Circular No. 23/2018/TT-NHNN on the reorganization, revocation of Licenses, and liquidation of assets of People's Credit Funds

CIRCULAR

Provisions on reorganization, revocation of Licenses and liquidation of assets of credit cooperatives

of credit cooperatives

 

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;

Based on the Bankruptcy Law dated June 19, 2014;

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 this Circular to provide for the reorganization, revocation of Licenses and liquidation of assets of credit cooperatives.

 

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates:

1. Reorganization of credit cooperatives in the forms of division, separation, merger, and consolidation.

2. Procedures for revoking the License of credit cooperatives.

3. Procedures for liquidation of assets of credit cooperatives under the supervision of the State Bank.

Article 2. Applicability

4. Deposit Insurance Corporation of Vietnam.

2. Organizations and individuals related to the reorganization, revocation of Licenses, and liquidation of assets of credit cooperatives.

Article 3. Explanation of Terms

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

1. Division of credit cooperatives means the act where a credit cooperative (hereinafter referred to as the divided credit cooperative) divides its entire assets, rights, obligations, and lawful interests to establish two or more new credit cooperatives, while ceasing the existence of the divided credit cooperative.

2. Separation of credit cooperatives means the act where a credit cooperative (hereinafter referred to as the separated credit cooperative) separates part of its assets, rights, obligations, and lawful interests to establish one or several new credit cooperatives without ceasing the existence of the separated credit cooperative.

3. Merger of credit cooperatives means the act where two or more credit cooperatives (hereinafter referred to as participating credit cooperatives) merge their entire assets, rights, obligations, and lawful interests to establish a new credit cooperative (hereinafter referred to as the merged credit cooperative), while ceasing the existence of the participating credit cooperatives.

4. Consolidation of credit cooperatives means the act where one or several credit cooperatives (hereinafter referred to as consolidated credit cooperatives) transfer their entire assets, rights, obligations, and lawful interests to another credit cooperative (hereinafter referred to as the receiving credit cooperative), while ceasing the existence of the consolidated credit cooperatives.

5. Credit cooperatives implementing reorganization include divided credit cooperatives, separated credit cooperatives, participating credit cooperatives in mergers, consolidated credit cooperatives, and receiving credit cooperatives.

6. Newly formed credit cooperatives are credit cooperatives established anew after the division, separation, or merger of credit cooperatives.

7. Credit cooperatives after reorganization include separated credit cooperatives, receiving credit cooperatives, and newly formed credit cooperatives.

8. First General Meeting of Members is a meeting comprising capital contributors of newly formed credit cooperatives after being approved in principle by the State Bank, with the task of adopting the Charter of organization and operation of the credit cooperative, electing the Chairman and other members of the Board of Management, the Head and other members of the Supervisory Board or a single full-time supervisor (hereinafter referred to as the full-time supervisor) for the first term, and deciding on other matters related to the establishment of the credit cooperative.

Article 4. Competence to approve reorganization of credit cooperatives, revoke Licenses, and supervise the liquidation of assets of credit cooperatives

1. The Director of the State Bank branch in the province or centrally-administered city where the main office of the credit cooperative is located (hereinafter referred to as the State Bank branch) approves the reorganization and decides to revoke the License of credit cooperatives within its jurisdiction.

2. The State Bank branch supervises the process of liquidation of assets of credit cooperatives within its jurisdiction.

Article 5. Principles for Preparing and Submitting Applications

1. The request for approval of reorganization of credit cooperatives is signed by the Chairman of the Reorganization Council; the request for dissolution of credit cooperatives is signed by the Chairman of the Board of Management of the credit cooperative.

In case the Chairman of the Reorganization Council or the Chairman of the Board of Management of the credit cooperative delegates another person to sign, the file must contain a power of attorney in accordance with the provisions of the law.

2. The dossier shall be prepared in one set in Vietnamese.

3. In case the documents in the file are copies that are not certified true copies or copies issued from the original book, when submitting the file, the original must be presented for comparison, the person comparing must sign to confirm the copy and bear responsibility for the accuracy of the copy compared to the original.

4. Credit cooperatives submit the file to the State Bank branch through one of the following methods: direct submission, submission via postal service.

Chapter II

REORGANIZATION OF CREDIT COOPERATIVES

Section 1

GENERAL PROVISIONS

Article 6. Principles for reorganizing people's credit funds

1. Comply with the provisions of this Circular and relevant laws.

2. The reorganization of people's credit funds shall be carried out based on the reorganization plan approved by the State Bank branch in accordance with the provisions of the law.

3. Ensure the safe and continuous operation of people's credit funds; ensure the rights and legitimate interests of members of people's credit funds and customers during the reorganization process.

4. The transfer and sale of assets during the reorganization of people's credit funds must ensure transparency, comply with the provisions of the law and agreements between the parties, ensure asset safety and not affect the rights and interests of the people's credit fund undergoing reorganization and related organizations and individuals.

5. The people's credit fund after reorganization shall succeed to the rights and obligations of the people's credit fund undergoing reorganization in accordance with the provisions of the law and agreements between the parties.

6. The business license of the people's credit fund being divided and the people's credit fund participating in merger becomes invalid when the newly formed people's credit fund commences operations. The business license of the people's credit fund being merged becomes invalid when the receiving people's credit fund completes the procedures for changing cooperative registration.

Article 7. Territorial area, scope, and content of activities of the people's credit fund after reorganization

The territorial area, scope, and content of activities of the people's credit fund after reorganization must be consistent with the reorganization plan approved by the State Bank branch.

Article 8. Requirements for reorganizing people's credit funds

1. The reorganization plan must be feasible, ensuring the rights and obligations between related parties, and must be developed and adopted in accordance with Article 12 of this Circular.

2. People's credit funds undergoing reorganization (including those that are not required to undergo annual independent audit according to the State Bank's regulations on independent audit for credit institutions) must have an audited financial report for the most recent year, except for people's credit funds under special supervision.

3. After reorganization, the people's credit fund must ensure compliance with legal provisions regarding the capital contribution ratio of members; operational territory; scope and content of activities; standards for members of the Board of Management, Supervisory Board, and General Director; limits and ratios to ensure safety in operations.

Article 9. Reorganization Council

1. People's credit funds undergoing reorganization shall establish a Reorganization Council to address issues related to the reorganization of people's credit funds. The Chairman of the Reorganization Council shall be elected by the members of the Reorganization Council.

2. The Reorganization Council of the people's credit fund includes the Chairman of the Board of Management, the Head of the Supervisory Board or a dedicated supervisor, and the General Director of the people's credit fund undergoing reorganization.

3. The Reorganization Council has the responsibility to:

a) Develop the reorganization plan;

b) Propose the Board of Management of the people's credit fund undergoing reorganization to convene a Member Assembly to approve the reorganization plan and other issues related to the reorganization procedures of the people's credit fund;

c) Propose the organizational structure and personnel to be elected or appointed as the Chairman and other members of the Board of Management, the Head and other members of the Supervisory Board or dedicated supervisor, and the General Director of the people's credit fund after reorganization;

d) Represent the people's credit fund undergoing reorganization to carry out reorganization procedures in accordance with this Circular and bear legal responsibility for the legality and accuracy of the documents in the application for approval of reorganization.

Article 10. Publicizing Information on the Reorganization of People's Credit Funds

1. After the State Bank branch approves the principle of reorganization, the people's credit fund implementing the reorganization must post at its main office and transaction rooms; at the People's Committee offices of communes, wards, towns (hereinafter referred to collectively as the People's Committee of the commune level) within the operating area of the people's credit fund; announce on the local radio station or community broadcasting station where the main office of the people's credit fund is located for seven working days the following information:

a) The name and address of the main office of the people's credit fund implementing the reorganization;

b) The number and date of the document of the State Bank branch approving the principle of reorganizing the people's credit fund;

c) The charter capital of the people's credit fund implementing the reorganization at the time of submitting the application for approval of the principle of reorganization;

d) The legal representative of the people's credit fund implementing the reorganization;

đ) Anticipated information about the people's credit fund after reorganization, including: name, address of the main office, charter capital, legal representative, operating area.

2. After the State Bank branch approves the reorganization, the people's credit fund after reorganization must post at its main office and transaction rooms; at the People's Committee offices of the commune level within the operating area of the people's credit fund; announce on the local radio station or community broadcasting station where the main office of the people's credit fund is located for three consecutive days and publish in a provincial or centrally-administered city newspaper for three consecutive issues the following information:

a) The name and address of the main office of the people's credit fund after reorganization;

b) The number and date of the decision of the State Bank branch approving the reorganization of the people's credit fund;

c) The number and date of the License for Establishment and Operation, Certificate of Registration for Cooperative Association;

d) Content, scope, duration, and operating area; charter capital of the people's credit fund after reorganization;

đ) The legal representative of the people's credit fund after reorganization;

e) List and corresponding contribution ratio of each member participating in the capital contribution at the people's credit fund after reorganization;

g) The expected opening date for the newly formed people's credit fund;

h) Official information regarding the cessation of operations of the divided people's credit fund, the merged people's credit fund, the people's credit fund participating in consolidation, including:

(i) Name, address of the main office;

(ii) Expected cessation date of operations.

Section 2

DOCUMENTS AND PROCEDURES FOR IMPLEMENTING REORGANIZATION

OF PEOPLE'S CREDIT FUNDS

Article 11. Documents for Requesting Approval of Reorganization

1. Documents for requesting approval of the principle of reorganization include:

a) Application for approval of reorganization of the people's credit fund according to the form prescribed in Appendix No. 01 issued together with this Circular;

b) Reorganization plan as stipulated in Article 12 of this Circular;

c) Resolution of the Member Assembly of the people's credit fund implementing the reorganization adopting:

(i) The reorganization plan;

(ii) Merger and consolidation contracts for cases where the people's credit fund implements mergers and consolidations;

(iii) 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 or dedicated supervisory officers, Director of the newly formed people's credit fund, the people's credit fund being separated, the people's credit fund receiving mergers (if there are changes);

(iv) Changes that require approval from the State Bank of the people's credit fund being separated, the people's credit fund receiving mergers;

d) Financial report of the year immediately preceding the submission of the application for approval of the principle of reorganization of the people's credit fund implementing the reorganization, audited by an independent auditing organization and without any disclaimer opinion.

In case there is no audited financial report at the time of submitting the application for approval of the principle, the people's credit fund implementing the reorganization submits an unaudited financial report and must submit the audited financial report immediately after the auditing organization issues the audit report. The people's credit fund implementing the reorganization shall be responsible for the contents of the submitted financial report;

đ) 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 or dedicated supervisory officers, Director of the newly formed people's credit fund, the people's credit fund being separated, the people's credit fund receiving mergers (if there are changes), including: full name, current position (if applicable) and proposed position to be elected or appointed;

e) Documentation proving the qualifications of those proposed to be elected or appointed as Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board or dedicated supervisory officers, Director of the newly formed people's credit fund, the people's credit fund being separated, the people's credit fund receiving mergers (if there are changes) including:

(i) Personal resume according to the form at Appendix No. 02 issued together with this Circular;

(ii) Criminal record certificate of the personnel proposed to be elected or appointed according to the laws on criminal records. The criminal record certificate must be issued by the competent authority before the people's credit fund submits the application at most six months prior to the submission date;

(iii) Declaration of related parties of the personnel proposed to be elected or appointed according to Appendix No. 03 issued together with this Circular;

(iv) Certificates and diplomas of the personnel proposed to be elected or appointed proving compliance with the standards set by the State Bank. In case certificates and diplomas are issued by educational institutions abroad, they must be recognized by the competent authority of Vietnam according to relevant laws.

g) In addition to the components of the dossier prescribed at points a, b, c, d, đ, and e of this Clause, the people's credit cooperative implementing the merger or consolidation must submit the merger or consolidation contract signed by the Chairman of the Board of Directors of the people's credit cooperative being merged, the people's credit cooperative receiving the merger, and the people's credit cooperative participating in the consolidation. The merger or consolidation contract must include the following main contents: the name and address of the headquarters of the people's credit cooperative being merged, the people's credit cooperative receiving the merger, and the people's credit cooperative participating in the consolidation; procedures for the merger or consolidation; methods, procedures, deadlines, and conditions for asset conversion, and the deadline for implementing the merger or consolidation.

2. The dossier requesting approval for restructuring includes:

a) A document from the Chairman of the Restructuring Organization clearly stating the changes compared to the Restructuring Plan already submitted to the State Bank branch for principle approval (if applicable);

b) The Resolution of the Members' General Meeting of the people's credit cooperative implementing restructuring approving the changes in the Restructuring Plan already submitted to the State Bank branch for principle approval on restructuring (if applicable);

c) The dossier requesting approval for the changes that must be approved by the State Bank for the people's credit cooperative being separated and the people's credit cooperative receiving the merger according to the regulations of the State Bank;

d) The minutes of the first Members' General Meeting of the newly formed people's credit cooperative regarding:

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

(ii) Other contents required to be voted on and approved by the majority of the meeting participants according to the regulations;

đ) The minutes of the Members' General Meeting of the people's credit cooperative being separated and the people's credit cooperative receiving the merger regarding the election and appointment of the Chairman and other members of the Board of Directors, the Head and other members of the Supervisory Board or dedicated supervisory officers according to the list of personnel approved by the State Bank branch (if there are changes);

e) The Decision of the Board of Directors of the newly formed people's credit cooperative, the people's credit cooperative being separated, and the people's credit cooperative receiving the merger (if there are changes) regarding the appointment of the Director according to the list of personnel approved by the State Bank branch;

g) A list of members contributing capital to the people's credit cooperative after restructuring, including at least the following contents:

(i) Full name (for individual members, household representatives); Name and address of the headquarters (for corporate members);

(ii) Identity card number or citizen identification card number or passport number (for individual members, household representatives); business registration certificate number or enterprise code (for corporate members);

(iii) Amount of capital contribution and the proportion of each member's contribution.

Article 12. Restructuring Plan

1. The Restructuring Plan must be approved by the Members' General Meeting of the people's credit cooperative implementing restructuring and signed by the Chairman of the Restructuring Organization.

2. The Restructuring Plan of the people's credit cooperative (except in cases provided for in Clause 3 of this Article) must include at least the following contents:

a) Name, address, and website (if any) of the people's credit cooperative implementing restructuring;

b) Reasons for restructuring;

c) Financial status and operations of the people's credit cooperative implementing restructuring in the year immediately preceding the submission of the dossier;

d) Actual value of the charter capital and non-performing debt as of the date of submission; compliance with limits and ratios ensuring safety in the operations of the people's credit cooperative implementing restructuring in the year immediately preceding the submission of the dossier;

đ) Implementation roadmap for restructuring;

e) Projected name, operating area, location of the headquarters, network of operations, duration of operation, charter capital, scope, and content of activities of the people's credit cooperative formed after restructuring in accordance with relevant laws;

g) Projected business plan for each of the three years following restructuring of the people's credit cooperative; including at least business objectives and plans, and projected compliance with limits and ratios ensuring safety in operations each year, along with analysis and explanation of the feasibility of the plan;

h) Measures for transitioning information technology management systems, data transmission systems, internal control and audit systems to ensure smooth operations during and after the completion of the restructuring process of the people's credit cooperative;

i) Budget for costs incurred during the restructuring process and principles for allocating costs for the people's credit cooperative implementing restructuring;

k) Plan for handling employees working at the people's credit cooperative implementing restructuring;

l) Assessment of the impact of restructuring the people's credit cooperative and measures to address existing weaknesses (if any) to ensure safe and continuous operations of the people's credit cooperative during the restructuring process;

m) Rights and obligations of the people's credit cooperative implementing restructuring and related organizations and individuals (if any);

n) Principles and plan for dividing assets (for people's credit cooperatives implementing division or separation) based on agreements between parties ensuring compliance with legal provisions;

o) Plan for handling special loans already taken out (if any).

3. The merger or consolidation plan for people's credit cooperatives under special supervision shall be developed and approved in accordance with the provisions of Clause 1 of Article 149, Article 149a, and Article 149b of the Law on Credit Organizations (as amended and supplemented).

Article 13. Procedure for approving the reorganization of people's credit funds

1. Approval of principles:

a) The reorganization council of the people's credit fund shall complete the dossier in accordance with Clause 1, Article 11 of this Circular and submit it to the State Bank branch.

b) Within fifteen days from the date of receipt of the dossier, the State Bank branch shall issue a document to the reorganization council of the people's credit fund confirming receipt of a complete and valid dossier or requesting supplementation and completion of the dossier.

c) Within fifteen days from the date of issuance of the document confirming receipt of a complete and valid dossier, the State Bank branch shall issue a document to seek opinions:

(i) People's Committee of the commune where the people's credit fund undergoing reorganization has its main office on the impact of the reorganization on economic and social stability in the area;

(ii) People's Committee of the commune where the people's credit fund after reorganization will have its main office on 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 Management, Head and other members of the Supervisory Board or dedicated supervisor, Director of the people's credit fund after reorganization;

(iii) Banking Inspection and Supervision Department of the commune where the people's credit fund undergoing reorganization has its main office (for areas where there is a Banking Inspection and Supervision Department) on the operation situation of the people's credit fund undergoing reorganization; list of personnel proposed to be elected or appointed as Chairman and other members of the Board of Management, Head and other members of the Supervisory Board or dedicated supervisor, Director of the people's credit fund after reorganization;

d) Within fifteen days from the date of receipt of the document seeking opinions, the Banking Inspection and Supervision Department and the People's Committee of the commune shall issue documents providing their opinions on the matters requested. If no written opinion is received from these units within this period, the State Bank branch shall consider that these units have no objection;

đ) Within sixty days from the date of receipt of a complete and valid dossier, the State Bank branch shall issue a document approving the principle of reorganization 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 Management, Head and other members of the Supervisory Board or dedicated supervisor, Director of the newly formed people's credit fund, people's credit fund being split off, people's credit fund receiving merger (if there is a change). In case of non-approval, the State Bank branch shall issue a document stating the reasons.

2. Within five working days from the date the State Bank branch approves the principle of reorganization, the people's credit fund undergoing reorganization shall publish information in accordance with Clause 1, Article 10 of this Circular.

3. Approval of reorganization:

a) Within sixty days from the date the State Bank branch approves the principle of reorganization, the reorganization council shall submit to the State Bank branch the dossier requesting approval of reorganization as stipulated in Clause 2, Article 11 of this Circular. If the State Bank branch does not receive a complete and valid dossier within this period, the document approving the principle of reorganization shall lose its validity.

Within ten days from the date of receipt of the above dossier, the State Bank branch shall issue a document to the reorganization council confirming receipt of a complete and valid dossier or requesting supplementation and completion of the dossier;

b) Within thirty days from the date of receipt of a complete and valid dossier, the State Bank branch:

(i) Shall issue a decision approving the reorganization of the people's credit fund;

(ii) Shall issue, amend, or supplement the License for the people's credit fund after reorganization.

In case of non-approval, the State Bank branch shall issue a document stating the reasons.

4. Within forty-five days from the date the State Bank branch issues a decision approving the reorganization of the people's credit fund, the people's credit fund after reorganization shall complete the registration procedures for cooperative organizations or change registration content of cooperative organizations in accordance with the law; publish information in accordance with Clause 2, Article 10 of this Circular; organize the opening of operations in accordance with the law (for newly formed people's credit funds) and issue a report on the completion of the reorganization of the people's credit fund to the State Bank branch.

5. Within five working days from the date the License expires as stipulated in Clause 6, Article 6 of this Circular, the people's credit fund being split, the people's credit fund being merged, the people's credit fund participating in consolidation shall be responsible for returning the expired License to the State Bank branch.

Article 14. Merger and consolidation of people's credit funds under special supervision

1. The proposal and decision on the policy of merger and consolidation of people's credit funds under special supervision shall be implemented in accordance with the provisions of Clause 1 and 2 of Article 147a of the Law on Credit Organizations (as amended and supplemented).

2. Within sixty days from the date of receipt of the decision on the policy of merger and consolidation, the people's credit fund under special supervision shall develop the plan for merger and consolidation in accordance with Articles 149a and 149b of the Law on Credit Organizations (as amended and supplemented).

3. The State Bank branch shall examine and approve the plan for merger and consolidation of the people's credit fund under special supervision in accordance with Article 149a of the Law on Credit Organizations (as amended and supplemented).

4. The implementation of the plan for merger and consolidation of the people's credit fund under special supervision shall be carried out in accordance with Article 149d of the Law on Credit Organizations (as amended and supplemented).

5. Within five working days from the date the License ceases to be valid as prescribed in Clause 6 of Article 6 of this Circular, the people's credit fund being merged, the people's credit fund participating in consolidation shall have the responsibility to return the License that has ceased to be valid to the State Bank branch.

Chapter III

REVOCATION OF LICENSE AND LIQUIDATION OF ASSETS OF

OF PEOPLE'S CREDIT FUNDS

Section 1

GENERAL PROVISIONS

Article 15. Acts not to be performed during the process of revoking the License and liquidating assets of the people's credit fund

From the date the General Meeting of Members of the people's credit fund passes the proposal to revoke the License for the voluntary dissolution of the people's credit fund or the State Bank branch issues a document requesting the people's credit fund to prepare a dossier to propose dissolution, the people's credit fund, managers, directors, and employees of the people's credit fund shall not perform the following acts:

1. Concealing or disposing of the assets of the people's credit fund, returning the capital contributions of members.

2. Abandoning or reducing debt collection rights.

3. Converting unsecured debts into secured debts guaranteed by the assets of the people's credit fund.

4. Pledging, mortgaging, donating, and leasing the assets of the people's credit fund.

5. Signing new agreements or contracts except for those aimed at terminating operations.

6. Transferring money and assets of the people's credit fund abroad.

Section 2

REVOCATION OF LICENSE

Article 16. Cases of revocation of the License

1. The people's credit fund voluntarily requests dissolution when it has the ability to settle all debts and other financial obligations.

2. The application dossier for the issuance of the License of the people's credit fund contains false information to meet the conditions for obtaining the License.

3. The people's credit fund operates contrary to the contents stipulated in the License.

4. The people's credit fund seriously violates the legal regulations on limits and ratios to ensure safety in operations.

5. The people's credit fund does not implement or implements inadequately the decisions of the State Bank branch to ensure safety in banking operations.

6. The people's credit fund is divided, merged, consolidated, or declared bankrupt.

7. The people's credit fund expires its operating period without requesting an extension or requests an extension but is not approved in writing by the State Bank branch.

Article 17. Procedures for revoking the License for the voluntary dissolution of the people's credit fund

1. Approval of the dissolution proposal:

a) The people's credit fund prepares the dissolution application dossier in accordance with Clause 4 of this Article and sends it to the State Bank branch;

b) Within fifteen days from the date of receipt of the dossier, the State Bank branch sends a document to the people's credit fund confirming the receipt of a complete and valid dossier or requesting additional information;

c) Within fifteen days from the date of receipt of a complete and valid dossier, the State Bank branch sends a document seeking opinions from:

(i) The Banking Inspection and Supervision Department (in cases where the headquarters of the people's credit fund is located in a province or city with a Banking Inspection and Supervision Department) regarding the current organizational structure, operation, ability to settle all debts and other financial obligations; the impact of dissolution and revocation of the License on depositors' rights and the stability of the people's credit fund system in the area;

(ii) The People's Committee of the commune where the headquarters of the people's credit fund is located regarding dissolution and revocation of the License; the impact of dissolution and revocation of the License on political stability and socio-economic development in the area;

(iii) The Cooperative Bank regarding the impact of dissolution and revocation of the License;

d) Within fifteen days from the date of receipt of the document from the State Bank branch, the units specified in point c of this Clause shall send their opinions on the matters requested. If no written opinion is received from these units within this period, the State Bank branch shall consider that they have no objections;

đ) Within fifty days from the date of receipt of a complete and valid dossier, the State Bank branch:

(i) Issues a decision approving dissolution, approves the Liquidation Plan of the people's credit fund, requires the people's credit fund to establish a Liquidation Board and proceed with asset liquidation; issues a decision to establish a Liquidation Oversight Team in accordance with Article 27 of this Circular; or

(ii) Sends a document requesting the people's credit fund to report and explain relevant matters (if necessary). Within fifteen days from the date of receipt of the explanation document from the people's credit fund, the State Bank branch shall review and handle in accordance with point đ(i) of this Clause; or

(iii) Sends a document rejecting approval of the dissolution of the people's credit fund and specifies the reasons.

2. Asset liquidation:

a) From the date the State Bank branch issues a decision approving dissolution, the people's credit fund must stop all business activities listed in the License;

b) Within thirty days from the date the State Bank branch issues a decision approving dissolution, the people's credit fund must establish a Liquidation Board and proceed with asset liquidation according to the approved Liquidation Plan, complying with the provisions of Section 3 Chapter III of this Circular and related laws.

c) Within thirty days from the date of completion of liquidation, the Liquidation Board shall submit a report on the results of the liquidation and a request to terminate the liquidation (including a request to terminate the liquidation to carry out bankruptcy procedures as provided for by law) to the Liquidation Supervision Team, the People's Committee of the commune where the credit cooperative is headquartered, and the State Bank branch.

d) Within fifteen days from the date of receipt of the report of the Liquidation Board as stipulated in point c Clause of this Article, the Liquidation Supervision Team shall submit a report on the results of the liquidation and a request to terminate the liquidation (including a request to terminate the liquidation to carry out bankruptcy procedures as provided for by law) to the State Bank branch.

đ) During the supervision of the liquidation of assets of the credit cooperative, if it is found that the credit cooperative is unable to fully pay off its debts and other financial obligations, the Liquidation Supervision Team shall be responsible for reporting the results of the liquidation to the State Bank branch, requesting the termination of the liquidation, and demanding the credit cooperative to file a petition with the Court to initiate bankruptcy proceedings as provided for by law.

3. Revocation of License:

Within thirty days from the date of receipt of the report of the Liquidation Supervision Team as stipulated in point d Clause 2 Article of this Decree, the Director of the State Bank branch shall examine and issue a decision:

a) To terminate the liquidation and revoke the license of the credit cooperative; or

b) To terminate the liquidation of the credit cooperative to carry out bankruptcy procedures and revoke the license as provided for in Clause 2 Article 19 of this Circular.

4. Documents for Dissolution Application:

a) A dissolution application document signed by the Chairman of the Management Board of the credit cooperative, stating clearly the reasons for requesting dissolution, the ability to settle all debts, and measures to be taken after dissolution;

b) The resolution of the Members' Congress of the credit cooperative approving the dissolution, revocation of the credit cooperative's license, and the asset liquidation plan;

c) The asset liquidation plan of the credit cooperative as prescribed in Article 25 of this Circular;

d) The financial statement of the credit cooperative (including the credit cooperative not required to undergo annual independent audit according to the State Bank's regulations on independent audit for credit organizations) of the most recent quarter before the date of the dissolution application, audited by an independent auditing organization and without any disclaimer. In case there is no audited financial statement at the time of submitting the dissolution application, the credit cooperative shall submit an unaudited financial statement and must submit an audited financial statement immediately upon issuance by the auditing organization. The credit cooperative shall be responsible for the contents of the submitted financial statements.

Credit cooperatives under special supervision are not required to submit independently audited financial statements as prescribed herein.

Article 18. Procedures for Revoking the License of Credit Cooperatives Subject to Revocation of License as Provided for in Clause 2, 3, 4, 5, and 7 of Article 16 of this Circular

1. Based on the inspection conclusions, reports on supervisory results, and documents from competent authorities regarding the operations of credit cooperatives falling within the cases stipulated in Clause 2, 3, 4, 5, and 7 of Article 16 of this Circular, the State Bank branch shall issue a document requesting the credit cooperative to prepare a dissolution application.

For credit cooperatives under special supervision, within fifteen days from the date of receipt of the proposal from the Special Supervision Board regarding the policy to dissolve the credit cooperative under special supervision, the State Bank branch shall submit to the Governor (through the Banking Inspection and Supervision Agency) for examination and submission to the Government for a decision on the policy to dissolve the credit cooperative under special supervision. Within ten days from the date of receipt of the Government's document on the policy to dissolve the credit cooperative under special supervision, the State Bank branch shall issue a document requesting the credit cooperative under special supervision to prepare a dissolution application.

2. Within sixty days from the date of receipt of the document of the State Bank branch as stipulated in Clause 1 of this Article, the credit cooperative shall prepare a dissolution application in accordance with Clause 4 of Article 17 of this Circular and submit it to the State Bank branch.

3. The State Bank branch shall examine and approve the dissolution of the credit cooperative in accordance with point b, c, d, đ Clause 1 of Article 17 of this Circular.

4. The credit cooperative shall implement the liquidation of assets in accordance with Clause 2 of Article 17, Section 3 Chapter III of this Circular and relevant laws.

5. The State Bank branch shall implement the revocation of the credit cooperative's license in accordance with Clause 3 of Article 17 of this Circular.

Article 19. Revocation of License in cases of reorganization or bankruptcy of people's credit funds

1. In cases where people's credit funds undergo reorganization, the procedure for revoking the License shall be carried out according to the provisions on the reorganization of people's credit funds under Clause 5, Article 13, Clause 5, Article 14 of this Circular and relevant laws.

2. In cases where people's credit funds go bankrupt, the State Bank branch shall issue a decision to revoke the License of the people's credit fund after the Judge appoints a Liquidator or a business to manage and liquidate assets.

Article 20. Announcing information on the revocation of the License and implementing procedures to terminate legal personality

1. Within seven working days from the date the State Bank branch's decision approving the dissolution of the people's credit fund becomes effective, the people's credit fund must publish such information in a daily newspaper within the province or centrally-administered city for three consecutive issues, and must post such information at the People's Committee office of the commune where the headquarters is located, at the headquarters, and at the transaction offices of the people's credit fund for seven working days. The information to be published includes:

a) Number and date of the State Bank branch's decision approving the dissolution;

b) Name and address of the headquarters;

c) The number and date of the License for Establishment and Operation, Certificate of Registration for Cooperative Association;

d) Charter capital;

2. Within seven working days from the date the Decision revoking the License becomes effective:

2. Within seven working days from the date the decision to revoke the License becomes effective:

a) The people's credit fund must publish the decision to revoke the License in a daily newspaper within the province or centrally-administered city for three consecutive issues, post it at the People's Committee office of the commune where the headquarters is located; post it at the headquarters, transaction offices, and transaction points of the people's credit fund;

b) The State Bank branch must publish on its electronic information website the revocation of the License of the people's credit fund and send the decision to revoke the License to the State Bank of Vietnam, the People's Committee of the commune where the headquarters is located, the Deposit Insurance Corporation of Vietnam, the Vietnam Cooperative Bank, and the Association of People's Credit Funds.

3. In cases where the License is revoked due to reorganization of the people's credit fund, division, merger, or participation in consolidation, the people's credit fund must announce information in accordance with Clause 2, Article 10 of this Circular.

4. The people's credit fund must implement procedures to terminate legal personality in accordance with the law.

Section 3

LIQUIDATION OF ASSETS OF PEOPLE'S CREDIT FUNDS

Article 21. Time limit for liquidation

1. The time limit for liquidation is twelve months from the date the State Bank branch's decision approving the dissolution of the people's credit fund becomes effective.

2. The time limit for liquidation of the people's credit fund may be extended, with each extension not exceeding twelve months.

3. During the liquidation process, if it is found that it is impossible to complete the liquidation within the prescribed period, thirty days before the end of the liquidation period, the Liquidation Board must submit a written request for an extension of the liquidation period to the State Bank branch, specifying the reasons for requesting the extension and the duration of the extended liquidation.

Within fifteen days from the date of receipt of the request for an extension of the liquidation period from the Liquidation Board, the State Bank branch must issue a written extension or non-extension of the liquidation period of the people's credit fund.

Article 22. Completion of liquidation

The people's credit fund completes liquidation in the following cases:

1. The people's credit fund has fully settled all debts to creditors in accordance with Clause 1, Clause 2, Article 26 of this Circular.

2. The people's credit fund is unable to fully settle all debts to creditors.

3. The liquidation period has expired as prescribed, including any extension period (if applicable).

Article 23. Liquidation Board

1. In cases where the people's credit fund voluntarily dissolves, the Liquidation Board is established by the General Assembly of the people's credit fund based on the proposal of the Management Board of the people's credit fund.

2. In cases where the License of the people's credit fund is revoked, the Director of the State Bank branch decides on the composition of the Liquidation Board as follows:

a) Composition in accordance with Clause 3, Clause 4 of this Article based on the proposal of the people's credit fund; or

b) Other composition decided by the Director of the State Bank branch in cases where the people's credit fund does not propose the composition in accordance with Clause 3, Clause 4 of this Article.

3. The composition of the Liquidation Board of the people's credit fund includes the Chairman of the Management Board, the Head of the Supervisory Board or a dedicated supervisor, the Director, the Chief Accountant, and all members of the people's credit fund who have contributed capital of five percent or more of the charter capital, and the five largest depositors at the people's credit fund (provided these depositors agree to participate in the Liquidation Board) at the time of the dissolution proposal or when the State Bank branch requests the people's credit fund to prepare a dissolution application file.

In cases where there is a vacancy in the positions of Chairman of the Management Board, Head of the Supervisory Board or a dedicated supervisor, Director, or Chief Accountant of the people's credit fund, the Management Board of the people's credit fund selects replacements to fill these positions and join the Liquidation Board.

4. The Chairman of the Management Board of the people's credit fund is the Chairman of the Liquidation Board. In cases where there is a vacancy in the position of Chairman of the Management Board, the Management Board of the people's credit fund convenes a meeting to elect one person among the remaining members of the Management Board to assume the role of Chairman of the Liquidation Board.

Article 24. Powers and responsibilities of the Liquidation Board

1. The Liquidation Board is authorized to use the seal of the people's credit fund during the liquidation process in accordance with the law.

2. The Liquidation Board is responsible for:

a) Reviewing all items of assets and liabilities, off-balance sheet items of the balance sheet of the people's credit fund, compiling a list and amount of creditors and debtors up to the date of asset liquidation of the people's credit fund, and preparing a list of assets of the people's credit fund for disposal.

b) Implement the liquidation of assets of the people's credit fund according to the liquidation plan approved by the State Bank branch, comply with the provisions of this Circular and relevant laws, and take all measures to recover debts and assets of the people's credit fund. All revenues of the people's credit fund must be used to pay off creditors as stipulated in Article 26 of this Circular.

c) Report regularly on the 10th day of each month or when necessary, to the Liquidation Supervision Team about the situation of asset liquidation, asset distribution, and payment to creditors of the people's credit fund.

3. The costs of the Liquidation Council's operations shall be borne by the people's credit fund. The accounting for the costs of the Liquidation Council's operations must comply with the financial regulations applicable to people's credit funds under the law.

Article 25. Plan for the liquidation of assets of the people's credit fund

The plan for the liquidation of assets of the people's credit fund must be approved by the General Meeting of Members of the people's credit fund and must at least include the following contents:

1. Name, address, and website (if any) of the people's credit fund.

2. Name, address, and contact phone number of members of the Board of Management, members of the Supervisory Board or dedicated supervisors, and the Director of the people's credit fund.

3. List of members of the Liquidation Council (including name, address, and contact phone number of each member).

4. Summary of financial status and activities (actual value of charter capital, bad debt, accounts receivable and payable including on-balance sheet and off-balance sheet items) up to the date of dissolution request or the date when the State Bank branch issues a document requiring the people's credit fund to liquidate its assets; clearly identifying the ability to settle debts and other property obligations; deadlines for debt repayment and contract liquidation.

5. List of capital contributors and their contribution ratios.

6. Plan and measures for handling rights and obligations, specifying the liquidation schedule and asset distribution plan.

7. Plan for storing documents after the recovery of the License.

8. Responsibilities of organizations and individuals related to the process of asset liquidation, dissolution, and license recovery.

Article 26. Handling secured debts, order of asset distribution

1. The handling of secured debts of the people's credit fund shall be carried out in accordance with relevant laws.

2. The distribution of the value of assets of the people's credit fund shall be carried out in the following order:

a) Special loans as provided for in Article 146d of the Law on Credit Institutions (as amended and supplemented).

b) Fees and expenses for asset liquidation as prescribed by law;

c) Debts for salaries, severance pay, unemployment benefits, social insurance, health insurance for employees as prescribed by law and other rights according to collective labor agreements and signed labor contracts.

d) Payments to depositors;

đ) Financial obligations to the State;

e) Debts from the Preservation Fund.

g) Debts from the Vietnam Cooperative Bank.

h) Other debts as prescribed by relevant laws.

3. In cases where the value of the assets of the people's credit fund remains after paying off the debts as stipulated in Clauses 1 and 2 of this Article, the remaining asset value shall be distributed among the capital contributors according to their contribution ratio at the time of asset distribution.

4. The people's credit fund shall not distribute state-subsidized capital and common assets (state-subsidized capital, public works, infrastructure serving the community) to members but must transfer them to local authorities for management. Land allocated by the state for the people's credit fund to use shall be handled in accordance with the law on land.

Section 4

SUPERVISION OF THE LIQUIDATION OF ASSETS OF THE PEOPLE'S CREDIT FUND

Article 27. Liquidation Supervision Team

1. The Director of the State Bank branch decides to establish the Liquidation Supervision Team to supervise the liquidation of assets of the people's credit fund in the area, appoints the head of the Liquidation Supervision Team, and specifies the specific tasks and powers of the head and members of the Liquidation Supervision Team.

2. The Liquidation Supervision Team consists of at least five members including representatives of the State Bank branch, the Banking Inspection and Supervision Department (in the province or city where the Banking Inspection and Supervision Department is located), and the Vietnam Cooperative Bank.

3. Members of the Liquidation Supervision Team shall not be any of the following:

a) Members of the Board of Management, members of the Supervisory Board or dedicated supervisors, Directors, or members of the people's credit fund being liquidated, or members of the Liquidation Council of the people's credit fund being liquidated.

b) Persons related to those specified in Point a of this Clause.

Article 28. Operation Mechanism of the Liquidation Supervision Team

1. Members of the Asset Liquidation Supervision Team work on a part-time basis.

2. The Liquidation Supervision Team is responsible to the Director of the State Bank branch where the people's credit fund whose license was revoked has its main office and to the Governor regarding the execution of their duties.

3. The Liquidation Supervision Team uses the seal of the State Bank branch in documents. Reports of the Liquidation Supervision Team are signed by the head.

4. The head of the Liquidation Supervision Team and members are responsible to the Director of the State Bank branch for the execution of their duties.

5. A meeting of the Liquidation Supervision Team can only be held if at least two-thirds of the total number of members participate. Decisions of the Liquidation Supervision Team can only be passed if a majority of the members present agree. In case of an equal number of valid votes, the decision-making power belongs to the head of the Liquidation Supervision Team.

6. The Liquidation Supervision Team concludes its mission when the Director of the State Bank branch makes a decision to conclude the liquidation of assets of the people's credit fund. In cases where liquidation is concluded to initiate bankruptcy procedures, the Liquidation Supervision Team concludes its mission when the Director of the State Bank branch makes a decision to establish a Special Supervisory Board to oversee the operation of the people's credit fund.

Article 29. Tasks and Powers of the Liquidation Supervision Team

1. Direct, supervise the people's credit fund to inventory all debts, receivables, and payables; require the people's credit fund to invite creditors and debtors to reconcile accounts to determine payment capacity and sources of repayment.

2. Require the Liquidation Board to report and provide documents and information on the organizational status and operations of the people's credit fund during the asset liquidation process and the implementation of payments to creditors according to the priority sequence specified in this Circular.

3. Supervise the entire asset liquidation process of the people's credit fund.

4. Regularly on the 15th of each month or at any time, report to the State Bank branch on the situation of asset liquidation and asset distribution of the people's credit fund. In necessary cases, report to the State Bank branch to request relevant agencies to assist the people's credit fund in recovering receivables.

5. Propose the Director of the State Bank branch to issue a decision to suspend the activities of members of the Liquidation Board who intentionally violate laws or fail to implement the liquidation plan or refuse responsibilities and obligations; in serious cases, propose the Director of the State Bank branch to submit to the Governor for a request to relevant authorities to handle individuals who have committed violations (if any).

6. Recommend the Director of the State Bank branch to handle issues arising outside their jurisdiction.

7. Report to the Director of the State Bank branch to issue a decision to conclude the liquidation process and require the people's credit fund to file a petition with the Court to initiate bankruptcy proceedings as stipulated in point d, e Clause 2 Article 17 of this Circular.

Chapter IV

RESPONSIBILITIES OF RELATED UNITS

Article 30. Responsibilities of the people's credit fund

1. Responsibilities regarding the restructuring of the people's credit fund:

a) The people's credit fund implementing restructuring shall be responsible for complying with all relevant regulations as prescribed in this Circular;

b) The Board of Directors, Supervisory Board, and General Director of the people's credit fund shall be responsible for all activities of the people's credit fund and must ensure absolute safety of the assets of the people's credit fund until the restructuring is completed according to the approved restructuring plan by the State Bank branch;

c) After the State Bank branch has issued a principle approval for restructuring, the people's credit fund implementing restructuring shall proactively prepare for the handover and must immediately hand over all rights, obligations, and related matters when the State Bank branch approves the restructuring;

d) After restructuring, if any issues outside the books or not handed over are discovered, the Chairman and members of the Board of Directors, the Head and members of the Supervisory Board or dedicated supervisors, and the General Director of the people's credit fund implementing restructuring shall bear full responsibility under the law.

2. Responsibilities regarding the dissolution, revocation of licenses, and liquidation of the people's credit fund:

a) The Chairman of the Board of Directors of the people's credit fund shall be responsible for the accuracy, legality, and validity of the application for license revocation;

b) Provide complete and truthful information on the organizational status and operations of the people's credit fund to serve the asset liquidation process;

c) Implement reporting systems and other relevant regulations concerning the dissolution, revocation of licenses, and asset liquidation of the people's credit fund in accordance with the provisions of this Circular.

Article 31. Responsibilities of the State Bank Branch

1. Responsibilities regarding the restructuring of people's credit funds:

a) The focal point for receiving and coordinating with relevant units to appraise the application for the restructuring of people's credit funds within its jurisdiction;

b) Issuing a document approving or not approving the principle of restructuring for people's credit funds within its jurisdiction;

c) Issuing a decision approving or not approving the restructuring of people's credit funds within its jurisdiction, amending the License and approving changes in the people's credit funds being split off, people's credit funds merging into; issuing a License for newly formed people's credit funds;

d) Inspecting people's credit funds within its jurisdiction where there is no Banking Inspection and Supervision Department in accordance with the provisions of this Circular and related laws on the implementation of restructuring;

2. Responsibilities regarding the revocation of Licenses and liquidation of assets of people's credit funds:

a) Issuing a decision to revoke the License of people's credit funds within its jurisdiction, announcing the Decision to revoke the License in accordance with the provisions of this Circular;

b) Deciding on matters related to the establishment of the Liquidation Oversight Team;

c) Receiving reports from the Liquidation Oversight Team on the operation status and progress of the asset liquidation process of people's credit funds. In necessary cases, issuing a document requesting relevant agencies to support people's credit funds in recovering receivables, handling customers intentionally causing loss of people's credit fund assets;

d) Considering and deciding to suspend members of the Liquidation Council of people's credit funds based on the proposal of the Liquidation Oversight Team. In serious cases, the Director of the State Bank Branch shall submit to the Governor for a document requesting the competent authority to handle individuals who have violated the rules;

e) Issuing a decision to conclude the liquidation of people's credit funds, requiring people's credit funds to file a bankruptcy petition with the Court according to the law on bankruptcy;

f) Handling complaints related to the asset liquidation process and the revocation of people's credit fund Licenses outside the authority of the Liquidation Oversight Team. Submitting to the Governor of the State Bank for consideration and handling issues arising outside the authority;

3. Responsibilities regarding reporting to the State Bank:

a) Within five days from the date of issuance of the document approving the principle and the decision approving the restructuring of people's credit funds, the State Bank Branch shall send the State Bank (through the Banking Inspection and Supervision Agency) the document approving the principle along with the restructuring plan of people's credit funds, the decision approving the restructuring of people's credit funds;

b) Within five days from the date of issuance of the document approving the dissolution of people's credit funds, the decision concluding the liquidation and revoking the License of people's credit funds (including cases of concluding the liquidation of people's credit funds to implement bankruptcy procedures), the State Bank Branch shall send the State Bank (through the Banking Inspection and Supervision Agency) the document approving the dissolution along with the asset liquidation plan of people's credit funds, the decision concluding the liquidation and revoking the License of people's credit funds;

c) Reporting to the State Bank quarterly, no later than the 15th day of the following month after the end of each quarter, on the situation of approving restructuring, revoking Licenses, and liquidating assets of people's credit funds within its jurisdiction (if any changes occur).

Article 32. Responsibilities of the Banking Inspection and Supervision Agency

1. The Banking Inspection and Supervision Authority:

a) The focal point for receiving reports from the State Bank branch regarding the situation of approving restructuring, revoking licenses, and liquidating assets of people's credit funds as stipulated in Clause 3, Article 31 of this Circular;

b) The focal point for advising and submitting to the Governor decisions on amending and supplementing relevant regulations concerning the restructuring, revoking licenses, and liquidating assets of people's credit funds;

c) The focal point for advising and submitting to the Governor matters related to reviewing and presenting to the Government proposals for dissolving people's credit funds under special supervision as provided for in Clause 1, Article 18 of this Circular.

2. The Banking Inspection and Supervision Department:

a) Provide written comments to the State Bank branch on the restructuring and revocation of licenses of people's credit funds within its jurisdiction;

b) Dispatch staff to participate in the Liquidation Oversight Team of people's credit funds within its jurisdiction as prescribed in this Circular;

c) Inspect and supervise people's credit funds within its jurisdiction that are implementing restructuring according to this Circular and relevant laws.

Chapter V

IMPLEMENTING PROVISIONS

1. Documents and papers issued and granted by competent authorities before July 1, 2025, which remain valid or within their validity period, shall continue to be applied and used according to the law until they expire or are amended, supplemented, replaced, abolished, revoked, or recalled by the authority receiving the functions, tasks, and powers or by the competent authority.

In cases where people's credit funds have been approved for restructuring, dissolution, have had their licenses revoked, and are currently liquidating assets before the effective date of this Circular, such restructuring, dissolution, license revocation, and asset liquidation shall continue to be carried out in accordance with the laws applicable at the time of approval for restructuring or dissolution and issuance of the license revocation decision.

Article 34. Effective Date

1. This Circular takes effect from November 1, 2018.

2. The following documents are hereby abolished:

a) Decision No. 24/2006/QD-NHNN dated June 6, 2006 of the Governor of the State Bank on the issuance of regulations on issuing and revoking licenses for establishing and operating people's credit funds; opening and closing operations of trading offices, branches, representative offices, and transaction points of people's credit funds; splitting, separating, merging, and consolidating people's credit funds; and liquidating people's credit funds under the supervision of the State Bank;

b) Decision No. 26/2008/QD-NHNN dated September 9, 2008 of the Governor of the State Bank on amending and supplementing certain articles of the regulations on issuing and revoking licenses for establishing and operating people's credit funds; opening and closing operations of trading offices, branches, representative offices, and transaction points of people's credit funds; splitting, separating, merging, and consolidating people's credit funds; and liquidating people's credit funds under the supervision of the State Bank issued together with Decision No. 24/2006/QD-NHNN dated June 6, 2006 of the Governor of the State Bank.

Article 35. Implementation

The Director of the Office, the Head of the Banking Inspection and Supervision Department, Heads of units under the State Bank, Governors of State Bank branches, Chairmen of Management Boards, and Directors of people's credit funds are responsible for implementing this Circular./.