Circular No. 17/2004/TT-BTC amending and supplementing Circular No. 97/2000/TT-BTC dated October 12, 2000 guiding the financial regime for grassroots People's Credit Funds.

CIRCULAR

Amending and supplementing Circular No. 97/2000/TT-BTC dated October 12, 2000 guiding the financial regime for grassroots Credit Cooperatives

Pursuant to Decree No. 166/1999/NĐ-CP dated November 19, 1999 of the Government on financial regulations for credit organizations;

Pursuant to Decree No. 48/2001/NĐ-CP dated August 13, 2001 of the Government on the organization and operation of Credit Cooperatives.

To ensure appropriate guidance on the implementation of the financial regime suitable with the specific nature, trends, and scale of development of grassroots Credit Cooperatives, the Ministry of Finance guides the amendment and supplementation of Circular No. 97/2000/TT-BTC dated October 12, 2000 guiding the implementation of the financial regime for grassroots Credit Cooperatives as follows:

1. Section 1 Chapter I shall be amended as follows: "The subjects to which this Circular applies are grassroots Credit Cooperatives established, organized, and operated in accordance with the Law on Credit Organizations, the Law on Cooperatives, and related legal documents."

2. Section 1 Part II Chapter II shall be amended as follows:

"1. Revenue management:

1.1. The revenue of grassroots Credit Cooperatives includes the following items:

a) Revenue from business operations: Interest income from loans to customers; interest income from deposits; service charges for payment transactions; fees for treasury services; other services related to banking activities.

b) Revenue from other activities: Interest income from capital contributions, purchasing shares, and entrusted business of organizations and individuals both domestically and internationally; income from pawn services (if applicable); income from other services.

c) Reimbursement of provisions already deducted from expenses according to current regulations; income from funds that have been processed using risk reserves.

d) Other revenues, including income from the sale and liquidation of assets.

1.2. Principles for determining revenue:

a) Revenue from lending activities and deposit interest income is the amount receivable during the period determined based on the following principle:

Grassroots Credit Cooperatives record interest receivable on loans within their terms as revenue. For overdue interest receivable, it is not recorded as revenue but monitored off-balance sheet until collected, at which point it is recorded as revenue from business operations.

If the interest receivable on loans within their terms has been recorded as revenue but the customer fails to pay on time, after 90 days without payment or before 90 days if the loan becomes overdue, the Credit Cooperative records a reduction in revenue and monitors it off-balance sheet until collected, at which point it is recorded as revenue from business operations.

b) For revenue from joint venture investments, share purchases, and entrusted business, the revenue generated is the amount received in the year.

c) For revenue from other activities: Revenue is the total money from sales and service provision, including subsidies, surcharges, and premiums that the Credit Cooperative receives after deducting price reductions, returned goods (if valid receipts are provided and accepted by the customer for payment), regardless of whether the payment has been received.

1.3. Grassroots Credit Cooperatives may grant interest rate reductions or exemptions to customers in accordance with the Law on Credit Organizations and guidelines from the State Bank.

1.4. Revenue generated by grassroots Credit Cooperatives during the period must be supported by valid invoices and receipts and fully recorded as revenue.

3. Section 2 Part II Chapter II shall be amended as follows:

Expenses of grassroots Credit Cooperatives include:

2.1. Expenses for business operations:

Interest expense on deposits and loans.

Interest expense on entrusted capital from organizations and individuals both domestically and internationally.

Other expenses for business operations.

2.2. Expenses for staff working at grassroots Credit Cooperatives:

Salaries and allowances with salary characteristics for staff working at Credit Cooperatives.

Annually, the Management Board of the Credit Cooperative bases its decision on the Resolution of the Member Assembly to determine salaries, allowances, and remuneration for staff in line with the cooperative's business results.

Salaries and allowances for staff of Credit Cooperatives are based on labor contracts or collective labor agreements.

Annually, the Credit Cooperative must register with the tax authority (where corporate income tax is registered) regarding the total salary budget for the year and the basis and method of salary payment.

Social insurance, health insurance, and trade union fees for staff directly employed by Credit Cooperatives, as required by current state regulations.

Expense for setting up a reserve fund for unemployment benefits as prescribed by current laws.

Expense for occupational safety equipment for those who need it while working.

Meal expenses between shifts for employees, as stipulated by the Credit Cooperative, consistent with business efficiency, with each person's expense not exceeding the minimum wage set by the state for civil servants.

2.3. Expenses related to assets.

Depreciation expenses for fixed assets used in business operations and repair costs for fixed assets are carried out according to the current regulations on the management, use, and depreciation of fixed assets prescribed by the Ministry of Finance for enterprises.

Rental expenses for assets are recorded as operating expenses based on the amount payable in the year according to the lease agreement. In cases where rental payments are made in advance for multiple years, the rental expense is allocated gradually over the years of asset usage.

Insurance expenses for assets.

Expenses for the sale and liquidation of fixed assets (including the residual value of fixed assets when sold or liquidated).

2.4. Expenses for external services:

These include transportation costs, electricity, water, telephone, materials, printing paper, office supplies, tools, fire protection services, and other services.

All such expenses must be supported by valid invoices or receipts as prescribed by the Ministry of Finance.

2.5. Expenses to ensure the safety of operations for grassroots Credit Cooperatives:

a) Expenses for setting up provisions in the operations of the grassroots Credit Cooperative Fund according to point 5, Section I, Chapter II of Circular No. 97/2000/TT-BTC dated October 12, 2000 of the Ministry of Finance.

b) Expenses for participating in Deposit Insurance or organizing system safety according to the provisions of the law.

c) Fees for joining domestic industry associations according to the provisions of the law.

2.6 Other expenses:

Training costs for staff working in the grassroots Credit Cooperative Fund including costs for organizing training classes at the grassroots Credit Cooperative Fund and costs for sending staff to training institutions under the State regulations.

Costs for Party and mass organizations at the grassroots Credit Cooperative Fund shall be taken from the organization's budget; if the organization's budget is insufficient, the shortfall shall be recorded as expenses of the Fund.

Costs related to treasury operations.

Security costs for the office.

Costs for recovering overdue debts that are difficult to collect.

The grassroots Credit Cooperative Fund may allocate expenses to legal entities that have contributed to the recovery of overdue debts that are difficult to collect based on their efforts and the results of debt recovery achieved through their contributions.

The grassroots Credit Cooperative Fund shall establish rules for allocating expenses for the recovery of overdue debts that are difficult to collect, submit them for approval by the Board of Directors, and publicly announce these rules. The Director of the grassroots Credit Cooperative Fund shall be responsible for these expenses.

The maximum allocation for legal entities contributing to the recovery of overdue debts that are difficult to collect in a year by the grassroots Credit Cooperative Fund shall not exceed 2% of the recovered debt amount. The maximum expense for recovering a single debt shall not exceed 10 million VND.

Costs for losses on remaining assets after compensation from sources as stipulated in point 6, Section I, Chapter II of Circular No. 97/2000/TT-BTC dated October 12, 2000 of the Ministry of Finance.

2.7 Advertising, marketing, promotional, reception, ceremonial, transaction, external affairs, commission brokerage, conference, and other expenses according to actual expenditures and must be supported by invoices or receipts as prescribed by the Ministry of Finance, linked to business results. The maximum expenditure shall not exceed 10% of the total reasonable expenses from items 2.1 to 2.6 of this section.

2.8 Taxes, fees, land rental payments related to business activities (excluding corporate income tax), including: business license tax, land use tax or land rental payment, natural resource tax, bridge tolls, airport fees, and other taxes and fees.

4. Delete the provision "setting aside a reserve fund for unemployment benefits for 5% of the number of employees working at the Fund, with the balance of this reserve fund not exceeding six months' salary actually paid in the year of the grassroots Credit Cooperative Fund" in Article 2, Part III, Chapter II.

5. Replace the term "Credit Cooperative Fund" in Circular No. 97/2000/TT-BTC dated October 12, 2000 with "grassroots Credit Cooperative Fund".

6. This Circular takes effect fifteen days after its publication in the Official Gazette. Provisions guiding in Circular No. 97/2000/TT-BTC dated October 12, 2000 that are not contrary to the provisions of this Circular remain in force./.