Circular No. 04/2015/TT-NHNN on people's credit funds

CIRCULAR

Provisions on people's credit funds

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Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

No. 06/2013/UBTVQH13 dated March 18, 2013;

Pursuant to the Law on Cooperatives No. 23/2012/QH13 dated November 20, 2012;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of Banking Inspection and Supervision;

The Governor of the State Bank of Vietnam issues Circulars stipulating provisions on people's credit funds.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates the issuance of Licenses for establishment and operation, operational territory, governance, management, supervision, charter capital, contributions, transfer of contributions, refund of contributions, members, member assemblies, activities and rights and obligations of people's credit funds.

Article 2. Applicability

4. Deposit Insurance Corporation of Vietnam.

2. Organizations and individuals related to the establishment, issuance of Licenses for establishment and operation of people's credit funds, organization and operation of people's credit funds.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. License is the License for establishment and operation of people's credit funds. Documents of the State Bank regarding amendments and supplements to the License are an integral part of the License.

2. Members of people's credit funds are individuals, households, legal entities meeting the conditions stipulated in this Circular and agreeing to the Charter, voluntarily participating in contributing capital to establish people's credit funds.

3. Founding assembly is the assembly of contributing members (individuals, representatives of households, legal entities), with the mission:

a) Approving: Draft Charter of people's credit funds; Project for establishing people's credit funds; List of candidates proposed for election and appointment as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board (or dedicated supervisory officers), General Director of people's credit funds for the first term;

b) Electing the Preparatory Committee, Head of the Preparatory Committee from contributing members listed as candidates for election and appointment as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board (or dedicated supervisory officers), General Director of people's credit funds for the first term and some other members to represent contributing members in implementing tasks related to the approval of principles for establishing people's credit funds and amending and supplementing the application for a License at the request of the State Bank branch.

c) Deciding on other matters related to the establishment of the people's credit fund.

4. State Bank branch is the State Bank branch of the province or centrally-administered city where the main office of the people's credit fund is located.

5. Founding congress is the assembly of all contributing members establishing the people's credit fund organized after receiving the State Bank branch's approval of the principles for establishment, with the mission:

a) Approving the Charter of the people's credit fund;

b) Electing the Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board (or dedicated supervisory officers) for the first term according to the list of personnel already approved by the State Bank branch;

c) Approving regulations on the organization and operation of the Board of Directors, Supervisory Board of people's credit funds;

d) Deciding on other matters related to the establishment of people's credit funds.

6. Capital contribution establishing member status is the minimum contribution amount required to establish the status of a member when joining a people's credit fund.

7. Capital annual contribution is the annual capital that members must contribute to maintain their status as members.

Article 4. Authority to Issue Licenses

The Director of the State Bank branch examines and issues Licenses for people's credit funds with headquarters within their jurisdiction.

Article 5. Term of Operation

The maximum operating period of people's credit funds is 50 years. The specific operating period is proposed by the Preparatory Committee established by the people's credit fund and recorded in the License.

Article 6. Nature and Objectives of Operations

The People's Credit Fund operates on the principle of voluntariness, autonomy, and responsibility for the results of its operations, with the main objective being to provide mutual assistance among members to effectively carry out production, business service activities, and improve living standards.

Article 7. Name of the People's Credit Fund

1. The name of the People's Credit Fund must be written in Vietnamese, may include numbers and symbols, must be pronounceable, and must consist of at least two components in the following order:

a) People's Credit Funds;

b) The specific name must comply with legal regulations and must be decided by the Founding Conference (for newly established People's Credit Funds) or the Member Assembly (for operating People's Credit Funds).

2. The name of the People's Credit Fund must be displayed or affixed at the main office, printed or written on transaction documents, files, and materials issued by the People's Credit Fund.

Article 8. Operating Area

1. The People's Credit Fund operates within the territory of one commune, ward, or town (hereinafter referred to as commune).

2. The inter-commune operating area of the People's Credit Fund must be communes adjacent to the commune where the main office of the People's Credit Fund is located within the same district, county, city under provincial jurisdiction, or provincial-level city.

3. The People's Credit Fund may be considered for approval to operate in an inter-commune area according to the provisions of Clause 2 of this Article if it meets all of the following conditions:

a) Having a minimum of 300 members at the time of application;

b) Having a registered capital of at least five times the statutory capital requirement at the time of application;

c) Generating profit for two consecutive years prior to the year of application;

d) Having an organizational structure, management machinery, internal audit system, and internal control system in accordance with the Law on Credit Organizations and this Circular;

đ) Not violating the regulations on limits and ratios ensuring safety in the operation of the People's Credit Fund as stipulated by the State Bank for twelve consecutive months prior to the application date;

e) Properly classifying debts and setting aside risk reserves in accordance with the regulations of the State Bank in the year preceding the application date;

g) Having a non-performing loan ratio below 3% for two consecutive years prior to the application year;

h) Providing evidence of community linkage capability in adjacent communes based on shared community benefits, geographical conditions, cultural practices, regional characteristics, industries, and other special features in the area;

i) Not being a weak People's Credit Fund required to restructure according to the requirements of the State Bank;

k) Total deposits from members of the People's Credit Fund must be at least 60% of the total deposits of the People's Credit Fund for two consecutive years prior to the application year.

4. For People's Credit Funds with restructuring plans approved by the State Bank branch, the operating area shall be implemented according to the approved plan.

5. The procedures and documentation for approving operations in an inter-commune area of the People's Credit Fund shall be carried out in accordance with the regulations of the State Bank regarding changes that require approval by the State Bank.

Article 9. Principles for Preparing Documentation

1. Documents in the application for a License must be signed by the Head of the Preparatory Board, except where otherwise provided in this Circular. Documents signed by the Head of the Preparatory Board must have the title "Preparatory Board for Establishment and the Name of the People's Credit Fund".

2. The application for a People's Credit Fund License must be prepared in one (1) set in Vietnamese.

3. Copies of documents and certificates must be certified in accordance with legal regulations.

In cases where the documents in the application are copies that are not certified copies or copies issued from original books, when submitting the application, the original must be presented for verification. The verifier must sign confirmation on the copy and bear responsibility for the accuracy of the copy compared to the original.

4. Each set of documentation must include a list of documents in the set.

Chapter II

SPECIFIC PROVISIONS

Section 1

LICENSE ISSUANCE

Article 10. Conditions for Issuing a Permit

1. Having a minimum charter capital equal to the statutory capital level prescribed by the Government at the time of requesting the license issuance.

2. Having at least thirty members meeting the requirements stipulated in Article 31 of this Circular, with sufficient financial capacity to participate in establishing the people's credit fund.

3. The manager and members of the supervisory board meet the conditions and standards prescribed in Articles 20, 23, and 24 of this Circular.

4. The organizational structure of the Board of Directors and the supervisory board complies with the provisions of the Law on Credit Institutions and this Circular.

5. Having Bylaws consistent with the provisions of the Law on Credit Institutions, the Law on Cooperatives, and other relevant laws.

6. Having a feasible establishment project and business plan for the first three years of operation.

Article 11. Application Documents for Granting the License

1. A permit application form signed by the Head of the Preparatory Board according to the model in Appendix No. 01 of this Circular.

2. Draft Charter of the people's credit fund approved by the Founding Conference.

3. A proposal for establishing the people's credit fund approved by the Founding Conference, which clearly states:

a) The necessity of establishing the people's credit fund;

b) The name of the people's credit fund, operational area, proposed main office location, duration of operation, charter capital upon establishment, and activities consistent with the provisions of the Law on Credit Institutions and this Circular;

c) Organizational structure;

d) Provisions on risk management, including types of risks that may occur during operations, methods and measures to prevent and control these risks;

đ) Procedures and policies for lending to members, depositors at the people's credit fund, and poor households in the area who are not members of the people's credit fund;

e) Information technology: Proposed information technology system for managing operations, capability to apply information technology systems in banking activities, and investment plans for the information technology system;

g) Proposed internal control and audit system in compliance with the regulations of the State Bank;

h) Business plan for the first three years that aligns with the content and scope of operations, including analysis and explanation of the effectiveness and feasibility of the plan each year;

4. List of personnel proposed to be elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the supervisory board, and General Director of the people's credit fund.

5. Documentation proving the qualifications of those proposed to be elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the supervisory board, and General Director of the people's credit fund, including:

a) Curriculum vitae according to the model in Appendix No. 04 of this Circular;

b) Copy of Identity Card or passport;

c) Copy of professional certificates and diplomas;

d) Judicial record issued by the Provincial Department of Justice;

đ) Other documents proving compliance with the conditions and standards prescribed in the Law on Credit Institutions and Articles 20, 23, and 24 of this Circular;

6. List of members participating in the capital contribution to establish the people's credit fund. The list must be confirmed by all contributing members and must include at least the following contents:

a) Full name (for individual members or household representatives); Name and main office address (for corporate members);

b) Identity card number or passport number (for individual members); household registration book number (for family members); business registration certificate number (for corporate members);

c) Amount of capital contribution and percentage of contribution of each member.

7. Copy of identity card or passport (for individual members, representatives of corporate members, and family members). For members who are civil servants, additional proof of employment and copy of recruitment decision from the recruiting agency must be provided.

8. Copy of household registration book (for family members).

9. Copy of business registration certificate (for corporate members).

10. Power of attorney from the corporate member for its representative to participate in capital contribution.

11. Power of attorney from the family member for its representative to participate in capital contribution.

12. Financial report of the most recent year preceding the year of the permit application and the latest financial report not more than ninety days prior to the date of signing the permit application (for corporate members).

13. Report on financial capability to participate in capital contribution to establish the people's credit fund for corporate members according to the model in Appendix No. 06 of this Circular.

14. Application for membership according to the models in Appendices No. 02A, No. 02B, and No. 03 of this Circular.

15. Minutes of the Founding Meeting.

16. Draft internal regulations in accordance with Clause 2 of Article 93 of the Law on Credit Institutions and regulations on the organization and operation of the Board of Directors and the supervisory board of the people's credit fund.

17. Bylaws of the people's credit fund approved by the Founding Assembly and signed by the Chairman of the Board of Directors.

18. Minutes of the Founding Assembly of the people's credit fund.

19. Resolution of the Founding Assembly approving the Bylaws, electing the Chairman and other members of the Board of Directors, appointing the Head and other members of the supervisory board (or dedicated supervisory officers), and passing other matters within its authority through majority voting.

20. Decision of the Board of Directors of the people's credit fund appointing the General Director according to the proposed list of personnel approved by the branch of the State Bank.

21. Document proving ownership or lawful right to use the location of the main office.

22. Internal regulations in accordance with Clause 16 of this Article approved by the Founding Assembly.

Article 12. Procedure for Issuing the License

1. Approval of the principle of establishment:

a) The preparatory board prepares the application file for issuing a permit in accordance with Clauses 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, and 16 of Article 11 of this Circular and sends it via postal service or directly to the State Bank branch;

b) Within ten working days from the date of receiving the file as stipulated in point a of this clause, the State Bank branch sends a letter to the preparatory board confirming receipt of the complete and valid file or requesting supplementary and completion of the file;

c) Within ten working days from the date of receiving the complete and valid file as stipulated in point a of this clause, the State Bank branch:

(i) Sends a letter to the People's Committee of the commune where the people's credit fund is expected to set up its main office to seek their opinion on the establishment of the people's credit fund in the area; and the list of proposed personnel to be elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the supervisory board, and General Director of the people's credit fund;

(ii) Submit a document to the Vietnam Rural Credit Bank regarding the list of personnel proposed for election and appointment as the Chairman and other members of the Board of Directors, the Head and other members of the Supervisory Board, and the Director of the People's Credit Fund (if deemed necessary);

(iii) Submit a document to seek opinions from the Banking Inspection and Supervision Department (for People's Credit Funds established within the jurisdiction of a province or city where there is a Banking Inspection and Supervision Department) concerning the establishment of a People's Credit Fund in that area; the list of personnel proposed for election and appointment as the Chairman and other members of the Board of Directors, the Head and other members of the Supervisory Board, and the Director of the People's Credit Fund;

d) Within ten working days from the date of receipt of the request document from the State Bank branch, the Banking Inspection and Supervision Department, the People's Committee of the commune where the People's Credit Fund is expected to establish its main office, and the Vietnam Rural Credit Bank, these entities shall submit documents providing their opinions on the requested matters. If no written opinion is received from the units mentioned above beyond the aforementioned period, the State Bank branch shall consider that the units consulted have no objection;

đ) Within thirty days from the date of receipt of the opinions of the People's Committee of the commune, the Banking Inspection and Supervision Department, and the Vietnam Rural Credit Bank, or from the expiration date of the period for soliciting opinions without receiving any participating opinions, the State Bank branch shall issue a document to the Preparatory Board approving in principle the establishment of the People's Credit Fund and approving the list of personnel proposed for election and appointment as the Chairman and other members of the Board of Directors, the Head and other members of the Supervisory Board, and the Director of the People's Credit Fund. In case of disapproval, the State Bank branch shall issue a document to the Preparatory Board specifying the reasons;

2. Within ninety days from the date of receipt of the document approving in principle from the State Bank branch:

a) The Preparatory Board shall organize the Founding Congress in accordance with Clause 5, Article 3 of this Circular;

b) The Preparatory Board shall prepare the application file in accordance with Clauses 17, 18, 19, 20, 21, and 22, Article 11 of this Circular and send it via postal service or deliver it directly to the State Bank branch;

Beyond the aforementioned period, if the State Bank branch does not receive or receives incomplete documents as mentioned above, the document approving in principle will lose its validity;

3. Issuing the License:

a) Within five working days from the date of receipt of the files specified in point b, Clause 2 of this Article, the State Bank branch shall confirm in writing that all valid files have been received or request the People's Credit Fund to supplement and complete the application file for the License;

b) Within sixty days from the date of receipt of all valid files as stipulated in point b, Clause 2 of this Article, the State Bank branch shall issue the License and issue a document confirming the registration of the Charter of the People's Credit Fund. In case of non-issuance of the License, the State Bank branch shall issue a document specifying the reasons;

4. After obtaining the License, the People's Credit Fund shall proceed with the necessary procedures to commence operations in accordance with Article 15 of this Circular.

Article 13. Contents of the License

1. The License must include the following main contents:

a) License number; issuing authority; date of issuance;

b) Name of the People's Credit Fund:

(i) Full name, abbreviated name in Vietnamese;

(ii) Trading name (if any);

c) Location of the main office;

d) Content and scope of operations;

đ) Operating area;

e) Charter capital;

g) Term of operation.

2. The State Bank branch shall specify in detail the contents, scope of operations, operating area, and term of operation in the License according to Model 07 of this Circular.

Article 14. Licensing Fee

1. The level of the licensing fee for the People's Credit Fund shall be implemented in accordance with the provisions of the law on fees and charges.

2. Within fifteen days from the date of issuance of the License, the People's Credit Fund must pay the licensing fee at the State Bank branch.

3. The licensing fee specified in Clause 2 of this Article shall not be deducted from the charter capital and shall not be refunded under any circumstances.

Article 15. Commencement of Operations

1. The People's Credit Fund that has been granted a License must register business operations in accordance with the provisions of the law.

2. The People's Credit Fund must commence operations within twelve months from the date of issuance of the License and may only conduct activities from the date of commencement of operations.

3. Ten working days before commencing operations, the People's Credit Fund that has been granted a License must post notices at the headquarters of the People's Committee of the commune where the main office is located, announce on the local radio station or community radio for three consecutive days, and publish in a provincial or centrally-administered city newspaper for three consecutive issues regarding:

a) Name and address of the main office;

b) License number and date of issuance; registration certificate number and date of issuance; content, scope of operations, term, and operating area;

c) Charter capital;

d) Legal representative;

đ) List and corresponding contribution ratios of each member participating in the establishment of the People's Credit Fund;

e) Anticipated date of commencement of operations.

4. Conditions for commencement of operations:

The People's Credit Fund that has been granted a License may only commence operations when it meets the following conditions:

a) Having a business registration certificate; having sufficient charter capital deposited into a frozen account without interest at the State Bank branch at least thirty days before the date of commencement of operations, the charter capital will be unfrozen once the People's Credit Fund has commenced operations;

b) Having a headquarters that ensures asset safety and is suitable for operational requirements;

c) Having announced information in accordance with Clause 3 of this Article;

d) Having an organizational structure, management and operation machinery, internal audit system, internal control system, and risk management system appropriate to the content and scope of operations;

đ) Having internal regulations as stipulated in Clause 22 of Article 11 of this Circular.

5. At least ten working days before the anticipated date of commencement of operations, the People's Credit Fund that has been granted a License must notify in writing about the conditions for commencement of operations as stipulated in Clause 4 of this Article, directly or by mail to the State Bank branch. The State Bank branch will suspend the commencement of operations of the People's Credit Fund if it does not meet the conditions stipulated in Clause 4 of this Article.

Article 16. Use of License

1. People's Credit Funds granted a License must use the correct name and operate within the scope of activities specified in the License, and shall not engage in any business activities outside the content and scope of activities recorded in the License.

2. People's Credit Funds shall not erase, buy, sell, transfer, lease, or lend the License.

3. In case the License is lost, torn, burned, or damaged, the People's Credit Fund must submit a written document clearly stating the reason directly or through postal service to the State Bank branch that issued the License, requesting consideration for issuance of a copy of the License from the original record according to the provisions of the law. Within five working days from the date of receipt of the request document, the State Bank branch will examine and issue a copy of the License from the original for the People's Credit Fund.

Section 2

BOARD OF MANAGEMENT, SUPERVISION BOARD, DIRECTOR

Article 17. Organization and Operation of the Board of Management

1. The Board of Management of the People's Credit Fund is the governing body with the authority to act on behalf of the People's Credit Fund to decide and perform the rights and obligations of the People's Credit Fund, except for matters within the jurisdiction of the Member Assembly.

2. The Board of Management of the People's Credit Fund consists of the Chairman and other members of the Board of Management. The Chairman and other members of the Board of Management are elected, appointed, or removed by the Member Assembly or the Founding Assembly (in the case of establishing a People's Credit Fund) directly through secret ballot. The number of Board of Management members is determined by the Member Assembly but shall not be less than three (3) members.

3. The term of office of the Board of Management is decided by the Member Assembly and recorded in the Charter, at least two (2) years and not more than five (5) years.

4. The Chairman and other members of the Board of Management may not delegate their powers and duties to persons who are not members of the Board of Management.

5. The Board of Management operates based on the principle of collective decision-making and decides by majority rule.

Article 18. Duties and Powers of the Board of Management and the Chairman of the Board of Management

1. The Board of Management of the People's Credit Fund has the following duties and powers:

a) Duties and powers as prescribed in Article 82 of the Law on Credit Organizations;

b) To convene extraordinary meetings of the Member Assembly as stipulated in Article 19 of this Circular.

2. The Chairman of the Board of Management is the legal representative of the People's Credit Fund. The Chairman of the Board of Management has the following duties and powers:

a) Drafting the program and plan of activities of the Board of Directors;

b) Assigning tasks to other Board of Directors members to perform, supervising other Board of Directors members in the performance of assigned tasks and common rights and obligations;

c) Preparing content, agenda, convening, and chairing meetings of the Board of Directors, Member Assembly;

d) Being responsible to the Board of Directors, Member Assembly for the tasks assigned;

đ) Signing or authorizing others to sign documents of the Board of Directors, Member Assembly in accordance with the law and the Charter of the people's credit fund;

e) To perform other tasks and powers as prescribed in the Charter of the People's Credit Fund.

Article 19. Meetings of the Board of Management

1. The Board of Management meets at least once a month convened and chaired by the Chairman of the Board of Management or a member of the Board of Management authorized by the Chairman of the Board of Management.

The Board of Management convenes extraordinary meetings when one-third of the Board of Management members or the Chairman of the Board of Management, the Head of the Supervision Board, the dedicated supervisor, or the Director of the People's Credit Fund requests.

2. A meeting of the Board of Management is valid if at least two-thirds of the Board of Management members attend. If the first call for a meeting of the Board of Management does not have the minimum number of attendees, the Chairman of the Board of Management must convene a second meeting of the Board of Management within ten working days from the date of the first planned meeting. After two calls for a meeting of the Board of Management without the minimum number of attendees, the Chairman of the Board of Management proposes the Board of Management to convene an extraordinary meeting of the Member Assembly within thirty days from the date of the second planned meeting to review the status of Board of Management members who did not attend the meeting and take appropriate measures.

3. The content and conclusions of each session of the Board of Management must be recorded in the minutes book; the minutes of the Board of Management meeting must have signatures of the chairperson, participating Board of Management members, and the secretary of the session. The chairperson and secretary are jointly responsible for the accuracy and truthfulness of the Board of Management meeting minutes. Board of Management members have the right to reserve their opinions, which are recorded in the meeting minutes.

4. Decisions of the Board of Management are passed based on the principle of majority, with each member having one vote of equal value. In case the number of votes in favor and against are equal, the vote of the person chairing the meeting is decisive.

Article 20. Conditions and criteria for members of the Board of Directors

1. Board of Management members must meet the following conditions and standards:

a) They are individual members or representatives of the capital contribution of corporate members;

b) They do not fall under the cases prescribed in Article 33 and Article 34 of the Law on Credit Organizations. Board of Management members cannot simultaneously hold the positions of Chief Accountant or Cashier of the People's Credit Fund;

c) They have worked in one of the fields of economics, finance, accounting, auditing, banking, or law for at least two (2) years or possess a degree (or certificate) proving training in credit fund operations;

d) They comply with the provisions of the law; they have not been administratively punished in the economic, financial, accounting, auditing, or banking sectors in the twenty-four months immediately preceding the date of election.

2. The Chairman of the Board of Management must meet the following conditions and standards:

a) They are individual members of the People's Credit Fund, except in the case prescribed in point e of this clause;

b) They meet the conditions prescribed in points b and d of clause 1 of this article;

c) They have worked in one of the fields of economics, finance, accounting, auditing, banking, or law for at least two years;

d) They have held a managerial or executive position in an entity in one of the fields of banking or finance according to the Charter or equivalent document of the entity, or a department-level leadership position or equivalent position according to the regulations of state agencies, economic organizations, political organizations, or political-social organizations for at least one year;

đ) They must meet one of the following conditions:

(i) They have a bachelor's degree or higher in one of the majors of economics, finance, accounting, auditing, banking, business administration, or law;

(ii) Hold a graduation certificate at the college level or higher in one of the following majors: economics, finance, accounting, auditing, banking, business administration, law, and have a diploma (or certificate) proving training in the operations of rural credit cooperatives.

e) In cases where it is necessary when the rural credit cooperative undergoes restructuring, an event affecting operational safety occurs, or is placed under special supervision, the State Bank branch shall consult with the People's Committee of the commune where the main office of the rural credit cooperative is located and report to the Governor of the State Bank before considering and appointing personnel to hold the position of Chairman of the Board of Directors of the rural credit cooperative.

Article 21. Organization and Activities of the Supervisory Board

1. The Head and members of the Supervisory Board of the rural credit cooperative shall be directly elected by the Member Assembly, Founding Assembly (in the case of establishing a rural credit cooperative), with no fewer than three members, including at least one full-time member. For rural credit cooperatives with operating capital of up to VND 8,000,000,000 (eight billion dong) and less than 1,000 members, the election of the Supervisory Board or only one full-time supervisor may be decided by the Member Assembly.

2. The Supervisory Board is responsible to the Member Assembly for the performance of its duties and powers.

3. The Supervisory Board shall convene at least once a month, convened and chaired by the Head.

4. The term of office of the Supervisory Board follows the term of office of the Board of Directors.

Article 22. Duties and Powers of the Supervisory Board, Head of the Supervisory Board, Full-Time Supervisor

1. The duties and powers of the Supervisory Board of the rural credit cooperative are stipulated in Article 84 of the Law on Credit Institutions.

2. The Head of the Supervisory Board has the following duties and powers:

a) Organize the implementation of the duties and powers of the Supervisory Board as prescribed in Clause 1 of this Article;

b) Convene and chair meetings of the Supervisory Board;

c) Represent the Supervisory Board to sign documents within the authority of the Supervisory Board;

d) Attend meetings of the Board of Directors, speak but not vote;

đ) Prepare work plans and assign tasks to members of the Supervisory Board;

e) Delegate another member of the Supervisory Board to perform their duties during absence;

g) Represent the Supervisory Board to convene and chair extraordinary Member Assemblies as prescribed in Clause 6 of Article 84 of the Law on Credit Institutions;

h) Perform other duties and powers as prescribed in the Charter of the rural credit cooperative.

3. For rural credit cooperatives that elect only one full-time supervisor, the full-time supervisor has the following responsibilities and powers:

a) Carry out the duties and powers of the Supervisory Board as prescribed in Article 84 of the Law on Credit Institutions;

b) Attend meetings of the Board of Directors, speak but not vote;

c) Carry out other duties and powers as prescribed in the Charter of the rural credit cooperative.

Article 23. Conditions and Standards for Members of the Supervisory Board, Full-Time Supervisor

1. Members of the Supervisory Board must meet the following conditions and standards:

a) They are individual members or representatives of the capital contribution of corporate members;

b) Not fall under the provisions of Article 33 and Article 34 of the Law on Credit Institutions. Members of the Supervisory Board shall not concurrently serve as Chief Accountant, Cashier, or business operation staff of the rural credit cooperative, nor shall they be related persons of Deputy Director, Chief Accountant, or Cashier of the rural credit cooperative;

c) Have a diploma (or certificate) proving training in the operations of rural credit cooperatives;

d) Meet the conditions prescribed in point d, Clause 1 of Article 20 of this Circular.

2. The Head of the Supervisory Board and the full-time supervisor must meet the following conditions and standards:

a) Be an individual member of the rural credit cooperative;

b) Meet the conditions and standards prescribed in points b, c, and d, Clause 1 of this Article;

c) Hold a graduation certificate at the college level or higher in one of the following majors: economics, finance, accounting, auditing, banking, law.

Article 24. Conditions and criteria for the Director

1. Is an individual member of the people's credit cooperative (in the case where the Board of Directors appoints one member of the Board of Directors as the Director).

2. Not falling under the cases stipulated in Articles 33 and 34 of the Law on Credit Institutions.

3. Having at least two years of work experience in one of the fields of economy, finance, banking.

4. Having previously held a managerial or executive position in an entity within one of the fields of banking, finance according to the Charter or equivalent document of that entity, or a department head or equivalent position according to the regulations of state agencies, economic organizations, political organizations, socio-political organizations for at least one year.

5. Residing in the operational area of the people's credit cooperative.

6. Possessing a diploma or higher degree in one of the majors of economics, finance, accounting, auditing, banking, business administration, law, and having a certificate (or certification) proving training in the operations of people's credit cooperatives. In the case where the Director is a hired individual, in addition to the conditions and criteria stipulated in Clauses 2, 3, 4, 5, and 7 of this Article, must have a bachelor’s degree or higher in one of the majors of economics, finance, banking, accounting, auditing, business administration, law, and not be part of the management, operation, Supervisory Board machinery of the corporate member.

7. Meeting the conditions prescribed in point d, Clause 1, Article 20 of this Circular.

Article 25. Approval of the list of candidates to be elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, dedicated supervisors, and Director

1. Candidates to be elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, dedicated supervisors, and Director of the people's credit cooperative must meet the conditions and criteria prescribed in Articles 20, 23, and 24 of this Circular.

2. The list of candidates to be elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, dedicated supervisors, and Director of the people's credit cooperative must be approved in writing by the State Bank branch before election or appointment. Those elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, dedicated supervisors, and Director of the people's credit cooperative must be included in the list already approved by the State Bank branch.

3. The procedure and dossier for approving the list of candidates as prescribed in Clause 2 of this Article shall be implemented in accordance with the regulations of the State Bank.

4. The people's credit cooperative must notify in writing to the State Bank branch the list of persons elected or appointed as prescribed in Clause 2 of this Article within ten working days from the date of election or appointment.

Section 3

REGULATORY CAPITAL, CONTRIBUTED CAPITAL, TRANSFER OF CONTRIBUTED CAPITAL,

WITHDRAWAL OF CONTRIBUTED CAPITAL

Article 26. Regulatory Capital

1. The regulatory capital of the people's credit cooperative is the total contributed capital recorded in the Charter of the people's credit cooperative, accounted for in Vietnamese Dong.

2. Any change in the regulated capital must comply with the regulations of the State Bank of Vietnam regarding changes that require the approval of the State Bank of Vietnam.

3. Members may not use entrusted capital or borrowed capital in any form to contribute capital to the people's credit cooperative and must commit to and be responsible for the legality of the source of contributed capital.

4. Legal entities contributing capital to the people's credit cooperative must comply strictly with the provisions of the law on capital contribution.

Article 27. Forms of Contributing Charter Capital

1. The charter capital of the People's Credit Fund shall be contributed in Vietnamese dong or other assets necessary for the direct operation of the People's Credit Fund.

2. In cases where contributions are made with other assets, such assets must have legal documents proving ownership or usage rights. The valuation, transfer of ownership or usage rights of contributed assets shall be carried out in accordance with the provisions of the law.

Article 28. Capital Contribution of Members

1. Members' contributions include membership establishment contributions and annual contributions.

a) The minimum membership establishment contribution is 300,000 Vietnamese dong;

b) The minimum annual contribution is 100,000 Vietnamese dong. Members of the People's Credit Fund are not required to make annual contributions in the first financial year following their joining the People's Credit Fund. Annual contributions may be paid in one or multiple installments during the financial year, starting from the 2016 financial year.

2. The total maximum contribution of a member of the People's Credit Fund shall not exceed 10% of the charter capital of the People's Credit Fund at the time of contribution.

3. The contributions of members of the People's Credit Fund shall be stipulated in the Regulations of the People's Credit Fund. The General Assembly of Members of the People's Credit Fund decides specifically on the membership establishment contribution level, the annual contribution level, the method of payment, and the total maximum contribution of a member as provided for in Clauses 1 and 2 of this Article.

4. From the date this Circular takes effect until the next General Assembly of Members decides specifically on the membership establishment contribution level as provided for in point a Clause 1 of this Article, the membership establishment contribution level shall be 300,000 Vietnamese dong.

5. When making a membership establishment contribution, members shall receive the contribution amount printed by the People's Credit Fund according to Model 05 of this Circular and the Member Card according to the uniform model guided by the Vietnam Rural Bank throughout the system of People's Credit Funds.

6. The People's Credit Fund must maintain a record of membership establishment contributions, annual contributions, transfers, and receipt of transfers of members' contributions.

Article 29. Distribution of Profits to Members

Members of the People's Credit Fund shall be entitled to profit distribution based on the total contribution amount, the degree of utilization of products and services by members at the People's Credit Fund, and decided by the General Assembly of Members of the People's Credit Fund, in compliance with the provisions of the law.

Article 30. Transfer, Refund of Capital Contributions

1. Members may transfer all or part of their contributions to another member or to an individual, household, or legal entity that is not a member but meets the conditions stipulated in Article 31 of this Circular. The transfer of members' contributions must ensure:

a) The remaining contribution amount (in the case of partial contribution transfer) complies with the regulations on the membership establishment contribution level and annual contribution level as provided for in Clause 1 of Article 28 of this Circular;

b) The transfer of all contributions can only be carried out after the member has fulfilled their obligation to repay loans and other financial obligations to the People's Credit Fund as stipulated in the Regulations of the People's Credit Fund;

c) The transferee member must comply with the regulations on the maximum total level of capital contribution of one member stipulated in Clause 2 of Article 28 of this Circular.

2. The refund of capital contributions to members must satisfy the following conditions:

a) For members: The member has settled all financial obligations towards the People's Credit Fund, including:

(i) All debts (principal and interest) of the member;

(ii) Losses for which the member is responsible for compensation;

(iii) Business losses and risks corresponding to the proportion of capital contribution that the member shares responsibility for, as decided by the General Assembly of members;

b) For the People's Credit Fund:

(i) The repayment of contributions does not reduce the actual charter capital value of the People's Credit Fund below the statutory capital level;

(ii) Does not violate the minimum capital safety ratio of the People's Credit Fund as prescribed by the State Bank before and after the repayment of contributions to members;

The amount of contributions repaid to members shall be determined according to the proportion of the member's contribution to the actual charter capital value of the People's Credit Fund at the time of approval to terminate the member status.

3. The repayment and transfer of all contributions of members must be approved by the General Assembly of Members or by the Board of Directors in accordance with the Regulations of the People's Credit Fund.

Section 4

PROVISIONS ON MEMBERS

Article 31. Conditions for Becoming a Member

1. For individuals:

a) Vietnamese citizens aged 18 years or older, having full capacity to act in civil matters, with permanent residence registration on the operational territory of the people's credit fund;

b) Officials and civil servants working at organizations and agencies whose main offices are located within the operational territory of the people's credit fund. Members of the people's credit fund who are officials and civil servants shall not hold the positions of Chairman and member of the Board of Management; Head and member of the Supervisory Board; Director, Deputy Director; Chief Accountant and other specialized professional positions, except as provided for in point e, Clause 2, Article 20 of this Circular.

c) Not belonging to any of the following categories:

(i) Currently being pursued for criminal responsibility, currently serving a criminal judgment or decision of the court; persons who have been convicted of serious crimes or more severe offenses and have not yet had their criminal records expunged;

(ii) Officials and civil servants working in industries and professions related to state secrets as prescribed by law;

(iii) Officers, non-commissioned officers, or professional military personnel in the People's Armed Forces;

d) Other conditions as stipulated in the Charter of the people's credit cooperative.

2. For households:

a) A household with permanent residence registration on the operational territory of the people's credit fund; members of the household share assets to serve the production and business service activities of the household;

b) The representative of the household must be authorized in writing by the members of the household according to the provisions of the law and must meet the conditions stipulated in Clause 1 of this Article.

3. For legal entities:

a) Legal entities (excluding Social Funds and Charity Funds) operating normally and having their main office located within the operational area of the people's credit fund;

b) The person signing the application to join the capital contribution of the people's credit fund must be the legal representative of the legal entity. The legal representative of the legal entity may authorize another individual of the legal entity to represent and participate in the people's credit fund according to relevant laws.

4. Individuals, households, and legal entities must submit a voluntary application to become members of the people's credit fund according to the model forms at Appendix 02A, Appendix 02B, and Appendix 03 of this Circular, agree to the Charter, and contribute sufficient capital contributions as prescribed in Article 28 of this Circular.

5. Each subject specified in Clauses 1, 2, and 3 of this Article may only participate as a member of one (1) people's credit fund.

Article 32. Termination of Membership Status

1. A member of the people's credit fund terminates their membership status when they fall under one of the following circumstances:

a) Involuntary termination: An individual member dies, goes missing, loses, or has limited capacity to act in civil matters; a household member does not have a representative meeting the conditions stipulated in Clause 2 of Article 31 of this Circular; a legal entity member when the organization is dissolved, bankrupt, or does not have a representative meeting the conditions stipulated in Clause 3 of Article 31 of this Circular; a member has transferred all capital contributions to another person according to the law and the Charter of the people's credit fund.

b) Voluntary termination: A member voluntarily and obtains approval from the Board of Management to terminate their membership status in the people's credit fund and is approved by the General Assembly of Members according to the Charter of the people's credit fund;

c) Exclusion: A member is excluded from the people's credit fund by the General Assembly of Members due to:

(i) Not ensuring sufficient capital contributions as prescribed in Clause 1 of Article 28 of this Circular;

(ii) Engaging in fraudulent or deceptive behavior in membership application documents;

(iii) Other cases as prescribed in the Charter of the people's credit fund.

2. The handling of capital contributions of members terminating their membership status according to Clause 1 of this Article shall be carried out as follows:

a) In the case of involuntary termination of membership status as prescribed in point a, Clause 1 of this Article:

(i) An individual member who dies, goes missing, loses, or has limited capacity to act in civil matters, or a household member without a representative meeting the conditions stipulated in Article 31 of this Circular: Shall be handled according to the provisions of civil law regarding inheritance, loss of capacity to act in civil matters, limited capacity to act in civil matters, and related laws;

(ii) A legal entity member that is dissolved or bankrupt: Shall be handled according to the provisions of law regarding dissolution and bankruptcy;

b) In the case of voluntary termination of membership status as prescribed in point b, Clause 1 of this Article: The member may transfer their capital contribution according to Clause 1 of Article 30 of this Circular or be refunded their capital contribution according to Clause 2 of Article 30 of this Circular;

c) In the case of exclusion from membership status as prescribed in point c, Clause 1 of this Article: The member may not transfer their capital contribution. The refunding of capital contribution shall be carried out according to Clause 2 of Article 30 of this Circular.

3. A member terminating their membership status shall enjoy other benefits from the reward fund and welfare fund (if any) according to the decision of the General Assembly of Members of the people's credit fund after fulfilling all financial obligations as prescribed in the Charter of the people's credit fund.

Section 5

GENERAL ASSEMBLY OF MEMBERS

Article 33. Notice of the Members' General Meeting

The convening of the Members' General Meeting must be carried out in writing and must be sent to all members or member representatives at least seven working days before the opening date of the Members' General Meeting if the Credit Cooperative Charter does not specify a time limit. The notice for the Members' General Meeting must clearly state the time, location, agenda, and related documents.

Article 34. Members' General Meeting

1. Implemented according to the provisions of Article 80 of the Law on Credit Organizations.

2. The Members' General Meeting must convene once a year within ninety days from the end of the fiscal year, convened by the Board of Management.

3. Extraordinary Members' General Meetings shall be convened in the following cases:

a) If the Board of Management deems it necessary for the benefit of the credit cooperative, the Board of Management may convene the meeting.

b) The Chairman of the Board of Management may convene the meeting in accordance with Clause 2 of Article 19 of this Circular.

c) The Head of the Supervisory Board or the dedicated supervisor may convene the meeting in accordance with Clause 6 of Article 84 of the Law on Credit Organizations.

d) At least one-third of the total number of credit cooperative members jointly submit a written request for convening an extraordinary Members' General Meeting.

In the case of organizing an extraordinary Members' General Meeting based on the request of at least one-third of the total number of credit cooperative members, the Board of Management must convene the extraordinary Members' General Meeting within ten working days from the date of receipt of the written request. Beyond this period, the group of members who jointly requested the convening of the extraordinary Members' General Meeting may submit a written request to the State Bank branch to require the credit cooperative to convene the extraordinary Members' General Meeting.

e) The State Bank branch may request the convening of the meeting in the event of an occurrence affecting the safety of the credit cooperative's operations.

f) Other cases as stipulated in the Credit Cooperative Charter.

Article 35. Provisions on the Number of Members and Voting in the Members' General Meeting

1. The Members' General Meeting of a credit cooperative can be organized in the form of a Full Members' General Meeting or a Delegates' General Meeting (collectively referred to as the Members' General Meeting). Both the Full Members' General Meeting and the Delegates' General Meeting have the same duties and powers.

2. A credit cooperative with more than one hundred members may organize a Delegates' General Meeting.

3. The criteria for delegates and the procedures and formalities for electing delegates to attend the Delegates' General Meeting are stipulated in the Credit Cooperative Charter. The election of delegates to attend the Members' General Meeting must be based on the principles of democracy and equality among members. Elected delegates cannot delegate others to attend the Members' General Meeting on their behalf.

4. The number of elected delegates attending the Delegates' General Meeting is stipulated in the Credit Cooperative Charter but must ensure:

a) Not less than thirty percent of the total number of members for credit cooperatives with one hundred to three hundred members;

b) Not less than twenty percent of the total number of members for credit cooperatives with three hundred to one thousand members;

c) Not less than two hundred delegates for credit cooperatives with over one thousand members.

5. The Members' General Meeting is considered valid when at least three-quarters of the total number of members or delegates attend the meeting.

6. In the case where the number of members or delegates attending the meeting does not meet the requirements stipulated in Clause 5 of this Article, the Board of Management or the Supervisory Board (in the case of organizing an extraordinary Members' General Meeting convened by the Supervisory Board) must temporarily postpone the Members' General Meeting and reconvene within thirty days from the date of postponement of the Members' General Meeting (for annual Members' General Meetings, the temporary postponement and reconvening period shall not exceed the time limit for organizing the Members' General Meeting specified in Clause 2 of Article 34 of this Circular).

7. Decisions to amend, supplement the Charter, divide, separate, merge, consolidate, dissolve, or declare bankruptcy of a credit cooperative can only be passed at the Members' General Meeting when at least three-quarters of the total number of members or delegates present at the Members' General Meeting vote in favor.

8. Decisions on other issues can only be passed at the Members' General Meeting when more than half of the total number of members or delegates present at the Members' General Meeting vote in favor.

9. Each member or delegate attending the Members' General Meeting has one voting ballot. Each voting ballot has equal value, regardless of the amount of capital contribution or position held by the member or delegate.

Chapter 6

ACTIVITIES OF THE CREDIT COOPERATIVE

Article 36. Mobilizing Capital

1. Accepting demand deposits, term deposits, and savings deposits from members, organizations, and individuals in Vietnamese dong.

2. The total amount of deposits accepted from members of the credit union must be at least 50% of the total amount of deposits accepted by the credit union.

3. Borrowing to balance funds according to the regulations issued by the Vietnam Cooperative Bank in accordance with the provisions of the law.

4. Borrowing from other financial institutions (excluding other credit unions), other financial organizations.

5. Borrowing from the Vietnam Cooperative Bank.

6. Accepting entrusted capital for lending from the Government, organizations, and individuals within the country.

Article 37. Lending Activities

1. The lending activities of the credit union mainly aim to assist between members to effectively carry out production, business service activities, and improve the living standards of credit union members.

2. The credit union lends in Vietnamese dong, in accordance with the legal provisions on lending by financial institutions to customers and bears responsibility for its decisions. The credit union shall not lend secured by the share capital contributions of members.

3. The total amount lent by the credit union to a member that is a legal entity shall not exceed the total share capital contribution and deposit balance of that legal entity at the credit union at the time of the lending decision, and the loan term shall not exceed the remaining term of the deposit.

4. The credit union lends to customers that are organizations and individuals who are not members but have deposits at the credit union based on security provided by the deposit amount issued by the credit union itself. The total amount lent shall not exceed the deposit balance at the time of the lending decision, and the loan term shall not exceed the remaining term of the deposit.

5. The credit union lends to poor households that are not members, registered with permanent residence in the operational area of the credit union. Poor households must be included in the list of poor households approved by the People's Committee of the district. The procedures, formalities, and documentation for lending to poor households are carried out according to the current credit regime applicable to members.

6. The credit union must report to the Member Assembly any loans made to the Chairman and other members of the Management Board, the Head and other members of the Supervisory Board, and the Director of the credit union before the meeting of the Member Assembly; report to the State Bank branch when loans are made to these entities.

7. Jointly with the Vietnam Cooperative Bank, lend syndicated loans to credit union members in accordance with the provisions of the law.

Article 38. Managing Lending Activities

The credit union must issue internal regulations on lending and managing borrowed money to ensure the proper use of borrowed money, which must include at least the following contents:

1. Specific provisions on lending to individual members, household members, legal entities, and poor households that are not members, including:

a) Procedures for assessing and evaluating the need and purpose of borrowing by members (to serve production, business services, and improving living standards); the feasibility of production, business service projects and the ability to repay borrowed capital from production, business service efficiency; the need to improve living standards; responsibilities and authorities of each relevant department and individual during the assessment and approval process for lending, restructuring repayment terms;

b) Procedures for approving lending and reviewing and deciding on restructuring repayment terms (including extending debt and adjusting repayment periods);

c) Procedures for approving lending to poor households that are not members;

d) Procedures for disbursing borrowed capital in line with the progress of production, business service projects;

đ) Procedures for monitoring, managing, and supervising to ensure the proper use of borrowed money for intended purposes, while serving as the basis for implementing loan classification and risk reserve provisioning;

e) Provisions on collateral assets in accordance with the law (if any), methods for determining the value of collateral assets and the handling of collateral assets to recover the loan according to the law;

g) Interest rates for lending and lending amounts.

2. Specific provisions on securing borrowed money in accordance with this Circular and related legal provisions.

3. Specific provisions on extending debt, adjusting repayment periods, and managing credit quality for loans extended debt or adjusted repayment periods.

4. Specific provisions on joint lending in accordance with Clause 7, Article 37 of this Circular.

Article 39. Other Activities

1. Open a deposit account at the State Bank.

2. Open a settlement account at a commercial bank or a foreign bank branch.

3. Deposit funds with the Vietnam Credit Cooperative Bank to regulate capital; open a settlement account to use settlement services provided by the Vietnam Credit Cooperative Bank.

4. Provide money transfer services, perform collection and payment agency services for members.

5. Provide banking and financial advisory services for members.

6. Accept mandates and act as agents in certain areas related to banking activities and asset management according to the regulations of the State Bank.

7. Act as an insurance sales agent.

8. Participate in establishing the Vietnam Credit Cooperative Bank through capital contribution.

Section 7

RIGHTS AND OBLIGATIONS OF THE PEOPLE'S CREDIT UNION FUND

Article 40. Rights of the People's Credit Union Fund

1. Receive guidance and training in banking operations and information technology from the Vietnam Credit Cooperative Bank.

2. Receive support for banking activities from the Vietnam Credit Cooperative Bank according to the provisions of the law.

3. Receive guidance and support for internal auditing from the Vietnam Credit Cooperative Bank according to the provisions of the law.

4. Receive state funding, as well as funding from domestic and foreign organizations and individuals.

5. Require borrowers to provide documentation on their production, business, service, and living conditions related to the loan.

6. Decide on income distribution and handling of losses according to the provisions of the law and the Charter of the People's Credit Union Fund.

7. Refuse requests from organizations and individuals that violate the law.

8. Lodge complaints and initiate lawsuits against organizations and individuals who infringe upon the legitimate rights and interests of the People's Credit Union Fund.

9. Perform other rights as prescribed by law.

Article 41. Obligations of the People's Credit Union Fund

1. Conduct business operations according to the License issued. Adhere to state regulations concerning currency, credit, and banking services.

2. Comply with legal provisions regarding accounting, statistics, and auditing.

3. Bear financial obligations within the scope of the charter capital and other sources of capital of the People's Credit Union Fund according to the provisions of the law.

4. Pay taxes and fulfill other financial obligations according to the provisions of the law.

5. Contribute capital to establish membership status and annual contributions at the Vietnam Credit Cooperative Bank.

6. Deposit idle funds into a regulatory deposit account at the Vietnam Credit Cooperative Bank according to legal provisions.

7. Participate in the System Safety Guarantee Fund for Credit Union Funds according to the regulations of the State Bank.

8. Provide reports to the Vietnam Credit Cooperative Bank for purposes of capital regulation, system safety monitoring, and management of the System Safety Guarantee Fund for Credit Union Funds according to the Capital Regulation Rules and the Management and Use Rules of the System Safety Guarantee Fund for Credit Union Funds issued by the Vietnam Credit Cooperative Bank in accordance with the law.

9. Implement preferential policies and material and spiritual care for members to foster unity and enhance inter-member collaboration.

10. Participate in deposit insurance according to the law and publicly disclose participation in deposit insurance at its main office.

11. To fulfill other obligations as prescribed by law.

Chapter III

FINANCE, ACCOUNTING RECORDS, REPORTS, AND VIOLATION HANDLING

Article 42. Financial System and Accounting Records

The People's Credit Union shall implement the financial system and accounting records in accordance with the provisions of the law.

Article 43. Reporting

1. The People's Credit Union shall implement the reporting system on accounting and statistics in accordance with the provisions of the law and report its business activities regularly as prescribed by the State Bank.

2. In addition to the reports required under Clause 1 of this Article, the People's Credit Union shall promptly submit written reports to the State Bank branch as prescribed in Clause 2 of Article 141 of the Law on Credit Organizations.

Article 44. Handling Violations

The People's Credit Union, organizations, and individuals related to the establishment, organization, and operation of the People's Credit Union who violate the provisions of this Circular shall be subject to handling according to the provisions of the law depending on the form and nature of the violation.

Chapter IV

TRANSITIONAL PROVISIONS

Article 45. General Provisions

1. For loan contracts signed before this Circular takes effect and comply with the legal regulations at the time of signing, the People's Credit Union and customers may continue to implement the agreements already signed until the end of the loan contract term or amend and supplement them in accordance with the provisions of this Circular.

2. From the date this Circular takes effect, the election, appointment, or supplementation and replacement of members of the Management Board, members of the Supervisory Board, and the Director of the People's Credit Union must be carried out in accordance with the provisions of Articles 17, 20, 21, 23, 24, and 25 of this Circular.

3. The transition for People's Credit Unions that do not meet the provisions regarding the operating area; the maximum capital contribution ratio of one member; members registering their permanent residence outside the operating area; and the total amount of deposits received from members shall be implemented in accordance with the provisions of Articles 47, 48, 49, and 50 of this Circular.

Article 46. Responsibilities of People's Credit Funds

1. At the time this Circular takes effect, if the People's Credit Union does not meet the provisions regarding the operating area, the capital contribution ratio of one member, members registering their permanent residence outside the operating area, and the total amount of deposits received from members as stipulated in this Circular, it must develop solutions and proactively organize measures to comply with the regulations.

2. Within a maximum period of 60 days from the date this Circular takes effect, the People's Credit Union must directly send or send by post the solution plan as prescribed in Clause 2 and Clause 4 of Article 47, Articles 48, 49, and 50 of this Circular to the State Bank branch in the province or centrally-administered city without a Banking Inspection and Supervision Department or send it to the Banking Inspection and Supervision Department in the province or centrally-administered city where the People's Credit Union has its main office. Within a maximum period of 60 days after the maximum deadline specified in Clause 2 of Article 47, the People's Credit Union must directly send or send by post the solution plan as prescribed in Clause 3 of Article 47 of this Circular to the State Bank branch in the province or centrally-administered city without a Banking Inspection and Supervision Department or send it to the Banking Inspection and Supervision Department in the province or centrally-administered city where the People's Credit Union has its main office.

Within a maximum period of 20 days from the date of receiving the solution plan from the People's Credit Union, the State Bank branch in the province or centrally-administered city without a Banking Inspection and Supervision Department or the Banking Inspection and Supervision Department in the province or centrally-administered city where the People's Credit Union has its main office must issue a written request for the People's Credit Union to modify and supplement the solution plan if it does not meet the requirements.

If the State Bank branch or the Banking Inspection and Supervision Department requests modification and supplementation of the solution plan, within a maximum period of 30 days from the date the State Bank branch or the Banking Inspection and Supervision Department issues a written request for modification and supplementation, the People's Credit Union must complete and directly send or send by post the modified and supplemented solution plan to the State Bank branch or the Banking Inspection and Supervision Department.

Within a maximum period of 20 days from the date of receiving the solution plan (including cases of modification and supplementation), the State Bank branch or the Banking Inspection and Supervision Department must issue a written approval of the solution plan of the People's Credit Union.

3. The People's Credit Union is responsible for supplementing the measures and implementation schedules mentioned in Clause 2 of this Article into the restructuring plan, organization, and operation of the People's Credit Union to implement synchronously according to the requirements of the State Bank branch or the Banking Inspection and Supervision Department.

4. Quarterly, no later than the 15th day of the following month, the People's Credit Union must submit a written report on the progress of implementing the approved solution plan to the State Bank branch or the Banking Inspection and Supervision Department directly or by post.

Article 47. Transitional Provisions for Operating Areas

1. At the time this Circular takes effect, the People's Credit Union currently operating in adjacent communes to the commune where its main office is located within the scope of a province or centrally-administered city approved by the State Bank branch may continue to operate in that area. Within 30 days from the date this Circular takes effect, the People's Credit Union must report to the State Bank branch in the province or centrally-administered city without a Banking Inspection and Supervision Department or the Banking Inspection and Supervision Department in the province or centrally-administered city where the People's Credit Union has its main office about meeting each condition for operating across communes as prescribed in Clause 3 of Article 8 of this Circular.

2. At the time this Circular takes effect, if the People's Credit Union operates in adjacent communes to the commune where its main office is located within the scope of a province but does not meet the conditions for operating across communes as prescribed in Clause 3 of Article 8 of this Circular, it must develop a solution plan, which must include at least the following contents:

a) The current status of the inter-village operating area;

b) The degree of compliance with each condition for operating across communes as prescribed in Clause 3 of Article 8 of this Circular;

c) A plan, measures for handling, and commitment to ensure implementation within a maximum period of 24 months from the date this Circular takes effect, meeting the conditions for operating across communes as stipulated in Clause 3, Article 8 of this Circular.

3. After the maximum handling period prescribed in Clause 2 of this Article, if the people's credit cooperative still fails to meet the conditions for operating across communes, it must develop a handling plan, which shall include at least the following contents:

a) The current status of the inter-village operating area;

b) The degree of compliance with each condition for operating across communes as prescribed in Clause 3 of Article 8 of this Circular;

c) A plan, measures for handling, including restructuring through division or separation as prescribed by law, and a commitment to ensure that within a maximum period of 12 months from the end date of the handling plan prescribed in Clause 2 of this Article, the people's credit cooperative will cease operations in adjacent communes and adjust its activities to the commune where its main office is located.

4. At the time this Circular takes effect, if the people's credit cooperative has an operational area in communes not adjacent to the commune where its main office is located, it must develop a handling plan, which shall include at least the following contents:

a) The current situation regarding inter-village operation areas of the people's credit cooperative;

b) The degree of compliance with each condition for operating across communes as stipulated in Clause 3, Article 8 of this Circular;

c) A plan, measures for handling, including restructuring through division or separation as prescribed by law, and a commitment to ensure that within a maximum period of 36 months from the date this Circular takes effect, there will be no operational areas in non-adjacent communes.

Article 48. Transitional provisions for members registered with permanent residence outside the operational area

At the time this Circular takes effect, if the people's credit cooperative has individual members who are not residents in the operational area of the people's credit cooperative as prescribed in Point a, Clause 1, Article 31 of this Circular, it must develop a handling plan, which shall include at least the following contents:

1. The number of members who are not residents in the operational area of the people's credit cooperative.

2. The total amount of capital contributions and the amount of capital contribution of each member who is not a resident in the operational area of the people's credit cooperative.

3. A plan, measures for handling (including transfer, termination of membership status) and a commitment to ensure that within a maximum period of 12 months from the date this Circular takes effect, there will be no members who are not residents in the operational area of the people's credit cooperative.

Article 49. Transitional provisions for the maximum percentage of capital contribution

At the time this Circular takes effect, if the people's credit cooperative has members whose capital contribution exceeds the limit prescribed in Clause 2, Article 28 of this Circular, it must develop a handling plan, which shall include at least the following contents:

1. A list of members whose total capital contribution exceeds the limit, the amount contributed, and the percentage of capital contribution of each member.

2. A plan, measures for handling and a commitment to ensure that within a maximum period of 12 months from the date this Circular takes effect, it complies with the regulations.

Article 50. Transitional provisions on receiving deposits from members

At the time this Circular takes effect, if the people's credit cooperative receives deposits from members lower than the level prescribed in Clause 2, Article 36 of this Circular, it must develop a handling plan, which shall include at least the following contents:

1. The total deposit balance of the people's credit cooperative at the reporting date, specifying: the total deposit balance from members of the people's credit cooperative; the ratio of the deposit balance from members of the people's credit cooperative to the total deposit balance of the people's credit cooperative.

2. A plan, timeline for handling and a commitment to ensure that within a maximum period of 12 months from the date this Circular takes effect, it complies with the regulations.

Article 51. Post-transition Disposition

The State Bank branch, the Inspection and Supervision Department shall apply necessary measures against the people's credit cooperative, including restructuring according to the law, revocation of the License, depending on the form and nature of the violation in the following cases:

1. If the people's credit cooperative does not submit a handling plan after the maximum period prescribed in Clause 2, Article 46; does not report on compliance with each condition for operating across communes as stipulated in Clause 1, Article 47 of this Circular; or does not resubmit the handling plan required to be revised or supplemented according to the request of the State Bank branch, the Inspection and Supervision Department after the maximum period prescribed in Clause 2, Article 46 of this Circular.

2. After the maximum period specified in the handling plan under Clause 3, 4 of Article 47, Article 48, Article 49, and Article 50 of this Circular or after the maximum period requested by the State Bank branch, the Inspection and Supervision Department, if the people's credit cooperative fails to implement the handling plan.

Chapter V

IMPLEMENTING PROVISIONS

Article 52. Responsibilities of Relevant Units

1. The Banking Inspection and Supervision Authority:

a) The entity responsible for receiving reports from the State Bank branch as prescribed in Points b, d, Clause 2 of this Article and as prescribed by law;

b) Inspecting, supervising, and handling violations by the people's credit cooperative in the province, city where the Inspection and Supervision Department is located in implementing this Circular and related laws;

c) Directing, guiding, supervising, and inspecting the people's credit cooperative with its main office located in the province, city where the Inspection and Supervision Department is located in implementing transitional provisions and post-transitional handling as stipulated in Articles 46, 47, and 51 of this Circular;

d) Take the lead in coordinating with Departments and Bureaus under the State Bank to submit matters related to the establishment, organization, and operation of people's credit funds to the Governor of the State Bank for consideration;

2. State Bank Branches at provincial and centrally governed municipal levels:

a) Managing, inspecting, supervising, and handling violations by the people's credit cooperative in the province, city where there is no Inspection and Supervision Department in implementing this Circular and related laws;

b) Reviewing, issuing Licenses, approving lists of individuals proposed to be elected or appointed as Chairperson and other members of the Board of Directors, Head and other members of the Supervisory Board, Director of the people's credit cooperative; confirming registration of the Charter of the people's credit cooperative as prescribed in this Circular; Within a maximum period of 15 days from the date of issuance of the License, report to the Governor of the State Bank (through the Inspection and Supervision Department) the results of issuing the License for the people's credit cooperative.

c) Drafts documents to seek opinions:

(i) People's Committee of Commune regarding the establishment of the people's credit cooperative on its territory, the list of personnel proposed for election and appointment as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, Director of the people's credit cooperative;

(ii) Vietnam Rural Bank with respect to the list of personnel proposed for election and appointment as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, Director of the people's credit cooperative (if deemed necessary);

(iii) The Banking Inspection and Supervision Department as stipulated at point c (iii) Clause 1 Article 12 of this Circular.

d) Direct, guide, supervise, and inspect the people's credit cooperative in implementing the provisions on transition and post-transition handling set forth in Articles 46, 47, and Article 51 of this Circular. Quarterly, within the first fifteen days of the first month of each quarter, submit a report in writing to the State Bank (Banking Inspection and Supervision Authority) on the implementation of the transition provisions by the people's credit cooperative on its territory.

2. Vietnam Rural Bank:

a) Uniformly guide the design and printing of Member Cards in the system of people's credit funds according to Clause 5, Article 28 of this Circular;

b) Provide written comments on the list of personnel proposed for election and appointment as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, Director of the people's credit cooperative when requested by the State Bank branch or the people's credit cooperative.

Article 53. Effective Date

1. This Circular takes effect from June 1, 2015.

2. The provisions on the issuance of Licenses, organization, and operation of grassroots people's credit cooperatives in the following documents shall cease to be effective:

a) Circular No. 08/2005/TT-NHNN dated December 30, 2005 of the State Bank guiding the implementation of certain provisions of Decree No. 48/2001/NĐ-CP dated August 13, 2001 on the organization and operation of people's credit cooperatives and Decree No. 69/2005/NĐ-CP dated May 26, 2005 of the Government amending and supplementing certain provisions of Decree No. 48/2001/NĐ-CP dated August 13, 2001 on the organization and operation of people's credit cooperatives;

b) Circular No. 06/2007/TT-NHNN dated November 6, 2007 of the State Bank amending and supplementing Circular No. 08/2005/TT-NHNN dated December 30, 2005 of the State Bank guiding the implementation of certain provisions of Decree No. 48/2001/NĐ-CP dated August 13, 2001 on the organization and operation of people's credit cooperatives and Decree No. 69/2005/NĐ-CP dated May 26, 2005 of the Government amending and supplementing certain provisions of Decree No. 48/2001/NĐ-CP dated August 13, 2001 on the organization and operation of people's credit cooperatives;

c) Articles 4, 5, 6, 7, 8, 9, 10, and 11 of Decision No. 24/2006/QĐ-NHNN dated June 6, 2006 of the State Bank promulgating regulations on the issuance and revocation of licenses for the establishment and operation of people's credit cooperatives; opening, closing operations of trading offices, branches, representative offices, and transaction rooms of people's credit cooperatives; splitting, separating, merging, and consolidating people's credit cooperatives; liquidation of people's credit cooperatives under the supervision of the State Bank;

d) Clause 4 Article 1 of Decision No. 26/2008/QĐ-NHNN dated September 9, 2008 of the Governor of the State Bank amending and supplementing certain provisions of the Regulations on the issuance and revocation of licenses for the establishment and operation of people's credit cooperatives; opening, closing operations of trading offices, branches, representative offices, and transaction rooms of people's credit cooperatives; splitting, separating, merging, and consolidating people's credit cooperatives; liquidation of people's credit cooperatives under the supervision of the State Bank issued together with Decision No. 24/2006/QĐ-NHNN dated June 6, 2006 of the Governor of the State Bank;

đ) Decision No. 31/2006/QĐ-NHNN dated July 18, 2006 of the State Bank promulgating regulations on the standards for members of the Board of Directors, members of the Supervisory Board, and managers of people's credit cooperatives;

e) Decision No. 45/2006/QĐ-NHNN dated September 11, 2006 of the State Bank promulgating regulations on the organization and operation of the Board of Directors, the Supervisory Board, and the management staff of people's credit cooperatives.

Article 54. Implementation Organization

The Chief of the Office, the Chief Inspector and Supervisor of Banks, Heads of units under the State Bank, Governors of State Bank Branches, Chairmen of the Board of Directors, General Directors of Vietnam Rural Bank, Chairmen of the Board of Directors, Directors of people's credit cooperatives are responsible for organizing the implementation of this Circular./.