Circular No. 09/2016/TT-NHNN amending and supplementing certain provisions of Circular No. 31/2012/TT-NHNN dated November 26, 2012 of the Governor of the State Bank of Vietnam on cooperative banks

CIRCULAR

Amending and supplementing certain articles of Circular No. 31/2012/TT-NHNN

dated November 26, 2012 of the Governor of the State Bank of Vietnam on credit cooperatives

The Governor of the State Bank of Vietnam issues this Circular to amend and supplement certain articles of Circular No. 31/2012/TT-NHNN dated November 26, 2012 of the Governor of the State Bank of Vietnam on credit cooperatives.

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 Enterprise Law No. 68/2014/QH13 dated November 26, 2014;

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;

Amending and supplementing certain articles of Circular No. 31/2012/TT-NHNN dated November 26, 2012 of the Governor of the State Bank of Vietnam on credit cooperatives:

Article 1. 1. Article 41 is amended and supplemented as follows:

"Article 41. Activities related to member savings and credit cooperatives

1. Accepting deposits for capital adjustment and providing loans for capital adjustment to member savings and credit cooperatives in accordance with the Capital Adjustment Regulation.

The construction and content of the Capital Adjustment Regulation must ensure the following principles:

a) Member savings and credit cooperatives deposit funds (without notice, with notice) at credit cooperatives for capital adjustment. In case of early withdrawal, the savings and credit cooperative must notify the credit cooperative in advance;

b) Credit cooperatives provide loans for capital adjustment to member savings and credit cooperatives when there is a need for capital to expand credit;

c) The interest rate mechanism for deposits must be supportive and the interest rate for capital adjustment loans must be clear, transparent, not aimed at profit, and must reflect the linkage between credit cooperatives and member savings and credit cooperatives;

d) Specific provisions regarding the objects, limits, procedures, documents related to accepting deposits for capital adjustment and providing loans for capital adjustment;

đ) The Capital Adjustment Regulation is developed by the credit cooperative, solicits opinions from all member savings and credit cooperatives, and is approved at the Members' Assembly of the credit cooperative. After promulgation, the credit cooperative organizes training and dissemination to member savings and credit cooperatives and submits the Capital Adjustment Regulation to the State Bank (Bank Inspection and Supervision Department) for inspection and supervision purposes. Any amendments or supplements to the Capital Adjustment Regulation must be approved by the Members' Assembly of the credit cooperative.

2. Providing loans to member savings and credit cooperatives to address temporary liquidity difficulties.

3. Opening settlement accounts and providing payment means for member savings and credit cooperatives.

4. Developing and applying new products and services in the activities of member savings and credit cooperatives to meet the needs of members of savings and credit cooperatives and serve the development of community benefits in the area.

5. Implementing other banking activities in accordance with the laws applicable to member savings and credit cooperatives."

2. Article 44 is amended and supplemented as follows:

"Article 44. Rights and responsibilities

1. Accessing the information system of the State Bank to collect information related to the activities of savings and credit cooperatives.

2. Requesting savings and credit cooperatives to provide reports for the purpose of capital adjustment and system safety monitoring.

3. Inspecting and supervising the use of borrowed capital and the ability to repay loans of member savings and credit cooperatives at credit cooperatives."

3. Article 45 is amended and supplemented as follows:

3. Article 45 is amended and supplemented as follows:

“Article 45. Responsibilities

1. Guide and train banking and information technology skills for member credit unions.

2. Support banking activities for member credit unions in accordance with the provisions of the law.

3. Participate in handling situations where member credit unions encounter difficulties or show signs of operational instability.

4. Issue the Capital Regulation Charter as stipulated in Clause 1, Article 41 of this Circular after it has been approved by the Shareholders' Meeting of the Cooperative Bank.

5. Support credit unions in conducting internal audits when requested by credit unions.

6. Provide written comments on the list of personnel proposed for election or appointment as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, and Director of member credit unions upon request from the State Bank's branch in the province or centrally-administered city.

7. Fulfill other responsibilities as prescribed by the Charter and the law.”

4. Clause 3 of Article 46 shall be amended and supplemented as follows:

“3. Take the lead and coordinate with relevant units to carry out inspection and supervision of cooperative bank operations; receive and require cooperative banks to amend and supplement the Capital Regulation Charter as stipulated in Clause 1, Article 41 of this Circular to comply with legal regulations if deemed necessary.”

Article 2. Effective Date

1. This Circular takes effect from August 15, 2016.

2. The Chief of the Office, the Chief Inspector and Supervisor of Banking, Heads of units under the State Bank, Directors of State Bank branches in provinces and centrally-administered cities, Chairmen of the Shareholders' Meetings, and General Managers of cooperative banks are responsible for organizing the implementation of this Circular.