Circular No. 21/2019/TT-NHNN Amending and supplementing certain articles of Circulars regulating cooperative credit banks, people's credit funds, and the system safety guarantee fund.

CIRCULAR

Amending and supplementing certain articles of Circulars governing cooperative banks, credit unions, and system safety guarantee funds for credit unions

||| Credit union

 

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Law on Cooperatives dated November 20, 2012;

Decree No.||| 16/2017/ND-CPdated February 17, 2017 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 a Circular amending and supplementing certain articles of Circulars governing cooperative banks, credit unions, and system safety guarantee funds for credit unions.

Article 1. 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 cooperative banks

1. Clause 1 of Article 34 is amended and supplemented as follows:

"1. For credit unions and other credit organizations: Not subject to special control measures under Clause 1 of Article 145 of the Law on Credit Institutions (as amended and supplemented) at the time of application to join as members."

2. Article 44 is amended and supplemented as follows:

“Article 44. Powers

1. To provide information related to the operations of credit unions to the State Bank of Vietnam.

2. To request credit unions to provide information and reports for the purpose of capital flow adjustment and system safety monitoring.

3. To inspect and supervise member credit unions in their use of loans and loan repayment capacity from cooperative banks.

4. To inspect and supervise the activities of member credit unions according to the requirements of the State Bank of Vietnam regarding the objects, contents, scope, and deadlines for inspection and supervision."

3. Article 46 is amended and supplemented as follows:

“Article 46. Responsibilities of the Banking Inspection and Supervision Authority

1. To be responsible for resolving difficulties during the implementation of this Circular.

2. To coordinate with relevant units of the State Bank of Vietnam to review applications for Cooperative Bank licenses, and to make recommendations to the Governor of the State Bank of Vietnam for decisions on issuing Cooperative Bank licenses.

3. To take the lead and coordinate with relevant units to conduct inspections and supervision of cooperative bank operations; to receive and approve the Capital Flow Adjustment Regulations as stipulated in Clause 1 of Article 41 of this Circular, and to require cooperative banks to amend and supplement them if necessary.

4. To coordinate with the State Bank of Vietnam branches to request cooperative banks to inspect and supervise member credit unions according to Clause 4 of Article 44 of this Circular.

5. To provide information and data to competent agencies and units about the operations and compliance with relevant laws of cooperative banks."

4. Article 47 is amended and supplemented as follows:

“Article 47. Responsibilities of Units under the State Bank of Vietnam

1. Units under the State Bank of Vietnam:

a) To monitor and coordinate with the Banking Inspection and Supervision Authority to manage the operations of cooperative banks within their functions and powers;

b) To coordinate with the Banking Inspection and Supervision Authority in reviewing applications for Cooperative Bank licenses.

2. State Bank of Vietnam branches shall coordinate with the Banking Inspection and Supervision Authority in requesting cooperative banks to comply with the provisions of Clause 4 of Article 44 of this Circular.”

Article 2. Amending and supplementing some articles of Circular No. 04/2015/TT-NHNN dated March 31, 2015 of the Governor of the State Bank of Vietnam on people's credit funds

1. Supplement Clause 1a to Article 2 as follows:

“1a. The Vietnam Cooperative Bank.”

2. Clause 7 of Article 3 shall be amended and supplemented as follows:

“7. Additional capital contribution is additional capital contribution of members (outside the capital contribution establishing member status) for the people's credit fund to carry out business activities.”

3. Article 8 shall be amended and supplemented as follows:

“Article 8. Operating territory and scale

1. The operating territory of the people's credit fund is one commune, one ward, or one town (hereinafter referred to collectively as one commune).

2. The people's credit fund must ensure that the total amount of deposits received does not exceed twenty times the equity capital.”

4. Clause 1 of Article 12 shall be amended and supplemented as follows:

“1. Approving in principle the establishment:

a) The preparatory board prepares the application file according to the provisions of 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 by post or submits it directly at 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 shall send a letter to the preparatory board confirming receipt of a complete and valid file or requesting supplementation and completion of the file;

c) Within ten working days from the date of receiving a 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 establish its main office regarding the establishment of the people's credit fund in the area; 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, Director of the people's credit fund;

(ii) Sends a letter to the Vietnam Cooperative Bank regarding the 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, Director of the people's credit fund (if deemed necessary);

d) Within ten working days from the date of receiving the request letter from the State Bank branch, the People's Committee of the commune where the people's credit fund is expected to establish its main office, the Vietnam Cooperative Bank shall send a letter participating in opinions on the contents requested. If no written opinion is received from the units within the specified period, the State Bank branch shall determine that the units solicited have no objections;

đ) Within thirty days from the date of receiving the opinion of the People's Committee of the commune, the Vietnam Cooperative Bank or from the date of expiration of the period for soliciting opinions without receiving a participation opinion, the State Bank branch shall send a letter to the preparatory board approving in principle the establishment of the people's credit fund and approving the 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, Director of the people's credit fund. In case of non-approval, the State Bank branch shall send a letter to the preparatory board, stating the reasons.”

5. Point b of Clause 3 of Article 12 shall be amended and supplemented as follows:

“b) Within sixty days from the date of receiving a complete and valid file as stipulated in point b of Clause 2 of this Article, the State Bank branch shall issue the License; if the License is not issued, the State Bank branch shall send a letter specifying the reasons.”

6. Point a of Clause 4 of Article 15 shall be amended and supplemented as follows:

“a) Having a Certificate of Registration of Cooperative; having sufficient registered capital deposited into a frozen account with no interest at the State Bank branch at least thirty days before the opening day of operations, the registered capital shall be unfrozen when the people's credit fund has commenced operations;”

7. Clause 2, Clause 3 of Article 17 shall be amended and supplemented as follows:

“2. The Board of Directors of the people's credit fund consists of the Chairman and other members of the Board of Directors. The Chairman and other members of the Board of Directors are directly elected, dismissed, or removed by the Member Assembly, Founding Assembly (in the case of establishment of the people's credit fund) of the people's credit fund through secret ballot voting. The number of Board of Directors members is decided by the Member Assembly, Founding Assembly but must not be less than three (3) members.

In case the number of Board of Directors members is insufficient for two-thirds of the total number of members of the term or is insufficient for the minimum number of members as prescribed in the Charter of the people's credit fund, the people's credit fund must supplement the number of Board of Directors members within sixty days from the date of insufficiency.

3. The term of the Board of Directors is decided by the Member Assembly, Founding Assembly and recorded in the Charter, at least two years and not more than five years. The Chairman of the Board of Directors holds the position for no more than two consecutive terms, the term at the time of January 1, 2020 is considered the first term. The term of the Board of Directors member is the term of the Board of Directors. The term of the Board of Directors member who is supplemented or replaced is the remaining term of the Board of Directors. The Board of Directors of the concluded term continues to operate until the new term's Board of Directors takes over the work.”

8. Clause 2 of Article 18 shall be amended and supplemented as follows:

“2. The Chairman of the Board of Directors 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) Performing other tasks and powers as prescribed in the Charter of the people's credit fund.”

9. Article 20 shall be amended and supplemented as follows:

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

1. For people's credit funds with total assets under VND 200 billion:

a) Conditions and criteria for members of the Board of Directors:

(i) Being an individual member or the representative of the capital contribution of a corporate member;

(ii) Residing in the operational area of the people's credit fund;

(iii) Having sufficient health to meet the requirements of work;

(iv) Not being in any of the cases prescribed in Articles 33 and 34 of the Law on Credit Institutions (as amended and supplemented);

(v) Not being a person who must bear responsibility according to the inspection conclusion leading to the credit institution or foreign bank branch being administratively punished at the highest fine level for violations related to licenses, governance, management, shares, share purchases, lending, purchasing corporate bonds, safety ratios as stipulated in the Law on Administrative Violations in the Field of Currency and Banking within the 24 months immediately preceding the date of election;

(vi) Having at least one year of experience as a manager or executive of a credit institution or having at least two years of experience as a manager or executive of a business operating in the financial, banking, accounting, auditing sector or having at least three years of direct work experience in the finance, banking, accounting, auditing departments;

(vii) Holding a college diploma in one of the following majors: finance, banking, accounting, auditing, business administration, law, or holding a certificate proving completion of training in the People's Credit Fund Operations Training Program issued by the State Bank of Vietnam, or holding a high school diploma in one of the aforementioned majors, or holding a bachelor's degree or higher.

b) Conditions and criteria for the Chairman of the Board of Directors:

(i) Meeting the conditions and criteria specified in points a(ii), a(iii), a(iv), a(v) of this clause;

(ii) Being an individual member of the people's credit fund;

(iii) Having at least two years of experience as a manager or executive of a credit institution or having at least three years of experience as a manager or executive of a business operating in the financial, banking, accounting, auditing sector or having at least four years of direct work experience in the finance, banking, accounting, auditing departments;

(iv) Holding a college diploma in one of the following majors: finance, banking, accounting, auditing, business administration, law, or holding a bachelor's degree or higher.

2. For people's credit funds with total assets from VND 200 billion to VND 500 billion:

a) Conditions and criteria for members of the Board of Directors:

(i) Meeting the conditions and criteria specified in points a(i), a(ii), a(iii), a(iv), a(v) of Clause 1 of this Article;

(ii) Having at least two years of experience as a manager or executive of a credit institution or having at least three years of experience as a manager or executive of a business operating in the financial, banking, accounting, auditing sector or having at least four years of direct work experience in the finance, banking, accounting, auditing departments.

(iii) Holding a college diploma in one of the following majors: finance, banking, accounting, auditing, business administration, law, or holding a bachelor's degree or higher;

b) Conditions and criteria for the Chairman of the Board of Directors:

(i) Meeting the conditions and criteria specified in points a(ii), a(iii), a(iv), a(v) of Clause 1 of this Article;

(ii) Being an individual member of the people's credit fund;

(iii) Having at least three years of experience as a manager or executive of a credit institution or having at least four years of experience as a manager or executive of a business operating in the financial, banking, accounting, auditing sector or having at least five years of direct work experience in the finance, banking, accounting, auditing departments;

(iv) Holding a bachelor's degree or higher.

3. For people's credit funds with total assets of VND 500 billion or more:

a) Conditions and criteria for members of the Board of Directors:

(i) Meeting the conditions and criteria specified in points a(i), a(ii), a(iii), a(iv), a(v) of Clause 1 of this Article;

(ii) Having at least three years of experience as a manager or executive of a credit institution or having at least four years of experience as a manager or executive of a business operating in the financial, banking, accounting, auditing sector or having at least five years of direct work experience in the finance, banking, accounting, auditing departments;

(iii) Holding a bachelor's degree or higher;

b) Conditions and criteria for the Chairman of the Board of Directors:

(i) Meeting the conditions and criteria specified in points a(ii), a(iii), a(iv), a(v) of Clause 1 of this Article;

(ii) Being an individual member of the people's credit fund;

(iii) Having at least three years of experience as a manager or executive of a credit institution or having at least five years of experience as a manager or executive of a business operating in the financial, banking, accounting, auditing sector or having at least five years of direct work experience in the finance, banking, accounting, auditing departments;

(iv) Holding a bachelor's degree or higher.

4. In necessary cases when the people's credit fund implements restructuring, an event affecting the safety of operations occurs, or it is placed under special supervision, the State Bank of Vietnam branch shall coordinate with the People's Committee of the commune where the main office of the people's credit fund is located to designate personnel to hold the position of Chairman of the Board of Directors of the people's credit fund. The designated personnel must meet the following conditions and criteria:

a) Having good reputation and a strong sense of compliance with the law;

b) Holding a bachelor's degree or higher, or holding a high school diploma or higher for leaders at the department level or equivalent positions in the organizational structure of state agencies, political organizations, socio-political organizations;

c) Having held a managerial or executive position for at least one year in an entity in one of the fields of banking, finance, accounting, auditing according to the Charter or equivalent documents of that entity, or leaders at the department level or equivalent positions in the organizational structure of state agencies, political organizations, socio-political organizations."

10. Clause 1, Clause 4 of Article 21 are amended and supplemented as follows:

"1. The Member Assembly, Founding Member Assembly of the people's credit fund (in the case of establishing a people's credit fund) directly elects the Head and members of the Supervisory Board and must ensure the following provisions:

a) The Supervisory Board of the people's credit fund with total assets of VND 200 billion or more must have at least three members, of which at least half of the total number of members must be full-time members who do not concurrently hold other positions or jobs at credit institutions or other businesses."

b) The People's Credit Fund's Supervisory Board with total assets from over 08 billion VND to under 200 billion VND must have at least 03 members, including at least 01 full-time member who does not concurrently hold any position or work at another credit institution or enterprise;

c) For People's Credit Funds with total assets of 08 billion VND or less: The General Meeting of Members decides on electing the Supervisory Board according to the provisions of point b Clause of this Article or only elects 01 full-time supervisor;

d) In case the number of Supervisory Board members is less than two-thirds of the total number of members for the term or is below the minimum number of members as stipulated in the Charter of the People's Credit Fund, the People's Credit Fund must supplement the required number of Supervisory Board members within 60 days from the date when the number of members is insufficient.

"4. The term of office of the Supervisory Board shall be concurrent with that of the Board of Directors. The Chairman of the Supervisory Board may not serve more than 02 consecutive terms, with the term starting on January 1, 2020 being considered the first term. The term of office of supplemented or replaced members is the remaining period of the Supervisory Board's term. The Supervisory Board of the concluded term continues its operation until the new term's Supervisory Board takes over."

11. Article 23 is amended and supplemented as follows:

“ Article 23. Conditions and standards for members of the Supervisory Board and full-time supervisors

1. For people's credit funds with total assets under VND 200 billion:

a) Conditions and standards for members of the Supervisory Board or full-time supervisors as prescribed in point c Clause 1 of this Circular:

(i) Meet the conditions and standards prescribed in points a(i), a(ii), a(iii), a(iv), a(v) Clause 1 of this Circular;

(ii) A member of the Supervisory Board shall not concurrently hold the position of Chief Accountant, Cashier, or business staff of the People's Credit Fund and shall not be related to a member of the Board of Directors, Director, Deputy Director, Chief Accountant, or Cashier of the People's Credit Fund;

(iii) Have at least 01 year of direct work experience in the fields of finance, banking, accounting, or auditing;

(iv) Hold a diploma in one of the majors of finance, banking, accounting, auditing, business administration, or law and have a certificate (or certification) proving training in People's Credit Fund operations according to the People's Credit Fund Operations Training Program of the State Bank of Vietnam, or hold an associate degree in one of the majors of finance, banking, accounting, auditing, business administration, or law, or hold a bachelor's degree or higher;

b) Conditions and standards for the Chairman of the Supervisory Board:

(i) Meet the conditions and standards prescribed in points a(ii), a(iii), a(iv), a(v) Clause 1 of this Circular;

(ii) Being an individual member of the people's credit fund;

(iii) Have at least 02 years of direct work experience in the fields of finance, banking, accounting, or auditing;

(iv) Holding a college diploma in one of the following majors: finance, banking, accounting, auditing, business administration, law, or holding a bachelor's degree or higher.

2. For people's credit funds with total assets from VND 200 billion to VND 500 billion:

a) Conditions and standards for members of the Supervisory Board:

(i) Meet the conditions and standards prescribed in points a(i), a(ii), a(iii), a(iv), a(v) Clause 1 of this Circular;

(ii) A member of the Supervisory Board shall not concurrently hold the position of Chief Accountant, Cashier, or business staff of the People's Credit Fund and shall not be related to a member of the Board of Directors, Director, Deputy Director, Chief Accountant, or Cashier of the People's Credit Fund;

(iii) Have at least 02 years of direct work experience in the fields of finance, banking, accounting, or auditing;

(iv) Hold an associate degree in one of the majors of finance, banking, accounting, auditing, business administration, or law, or hold a bachelor's degree or higher;

b) Conditions and standards for the Chairman of the Supervisory Board:

(i) Meet the conditions and standards prescribed in points a(ii), a(iii), a(iv), a(v) Clause 1 of this Circular;

(ii) Being an individual member of the people's credit fund;

(iii) Have at least 03 years of direct work experience in the fields of finance, banking, accounting, or auditing;

(iv) Holding a bachelor's degree or higher.

3. For people's credit funds with total assets of VND 500 billion or more:

a) Conditions and standards for members of the Supervisory Board:

(i) Meet the conditions and standards prescribed in points a(i), a(ii), a(iii), a(iv), a(v) Clause 1 of this Circular;

(ii) A member of the Supervisory Board shall not concurrently hold the position of Chief Accountant, Cashier, or business staff of the People's Credit Fund and shall not be related to a member of the Board of Directors, Director, Deputy Director, Chief Accountant, or Cashier of the People's Credit Fund;

(iii) Have at least 03 years of direct work experience in the fields of finance, banking, accounting, or auditing;

(iv) Hold a bachelor's degree or higher;

b) Conditions and standards for the Chairman of the Supervisory Board:

(i) Meet the conditions and standards for members of the Supervisory Board prescribed in point a Clause of this Article except for point a(i) Clause 1 of this Circular;

(ii) Be an individual member of the People's Credit Fund."

12. Article 24 is amended and supplemented as follows:

“Article 24. Director

1. For people's credit funds with total assets under VND 200 billion:

a) In the case of appointing a member of the Board of Directors as the Director:

(i) Meet the conditions and standards prescribed in points a(ii), a(iii), a(iv), a(v) Clause 1 of this Circular;

(ii) Having at least one year of experience as a manager or executive of a credit institution or having at least two years of experience as a manager or executive of a business operating in the financial, banking, accounting, or auditing sector, or having at least three years of direct work experience in departments specializing in finance, banking, accounting, or auditing;

(iii) Holding a college diploma in one of the following majors: finance, banking, accounting, auditing, business administration, law, or holding a bachelor's degree or higher;

(iv) Being an individual member of a people's credit fund.

b) In the case where the Director is hired:

(i) Meet the conditions and standards prescribed in points a(ii), a(iii), a(iv), a(v) Clause 1 of this Circular;

(ii) Having at least one year of experience as a manager or executive of a credit institution or having at least two years of experience as a manager or executive of a business operating in the financial, banking, accounting, or auditing sector, or having at least three years of direct work experience in departments specializing in finance, banking, accounting, or auditing;

(iii) Holding a bachelor's degree or higher;

(iv) Not being part of the management or executive staff, or the Supervisory Board of a corporate member;

(v) Residing within the operational area of the people's credit fund during their term of office.

2. For people's credit funds with total assets from VND 200 billion to VND 500 billion:

a) In the case of appointing a member of the Board of Directors as the Director:

(i) Meeting the conditions and standards stipulated in point a(i) and a(iv) of Clause 1 of this Article;

(ii) Having at least two years of experience as a manager or executive of a credit institution or having at least three years of experience as a manager or executive of a business operating in the financial, banking, accounting, or auditing sector, or having at least four years of direct work experience in departments specializing in finance, banking, accounting, or auditing;

(iii) Holding a bachelor's degree or higher.

b) In the case where the Director is hired:

(i) Meet the conditions and standards prescribed in points a(ii), a(iii), a(iv), a(v) Clause 1 of this Circular;

(ii) Having at least two years of experience as a manager or executive of a credit institution or having at least three years of experience as a manager or executive of a business operating in the financial, banking, accounting, or auditing sector, or having at least four years of direct work experience in departments specializing in finance, banking, accounting, or auditing;

(iii) Holding a bachelor's degree or higher;

(iv) Not being part of the management or executive staff, or the Supervisory Board of a corporate member;

(v) Residing within the operational area of the people's credit fund during their term of office.

3. For people's credit funds with total assets of VND 500 billion or more:

a) In the case of appointing a member of the Board of Directors as the Director:

(i) Meeting the conditions and standards stipulated in point a(i) and a(iv) of Clause 1 of this Article;

(ii) Having at least three years of experience as a manager or executive of a credit institution or having at least four years of experience as a manager or executive of a business operating in the financial, banking, accounting, auditing sector or having at least five years of direct work experience in the finance, banking, accounting, auditing departments;

(iii) Holding a bachelor's degree or higher.

b) In the case where the Director is hired:

(i) Meet the conditions and standards prescribed in points a(ii), a(iii), a(iv), a(v) Clause 1 of this Circular;

(ii) Having at least three years of experience as a manager or executive of a credit institution or having at least four years of experience as a manager or executive of a business operating in the financial, banking, accounting, auditing sector or having at least five years of direct work experience in the finance, banking, accounting, auditing departments;

(iii) Holding a bachelor's degree or higher;

(iv) Not being part of the management or executive staff, or the Supervisory Board of a corporate member;

(v) Residing within the operational area of the people's credit fund during their term of office.

4. In cases deemed necessary when the people's credit fund implements restructuring, experiences events affecting its operational safety, or is placed under special supervision, the State Bank branch shall coordinate with the People's Committee of the commune where the people's credit fund is headquartered to designate personnel to hold the position of Director of the people's credit fund. The designated personnel must meet the following conditions and standards:

a) Having good reputation and a strong sense of compliance with the law;

b) Holding a bachelor's degree or higher, or holding a high school diploma or higher for leaders at the department level or equivalent positions in the organizational structure of state agencies, political organizations, socio-political organizations;

c) Having held a managerial or executive position for at least one year in an entity within the banking, financial sectors as stipulated in the Charter or equivalent documents of that entity, or leading a department or holding an equivalent position in the organizational structure of a state agency, political organization, or socio-political organization."

13. Supplement Article 25a as follows:

"Article 25a. Removal and Dismissal

1. 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 shall be removed or dismissed if they fall into any of the following circumstances:

a) Being restricted in their capacity for civil acts;

b) Submitting a resignation letter to the Board of Directors or the Supervisory Board of the people's credit fund;

c) Not participating in the activities of the Board of Directors or the Supervisory Board for six consecutive months, except in cases of force majeure;

d) Failing to meet the standards and conditions prescribed in Articles 20, 23, and 24 of this Circular;

đ) Other cases as specified in the Charter of the people's credit fund.

2. After being removed or dismissed, 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 must bear responsibility for their decisions made during their term of office.

3. Within ten working days from the date of passing the decision on removal or dismissal of the relevant individuals as stipulated in Clause 1 of this Article, the Board of Directors of the people's credit fund must submit a report along with related documents to the State Bank branch."

14. Clause 1 of Article 26 is amended and supplemented as follows:

"1. The charter capital of the people's credit fund is the total amount of capital contributed by members and recorded in the Charter of the people's credit fund, accounted for in Vietnamese Dong. The charter capital of the people's credit fund can be supplemented from the following sources:

a) Capital contributions establishing membership status and additional capital contributions;

b) Supplementary reserve funds for charter capital and other reserves as prescribed by law;

c) Other sources as prescribed by law."

15. Article 28 is amended and supplemented as follows:

“Article 28. Capital Contribution of Members

1. The capital contribution of members includes the capital contribution establishing member status and additional capital contributions:

a) The level of capital contribution establishing member status is stipulated in the Charter of the People's Credit Fund, with a minimum of 300,000 VND;

b) The level of additional capital contributions of members of the People's Credit Fund shall be implemented according to the provisions in the Charter of the People's Credit Fund.

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

3. The General Assembly of members of the People's Credit Fund decides specifically on the level of capital contribution establishing member status, additional capital contributions, payment methods, and the maximum total level of capital contribution of one member as prescribed in Clause 1 and Clause 2 of this Article.

4. Annually, based on the actual capital contributions of individuals, legal entities, and households to become members as stipulated in Point a Clause 1 and Clause 2 of this Article, the People's Credit Fund shall implement:

a) The Management Board shall review conditions, compile a list of members requesting to join, and report to the General Assembly of members for approval of the new member admission list in accordance with Point d Clause 2 Article 80 of the Law on Credit Organizations;

b) Issue Membership Cards according to the model uniformly guided by the cooperative bank throughout the system of People's Credit Funds for new members after the General Assembly of members approves the new member admission list;

c) Issue Capital Contribution Books printed according to the model at Appendix No. 05 issued together with this Circular for new members after the General Assembly of members approves the new member admission list.

5. Recording the capital contribution of new members and additional capital contributions of members of the People's Credit Fund into the charter capital shall be carried out according to the guidance on accounting at the following time points:

a) In the case where the charter capital does not change: after the General Assembly of members has passed a resolution approving the new member admission list;

b) In the case where the charter capital decreases: after the State Bank branch issues a document approving the reduction of the charter capital of the People's Credit Fund;

c) In the case where the charter capital increases: after the State Bank branch issues a decision to amend and supplement the License regarding the charter capital of the People's Credit Fund.

6. The People's Credit Fund must open a book to record the capital contribution establishing member status, additional capital contributions, transfer, and receipt of capital contributions.

16. Article 30 is amended and supplemented as follows:

“Article 30. Transfer, Refund of Capital Contributions

1. Members may transfer all or part of their capital contributions to other members or to individuals, households, or legal entities that are not members but meet the conditions specified in Article 31 of this Circular. The transfer of capital contributions by members must ensure:

a) The remaining level of capital contribution (in the case of partial transfer) complies with the regulations on the level of capital contribution of members stipulated in Clause 1 and Clause 2 of Article 28 of this Circular;

b) The transfer of all capital 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 Charter 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 refund of capital contributions does not reduce the real value of the charter capital of the People's Credit Fund below the statutory capital;

(ii) Does not violate the regulations on the minimum capital adequacy ratio, the ratio of deposits from members, purchases, and investments in fixed assets of the People's Credit Fund before and after the refund of capital contributions to members;

(iii) The amount of refunded capital contributions to members is determined according to the following formula:

Where:    A: The amount of refunded capital contributions to members.

                   B₁: The level of capital contribution of the member at the time of preparing the most recent financial report closest to the time of approval to terminate member status.

                   B₂: The level of additional capital contributions of the member that have been contributed but not yet recorded in the charter capital of the People's Credit Fund.

                   C: The charter capital of the People's Credit Fund at the time of preparing the most recent financial report closest to the time of approval to terminate member status.

                   C₁: The real value of the charter capital of the People's Credit Fund at the time of preparing the most recent financial report closest to the time of approval to terminate member status.

3. The refund of capital contributions to members must be approved by the General Assembly of members of the People's Credit Fund based on a report reviewing conditions, lists of members requesting to leave, and lists of expelled members compiled by the Management Board. The People's Credit Fund shall refund capital contributions to members according to the guidance on accounting at the following time points:

a) Repayment of capital contributions in cases where the registered capital does not change: after the General Meeting of Members approves the list of new members to be admitted, the removal of members, or the decision to expel members of the credit cooperative. Within a maximum period of three working days after completing the repayment of capital contributions to members, the credit cooperative must report in writing to the State Bank branch regarding the repayment of capital contributions to members;

b) Repayment of capital contributions in cases where the registered capital decreases: after the State Bank branch issues a written approval for the reduction of the registered capital of the credit cooperative;

c) Repayment of capital contributions in cases where the registered capital increases: after the State Bank branch issues a decision to amend and supplement the License concerning the registered capital of the credit cooperative.

4. The transfer of capital contributions between members and individuals, households, or legal entities that are not members can only be carried out after the General Meeting of Members approves the admission of such individuals, households, or legal entities as new members.

The transfer of capital contributions among members must be approved by the General Meeting of Members or by the Board of Directors in accordance with the Articles of Association of the credit cooperative.”

17. Clause 1 and Clause 2 of Article 31 shall be amended and supplemented as follows:

"1. For individuals:

a) Vietnamese citizens aged 18 years or older, having full capacity for civil acts, residing or temporarily residing within the operational area of the credit cooperative. In the case of temporary residence, the individual must have production or business activities or be a worker operating within the operational area of the credit cooperative and must provide evidence thereof;

b) Officials, civil servants, or employees working at organizations or agencies whose main offices are located within the operational area of the credit cooperative. Members of the credit cooperative who are officials, civil servants, or employees may 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 when designated in accordance with Clause 4 of Article 20 and Clause 4 of Article 24 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, civil servants, or employees working in industries or professions related to state secrets as provided by law;

(iii) Officers, non-commissioned officers, or professional military personnel in units of the people's armed forces."

2. For households:

a) Households with members permanently residing within the operational area of the people's credit fund; household members share assets for household production and service business operations;

b) The representative of a household must be authorized in writing by all members of the household in accordance with the provisions of the law and must meet the conditions stipulated in Clause 1 of this Article.”

18. Add Clause 6a to Article 35 as follows:

"6a. Extraordinary General Meetings of Members of credit cooperatives under special supervision:

a) If the number of members or member representatives attending does not meet the requirements set forth in Clause 5 of this Article, the General Meeting of Members must be postponed and reconvened within thirty days from the date of the first postponement. The second General Meeting of Members will be held if at least half of the total number of members or member representatives attend;

b) If the number of members or member representatives attending the second General Meeting of Members does not meet the requirements set forth in point a of this Clause, it must be postponed and reconvened within twenty days from the date of the second postponement. In this case, the General Meeting of Members will be held regardless of the number of members or member representatives attending.”

19. Clause 2 of Article 36 shall be amended and supplemented as follows:

"2. The total amount of deposits received from members of the credit cooperative operating in one commune must be at least fifty percent of the total amount of deposits of the credit cooperative.

The total amount of deposits received from members of the credit cooperative operating in multiple communes must be at least sixty percent of the total amount of deposits of the credit cooperative.

The total amount of deposits received from members of the credit cooperative with total assets of five hundred billion VND or more must be at least seventy percent of the total amount of deposits of the credit cooperative.”

20. Add Article 36a as follows:

“Article 36a. White Savings Book

1. From January 1, 2020, people's credit funds shall only use white savings books according to the model issued and provided by the cooperative bank for receiving customers' savings deposits when implementing activities as stipulated in Clause 1 of Article 36 of this Circular.

2. The cooperative bank shall be responsible for:

a) Issuing and announcing the model of white savings book on the cooperative bank's communication channels before January 1, 2020, and sending it to the State Bank before January 31, 2020. The white savings book must have anti-counterfeiting factors and serial numbers ensuring statistical and management requirements.

b) Being the focal point for organizing the printing, managing, and providing white savings books to people's credit funds and bearing responsibility for ensuring safety during the management and provision of white savings books.

c) Issuing regulations on providing white savings books to people's credit funds to implement uniformly among people's credit funds. The provision of white savings books must include at least the following contents:

(i) The selling price must ensure the principle of covering printing and transportation costs of white savings books without aiming for profit and must be transparent and publicized.

(ii) The registration process for demand and provision of white savings books to people's credit funds, ensuring timely and full provision of white savings books according to the registration of people's credit funds and serving the supervision of the State Bank branch.

(iii) Regulations on the entry, exit, storage, inventory, and management of white savings books in accordance with the law.

d) Reporting to the State Bank branch about the situation of providing white savings books to people's credit funds in the province or city of the previous month before the 10th day of each month or upon request, in accordance with the form prescribed in Appendix No. 05a attached to this Circular for the State Bank branch to monitor and supervise the use of white savings books by people's credit funds in the area.

3. People's credit funds shall be responsible for:

a) Issuing internal regulations on the management and use of white savings books and submitting them to the State Bank branch immediately after issuance. Internal regulations on the management and use of white savings books must minimally include the following contents:

(i) Specific procedures for registering purchases, managing, and using white savings books, ensuring strict control over the quantity and quality of white savings books during storage, receipt, transfer, preservation, transportation, management, and use; monthly inventory and reconciliation; handling lost or damaged white savings books. White savings books must be strictly managed like valuable documents and can only be stored at the headquarters of the people's credit fund.

(ii) Responsibilities of the Management Board, Chairman of the Management Board, Director (Deputy Director), Supervisory Board, and related individuals and departments in managing and using white savings books; checking and reconciling white savings books and handling lost or damaged white savings books.

(iii) Procedures for handling responsibilities of related individuals and departments in managing and using white savings books and losing white savings books. Immediately after receiving white savings books from the cooperative bank, the people's credit fund must stamp across all pages of the white savings books or the white savings book section between the customer deposit slip and the retained copy.

b) Reporting to the State Bank branch and the cooperative bank immediately upon discovering lost white savings books to take appropriate measures, and simultaneously posting a list of lost white savings books (serial numbers) at the main office, transaction rooms, and the headquarters of the People's Committee within the operational area of the people's credit fund upon discovery of lost white savings books.

c) Publicizing the model of white savings books issued and provided by the cooperative bank at the main office, transaction rooms, and through the media of the commune or ward; facilitating customers who have deposited savings at the people's credit fund to compare with the model of white savings books and exchange for new models when requested by customers.

d) Summarizing and reporting the situation of using white savings books of the previous month before the 10th day of each month or upon request, in accordance with the form prescribed in Appendix No. 05a attached to this Circular and submitting it to the State Bank branch.

4. The State Bank branch shall be responsible for:

a) Organizing inspections, monitoring, and checking the management and use of white savings books by people's credit funds.

b) Notifying people's credit funds in the area about lost white savings books immediately upon receiving reports from people's credit funds.

c) Regularly every quarter, before the 20th day of the first month of the next quarter, summarizing and reporting the situation of using white savings books by people's credit funds in the area and comparing it with the report of the cooperative bank.

d) Receiving internal regulations on the management and use of white savings books by people's credit funds. Requesting people's credit funds to amend and supplement internal regulations if they do not comply with legal provisions.

21. Article 37 is amended and supplemented as follows:

“Article 37. Lending Activities

1. The lending activities of the People's Credit Fund mainly aim to provide mutual assistance among members to effectively carry out production, business service activities, and improve the living standards of members of the People's Credit Fund.

2. The People's Credit Fund lends in Vietnamese dong according to the provisions of the law on lending by credit organizations to customers and bears responsibility for its decisions. The People's Credit Fund shall not lend secured by Membership Contribution Books.

3. The People's Credit Fund lends to customers who are legal entities or individuals who are not members but have deposits at the People's Credit Fund based on security provided by deposit books issued by the People's Credit Fund itself.

4. The People's Credit Fund lends to poor household members registered as permanent residents within the operating area of the People's Credit Fund when such households are not members of the People's Credit Fund. In cases where multiple members of a poor household borrow together, all members of the poor household must sign or authorize one member to sign the loan agreement with the People's Credit Fund, or the poor household must be approved by the People's Committee of the district. The procedures, formalities, and documents for lending to poor household members shall be carried out according to the current credit regime applicable to members.

5. Together with cooperative banks, the People's Credit Fund lends joint capital to members of the People's Credit Fund according to the provisions of the law.

22. Clause 4 of Article 38 is amended as follows:

"4. Specific regulations on joint lending as stipulated in Clause 5 of Article 37 of this Circular."

23. Clause 10a is added to Article 41 as follows:

"10a. Subject to inspection and supervision by the cooperative bank in implementing legal provisions when requested by the State Bank."

24. Article 45 is amended and supplemented as follows:

“Article 45. General Provisions

1. For lending contracts and deposit agreements signed before January 1, 2020, which comply with the legal provisions at the time of signing, the People's Credit Fund and customers may continue to implement the agreements signed until the end of the contract term or amend and supplement them in accordance with this Circular.

2. From January 1, 2020, the election, appointment, or supplementation and replacement of Board of Directors members, Supervisory Board members, and General Directors of the People's Credit Fund must be carried out in accordance with Articles 17, 20, 21, 23, 24, and 25 of this Circular, except for the cases stipulated in Clause 3 of this Article.

3. From January 1, 2020, members currently holding positions as Board of Directors members, Supervisory Board members, and General Directors of the People's Credit Fund who do not meet the educational qualifications and certificates as prescribed in Articles 20, 23, and 24 of this Circular may continue to hold their positions and be considered for re-election or reappointment for the next term, but they must meet the educational qualifications and certificates as prescribed in Articles 20, 23, and 24 of this Circular within 24 months from January 1, 2020.

4. For People's Credit Funds that do not meet the provisions regarding the operating area, scale of operations; number of Supervisory Board members; maximum shareholding ratio of a single member; total amount of deposits received; receiving deposits from members, the continuation process shall be implemented according to the provisions of Articles 47, 47a, 48, and 50 of this Circular.

5. Members may convert annual contributions into additional contributions, transfer contributions to other members, or receive refunds of annual contributions according to the provisions of this Circular within 12 months from January 1, 2020.

6. Savings books issued by the People's Credit Fund to customers can continue to be used until the deposit period expires or renewed if requested by the customer. Upon expiration of the deposit period, if the customer wishes to continue depositing, the People's Credit Fund must collect the old savings book and use the new savings book issued by the cooperative bank.

Within 30 days from January 1, 2020, the People's Credit Fund must compile and report the situation of using old savings books to the State Bank branch (including the total number of printed savings books, the number of used savings books, the number of unused savings books, the number of lost or damaged savings books) and must return all unused old savings books to the State Bank branch for destruction.

25. Article 46 is amended and supplemented as follows:

“ Article 46. Responsibilities of People's Credit Funds

1. As of January 1, 2020, if a People's Credit Fund has not met the provisions regarding the operating area, scale of operations, organizational structure of the Supervisory Board, capital contribution ratio of a member, and total amount of deposits from members as stipulated in this Circular, it must develop and proactively implement measures to address these issues in accordance with the regulations.

2. Within a maximum period of 60 days from January 1, 2020 or 60 days from the date on which the official document adjusting administrative boundaries issued by the competent state agency takes effect, the People's Credit Fund must directly submit or send by post to the State Bank branch the resolution plan as prescribed in Clause 4, Clause 6, Article 47, Article 47a, Article 48, and Article 50 of this Circular. Within a maximum period of 60 days following the maximum deadline specified in point c, Clause 4, Article 47, the People's Credit Fund must directly submit or send by post to the State Bank branch the resolution plan as prescribed in Clause 5, Article 47 of this Circular.

Within a maximum period of 20 days from the date of receipt of the resolution plan submitted by the People's Credit Fund, the State Bank branch shall issue a document requesting the People's Credit Fund to amend and supplement the resolution plan if it does not meet the requirements. In case the State Bank branch requests amendments and supplements to the resolution plan, within a maximum period of 30 days from the date the State Bank branch issues a document requesting such amendments and supplements, the People's Credit Fund must complete and directly submit or send by post the amended and supplemented resolution plan to the State Bank branch. Within a maximum period of 20 days from the date of receipt of the resolution plan (including cases of amendments and supplements), the State Bank branch shall issue a document approving the resolution plan of the People's Credit Fund.

3. Quarterly, before the tenth day of the first month of each quarter, the People's Credit Fund must prepare a report on the progress of implementing the resolution plan approved by the State Bank branch and directly submit or send by post to the State Bank branch.

4. The People's Credit Fund shall amend and supplement its Charter and internal regulations in accordance with the provisions of this Circular.

26. Article 47 is amended and supplemented as follows:

“Article 47. Transitional Provisions for Operating Areas

1. A People's Credit Fund with an inter-village operating area consisting of contiguous villages within the jurisdiction of a province or centrally-administered city where the main office of the People's Credit Fund is located prior to January 1, 2020 may maintain its current operating area if it meets the following conditions:

a) Having at least 300 members;

b) The actual value of the registered capital being no less than the statutory minimum capital requirement;

c) Having an organizational structure, management machinery, operational machinery, internal audit system, internal control system, managers, operators, and members of the Supervisory Board meeting the standards and conditions as prescribed by the Law on Credit Organizations and guidelines of the State Bank;

d) Not falling under the category of People's Credit Funds subject to early intervention and special supervision according to the law;

đ) The total amount of deposits from members of the People's Credit Fund being no less than 60% of the total amount of deposits of the People's Credit Fund.

2. People's Credit Funds operating in specific industries or those operating in individual enterprises as prescribed in Circular No. 06/2007/TT-NHNN dated November 6, 2007, amending and supplementing Circular No. 08/2005/TT-NHNN dated December 30, 2005, of the Governor of the State Bank guiding the implementation of Decree No. 48/2001/NĐ-CP dated August 13, 2001 on the organization and operation of People's Credit Funds and Decree No. 69/2005/NĐ-CP dated May 26, 2005 of the Government amending and supplementing certain articles of Decree No. 48/2001/NĐ-CP dated August 13, 2001 of the Government on the organization and operation of People's Credit Funds shall continue to operate in their existing areas upon approval by the State Bank.

3. Changes in the operating area of a People's Credit Fund due to division or separation of administrative boundaries since June 1, 2015 shall be carried out as follows:

a) The People's Credit Fund may continue to operate in the inter-village area comprising villages formed due to the division or separation of administrative boundaries within the jurisdiction of a province or centrally-administered city;

b) Within 30 days from January 1, 2020 for cases where the official document adjusting administrative boundaries issued by the competent state agency took effect before January 1, 2020, or within 30 days from the date on which the official document adjusting administrative boundaries issued by the competent state agency takes effect for cases where such document took effect after January 1, 2020, the People's Credit Fund must submit a document to the State Bank branch informing about the adjustment of administrative boundaries and requesting amendments and supplements to the License;

c) Within 10 days from the date of receipt of the document from the People's Credit Fund, the State Bank branch shall issue a decision to amend and supplement the License of the People's Credit Fund.

4. As of January 1, 2020, a People's Credit Fund with an inter-village operating area consisting of contiguous villages within the jurisdiction of a province or centrally-administered city where the main office of the People's Credit Fund is located that does not meet one of the conditions for inter-village operation as stipulated in points a, b, c, d, and đ of Clause 1 of this Article must develop a resolution plan, except in cases where the People's Credit Fund applies early intervention, special supervision according to the law, or in cases stipulated in Clauses 2 and 3 of this Article. The resolution plan 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 inter-village operation as stipulated in Clause 1 of this Article;

c) A plan and measures for handling on a quarterly basis, and a commitment to ensure completion within a maximum period of 12 months from January 1, 2020 (for cases not meeting the conditions before January 1, 2020) or from the date determined as not meeting the conditions for inter-village operations as stipulated in Clause 1 of this Article.

5. After the maximum handling period prescribed in point c, Clause 4 of this Article, if a people's credit cooperative does not meet one of the conditions to operate inter-villages, which are adjacent villages within the scope of one province or centrally-run city where the headquarters of the people's credit cooperative is located, as prescribed in points a, b, c, d, and đ of Clause 1 of this Article, it must have a resolution plan, including at least the following contents:

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

b) The degree of compliance with each condition for inter-village operation as stipulated in Clause 1 of this Article;

c) A plan and measures for handling on a quarterly basis, and a commitment to ensure completion within a maximum period of 24 months from the end date of the handling plan prescribed in point c, Clause 4 of this Article, the people's credit cooperative must cease operations in adjacent villages and adjust its activities to the village where its headquarters is located.

6. As of January 1, 2020, a people's credit cooperative operating in villages that are not adjacent to the village where its headquarters is located (except for cases prescribed in Clauses 2 and 3 of this Article) or operating in villages outside the scope of one province or centrally-run city due to administrative boundary division or separation must develop a resolution plan, including at least the following contents:

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

b) A plan and measures for handling on a quarterly basis, including restructuring under the form of division or separation as prescribed by law, and a commitment to ensure completion within a maximum period of 36 months from January 1, 2020 or from the effective date of the administrative boundary adjustment document issued by the competent state agency, ceasing operations in non-adjacent villages and villages outside the scope of one province or centrally-run city.

27. Supplement Article 47a as follows:

“Article 47a. Transitional provisions on the total amount of deposits received

A people's credit cooperative whose total amount of deposits received does not comply with the provisions of Clause 2 of Article 8 of this Circular must develop a resolution plan, including at least the following contents:

1. The current situation regarding the total amount of deposits received.

2. A plan and measures for handling on a quarterly basis, and a commitment to ensure completion within a maximum period of 24 months from January 1, 2020, complying with the provisions on the total amount of deposits received as stipulated in Clause 2 of Article 8 of this Circular.

28. Amend and supplement Article 48 as follows:

“Article 48. Transitional provisions on the number of members of the Supervisory Board

A people's credit cooperative whose number of Supervisory Board members does not comply with the provisions of Clause 1 of Article 21 of this Circular as of January 1, 2020 must develop a resolution plan to ensure compliance within 12 months from January 1, 2020, having sufficient Supervisory Board members as required by Clause 1 of Article 21 of this Circular.

29. Amend and supplement Article 50 as follows:

“Article 50. Transitional provisions on receiving deposits from members

A people's credit cooperative whose level of deposits received from members is lower than the level prescribed in Clause 2 of Article 36 of this Circular, except in cases where the people's credit cooperative implements transitional provisions as prescribed in Article 47 of this Circular, must develop a resolution plan, including 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 and measures for handling on a quarterly basis, and a commitment to ensure completion within a maximum period of 24 months from January 1, 2020, complying with the regulations.

30. Amend and supplement Article 51 as follows:

“ Article 51. Post-transition Disposition

Depending on the form and nature of the violation, the State Bank branch shall apply necessary measures to deal with the people's credit funds within its jurisdiction, including restructuring measures as prescribed by law, and revoke the License in the following cases:

1. The people's credit fund does not submit the post-transition handling plan within the maximum period stipulated in Clause 2, Article 46 of this Circular or does not resubmit the plan for modification and supplementation as required by the State Bank branch within the maximum period stipulated in Clause 2, Article 46 of this Circular.

2. The people's credit fund fails to implement the post-transition handling plan within the maximum period stipulated in Clause 5, Clause 6, Article 47, Article 48, Article 49, and Article 50 of this Circular or within the maximum period requested by the State Bank branch."

31. Article 52 is amended and supplemented as follows:

“Article 52. Responsibilities of Related Units

1. The Banking Inspection and Supervision Authority:

a) The point of contact for receiving reports from the State Bank branch as prescribed in Point b and Point d, Clause 2 of this Article;

b) The point of contact for 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. The State Bank branch:

a) Manages, inspects, supervises, and handles violations by people's credit funds within its jurisdiction in implementing the provisions of this Circular and relevant laws;

b) Reviews and issues Licenses for people's credit funds according to this Circular and the policy of the State Bank during each period. Reviews and approves the list of individuals proposed to be elected or appointed as Chairpersons and other members of the Board of Directors, Heads and other members of the Supervisory Board, and Directors of people's credit funds as prescribed in this Circular. Within a maximum period of 15 days from the date of issuing the License, report to the Governor of the State Bank (through the Banking Inspection and Supervision Agency) the results of issuing the License for people's credit funds;

c) Drafts documents to seek opinions:

(i) People's Committee of communes regarding the establishment of people's credit funds within their jurisdictions; lists of personnel proposed to be elected or appointed as Chairpersons and other members of the Board of Directors, Heads and other members of the Supervisory Board, and Directors of people's credit funds;

(ii) Vietnam Rural Credit Bank on the list of personnel proposed to be elected or appointed as Chairpersons and other members of the Board of Directors, Heads and other members of the Supervisory Board, and Directors of people's credit funds (if deemed necessary);

d) Directs, guides, monitors, and inspects people's credit funds in implementing the provisions of Articles 46, 47, 47a, 48, 49, 50, and 51 of this Circular. Quarterly, within the first 15 days of the first month of the next quarter, drafts a report to the State Bank (Banking Inspection and Supervision Agency) on the implementation of transitional regulations by people's credit funds within its jurisdiction until the transition is completed.

3. Vietnam Rural Credit Bank:

a) Uniformly guides the system of people's credit funds in designing and printing Member Cards as prescribed in Clause 4, Article 28 of this Circular;

b) Provides written comments on the list of personnel proposed to be elected or appointed as Chairpersons and other members of the Board of Directors, Heads and other members of the Supervisory Board, and Directors of people's credit funds when requested by the State Bank branch."

Article 3. Amend and supplement some articles of Circular No. 05/2018/TT-NHNN dated March 12, 2018, issued by the Governor of the State Bank of Vietnam on the dossier, procedures, and formalities for approving changes, proposed lists of candidates for election, and personnel appointments of credit cooperatives that are cooperatives.

1. Clause 1 and Clause 2 of Article 9 shall be amended and supplemented as follows:

"1. The dossier includes:

a) The document requesting approval to change the registered capital of credit cooperatives must include at least the following contents:

(i) Current registered capital;

(ii) Proposed changed registered capital;

(iii) Reasons and necessity for changing the registered capital;

b) Plan for increasing registered capital including at least the following contents:

(i) Sources of funds to increase registered capital;

(ii) Sources of funds to refund contributions to members and the extent to which conditions for refunding contributions to members are met (if applicable);

c) Plan for reducing registered capital including at least the following contents:

(i) Sources of funds to increase registered capital (if applicable);

(ii) Sources of funds to refund contributions to members and the extent to which conditions for refunding contributions to members are met;

(iii) Expected completion time for reducing registered capital;

d) The resolution of the Members' Congress regarding the change in the charter capital. In cases where the reduction of the charter capital is requested, the proposed reduced charter capital must comply with the legal provisions on the minimum capital requirement and have plans to ensure the prescribed safety ratios in the operation of credit cooperatives that are cooperatives;

đ) List of members contributing capital and those expected to be refunded capital in the year according to Appendix No. 03a issued together with this Circular, confirmed by the credit cooperative;

e) The resolution of the Members' Congress approving the list of new members to be admitted and existing members to be expelled from the people's credit fund; the decision to expel members."

2. The procedure for implementing the approval formalities:

a) Credit cooperatives that are cooperatives prepare the dossier in accordance with Clause 1 of this Article and submit it to the State Bank of Vietnam. If the dossier is incomplete, within three working days from the date of receipt of the dossier, the State Bank of Vietnam will issue a document requesting the credit cooperative to supplement the dossier;

b) Within twenty days from the date of receiving a complete and valid dossier:

(i) The State Bank shall issue a decision to amend and supplement the Business License regarding the registered capital of credit cooperatives for cases of increasing the registered capital;

(ii) The State Bank of Vietnam issues a document approving the reduction of the charter capital of credit cooperatives that are cooperatives in cases where the reduction of the charter capital is requested. Credit cooperatives that are cooperatives may only implement the plan to reduce the charter capital after obtaining approval from the State Bank of Vietnam;

(iii) In case of refusal, the State Bank of Vietnam will reply in writing and specify the reasons."

2. Point c of Clause 1 of Article 11 shall be amended and supplemented as follows:

"c) The current and projected structure of the Board of Directors and Supervisory Board after the election and appointment. This includes the number of Board of Directors members, the number of Supervisory Board members, and the number of full-time Supervisory Board members;"

3. Clause 4 of Article 15 shall be amended and supplemented as follows:

"4. Solicit opinions from the People's Committee of the commune where the candidates for election and appointment reside, and the cooperative bank (if deemed necessary) regarding the list of candidates for the positions of Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, and Director of the people's credit fund, ensuring the time frame stipulated in this Circular;"

4. Point a(i) of Clause 2 and point b(ii) of Clause 3 of Article 16 shall be amended and supplemented as follows:

a) Point a(i) of Clause 2 shall be amended and supplemented as follows:

"(i) The number of members proposed to be elected to the Board of Directors and the Supervisory Board, including the number of dedicated members of the Supervisory Board;"

b) Point b(ii) of Clause 3 shall be amended and supplemented as follows:

"ii) The people's credit fund sends to the State Bank of Vietnam branch."

Article 4. Amend and supplement some articles of Circular No. 32/2015/TT-NHNN dated December 31, 2015, issued by the Governor of the State Bank of Vietnam on the limits and ratios for ensuring safety in the operations of people's credit funds.

1. Clause 6 and Clause 7 of Article 4 shall be amended and supplemented as follows:

"6. Within ten working days from the date of issuance, amendment, or supplementation of internal regulations, the people's credit fund shall send (directly or via postal service) to the State Bank of Vietnam branch in the province or city a dossier including:

a) A report on the issuance, amendment, or supplementation of internal regulations. In cases of amendments or supplements, clearly state the contents being amended or supplemented;

b) Internal regulations for new issuances; and the amended or supplemented internal regulations for amendments or supplements;"

7. In cases where the contents of the documents or internal regulations are inconsistent with the provisions of this Circular and related laws, the State Bank of Vietnam branch in the province or city shall request the people's credit fund to amend and supplement them accordingly."

2. Point c of Clause 2, Clause 3, and Clause 6 of Article 8 shall be amended and supplemented as follows:

a) Point c of Clause 2 shall be amended and supplemented as follows:

"c) Report to the State Bank of Vietnam branch in the province or city when there is a loan transaction;"

b) Clause 3 is amended and supplemented as follows:

"3. The total outstanding loans to a corporate member shall not exceed the total contributed capital and deposit balance of that corporation at the people's credit fund at any time. The loan term for corporate members shall not exceed the remaining term of their deposits and loans must be secured by the same deposits at the people's credit fund.

c) Clause 6 shall be amended and supplemented as follows:

"6. The limits prescribed in Clauses 2, 4, and 5 of this Article shall not apply to:

a) Loans made on behalf of the Government, organizations (including credit institutions and foreign bank branches), and individuals;

b) Loans fully secured by deposits at the same people's credit fund."

3. Clause 2 and Clause 3 of Article 11 shall be amended and supplemented as follows:

"2. Within a maximum period of thirty days from the effective date of this Circular, the people's credit fund must directly or by postal service submit to the State Bank of Vietnam branch in the province or city the plan for handling as prescribed in Clause 2 of Article 12 and point b of Clause 2 of Article 13 of this Circular.

3. The people's credit fund shall be responsible for supplementing the measures mentioned in the handling plan as stipulated in Clause 2 of this Article and incorporating the implementation progress into the restructuring plan for the organization and operations of the people's credit fund to implement according to the requirements of the State Bank of Vietnam branch in the province or city."

4. Point b of Clause 1 of Article 12 shall be amended and supplemented as follows:

"b) The people's credit fund must develop a handling plan and submit it to the State Bank of Vietnam branch in the province or city."

5. Article 14 shall be amended and supplemented as follows:

"b) The People's Credit Union must develop a plan for handling and submit it to the State Bank branch at the provincial or municipal level."

5. Article 14 shall be amended and supplemented as follows:

“Article 14. Post-transition Processing

After the transition period specified in the handling plan provided for in Article 12 of this Circular or after the maximum period requested by the State Bank of Vietnam branch in the province/city, if the people's credit union fails to rectify the violation, the State Bank of Vietnam branch in the province/city shall apply necessary measures, including restructuring measures as prescribed by law and revoking the license of the people's credit union, depending on the degree, nature, and risk involved.

6. Article 15 is amended and supplemented as follows:

Article 15. Responsibilities of Units under the State Bank of Vietnam

1. The Banking Inspection and Supervision Authority shall be responsible for taking the lead and coordinating with Departments and Bureaus under the State Bank of Vietnam to submit to the Governor of the State Bank of Vietnam for decision the requirement that people's credit unions must maintain the limits and ratios ensuring safety as stipulated in Clause 2 of Article 1 of this Circular.

2. The State Bank of Vietnam branch in the province/city directly under the central government shall be responsible for:

a) Inspecting, supervising, and handling violations committed by people's credit unions within its jurisdiction in implementing the provisions of this Circular;

b) Guiding people's credit unions within its jurisdiction in implementing the provisions of this Circular;

c) Receiving internal regulations of people's credit unions, requesting people's credit unions to amend and supplement their internal regulations according to Clause 6 of Article 4 of this Circular;

d) Reviewing the handling plans, requesting people's credit unions to supplement and modify their handling plans (if the handling plans do not meet requirements or ensure feasibility) as prescribed in Clause 2 of Article 12 and Point b of Clause 2 of Article 13 of this Circular;

e) Based on the results of inspections and supervision of people's credit unions within its jurisdiction, proposing to the State Bank of Vietnam to require people's credit unions to maintain and apply the limits and ratios ensuring safety as stipulated in Clause 2 of Article 1 of this Circular.

Article 5. Amending Clause 2 of Article 4 of Circular No. 03/2014/TT-NHNN dated January 23, 2014, issued by the Governor of the State Bank of Vietnam regarding the system safety guarantee fund of people's credit unions as follows:

"2. The contribution to the Safety Preservation Fund as prescribed in Clause 1 of this Article shall be implemented as follows:

a) The annual fee contribution rate (starting from the fiscal year 2019) is 0.05% of the average outstanding loan balance of the previous year of cooperative banks and people's credit unions, where the average outstanding loan balance of the year is calculated by dividing the total outstanding loans (groups 1 and 2 according to the classification of debts by the State Bank of Vietnam) at the end of each month during the year by the actual number of months to be counted. For cooperative banks, the outstanding loan balance at the end of each month shall exclude the portion of outstanding loans for capital adjustment to member people's credit unions;

b) The contribution to the Safety Preservation Fund for the fiscal year shall only be made when the total operating capital of the Safety Preservation Fund before contribution is lower than 1.5% of the total assets of the system of people's credit unions.

In case the total operating capital of the Safety Preservation Fund exceeds or equals 1.5% of the total assets of the system of people's credit unions after the contribution for the fiscal year, cooperative banks and people's credit unions shall still make contributions to the Safety Preservation Fund for that fiscal year;

c) The amount contributed to the Safety Preservation Fund shall be recorded as operational expenses of cooperative banks and people's credit unions."

Article 6.

1. Supplement Appendix No. 05a to Appendix No. 05 promulgated together with Circular No. 04/2015/TT-NHNN dated March 31, 2015, issued by the Governor of the State Bank of Vietnam regarding people's credit unions with Appendix No. 01 promulgated together with this Circular.

2. Replace Appendix No. 01 promulgated together with Circular No. 05/2018/TT-NHNN dated March 12, 2018, issued by the Governor of the State Bank of Vietnam regarding the files, procedures, and formalities for approving changes and lists of candidates for election and appointment of personnel of credit cooperatives with Appendix No. 02 promulgated together with this Circular.

3. Supplement Appendix No. 01a to Appendix No. 01 promulgated together with Circular No. 05/2018/TT-NHNN dated March 12, 2018, issued by the Governor of the State Bank of Vietnam regarding the files, procedures, and formalities for approving changes and lists of candidates for election and appointment of personnel of credit cooperatives with Appendix No. 03 promulgated together with this Circular.

4. Replace Appendix No. 03 promulgated together with Circular No. 32/2015/TT-NHNN dated December 31, 2015, issued by the Governor of the State Bank of Vietnam regarding the limits and ratios ensuring safety in the operation of people's credit unions with Appendix No. 04 promulgated together with this Circular.

Article 7. Responsibilities for Organizing Implementation

The Director of the Office, the Head of the Banking Inspection and Supervision Authority, the Heads of units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam branches in provinces/cities directly under the central government, the Chairmen of the Boards of Directors, and the General Managers of Vietnam Cooperative Banks, the Chairmen of the Boards of Directors, and the Directors of people's credit unions are responsible for organizing the implementation of this Circular.

Article 8. Implementation clause

1. This Circular takes effect from January 1, 2020.

2. This Circular abolishes:

a) Article 1 and Clauses 3, 4, 6, 7, 8, and 9 of Article 2 of Circular No. 06/2017/TT-NHNN dated July 5, 2017, issued by the Governor of the State Bank of Vietnam amending and supplementing certain articles of Circular No. 03/2014/TT-NHNN dated January 23, 2014, issued by the Governor of the State Bank of Vietnam regarding the system safety guarantee fund of people's credit unions and Circular No. 04/2015/TT-NHNN dated March 31, 2015, issued by the Governor of the State Bank of Vietnam regarding people's credit unions;

b) Clauses 2 and 4 of Article 1 of Circular No. 09/2016/TT-NHNN dated June 17, 2016, issued by the Governor of the State Bank of Vietnam amending and supplementing certain articles of Circular No. 31/2012/TT-NHNN dated November 26, 2012, issued by the Governor of the State Bank of Vietnam regarding cooperative banks./.