Decision No. 26/2008/QD-NHNN on amending and supplementing certain articles of the Regulation on granting and revoking licenses for the establishment and operation of People's Credit Funds; opening and terminating operations of trading offices, branches, representative offices, transaction rooms, and transaction points of People's Credit Funds; splitting, separating, merging, and consolidating People's Credit Funds; liquidation of 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.

Pursuant to …;

Regarding amendments and supplements to certain provisions of the Regulation on granting and revoking licenses for establishment and operation of People's Credit Funds; opening and closing operations of trading offices, branches, representative offices, transaction rooms, and transaction points of People's Credit Funds;

 merging, splitting, consolidating, and merging People's Credit Funds;

 dissolution of People's Credit Funds under the supervision of the State Bank;

issued together with Decision No. 24/2006/QĐ-NHNN dated June 6, 2006

On the basis of the Law on Credit Organizations 1997 and the Law Amending and Supplementing Certain Provisions of the Law on Credit Organizations 2004;

On the basis of the Law on Cooperatives 2003;ân On the basis of Decree No. 48/2001/NĐ-CP dated August 13, 2001 of the Government on the organization and operation of People's Credit Funds and Decree No. 69/2005/NĐ-CP dated May 26, 2005 on amending and supplementing certain provisions of Decree No. 48/2001/NĐ-CP Pursuant to the proposal of the Director of the Department of Cooperative Credit Organizations,

Amending and supplementing certain provisions of the Regulation on granting and revoking licenses for establishment and operation of People's Credit Funds; opening and closing operations of trading offices, branches, representative offices, transaction rooms, and transaction points of People's Credit Funds; merging, splitting, consolidating, and merging People's Credit Funds; dissolution of People's Credit Funds under the supervision of the State Bank issued together with Decision No. 24/2006/QĐ-NHNN dated June 6, 2006 of the Governor of the State Bank as follows:

of the Governor of the State Bank of Vietnam

_________________

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam 2003;

"Article 1. Scope of application and scope of regulation

1. This Regulation stipulates:

Pursuant to Decree No. 52/2003/ND-CP dated May 19, 2003, issued by the Government, detailing the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

a) The issuance of licenses for establishment and operation (hereinafter referred to as licenses) for grassroots People's Credit Funds, Central People's Credit Funds (hereinafter collectively referred to as People's Credit Funds);.

b) The opening and closing of operations of trading offices, branches, representative offices, transaction rooms, and savings funds of Central People's Credit Funds; the opening and closing of operations of transaction rooms and savings funds of grassroots People's Credit Funds;

DECISION:

Article 1. c) The splitting, merging, and consolidation of grassroots People's Credit Funds;

1. Economic organizations conducting foreign exchange trading agency activities; economic organizations conducting foreign currency receipt and payment service provision activities; economic organizations conducting border country currency exchange agency activities.

d) The revocation of licenses and dissolution of grassroots People's Credit Funds under the supervision of the State Bank.
2. The revocation of licenses and dissolution of Central People's Credit Funds shall be carried out according to separate regulations of the State Bank.
3. People's Credit Funds decide on the opening of transaction points in accordance with Article 2 (amended and supplemented) of this Regulation."
"Article 2. In this Regulation, the following terms are understood as follows:
1. Trading office of Central People's Credit Fund is a subordinate unit of the main office of the Central People's Credit Fund, accounting as a dependent entity, having its own seal, conducting business activities based on the authorization of the Central People's Credit Fund.
Central People's Credit Fund may only open trading offices within the territory of the province or centrally-administered city where the Central People's Credit Fund's main office is located.
2. Branch of Central People's Credit Fund is a subordinate unit of the Central People's Credit Fund, having its own seal, conducting business activities based on the authorization of the Central People's Credit Fund.

4. State Bank Branch in Border Province is the State Bank Branch in provinces sharing borders with China, Laos, and Cambodia.

3. Representative office of Central People's Credit Fund is a subordinate unit of the Central People's Credit Fund, having its own seal, performing functions based on the authorization of the Central People's Credit Fund. The representative office shall not conduct business activities.
4. Transaction room is a subordinate part of the People's Credit Fund, accounting as a reporting unit, having its own seal, subject to comprehensive and direct management by the General Director of the grassroots People's Credit Fund (for transaction rooms of grassroots People's Credit Funds), or the General Director of the trading office or branch of the Central People's Credit Fund (for transaction rooms of Central People's Credit Funds), carrying out transactions with customers according to the functions and tasks defined by the Management Council of the People's Credit Fund.

5. Savings fund is a subordinate part of the grassroots People's Credit Fund (for savings funds of grassroots People's Credit Funds), or of the trading office or branch of the Central People's Credit Fund (for savings funds of Central People's Credit Funds), accounting as a reporting unit, having its own seal, conducting one or more transactions as prescribed by the People's Credit Fund.

6. Transaction point is a subordinate part of the People's Credit Fund, without its own seal, conducting research, customer identification, introduction, acceptance of loan applications, disbursement, and collection of debts from credit contracts of the People's Credit Fund (for transaction points of grassroots People's Credit Funds), or of the trading office or branch (for transaction points of Central People's Credit Funds).

7. Splitting a grassroots People's Credit Fund means that a grassroots People's Credit Fund (hereinafter collectively referred to as the People's Credit Fund to be split) can be divided into two or more new grassroots People's Credit Funds according to the Articles of Association and the decision of the Members' Congress, and terminate the legal personality of the People's Credit Fund to be split; all assets, rights, obligations, and legitimate interests of the People's Credit Fund to be split are transferred to the new grassroots People's Credit Funds.

8. Splitting a grassroots People's Credit Fund means that a grassroots People's Credit Fund splits into two or more new grassroots People's Credit Funds according to the Articles of Association and the decision of the Members' Congress; at the same time, after the split, the People's Credit Fund being split and the new grassroots People's Credit Funds after the split perform their legal person rights and obligations in accordance with the purpose of operation recorded in the license.

9. Consolidation of grassroots People's Credit Funds means that two or more grassroots People's Credit Funds (hereinafter collectively referred to as the People's Credit Funds to be consolidated) can consolidate into one new grassroots People's Credit Fund (hereinafter collectively referred to as the consolidated People's Credit Fund) through mutual agreement among the People's Credit Funds to be consolidated by transferring all assets, rights, obligations, and legitimate interests to the consolidated People's Credit Fund, while terminating the legal personality of the People's Credit Funds to be consolidated.

6. The transaction point is a dependent part of the People's Credit Cooperative, without its own seal, responsible for researching, understanding, introducing customers, receiving loan application files, disbursing funds, and collecting debts for credit contracts of the People's Credit Cooperative (for transaction points of grassroots People's Credit Cooperatives), of branch offices (for transaction points of central People's Credit Cooperatives).

7. Splitting a grassroots People's Credit Cooperative is the process where a grassroots People's Credit Cooperative (hereinafter referred to collectively as the splitting People's Credit Cooperative) may be divided into two or more new grassroots People's Credit Cooperatives according to the Charter, the decision of the Member Assembly, and terminate the legal personality of the splitting People's Credit Cooperative; all assets, rights, obligations, and legitimate interests of the splitting People's Credit Cooperative shall be transferred to the new grassroots People's Credit Cooperatives.

8. Separating a grassroots People's Credit Cooperative is the process where a grassroots People's Credit Cooperative separates into two or more new grassroots People's Credit Cooperatives according to the Charter and the decision of the Member Assembly; simultaneously, after separation, the separated People's Credit Cooperative and the new People's Credit Cooperatives post-separation shall perform their legal entity rights and obligations in accordance with the purposes of operation recorded in the license.

9. Merging grassroots People's Credit Cooperatives is the process where two or more grassroots People's Credit Cooperatives (hereinafter referred to collectively as the merging People's Credit Cooperatives) may merge into one new grassroots People's Credit Cooperative (hereinafter referred to collectively as the merged People's Credit Cooperative) through an agreement among the merging People's Credit Cooperatives by transferring all assets, rights, obligations, and legitimate interests to the merged People's Credit Cooperative, while terminating the legal personality of the merging People's Credit Cooperatives.

10. The merger of grassroots credit funds is the process whereby one or more grassroots credit funds to be merged (hereinafter collectively referred to as the grassroots credit fund to be merged) are integrated into another grassroots credit fund (hereinafter collectively referred to as the merging grassroots credit fund) through an agreement among the grassroots credit funds, transferring all assets, rights, obligations, and lawful benefits of the grassroots credit fund to be merged to the merging grassroots credit fund, while simultaneously terminating the legal entity status of the grassroots credit fund to be merged.

3. Article 3 is amended and supplemented as follows:

Article 3. Competence for issuing, revoking licenses, approving the establishment, termination of operations of trading offices, branches, representative offices, transaction rooms, savings funds of grassroots credit funds, and division, separation, consolidation, and merger of grassroots credit funds

1. The Governor of the State Bank issues decisions on granting licenses for central credit funds; approves the establishment and termination of operations of trading offices, branches, representative offices of central credit funds.

2. The Director of the State Bank branch in provinces and centrally-administered cities issues decisions on granting and revoking licenses, and approves the establishment and termination of operations of transaction rooms, savings funds; division, separation, consolidation, and merger of grassroots credit funds within their jurisdiction; confirms registration for the establishment and termination of operations of transaction rooms, savings funds of central credit funds within their jurisdiction.

4. Supplement Clause 3 to Article 9 as follows:

"3. In case the license is lost or damaged, the grassroots credit fund shall request the State Bank to issue a new or replacement license (according to Form No. 12 attached).

Based on the request of the grassroots credit fund, within fifteen working days from the date of receipt of the application for issuance or replacement of the license, the State Bank will examine and issue a Decision to grant a new or replacement license to the grassroots credit fund according to the principle of retaining the original license number issued (according to Form No. 13 attached). In case of replacing the license for the grassroots credit fund, the State Bank must revoke the old license of the grassroots credit fund to keep the file.

5. The title of Section 2 is amended and supplemented as follows:

"Establishment and Termination of Operations of Trading Offices, Branches, Representative Offices, Transaction Rooms, Savings Funds of Central Credit Funds and Transaction Rooms, Savings Funds of Grassroots Credit Funds."

6. Supplement Article 14b as follows:

"Article 14b. Establishment and Termination of Operations of Transaction Rooms, Savings Funds of Central Credit Funds
1. Establishment of transaction rooms, savings funds of central credit funds:
a) A central credit fund may establish transaction rooms, savings funds in the province or centrally-administered city where its trading office or branch is located when it meets the following conditions:

- Having sufficient staff with competence and professional experience to meet the operational requirements of the transaction room, savings fund.

- Having adequate physical facilities to ensure safety in transactions, vaults, money transfers, fire prevention and extinguishing according to the regulations of the State Bank and relevant laws.

- Having internal regulations in writing to manage the transaction room, savings fund ensuring safe, effective operation and compliance with the law.
b) The central credit fund must submit a written registration for establishing the transaction room, savings fund to the State Bank branch in the province where the transaction room, savings fund is established before commencing operations (Form No. 14 attached).
c) Within five working days from the date of receipt of the registration document of the central credit fund, the State Bank branch in the province must issue a confirmation of registration for establishing the transaction room, savings fund (Form No. 15 attached).
d) The central credit fund must develop and promulgate internal regulations on the operation of the transaction room, savings fund suitable to the organizational scale and activities of the central credit fund and in accordance with the law. These regulations include the following main contents:

- Establishing an information system to meet management and supervision requirements based on ensuring safety, accuracy, and efficiency for transaction activities and updating information reports on the operation situation of the transaction room, savings fund;

- Regulations on the scope of activities, internal control, ensuring safety in transactions, vaults, and money transfers, management and retention of documents, requirements for fire prevention and extinguishing according to regulations;

- Regulations on the risk management information system and asset management regime for the transaction room, savings fund.

- Functions, tasks, delegated authority scope, and standards for managers and internal controllers at the transaction room, savings fund.

- Other regulations according to management and supervision requirements of the central credit fund.

đ) The central credit fund must register business operations according to the law and commence operations of the transaction room, savings fund after receiving the confirmation of registration from the State Bank.

2. Termination of operations of transaction rooms, savings funds of central credit funds:

a) The decision to terminate operations of transaction rooms, savings funds is made by the central credit fund. When a transaction room, savings fund is terminated, the central credit fund has the responsibility to register with the State Bank branch in the province where the transaction room, savings fund was established (Form No. 14 attached).

b) After the termination of operations of the transaction room, savings fund, the central credit fund has the responsibility to settle debts to creditors and resolve other related matters according to the law. The termination of operations of the transaction room, savings fund must ensure that it does not affect the operations of member grassroots credit funds in the area.

7. Article 15 is amended and supplemented as follows:

"Article 15. Conditions, Documents, Procedures, and Formalities for Establishing Transaction Rooms, Savings Funds of Grassroots Credit Funds

1. A grassroots people's credit cooperative may open a transaction office or savings fund within its operational area as recorded in the license issued by the State Bank when it meets the following conditions:

a) Having at least three years of operation from the date of commencement;

b) Having a need to expand its network of operations to serve members in the planned location for the transaction office or savings fund;

c) Maintaining sound financial conditions and generating profits in the two most recent years;

d) The management structure, operation system, and internal inspection and control system functioning effectively;

đ) Information systems meeting management requirements;

e) Not violating regulations on safety in banking operations as stipulated by the State Bank and other laws.

2. A grassroots people's credit cooperative shall submit to the provincial State Bank one set of documents for opening a transaction office or savings fund including:

a) A document from the Chairman of the Board of Directors (or authorized person) requesting the State Bank to approve the establishment of a transaction office or savings fund; this document must include a summary of the necessity, name, location, projected staffing, content, and scope of activities of the transaction office or savings fund;

b) An authorization document from the Chairman of the Board of Directors (for cases of delegation);

c) A resolution of the Board of Directors regarding the establishment of a transaction office or savings fund;

d) Financial reports for the two most recent years of the grassroots people's credit cooperative;

đ) A document approving the location of the transaction office or savings fund headquarters from the People's Committee of the commune where the transaction office or savings fund is planned to be established;

3. Procedures and formalities:

a) Within a maximum period of fifteen working days from the date of receipt of complete application documents as prescribed, the provincial State Bank will examine and issue a document approving or not approving the establishment of a transaction office or savings fund by the grassroots people's credit cooperative; if disapproved, the reasons must be clearly stated;

b) After being approved by the provincial State Bank, the grassroots people's credit cooperative must notify the business registration authority about the establishment of the transaction office or savings fund and follow legal procedures for stamping, managing, and using the seal of the transaction office or savings fund;

4. Regulations on safety in operations:

The grassroots people's credit cooperative must establish regulations on the content and scope of activities, ensuring safety in transactions, vaults, and money transfers, fire prevention and firefighting requirements for the transaction office or savings fund.

8. Article 16 is amended and supplemented as follows:

"Article 16. Documents, procedures, and formalities for terminating the operations of a transaction office or savings fund of a grassroots people's credit cooperative

1. A grassroots people's credit cooperative shall submit to the provincial State Bank one set of documents for terminating the operations of a transaction office or savings fund including:

a) A document from the Chairman of the Board of Directors (or authorized person) regarding the termination of the operations of a transaction office or savings fund, which clearly states the reasons, the current status of the transaction office or savings fund up to the date of application for termination, and confirms that the termination will not affect the operations of the grassroots people's credit cooperative;

b) An authorization document from the Chairman of the Board of Directors (for cases of delegation);

c) A resolution of the Board of Directors regarding the termination of the operations of a transaction office or savings fund;

d) A plan for resolving obligations to creditors and other related issues upon termination of the operations of a transaction office or savings fund.

2. Procedures and formalities:

Within a maximum period of fifteen working days from the date of receipt of complete application documents for terminating the operations of a transaction office or savings fund of a grassroots people's credit cooperative as prescribed, the provincial State Bank will examine and issue a document approving or not approving the termination of the operations of a transaction office or savings fund by the grassroots people's credit cooperative; if disapproved, the reasons must be clearly stated.

3. Notification of decision to terminate operations:

Within thirty working days from the date of receipt of the approval document from the provincial State Bank, the Board of Directors of the grassroots people's credit cooperative must issue a decision to terminate the operations of a transaction office or savings fund; this decision must be sent to the provincial State Bank, the business registration authority, and notified to the People's Committee of the commune where the grassroots people's credit cooperative has its main office and the transaction office or savings fund."

9. Appendices to this Regulation are supplemented with forms numbered 12, 13, 14, and 15.

Article 2. This Decision takes effect fifteen days after its publication in the Official Gazette.

Within twelve months from the date this Decision takes effect, all people's credit cooperatives must adjust their transaction offices, branches, representative offices, transaction offices, savings funds, service points (for central people's credit cooperatives), transaction offices, and service points (for grassroots people's credit cooperatives) according to this Regulation.

Article 3. The Head of the Office, Heads of the Cooperative Credit Organizations Department, Heads of relevant units under the State Bank, Governors of the State Bank Branches in provinces and centrally governed cities, Chairmen of the Boards of Directors, and General Managers of central people's credit cooperatives and Chairmen of the Boards of Directors, Directors of grassroots people's credit cooperatives are responsible for implementing this Decision./.