to the small finance sector as prescribed by law and guided by the State Bank.

55. 4. Small financial organizations have the right to act as insurance agents in accordance with insurance laws and other areas related to small finance activities.

55. 5. Small financial organizations are allowed to provide advisory support services to customers in managing and using capital effectively.

V. CHANGES THAT MUST BE APPROVED

56. Small financial organizations must obtain written approval from the State Bank before making changes to any of the contents stipulated in Clause 1, Article 28 of Decree No. 28/2005/ND-CP.

57. Documents Requesting Approval for Changes from the State Bank

57. 1. Documents requesting a change in the name of a small financial organization:

a) A proposal from the chairman of the board of directors (or authorized representative) requesting a change in the name of the small financial organization. The proposal must clearly state the reasons and necessity for the change;

b) A document from the shareholders' meeting (owners) agreeing to the change in the name of the small financial organization;

c) A resolution of the board of directors approving the name change of the small financial organization; and

d) Other documents (if necessary) to clarify the contents mentioned in point 57.1 sub-points a, b, c of this clause.

57. 2. Documents requesting a change in the registered capital:

a) A submission from the Chairman of the Board of Directors (or authorized representative) proposing to change the registered capital level of the small financial organization, specifying the reasons for changing the registered capital level and the implementation plan;

b) A document from the Members' Meeting agreeing to the change in the registered capital level;

c) A resolution of the Board of Directors approving the change in the registered capital level of the small financial organization;

d) An agreement on the allocation of contributions among contributing members;

đ) A report on the organizational and operational status up to the time of requesting to change the registered capital of the small financial organization; The audited financial report of the most recent year;

e) Other documents (if necessary) to clarify the contents mentioned in points a, b, c, d, đ of Clause 2 of Article 57;

57. 3. Documents for requesting to change the main office location or branch:

a) A submission from the Chairman of the Board of Directors (or authorized representative) proposing to change the main office location or branch of the small financial organization, specifying the reasons for moving the location and the safety issues at the new location;

b) A document from the Members' Meeting agreeing to the change in the main office location;

c) A resolution of the Board of Directors approving the change in the main office location or branch of the small financial organization;

d) A document from the People's Committee of the province or city expressing opinions on the small financial organization setting up its main office or branch (for cases where the main office or branch is moved to another province or city). In the absence of this document, the small financial organization must clearly state the reasons in the submission for the State Bank to consider;

đ) A confirmation document of lawful ownership or usage rights to the location of the main office or branch of the small financial organization for a minimum period of three years; and

e) Other documents (if necessary) to clarify the contents mentioned in points a, b, c, d, đ of Clause 3 of Article 57;

57. 4. Documents for requesting to change the scope of operations:

a) A submission from the Chairman of the Board of Directors (or authorized representative) proposing to change the scope of operations of the small financial organization, specifying the necessity, reasons for the change, and measures to resolve existing issues (if any) upon approval of the change;

b) A document from the Members' Meeting agreeing to the change in the scope of operations;

c) A resolution of the Board of Directors approving the change in the scope of operations of the small financial organization;

d) A report on the organizational and operational status up to the end of the latest month of the small financial organization; and

đ) Other documents (if necessary) to clarify the contents mentioned in points a, b, c, d of Clause 4 of Article 57;

57. 5. Documents for requesting to transfer contribution shares between contributing parties in the small financial organization:

a) A submission from the Chairman of the Board of Directors (or authorized representative) of the small financial organization requesting the State Bank to approve the transfer of contribution shares between the transferring party and the receiving party, specifying information about the legal status of the receiving party, reasons for the transfer, and plans for the transfer if approved;

b) A document from the Members' Meeting agreeing to the transfer of contribution shares;

c) A resolution of the Board of Directors of the small financial organization agreeing to the transfer of contribution shares;

d) A document from the transferring party notifying the State Bank of the partial or full transfer of their contribution shares in the small financial organization;

đ) A document from the receiving party requesting the State Bank to purchase partial or full contribution shares in the small financial organization from the transferring party;

e) A report on the organizational and operational status up to the end of the latest month of the small financial organization;

g) Audited financial reports of the most recent year; and

h) Other documents (if necessary) to clarify the contents mentioned in points a, b, c, d, đ, e, g of Clause 5 of Article 57;

If the receiving party is not a member of the small financial organization, the application must include additional documents and papers as stipulated in Point 10.5 of this Circular;

57. 6. Documents for requesting to amend and supplement the Articles of Association of the small financial organization:

a) A submission from the Chairman of the Board of Directors (or authorized representative) proposing to amend and supplement the Articles of Association of the small financial organization, providing clear explanations for the proposed amendments;

b) A document from the Members' Meeting agreeing to amend and supplement the Articles of Association of the small financial organization;

c) A resolution of the Board of Directors approving the amendment of the Articles of Association of the small financial organization;

d) Draft of the amended and supplemented Articles of Association; and

đ) Other documents (if necessary) to clarify the contents mentioned in points a, b, c, d of Clause 6 of Article 57;

57. 7. Documents for requesting the Governor's approval of Board of Directors members, Supervisory Board members, and General Manager (Director):

a) A submission from the Chairman of the Board of Directors (or authorized representative) requesting the Governor to approve the appointment, dismissal of positions. The submission must affirm that the person proposed for approval has the required qualifications, conditions, and standards under current laws;

b) A document from the Members' Meeting appointing, dismissing, or removing positions (for Board of Directors and Supervisory Board members);

c) A resolution of the Board of Directors (for General Manager/Director positions);

d) A curriculum vitae and certified copies of relevant diplomas and certificates of the person proposed for approval of the position;

đ) Original resignation letter of the person currently holding one of the aforementioned positions (for dismissal cases);

e) Other documents (if necessary) to clarify the contents mentioned in points a, b, c, d, đ of Clause 7 of Article 57;

58. Procedures and formalities for requesting the State Bank to approve changes in the small financial organization

58. 1. Within twenty working days from the date of receipt of the application file for amendment and supplementation as prescribed in Clause 57 of this Circular, the State Bank shall confirm in writing the completeness and validity of the file or notify the small financial organization about the necessary documents to be supplemented.

58. 2. Within thirty working days from the date of sending the confirmation of the complete file as prescribed, the Governor of the State Bank shall consider and approve the changes made by the small financial organization. In case of disapproval, the State Bank shall issue a written response stating the reasons for non-approval.

58. 3. After being approved in writing by the State Bank, the small financial organization must:

a) Register with the competent state agencies regarding business registration (and report to the People's Committee of the province or city where the main office or branch is located, as provided for in Point 57.3 of Clause 57 of this Circular) within at least ten working days;

b) Publish in three consecutive central or local newspapers in Vietnamese about the approved changes;

c) Amend and supplement relevant contents in the Charter and submit to the Governor of the State Bank for approval.

59. Changes must be notified

Within thirty days from the date of the following changes, the small financial organization must issue a written notification to the State Bank:

59. 1. Change of shareholders holding more than 10% of the charter capital, Board of Directors, General Director (Director) of corporate shareholders.

59. 2. Change of name and address of shareholders.

59. 3. Merger, division, consolidation, dissolution, bankruptcy of corporate shareholders.

59. 4. Any unusual changes significantly affecting the organization, operations, or financial situation of shareholders.

VI. INSPECTION, AUDIT, REWARD AND VIOLATION HANDLING

60. Inspection

60. 1. Small financial organizations must be subject to inspection and supervision by the State Bank Inspectorate as prescribed in Section 1 Chapter IX of the Law on Credit Institutions and other laws.

60. 2. Organizations applying for a License or participating in the establishment of a small financial organization as prescribed in this Circular will be inspected and audited by the State Bank Inspectorate on the following matters:

a) Compliance with the conditions for obtaining a License as prescribed in this Circular;

b) The amount of own capital that will be used to contribute to the charter capital of the small financial organization;

c) The operational status and effectiveness of the branches proposed to continue operating after obtaining the License (for organizations with a branch network).

60. 3. In case the State Bank has information indicating that a small financial activity organization violates the provisions of Clause 64 of this Circular, the bank inspector may:

a) Inspect and examine at locations suspected of engaging in unauthorized small financial activities and/or where the entity keeps accounting books, files, and reports;

b) Examine, copy, or retain the books, files, and reports of the inspected entity to accurately determine any violations of laws in the field of finance and banking by such entity;

Refusal or obstruction of access by the bank inspector to the locations or books and records mentioned herein shall be considered prima facie evidence of illegal activity by the entity.

61. Audit

Small financial organizations must conduct audits as prescribed in Section 2 Chapter IX of the Law on Credit Institutions and other laws.

62. Reward and Violation Handling

Rewards and penalties for violations of laws related to small financial activities shall be carried out according to the provisions of Chapter X of the Law on Credit Institutions and other relevant laws.

VII. IMPLEMENTATION ORGANIZATION

63. This Circular takes effect fifteen days after its publication in the Official Gazette.

64. Within twelve months from the effective date of Decree No. 165/2007/NĐ-CP of the Government, organizations engaged in small financial activities must submit applications and files for a License as prescribed in this Circular if:

64. 1. They are currently raising voluntary deposits from organizations and individuals who are not small financial customers; and/or

64. 2. They hold savings deposits (including mandatory and voluntary savings) of small financial customers exceeding 50% of their own capital. This own capital includes components as specified in Point 5.2 of Clause 5 of this Circular and refers to the own capital of the small financial program or project.

65. After the deadline set forth in Clause 64 of this Circular, organizations, programs, and projects engaged in small financial activities without submitting an application for a License or failing to meet the conditions for obtaining a License must simultaneously perform the following tasks:

65. 1. Immediately cease raising voluntary deposits from non-small financial customer clients, and at the same time must refund these clients the amounts they have deposited upon maturity;

65. 2. Reduce the scale of savings deposits from small financial customer clients as stipulated in Point 64.2 of Clause 64 of this Circular below 50% of their own capital; and the voluntarily raised funds from these clients must be deposited in a legally operating bank in Vietnam. These funds can only be withdrawn for the purpose of refunding depositors.

In special cases, the organization, program, or project must report to the State Bank for submission to the Prime Minister for consideration and decision on extension.

66. The Head of the Office, the Director of the Department of Banks and Non-Bank Financial Institutions, the Heads of relevant units under the State Bank, the Governors of the State Bank Branches in provinces and centrally-administered cities, the Chairmen of the Board of Directors, and the General Managers (Directors) of small financial organizations and related organizations and individuals are responsible for implementing this Circular. 

During implementation, if any difficulties arise, they should be promptly reported to the State Bank for guidance and resolution.