Consolidated Document number 45/VBHN-NHNN on cooperative credit banks

STATE BANK OF VIETNAM VIETNAM --------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
Number: 45/VBHN-NHNN	Hanoi, December 5, 2019

CIRCULAR

REGULATIONS ON COOPERATIVE BANKS

Circular No. 31/2012/TT-NHNN dated November 26, 2012 of the Governor of the State Bank of Vietnam on cooperative banks, which took effect from January 1, 2013, has been amended and supplemented by:

Circular No. 09/2016/TT-NHNN dated June 17, 2016 of the Governor of the State Bank of Vietnam 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, which took effect from August 15, 2016.

Circular No. 05/2018/TT-NHNN dated March 12, 2018 of the Governor of the State Bank of Vietnam on the dossier, procedures, and formalities for approving changes, lists of candidates for election and appointment of personnel of credit organizations that are cooperatives, which took effect from June 1, 2018.

Circular No. 17/2018/TT-NHNN dated August 14, 2018 of the Governor of the State Bank of Vietnam amending and supplementing certain articles of Circulars on issuing Licenses, network operations, and foreign exchange activities of credit institutions and branches of foreign commercial banks, which took effect from October 1, 2018.

Circular No. 21/2019/TT-NHNN dated November 14, 2019 of the Governor of the State Bank of Vietnam amending and supplementing certain articles of Circulars on cooperative banks, people's credit funds, and safety guarantee funds for people's credit funds, which took effect from January 1, 2020.

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Organizations No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Law on Enterprises No. 60/2005/QH11 dated November 29, 2005;

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:

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 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 stipulates the issuance of Licenses, organization and operation, powers and responsibilities of cooperative banks.[1]^,[2],[3],[4].

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates the issuance of Licenses, organization and operation, powers and responsibilities of cooperative banks; procedures and formalities for converting Central People's Credit Funds into cooperative banks.

Article 2. Applicability

1. Cooperative banks.

2. People's Credit Unions.

3. Organizations and individuals related to participating in establishing, issuing Licenses, organizing and operating, powers and responsibilities of cooperative banks.

Article 3. Explanation of Terms

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

1. First General Meeting is the first meeting of members of a cooperative bank, with the task of adopting: Charter of the cooperative bank; Project for establishing the cooperative bank; Electing the Chairman and members of the Board of Directors, Head and members of the Supervisory Board for the first term; Deciding other issues related to the establishment of the cooperative bank.

2. Capital contribution establishing member status is the minimum capital contribution required to establish member status when joining a cooperative bank.

3. Annual Capital Contribution is the annual capital that members must contribute to maintain their member status.

Article 4. Licensing Authority

1. The State Bank of Vietnam (hereinafter referred to as the State Bank) is the authority responsible for examining and issuing Licenses for establishment and operation (hereinafter referred to as Licenses) for cooperative banks.

2. The State Bank has the right to refuse to issue Licenses if the organization requesting the License does not meet the provisions of the Law on Credit Institutions and this Circular.

Article 5. Term of Operation and Operating Area

1. The maximum duration of operation of a cooperative bank is 99 (ninety-nine) years.

2. The operational territory of a cooperative bank: throughout the territory of the Socialist Republic of Vietnam.

3. A cooperative bank may establish branches, representative offices, and non-profit units within the country; representative offices abroad after being approved in writing by the State Bank.

Article 6. Nature and Objectives of Operations

The cooperative bank is a type of credit organization established under the cooperative model with the main objectives being to link up and ensure the safety of the system through financial support and monitoring activities within the people's credit fund system. Its primary operations include capital regulation and conducting banking activities for members that are people's credit funds.

Article 7. Principles for Establishing Documentation

1. The application for a Cooperative Bank License must be prepared in Vietnamese.

2. Copies of documents and certificates must be certified in accordance with the provisions of the law.

Chapter II

REGULATIONS ON GRANTING LICENSES

Section 1. ISSUANCE OF COOPERATIVE BANK LICENSE

Article 8. Conditions for Issuing a Cooperative Bank License

1. Having a minimum charter capital equivalent to the statutory capital level as prescribed by the Government at the time of application for establishment.

2. Members who are people's credit funds and other legal entities must meet the requirements stipulated in Article 34 of this Circular.

3. Managers, executives, and members of the Supervisory Board must satisfy the standards and conditions set forth in the Law on Credit Institutions and Articles 23, 24, and 25 of this Circular.

4. Having a Charter consistent with the provisions of the Law on Credit Institutions, the Law on Cooperatives, and other relevant laws.

5. Having a Feasible Plan for Establishment and Business Operation for the first three years of operation.

6.[5] (Repealed)

Article 9. Application Documents for Issuance of License

1. A request for issuance of a license signed by the Chairman of the Board of Directors of the proposed cooperative bank (Annex 3 of this Circular).

2. The Charter of the cooperative bank.

3. The plan for establishment of the cooperative bank, including:

a) The necessity of establishing the cooperative bank;

b) The name of the cooperative bank, the location of its headquarters, the duration of operation, the charter capital upon establishment, and the content of activities in compliance with the Law on Credit Institutions and this Circular.

c) The capital contribution structure of members, specifying those contributing 05% or more of the charter capital;

d) Organizational structure and personnel planning:

- Organizational personnel chart;

- Management, supervision, and operational machinery, including:

+ Board of Directors: Chairman, Board Members;

+ Supervisory Board: Chairperson, Supervisory Board Members, dedicated Supervisory Board Members;

+ General Director, Deputy General Directors, Chief Accountant, Branch Directors, and equivalent positions as specified in the Charter of the cooperative bank;

đ) Risk management capability: Types of risks expected to arise during operations (credit risk, operational risk, market risk, liquidity risk...) and measures to prevent and control these risks;

e) Information technology:

- Financial investment plans for information technology;

- IT application capabilities, specifying: implementation time for IT investment; types of IT to be applied; IT staff and their capabilities; ensuring the information system can integrate and connect with the State Bank's management system to provide information as required by the State Bank;

g) Development strategy, expansion of business network, provision and development of banking services (clearly analyzing planned services, types of customers...);

h) Internal control and audit system:

- Operating principles of the internal control and audit system;

- Internal regulations as stipulated in Clause 2 of Article 93 of the Law on Credit Institutions.

i) Proposed business plan for the first three years, at least including: projected business results, minimum capital adequacy ratios, performance indicators, and explanations of the feasibility of implementing the plan each year.

4. Documentation of individuals expected to participate in management, supervision, and operation:

a) List of personnel expected to participate in management, supervision, and operation;

b) Curriculum vitae (Annex 1 of this Circular), judicial record as prescribed by law;

c) Copy of Identity Card or Passport or other lawful personal identification;

d) Public disclosure of related interests as stipulated in Article 118 of the Enterprise Law;

đ) Copies of certificates proving professional qualifications;

5. Documentation of members:

a) List of members participating in capital contributions to the cooperative bank, including the following key contents:

- Name and location of headquarters; Certificate of Establishment or Business Registration Certificate; Amount of capital contribution, percentage of capital contribution, contribution period;

- Full name; permanent address; nationality; number, date of issue, place of issue of Identity Card or Passport or other lawful personal identification for individual representatives of capital contributions;

b) Request to join as a member of the cooperative bank;

c) Certificate of Establishment or Business Registration Certificate or equivalent document (for non-credit institution legal entities);

d) Written approval from the competent authority allowing the organization (excluding people's credit funds) to contribute capital to establish a cooperative bank (if applicable);

đ) Charter (for non-credit institution legal entities);

e) Power of attorney for the legal representative (including the representative of contributed capital) joining as a member of the cooperative bank according to the law;

g) Identity Card or Passport or other lawful personal identification of the person authorized to represent the non-credit institution legal entity contributing capital to the cooperative bank;

h) Declaration of related parties of non-people's credit fund members (Annex 2 of this Circular);

i) Financial statements of the most recent year prior to the application for establishment of the cooperative bank and financial statements up to the latest date but not more than 90 days before the application date (for non-credit institution legal entities);

k) Declaration specifying the capital contribution, number of shares held, and shareholding ratio of each member in other credit institutions.

6. Confirmation document of lawful ownership or usage rights of the headquarters location.

7. Resolution of the First Member Assembly regarding the establishment of the cooperative bank.

8. The Resolution of the First Members' Congress on electing the Chairman and members of the Board of Directors, the Head and members of the Supervisory Board.

9. The Decision of the Board of Directors on appointing the position of General Director of the cooperative bank.

Article 10. Procedure for Issuing the License

1. A cooperative bank intending to be established shall prepare one (1) set of documents in accordance with Articles 7 and 9 of this Circular and submit them directly or by post to the State Bank of Vietnam (Supervisory and Inspection Authority).

2. Within thirty (30) days from the date of receipt of the application for issuing the license, the State Bank of Vietnam (Supervisory and Inspection Authority) shall send a letter to the cooperative bank intending to be established confirming that all necessary documents have been received or requesting additional or completed documents as required.

3. Within one hundred eighty (180) days from the date of confirmation of receipt of complete and valid documents, the State Bank of Vietnam shall issue the License or send a letter refusing to issue the License stating the reasons.

Article 11. Commencement of Operations

1. A cooperative bank that has been granted a License in accordance with Section I Chapter II of this Circular must register its business, disclose information, and report the conditions for commencement of operations in accordance with Articles 25 and 26 of the Law on Credit Institutions.

2. A cooperative bank must send a direct letter or by post to the State Bank of Vietnam branch in the province or centrally administered city where the cooperative bank's headquarters is located, notifying the conditions for commencement of operations as stipulated in Clause 1 of this Article at least fifteen (15) days before the planned date of commencement of operations.

Section 2. TRANSFORMATION OF STATE CREDIT UNIONS INTO COOPERATIVE BANKS

Article 12. Procedures and Examination of Application Documents for Approval of Transformation and Issuance of Cooperative Bank License

1. The State Credit Union must convene a Transformation Congress in accordance with Article 13 of this Circular, and prepare an application for the State Bank of Vietnam's approval of the transformation in accordance with Article 14 of this Circular.

2. Within a maximum of sixty (60) working days after receiving the State Bank of Vietnam's approval for the transformation of the State Credit Union into a cooperative bank, the State Credit Union must convene the first Members' Congress to perform the following tasks:

a) Approve the Charter of the cooperative bank.

b) Officially elect the positions of Chairman and members of the Board of Directors, and the Head and members of the Supervisory Board of the cooperative bank for the first term in accordance with the list of candidates prescribed in Clause 1 of Article 22 of this Circular.

c) Approve the business plan for the first three years.

3. Within a maximum of fifteen (15) working days from the date of convening the first Members' Congress, the State Credit Union must prepare the application for the cooperative bank license in accordance with Article 16 of this Circular.

4. The Supervisory and Inspection Authority is responsible for receiving, examining the application documents, and submitting to the Governor of the State Bank of Vietnam for approval of the transformation and issuance of the cooperative bank license.

Article 13. Shareholders' Meeting for Conversion

1. The Shareholders' Meeting for converting the Central People's Credit Cooperative Fund into a cooperative bank (hereinafter referred to as the "Conversion Meeting") shall be convened by the Board of Directors of the Central People's Credit Cooperative Fund. The organization of the Conversion Meeting in the form of a general meeting of all members or a meeting of member representatives of the Central People's Credit Cooperative Fund, as well as the method of electing member representatives to attend the Conversion Meeting, shall be decided by the Board of Directors of the Central People's Credit Cooperative Fund.

2. The Conversion Meeting shall have the following tasks:

a) Approving the Proposal for Converting the Central People's Credit Cooperative Fund into a Cooperative Bank. The Proposal for Converting the Central People's Credit Cooperative Fund into a Cooperative Bank must at least include the following contents:

- The necessity of converting the Central People's Credit Cooperative Fund into a cooperative bank;

- The name of the cooperative bank, the location of its headquarters, the term of operation, and the charter capital;

- Contents of operations consistent with the provisions of the Law on Credit Institutions and this Circular;

- Organizational structure, management, and governance;

- A list of proposed personnel, detailing their professional qualifications and work experience in the banking sector:

+ Chairman and members of the Board of Directors;

+ Head and members of the Supervisory Board;

+ General Director.

b) Approving the draft Charter of the cooperative bank;

c) Approving the list of cooperative bank members.

Article 14. Documents, Procedures, and Formalities for Approval of the Conversion of the Central People's Credit Cooperative Fund into a Cooperative Bank

1. After the Conversion Meeting, the Central People's Credit Cooperative Fund shall prepare one set of documents requesting the State Bank to approve the conversion of the Central People's Credit Cooperative Fund into a cooperative bank, which shall be sent directly or by post to the State Bank (Bank Inspection and Supervision Department), including:

a) A document from the Chairman of the Board of Directors of the Central People's Credit Cooperative Fund requesting the State Bank to approve the conversion of the Central People's Credit Cooperative Fund into a cooperative bank;

b) Minutes of the Conversion Meeting;

c) Resolutions of the Conversion Meeting, which must at least include the following contents:

- Approving the Proposal for Converting the Central People's Credit Cooperative Fund into a Cooperative Bank;

- Approving the draft Charter of the cooperative bank;

- Approving the list of cooperative bank members.

d) The Proposal for Converting the Central People's Credit Cooperative Fund into a Cooperative Bank;

đ) The Charter of the cooperative bank;

e) The list of cooperative bank members.

2. Within ten working days from the date of receipt of complete and valid documents, the State Bank shall issue a decision approving the conversion of the Central People's Credit Cooperative Fund into a cooperative bank.

Article 15. Conditions for Issuing a Banking License for a Cooperative Bank

1. Managers, executives, and members of the Supervisory Board must meet the standards and conditions stipulated for the Central People's Credit Cooperative Fund at the time of requesting conversion.

2. There must be a Charter that complies with the provisions of the Law on Credit Institutions, the Law on Cooperatives, and other relevant laws.

3. There must be a headquarters, physical facilities, and information technology systems that ensure the operations of the bank.

Article 16. Documents for Application for Cooperative Bank License

1. The written request from the Chairman of the Central Credit Cooperative Fund Board of Directors requesting the State Bank to issue a Cooperative Bank License;

2. The Charter of the Cooperative Bank that has been approved by the first General Meeting of Members;

3. Minutes of the First General Meeting of Members;

4. Resolutions of the First General Meeting of Members, which must include at least the following contents:

a) Approval of the Charter of the Cooperative Bank;

b) Official election results for positions on the Board of Directors and Supervisory Board members;

c) Approval of the three-year business plan of the Cooperative Bank.

5. Membership documents for credit cooperative funds, including: List, location of headquarters, contributed capital.

6. Membership documents for other legal entities that are not credit cooperative funds (if any), including: List, location of headquarters, contributed capital.

7. Confirmation document of ownership or lawful right to use the location of the Cooperative Bank's main office.

8. Decision of the Board of Directors appointing the position of General Director of the Cooperative Bank.

9. The three-year business plan approved at the first General Meeting of Members.

Article 17. Procedure and Process for Issuing Cooperative Bank License

1. Within fifteen working days from the date of the first General Meeting of Members, the Central Credit Cooperative Fund shall prepare one set of documents in accordance with Article 16 of this Circular and submit it directly or by post to the State Bank (Supervision and Inspection Department).

2. Within ten working days from the date of receiving complete valid documents, the State Bank shall decide to issue the License.

Section 3. LICENSE AND LICENSE FEES

Article 18. Content of the License

1. The License must contain the following main contents:

a) License number; place of issuance; date of issuance;

b) Name of the Cooperative Bank:

- Full name, abbreviated name in Vietnamese;

- Full name, abbreviated name in English (if applicable);

- Trading name (if applicable).

c) Location of the main office;

d) Content and scope of operations;

d) Operating area;

e) Registered capital;

g) Term of operation.

2. The State Bank shall specify the content, scope of activities, operating area, and term of operation in the License according to the model specified in Appendix No. 05 of this Circular.

Article 19. License Fee

1. The level of license fee for Cooperative Banks shall be implemented in accordance with the provisions of laws on fees and charges.

2. Within fifteen working days from the date of issuance of the License, the Cooperative Bank must pay the fee at the State Bank's Branch.

3. The fee prescribed in Clause 1 of this Article shall not be deducted from the registered capital and shall not be refunded under any circumstances.

Article 20. Use of the License

1. The Cooperative Bank issued a License must operate under the name and within the scope of activities stipulated in the License, and may not engage in any business activities outside those specified in the License issued by the State Bank.

2. The Cooperative Bank shall not erase, buy, sell, transfer, lease, or lend the License.

3. In case the License is lost, torn, burned, or destroyed in any other form, the Cooperative Bank must submit a written statement explaining the reason directly or by post to the State Bank (Supervision and Inspection Department) requesting the State Bank to consider issuing a copy of the License from the original record in accordance with the law. Within two days from the date of receipt of the request, the State Bank will examine and issue a copy from the original for the Cooperative Bank.

Chapter III

BOARD OF DIRECTORS, SUPERVISORY BOARD, GENERAL DIRECTOR OF THE COOPERATIVE BANK

Article 21. Organization and operation of the Board of Directors, Supervisory Board, General Director

1. The Board of Directors of the cooperative bank is the governing body of the cooperative bank with the authority to act on behalf of the cooperative bank to decide and implement the rights and obligations of the cooperative bank, except for matters within the jurisdiction of the Members' Assembly.

2. The Supervisory Board of the cooperative bank carries out internal auditing, oversight, and evaluation of compliance with laws, internal regulations, Charter, and resolutions and decisions of the Members' Assembly and the Board of Directors.

3. The General Director is the highest executive officer of the cooperative bank, accountable to the Board of Directors for the performance of his duties and responsibilities.

4. The State Bank shall appoint representatives to manage the state capital support at the cooperative bank that meets the criteria and conditions stipulated in the Law on Credit Institutions and this Circular, who shall be elected by the Members' Assembly to the positions of Chairman of the Board of Directors, Head of the Supervisory Board, and member of the Board of Directors concurrently serving as the General Director of the cooperative bank.

5. The organization and operation of the Board of Directors, Supervisory Board, and General Director of the cooperative bank shall be carried out in accordance with the provisions of the Law on Credit Institutions and Articles 22, 23, 24, 25, 26, 27, and Article 28 of this Circular.

Article 22. Approval of the list of candidates for election or appointment as members of the Board of Directors, members of the Supervisory Board, and General Director

1. The list of candidates for election or appointment as members of the Board of Directors, members of the Supervisory Board, and General Director of the cooperative bank must be approved in writing by the State Bank before such elections or appointments take place. Those elected or appointed as members of the Board of Directors, members of the Supervisory Board, and General Director of the cooperative bank must be from the list already approved by the State Bank.

2.[6] (Repealed)

Article 23. Criteria for the Chairman and members of the Board of Directors

1. The Chairman of the Board of Directors must meet the following standards:

a) Having worked in the banking sector for five (5) years or more;

b) Having held a managerial or executive position in an organization operating in the banking sector for two (2) years or more;

c) Holding a bachelor's degree or higher in one of the following fields: economics, finance, accounting, auditing, banking, or law.

2. Members of the Board of Directors must meet the following standards:

a) Having worked in the banking sector for two (2) years or more;

b) Having held a managerial or executive position in an organization operating in the banking sector for one (1) year or more;

c) Holding a bachelor's degree or higher in one of the following fields: economics, finance, accounting, auditing, banking, or law.

3. The Chairman and members of the Board of Directors may not be individuals specified in Article 33 and Article 34 of the Law on Credit Institutions.

Article 24. Criteria for members of the Supervisory Board

1. Members of the Supervisory Board must meet the following criteria:

a) Having worked in one of the fields of accounting, auditing, finance, or banking for three (3) years or more;

b) Holding a bachelor's degree or higher in one of the following fields: economics, finance, accounting, auditing, or banking.

2. Full-time members of the Supervisory Board must reside in Vietnam during their term of office and may not simultaneously hold other positions or work at credit institutions or other enterprises.

3. Members of the Supervisory Board may not be individuals specified in Article 33 and Article 34 of the Law on Credit Institutions.

Article 25. Standards for the General Director

1.[7] (Repealed)

2. Having at least three (3) years of experience in management or executive positions within organizations operating in the banking sector.

3. Holding a bachelor's degree or higher in one of the following fields: economics, finance, banking, business administration, or law.

4. Residing in Vietnam during the term of office.

5. Not being an object as defined in Articles 33 and 34 of the Law on Credit Institutions.

Article 26. Duties and Powers of the Chairman of the Board of Directors

The Chairman of the Board of Directors is the legal representative of the cooperative bank, responsible for performing the following duties and powers:

1. Establishing programs and plans for the activities of the Board of Directors, assigning tasks, supervising, and monitoring the implementation of these tasks by Board members.

2. Preparing the content, program, convening, and chairing meetings of the Board of Directors and the Members' Assembly.

3. Being accountable to the Members' Assembly and the Board of Directors for assigned work.

4. Signing documents of the Members' Assembly and the Board of Directors in accordance with the law and the Charter of the cooperative bank.

5. Performing other rights and duties as stipulated in the Charter of the cooperative bank.

Article 27. Meetings of the Board of Directors

1. A meeting of the Board of Directors is valid when at least two-thirds (2/3) of the Board members attend. The Board operates based on the principle of collective responsibility and decides by majority vote. In case of a tie in voting, the decision of the side with the chairman of the meeting is decisive.

2. In the event that the first regular meeting of the Board of Directors is convened but does not have enough attendees according to regulations, the Chairman of the Board of Directors must convene a second meeting within fifteen (15) working days. If two consecutive meetings of the Board of Directors do not have enough attendees, the Chairman of the Board of Directors has the responsibility to report to the Members' Assembly in the nearest period about the status of non-attending Board members and take appropriate measures.

3. The content and conclusions of each session of the Board of Directors must be recorded in the minutes; the minutes of the meeting of the Board of Directors must have signatures of the chairperson and the secretary of the session. The chairperson and the secretary are jointly responsible for the accuracy and truthfulness of the minutes of the Board of Directors meeting. Board members have the right to reserve their opinions, which are recorded in the minutes of the session.

Article 28. Duties and Powers of the Head of the Supervisory Board

1. Being responsible for assigning and directing Supervisory Board members to implement the duties and powers of the Supervisory Board.

2. Establishing inspection, supervision, and monitoring programs and plans for the specific tasks of each member.

3. Convening and chairing meetings of the Supervisory Board.

4. Delegating one of the Supervisory Board members to act as the Head during his absence.

5. Proposing the Board of Directors to convene an extraordinary session to handle cases of violation of laws and the Charter of the cooperative bank.

6. Convening and chairing an extraordinary Members' Assembly as provided for in Clause 3, Article 37 of this Circular.

7. Performing other duties and powers as prescribed in the Charter of the cooperative bank.

Chapter IV

CHARTER CAPITAL, CONTRIBUTED CAPITAL, TRANSFER AND REFUND OF CONTRIBUTED CAPITAL OF THE COOPERATIVE BANK

Article 29. Registered Capital

1. Registered capital is the amount of capital recorded in the Charter of the cooperative bank, including:

a) The contribution of member credit cooperatives;

b) State support capital;

c) Contributions from other legal entities.

2. Members participating in capital contributions shall not use entrusted capital or borrowed funds in any form to establish a cooperative bank and must clearly identify the source of capital, commit to, and be responsible for the legality of the contributed capital.

3. Capital participating in establishing a cooperative bank must comply with current laws and ensure the following conditions:

a) For legal entities licensed in the banking, securities, and insurance sectors: The capital contribution must comply with relevant legal provisions;

b) For legal entities operating in industries requiring statutory capital: The maximum committed capital contribution shall not exceed the net worth minus the statutory capital;

c) For other legal entities: The maximum committed capital contribution shall equal the net worth minus the difference between long-term investments and long-term debts (specific determination method according to Appendix No. 04 of this Circular).

Article 30. Forms of Contributing Registered Capital

The registered capital of a cooperative bank can be contributed in Vietnamese dong and other assets.

In cases where capital is contributed in other assets, such assets must have legal documents proving ownership or usage rights (assets necessary for the direct operation of the cooperative bank). The valuation and transfer of ownership of contributed assets shall be carried out in accordance with the current legal regulations.

Article 31. Contributing Capital to Participate in a Cooperative Bank

1. The minimum level of capital contribution to establish membership status when joining a cooperative bank is 10,000,000 (ten million) Vietnamese dong.

2. The annual minimum capital contribution for members of a cooperative bank is 1,000,000 (one million) Vietnamese dong.

The specific level of capital contribution is decided by the Member Assembly. Members of a cooperative bank are not required to make annual capital contributions in the first financial year since the commencement of operations. Annual capital contributions must be completed no later than thirty days from the end of the Member Assembly.

3. The total capital contribution (including: Membership establishment capital contribution and annual capital contribution) of a member (including transferred capital) is determined by the Member Assembly and recorded in the Charter of the cooperative bank, but shall not exceed 30% of the registered capital of the cooperative bank at the time of capital contribution and transfer, except for the portion of state capital in the cooperative bank.

Article 32. Dividend Distribution Method

Dividend distribution based on capital contribution (membership establishment capital contribution and annual capital contribution), and the degree of use of services of the cooperative bank shall be decided by the Member Assembly and in compliance with legal regulations.

Article 33. Transfer and Refund of Capital Contribution

1. The transfer of member capital contributions shall be carried out as follows:

a) Members who are credit cooperatives: may only transfer part of their capital contribution (but must maintain the minimum membership establishment capital contribution and annual capital contribution) to other legal entities meeting the conditions stipulated in Article 34 of this Circular;

b) Members who are not credit cooperatives: may transfer all or part of their capital contribution to other legal entities meeting the conditions stipulated in Article 34 of this Circular. In cases of transferring part of the capital contribution, members must maintain the minimum membership establishment capital contribution and annual capital contribution as stipulated in Article 31 of this Circular.

2. When ceasing membership status as prescribed in Article 35 of this Circular, members may transfer their capital contribution, rights, and obligations to another legal entity or be refunded their capital contribution, interest on capital contribution (if any), and other benefits as stipulated in Clause 4 of this Article.

3. When ceasing membership status, the transfer of capital contribution to other legal entities must meet the conditions stipulated in Article 34 of this Circular.

4. The refund of capital contribution and interest on capital contribution (if any) to members must be based on the financial status of the cooperative bank at the end-of-year settlement and can only be considered if the following conditions are met:

b) Not leading to a violation of the minimum capital adequacy ratio as prescribed by the State Bank;

c) Ensuring liquidity at the time of the decision to repay;

c) Ensuring liquidity at that point in time;

d) Members have settled all financial obligations towards the cooperative bank, including:

- Fully repaying all loans (both principal and interest);

- Fully compensating all losses they are responsible for or jointly liable for;

- Addressing business losses and corresponding operational risks in line with the proportion of capital contribution for which the member is jointly responsible, as decided by the Member Assembly.

5. The transfer and refund of the entire capital contribution of a member must be approved by the Member Assembly.

Chapter V

PROVISIONS ON MEMBERS OF COOPERATIVE BANKS

Article 34. Conditions to become a member

1. For people's credit funds and other credit organizations: Not being subject to special control measures as provided for in Clause 1, Article 145 of the Law on Credit Organizations (as amended and supplemented) at the time of requesting to join as a member.

2. For other legal entities: Operating profitably in the year immediately preceding the year of requesting to join as a member.

3. The subjects specified in Clauses 1 and 2 of this Article must contribute their share capital as prescribed in Article 31 of this Circular, must submit an application and appoint a legal representative to participate.

Article 35. Termination of Member Status

A member of a cooperative bank ceases to be a member when:

1. The member ceases to exist as a legal entity.

2. The member is a legal entity other than a People's Credit Fund:

a) There is no qualified representative as prescribed by law and the Charter of the cooperative bank;

b) Does not contribute the annual capital contribution as prescribed in Clause 2, Article 31 of this Circular;

c) Has transferred its entire share capital to another legal entity as prescribed in Clause 1, Article 33 of this Circular.

3. The member is approved to leave or expelled from the cooperative bank by the General Meeting of Members in accordance with the provisions of law and the Charter of the cooperative bank.

Chapter VI

GENERAL MEETING OF MEMBERS OF THE COOPERATIVE BANK

Article 36. First General Meeting of Members

The first General Meeting of Members is a meeting of all members or representatives of all members of the cooperative bank to implement the following minimum contents:

1. Approving the project to establish the cooperative bank.

2. Approving the Charter of the cooperative bank.

3. Electing the Chairman and members of the Board of Directors, the Head and members of the Supervisory Board of the cooperative bank for the first term according to the list of candidates prescribed in Clause 1, Article 22 of this Circular.

4. Approving the business plan for the first three years.

Article 37. General Meeting of Members of the Cooperative Bank

1. The General Meeting of Members is the highest decision-making body of the cooperative bank that performs tasks and powers as prescribed in Article 80 of the Law on Credit Organizations.

2. The General Meeting of Members must convene annually once a year, convened by the Board of Directors within three months from the end of the fiscal year.

3. An extraordinary General Meeting of Members shall be convened in the following cases:

a) Convened by the Board of Directors if it deems necessary for the benefit of the cooperative bank or upon a written request from at least one-third of the total number of members;

b) Upon the request of the Supervisory Board as prescribed in Clause 6, Article 84 of the Law on Credit Organizations;

c) Upon the request of the State Bank in case of events affecting the safety of the cooperative bank's operations;

d) Other cases as prescribed in the Charter of the cooperative bank.

Within fifteen days from the date of receipt of the written request to convene an extraordinary General Meeting of Members from at least one-third of the total number of members, if the Board of Directors does not convene such a meeting, the members who requested the convening of the extraordinary General Meeting may request the State Bank to supervise the organization and conduct of the meeting if deemed necessary.

Article 38. Authority of the Members' General Meeting

The Members' General Meeting of a Cooperative Credit Bank has the authority to discuss and decide on the following matters:

1. Annual business operation report; Report on the activities of the Board of Directors and the Supervisory Board.

2. Proposal for profit distribution.

3. Business operation direction for the upcoming year.

4. Increase or decrease in charter capital, contribution levels of members.

5. Election, appointment, and removal of the Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board.

6. List of new members to be admitted; expulsion of members from the Cooperative Credit Bank at the proposal of the Board of Directors.

7. Amendment and supplementation of the Charter of the Cooperative Credit Bank.

8. Dissolution and bankruptcy of the Cooperative Credit Bank.

9. Other matters proposed by the Board of Directors, the Supervisory Board, or at least one-third (one third) of the total number of members of the Cooperative Credit Bank.

Article 39. Organization of the Members' General Meeting

1. The Members' General Meeting of a Cooperative Credit Bank may be organized in the form of a Full Members' General Meeting or a Delegates' General Meeting (collectively referred to as the Members' General Meeting).

2. The Full Members' General Meeting or the Delegates' General Meeting of a Cooperative Credit Bank have the same duties and powers. Based on actual circumstances, the Board of Directors decides on the method of organizing the Members' General Meeting, the method of electing delegates, and the number of delegates participating in each Members' General Meeting.

3. The number of delegates summoned to attend the Delegates' General Meeting shall not be less than twenty percent of the total number of members.

4. The Members' General Meeting is considered valid when at least two-thirds (two thirds) of the members or delegates summoned to attend the meeting are present.

5. In case the number of members (delegates) attending does not meet the requirement stipulated in Clause 4 of this Article, the Board of Directors or the Supervisory Board must temporarily postpone the Members' General Meeting and reconvene within thirty (thirty) days from the date of postponement of the Members' General Meeting (for annual Members' General Meetings, the temporary postponement and reconvening period shall not exceed the time limit for organizing the Members' General Meeting prescribed in Clause 2 of Article 37 of this Circular).

6. Decisions to amend and supplement the Charter, dissolve, or declare bankruptcy of the Cooperative Credit Bank can only be passed when at least three-quarters (three quarters) of the total number of members or delegates present at the Members' General Meeting vote in favor.

7. Decisions on other issues are passed when more than half (one half) of the total number of delegates present at the Members' General Meeting vote in favor.

8. Voting at the Members' General Meeting is not dependent on the amount of capital contributed or the position held by members in the Cooperative Credit Bank. Each member has only one voting ballot. The voting ballot of a delegate corresponds to the number of members represented by the delegate.

Article 40. Notice of Summoning the Members' General Meeting

The convoking body must send a notice of meeting invitation to each member or delegate at least seven (seven) working days before the opening day if the Charter of the Cooperative Credit Bank does not specify a different time limit. The notice of meeting invitation must include the time, location, agenda, and discussion materials.

Chapter VII

ACTIVITIES OF THE COOPERATIVE CREDIT BANK

Article 41. Activities with member people's credit funds

[9]

1. Accepting deposits for capital adjustment and providing loans for capital adjustment to member people's credit funds in accordance with the Capital Adjustment Regulation.

The construction and content of the Capital Adjustment Regulation must ensure the following principles:

a) Member people's credit fund submission money (unterm, term) in ncooperative bank for capital adjustment. In case of early withdrawal, the people's credit fund shall notify the cooperative bank in advance;

The Standing Office of the Council for International Cooperation on Non-Governmental Organizations (Vietnam Friendship Association) is the agency responsible for receiving registration dossiers, leading, and coordinating with member agencies of the Council to examine dossiers and return results of reviews of registration dossiers of foreign non-governmental organizations in Vietnam.) A member people's credit fund may be provided with a loan for capital adjustment by the cooperative bank when there is a need for capital to expand credit activities;

c) Interest rate mechanism for deposits must ensure supportiveness, and the interest rate for capital adjustment loans must be clear, transparent, not aimed at profit, and have a linkage between the cooperative bank and the member people's credit funds ;

d) Specific provisions regarding the objects, limits, procedures, documents related to accepting deposits for capital adjustment and providing loans for capital adjustment;

đ) The Capital Adjustment Regulation is established by the cooperative bank, soliciting opinions from all member people's credit funds and approved at the General Assembly of the cooperative bank members. After promulgating the Capital Adjustment Regulation, the cooperative bank organizes training and dissemination to member people's credit funds and sends it to the State Bank (Bank Inspection and Supervision Authority) for inspection and supervision work. Amendments and supplements to the Capital Adjustment Regulation are approved by the General Assembly of the Cooperative Bank Members.

2. Providing loans to member people's credit funds to address temporary liquidity difficulties.

3. Opening settlement accounts, providing payment means for member people's credit funds . . Developing and applying new products and services in the activities of member people's credit funds to meet the needs of people's credit fund members and serve the development of community benefits in the area..

45. Implement other banking activities in accordance with the law for member people's credit funds.

Article 42. Activities with customers who are not member people's credit funds

1. The cooperative bank may carry out certain banking activities and other business operations as stipulated in Section 2 of Chapter IV of the Law on Credit Institutions after obtaining written approval from the State Bank.

2. The cooperative bank may provide loans to customers who are not member people's credit funds only after prioritizing the fulfillment of capital adjustment needs of member people's credit funds.

3. If necessary, the State Bank may prescribe restrictions on the provision of credit by cooperative banks to customers who are not member people's credit funds.

Article 43. Application of safety regulations in banking activities

The cooperative bank implements safety regulations in banking activities as prescribed in the Law on Credit Institutions and specific guidance from the State Bank.

RIGHTS AND RESPONSIBILITIES OF THE COOPERATIVE BANK TOWARDS PEOPLE'S CREDIT FUNDS

Chapter VIII

Article 44. Rights and powers

2. Requesting people's credit funds to provide information and reports serving the purpose of capital adjustment and system safety monitoring.

[10]

1. Receiving information from the State Bank related to the operation of people's credit funds.

3. Inspecting and supervising member people's credit funds in their use of borrowed capital and their ability to repay borrowed capital from the cooperative bank.

4. Inspecting and supervising the activities of member people's credit funds according to the requirements of the State Bank regarding the objects, contents, scope, and time limits for inspection and supervision.

4. Inspect and supervise the activities of member people's credit funds in accordance with the requirements of the State Bank regarding the objects, contents, scope, and time limits for inspection and supervision.

Article 45. Responsibilities

[11]

1. Guide and train banking and information technology skills for member credit unions.

2. Supporting banking activities for member people's credit funds in accordance with the law.

3. Participate in handling situations where member credit unions encounter difficulties or show signs of operational instability.

4. Issue the Capital Regulation Charter stipulated in Clause 1, Article 41 of this Circular after it has been approved by the General Assembly of the Cooperative Bank.

5. Support them member people's credit funds in conducting internal audits when requested by credit unions..

6. Provide written comments on 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, and Director of member credit unions upon request from the State Bank of Vietnam branch in provinces and centrally-administered cities.

7. Fulfill other responsibilities as prescribed by the Charter and laws.

Chapter IX

IMPLEMENTATION

Article 46. Responsibilities of the Banking Inspection and Supervision Authority

[12]

1. Serve as the focal point for resolving issues during the implementation of this Circular.

2. Serve as the focal point and coordinate with relevant units under the State Bank of Vietnam to assess applications for Cooperative Bank licenses, and make recommendations to the Governor of the State Bank of Vietnam for decisions on issuing such licenses.

3. Lead and coordinate with related units to conduct inspections and supervision of cooperative bank operations; receive the Capital Regulation Charter as stipulated in Clause 1, Article 41 of this Circular, and require cooperative banks to amend and supplement it in accordance with legal regulations if necessary.

4. Serve as the focal point and coordinate with the State Bank of Vietnam branch to request the Governor of the State Bank of Vietnam to instruct cooperative banks to inspect and supervise member credit unions as stipulated in Clause 4, Article 44 of this Circular.

5. Provide information and data to relevant agencies and functional units about the activities and compliance with legal regulations related to cooperative bank operations..

Article 47. Responsibilities of Units Under the State Bank of Vietnam

[13]

1. Units under the State Bank of Vietnam:

a) Monitor and coordinate with the Banking Inspection and Supervision Authority to manage cooperative bank operations within their functional scope and authority;

b) Coordinate with the Banking Inspection and Supervision Authority in assessing applications for Cooperative Bank licenses.

2. The State Bank of Vietnam branch coordinates with the Banking Inspection and Supervision Authority in requesting cooperative banks to comply with the provisions of Clause 4, Article 44 of this Circular..

Chapter X

IMPLEMENTING PROVISIONS

[14]^,[15],[16]^,[17]

Article 48. Transitional provisions

1. The cooperative bank inherits and continues to fulfill all rights, obligations, and legitimate interests, as well as bears responsibility for addressing all existing and emerging issues from the Central Credit Union in accordance with the Law on Credit Institutions and related legal regulations.

2. The cooperative bank and its customers continue to perform contracts and transactions signed between the Central Credit Union and customers that remain valid until their expiration date, in accordance with the agreement. Any amendments, supplements, or termination of these contracts and transactions must be agreed upon by all parties and comply with the Law on Credit Institutions and related legal regulations.

Article 49. Effective Date

This Circular takes effect from January 1, 2013.

Article 50. Implementation organization

The Chief of the Office, the Chief 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 and centrally-administered cities, the Chairmen and members of the Board of Directors, the Heads and members of the Supervisory Board, the General Managers of cooperative banks, and related organizations and individuals are responsible for implementing this Circular./.

Appendix No. 01

Curriculum vitae

(Issued together with Circular No. 31/2012/TT-NHNN dated November 26, 2012 of the Governor of the State Bank of Vietnam)

Color photo (4 x 6) affixed with the stamp of the confirming authority

SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ----------------

CURRICULUM VITAE

1. Personal Information:

- Date of Birth Name:

- Common Name:

- Alias:

- Date of birth:

- Place of Birth:

- Nationality:

+ Original nationality:

+ Current nationalities:

- Permanent address according to household registration:

- Address according to Identity Card (or passport):

- Current residence address:

- Identity Card number or Passport number or other legally recognized personal identification number, place of issuance, date of issuance:

- Name and address of the legal entity; amount of capital contribution and percentage of capital contribution (if acting as a representative of a legal entity's capital contribution):

2. Educational Qualifications:

School name; city, country where the school is located; course name; duration of study; degree name (list all degrees and training programs related to the qualifications and conditions for the position being elected or appointed).

3. Work Experience:

- Work history, profession, and previous positions held (from age 18 to present), including what was done, where, and key characteristics.

- Positions held at other organizations.

- Expected position to be elected at the cooperative bank.

- Awards and disciplinary actions (if any).

4. Relationships:

- Fully disclose relationships with related persons including: father, mother, spouse, children, brothers, sisters (specify names, ages, current addresses, workplaces);

- Business Registration Certificate number of the legal entity; name, date of birth, and Identity Card number or Passport number of the legal representative of the entity.

5. Commitment before the law

- I..., hereby commit not to violate any laws, regulations of the State Bank of Vietnam, and the Charter of the cooperative bank.

- I..., hereby affirm that the declarations above are true. I will bear full responsibility for any false information in this declaration.

6. Signature and full name of the declarant

7. Certified by the People's Committee of the district where the declarant is registered as a permanent resident or the workplace authority.

(In addition to the basic contents above, the declarant may supplement other contents if deemed necessary)

1. Accounting regulations for tourism administrative and public service units issued together with Decision No. 1899/1998/QĐ-BTC dated December 19, 1998 of the Minister of Finance;

Declaration of Related Persons

(Issued together with Circular No. 31/2012/TT-NHNN dated November 26, 2012 of the Governor of the State Bank of Vietnam)

SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
----------------

DECLARATION OF RELATED PERSONS

Serial number	Declarant (organization, individual) and related persons	ID number, date of issue	Relationship with declarant	Capital contribution, shareholding in credit institutions		Capital contribution at the cooperative bank at establishment
				Name of Credit Institution	Ownership ratio/Capital stock of credit institutions
(1)	(2)	(3)	(4)	(5)	(6)	(7)
1	Nguyen Van A		Declaration Maker
2	Nguyen Thi B		Spouse
3	Company X		It is a company where Mr. A is the Chairman of the Board of Directors and General Manager...
...
Total					% (Details for each credit institution)

I declare that the above declaration form is true. If there is any dishonesty, I will fully bear the responsibility before the law.

…, day… month… year… Discloser (8) (Signature, write full name, stamp if applicable)

GUIDELINES FOR COMPLETING THE DECLARATION FORM

1. For section (2): fully declare all "related party" relationships as provided for in Clause 28, Article 4 of the Law on Credit Institutions.

2. For section (4): clearly state the relationship with the declarant.

3. For section (5): clearly list the names of credit institutions that have participated in capital contributions and hold shares.

4. For section (8): if it is a legal entity, the person signing for the declarant must be a representative of the legal entity.

Annex No. 03

Application for Issuance of License

(Issued together with Circular No. 31/2012/TT-NHNN dated November 26, 2012 of the Governor of the State Bank of Vietnam)

SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
----------------

……… day……. month…year…..

APPLICATION FOR FILM FESTIVAL ORGANIZATION PERMIT

COOPERATIVE BANK

Respectfully submitted to: Governor of the State Bank of Vietnam

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Circular No…/2012/TT-NHNN dated.../.../2012 of the Governor of the State Bank of Vietnam on cooperatives banks;

Pursuant to the Minutes of the Members' General Meeting on... month... year... regarding...

Pursuant to the Minutes of the Board of Directors' meeting on... month... year... concerning the appointment of the position of General Director of the cooperative bank;

Now, the Board of Directors... on behalf of the members requests the Governor of the State Bank of Vietnam:

I/ Issue the following Cooperative Bank License:

1. Name of the cooperative bank:

- Full name in Vietnamese;

- Abbreviation in Vietnamese;

- Full name in English (if applicable);

- Abbreviated name in English (if applicable);

- Trading name (if applicable).

2. Main office location, phone number, fax number:

3. Operating Area:

4. Content, scope of operations:

5. Term of operation:

6. Registered capital:

II/ Register the Charter of the Cooperative Bank

We hereby commit to strictly comply with the laws, regulations of the State Bank of Vietnam, and the Charter of the Cooperative Bank, and accept responsibility under the law for any violations.

Attached Documents

BOARD OF DIRECTORS SEAL CHAIRMAN

Annex No. 04

Determination of Financial Capacity for Non-Credit Institution Legal Entities

(Issued together with Circular No. 31/2012/TT-NHNN dated November 26, 2012 of the Governor of the State Bank of Vietnam)

1. General Formula:

Financial capacity for capital contribution to join a cooperative bank

= Shareholders' equity

-

Difference between long-term investments and long-term debt

2. Specific Formula:

A = E - LI

and

LI = LA - LD

Where:

+ A: Financial capacity for capital contribution to join a cooperative bank.

+ E: Shareholders' equity

+ LI: Difference between long-term investments and long-term debt

+ LA: Long-term assets

+ LD: Long-term debt

3. Conclusion:

* If A >= The committed capital contribution amount to the cooperative bank then the legal entity has sufficient financial capacity to contribute capital to join the cooperative bank.

* If A < The committed capital contribution amount to join the cooperative bank then the legal entity does not have sufficient financial capacity to contribute capital to join the cooperative bank.

Appendix No. 05

Model License

(Issued together with Circular No. 31/2012/TT-NHNN dated November 26, 2012 of the Governor of the State Bank of Vietnam)

STATE BANK OF VIETNAM VIETNAM --------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ----------------
Number: /GP-NHNN	Hanoi, day... month.... year.....

LICENSE

ESTABLISHMENT AND OPERATIONS OF COOPERATIVE BANKS

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Circular No /2012/TT-NHNN dated month day year 2012 of the Governor of the State Bank of Vietnam on cooperative banks;

Considering the application for a license submitted by the Chairman of the Board of Directors and the accompanying documents;

At the proposal of the Director of the Inspectorate and Supervision Department,

DECISION:

Article 1. Permission to establish a cooperative bank as follows:

1. Name of the cooperative bank:

- Full name in Vietnamese;

- Abbreviation in Vietnamese;

- Full name in English (if applicable);

- Abbreviation in English (if applicable);

- Trading name (if applicable):

2. Address of the main office:

Article 2. Content, scope of operations:

Activities... (list activities proposed and approved in accordance with the Law on Credit Institutions and this Circular);

Article 3. Operating Area:

Article 4. The charter capital of the cooperative bank is... dong (in words:...).

Article 5. The operating period of the cooperative bank is... years.

Article 6. During the course of operations, the cooperative bank must comply with Vietnamese laws.

Article 7. This License becomes effective from the date of signature.

Article 8. The cooperative bank license shall be issued in five (5) original copies: one (1) copy to be issued to the cooperative bank; one (1) copy for business registration; three (3) copies to be kept at the State Bank of Vietnam (one (1) copy to be kept at the State Bank of Vietnam Office; one (1) copy to be kept at the State Bank of Vietnam Branch in the province/city where the cooperative bank is expected to locate its main office...; one (1) copy to be kept in the file for issuing the cooperative bank license).

Place of Receipt: - As Article 8; - People's Committee of Province/City…; - Ministry of Public Security; - File VP, TTGSNH.

GOVERNOR

CERTIFIED CONSOLIDATED DOCUMENT DIRECTOR DEPUTY DIRECTOR Dao Minh Tu