Directive No. 10/CT-NH17 on the work of supervision, inspection, and oversight for the system of people's credit funds and credit cooperatives.

DIRECTIVE

OF THE STATE BANK OF VIETNAM

Regarding the supervision, inspection, and monitoring work for the system of people's credit funds and credit cooperatives

Implementation of Decision No. 390/TTg dated July 27, 1993 on the implementation of the pilot project to establish People's Credit Funds, up to now, over 300 People's Credit Funds (PCF) and 5 regional credit funds have been established, and the Central People's Credit Fund has commenced operations. Along with the formation and development of the PCF system, many credit cooperatives (CC) have voluntarily transferred to the PCF system, and more than 70 CCs have been granted licenses to operate by the State Bank. The initial results have confirmed that the pilot model of PCFs and the adjustment of activities of CCs according to the Banking Ordinance, CC Ordinance, and Financial Company Law are correct.

However, to help PCFs and CCs develop in the right direction, it is necessary to strengthen the supervisory work of the supervisory board at each PCF, and the regular inspection and monitoring work of the State Bank.

The Governor of the State Bank instructs the branches of the State Bank, the Board of Directors (BOD) of PCFs and CCs to implement the following points well:

1. The supervisory board at each PCF and CC must regularly supervise all activities according to the charter, self-discover and propose solutions to immediately rectify any errors (if any) in management, governance, and compliance with state policies and regulations.

2. The branch of the State Bank needs to organize training sessions on supervisory business for those working in supervisory roles at PCFs and CCs. At the same time, dispatch competent bank staff to PCFs and CCs to assist and guide the content and methods of supervision.

3. The inspection and monitoring work of the State Bank for the PCF and CC systems should not only involve checking cases when problems are discovered but also regular and continuous inspections to ensure that PCFs and CCs strictly adhere to established regulations and policies, guiding their business activities in the right direction and achieving effectiveness. It is necessary to recognize and act correctly, attaching importance to self-supervision while also strengthening the State Bank's inspection and monitoring work on the activities of PCFs and CCs.

4. The Department of Management of People's Credit Organizations is responsible for coordinating with the State Bank Inspectorate to organize, guide, and direct the implementation of inspection and monitoring work for the PCF and CC systems. The Branch Director of the State Bank is directly responsible for managing, inspecting, and monitoring PCFs and CCs within their jurisdiction. This work must be closely linked to the issuance of operating licenses for these organizations. Inspection and monitoring must be carried out as soon as these organizations are established, and each PCF and CC should be inspected once or twice annually.

5. Inspection and monitoring work for PCFs and CCs must delve into specific matters, comparing them with the charter, regulations, and policies to identify errors and provide guidance on corrective measures.

6. The Planning Department and related Departments and Bureaus need to guide the systems and policies for State Bank staff working in the agricultural and rural areas sector to motivate this workforce during their service at local bases.

The above are some contents regarding the guidance and implementation of self-supervision work by the supervisory boards of PCFs and CCs and the inspection and monitoring work of the State Bank for the PCF and CC systems. The Head of the Department of Management of People's Credit Organizations will provide detailed guidance on the content of inspection and monitoring work for the activities of PCFs and CCs. The Heads of related Departments and Bureaus will guide implementation according to their functions and responsibilities. Directors of State Bank branches in provinces and cities, and Chairmen of the BODs of PCFs and CCs shall strictly implement this directive.

Dao Duy Tung