Decree No. 48/2001/NĐ-CP On the organization and operation of People's Credit Funds.

DECREE OF THE GOVERNMENT

Regarding the organization and operation of People's Credit Funds

 

THE GOVERNMENT

Based on the Government Organization Law dated September 30, 1992;

Based on the Law on Credit Organizations No. 02/1997/QH10 dated December 12, 1997;

Based on the Law on Cooperatives No. 47/L-CTN dated April 3, 1996;

At the proposal of the Governor of the State Bank of Vietnam,

 

DECREE:

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the organization and operation of grassroots People's Credit Funds, Central People's Credit Funds (hereinafter referred to collectively as People's Credit Funds).

Article 2. Nature and Objectives of the Operation of People's Credit Funds

People's Credit Funds are cooperative credit organizations operating on the principles of voluntariness, autonomy, and responsibility for the results of their activities, with the main objective being mutual assistance among members, aiming to enhance the strength of the collective and each member to effectively carry out production, business, service activities, and improve living standards. The operations of People's Credit Funds must ensure cost coverage and accumulation for development.

Article 3. Grassroots People's Credit Funds

Grassroots People's Credit Funds are cooperative credit organizations voluntarily established by members within the local area and operate according to the provisions of this Decree with the main objective being mutual assistance among members.

Article 4. Central People's Credit Funds

Central People's Credit Funds are cooperative credit organizations jointly established by grassroots People's Credit Funds with the aim of supporting and enhancing the effectiveness of the entire system of People's Credit Funds.

To support the system of People's Credit Funds, other credit organizations, and other entities may participate in contributing capital to Central People's Credit Funds in accordance with the guidance of the State Bank of Vietnam (hereinafter referred to as the State Bank).

Article 5. Principles of Organization and Operation of People's Credit Funds

1. Voluntary Membership and Withdrawal from People's Credit Funds: Every Vietnamese citizen, households, and other eligible subjects according to Article 21 of this Decree can become members of People's Credit Funds; members have the right to withdraw from People's Credit Funds in accordance with the charter of People's Credit Funds.

2. Democratic Management and Equality: Members of People's Credit Funds have the right to participate in management, inspection, and supervision of People's Credit Funds and have equal rights in voting.

3. Self-responsibility and Mutual Benefit: People's Credit Funds bear responsibility for the results of their own operations; they independently decide on income distribution, ensuring mutual benefit for People's Credit Funds and its members.

4. Dividend Distribution Ensuring the Interests of Members and Development of People's Credit Funds: After fulfilling tax obligations, remaining profits are allocated partly to funds of People's Credit Funds, partly distributed according to members' contributions, and the remainder distributed to members based on their usage of People's Credit Funds services, as decided by the General Assembly of Members.

5. Cooperation and Community Development: Members must promote a spirit of collectivism, enhance cooperation awareness within People's Credit Funds and in the community; cooperation between People's Credit Funds both domestically and internationally shall be conducted in accordance with the law.

Article 6. Minimum Number of Members

The number of members of People's Credit Funds is not limited, but there must be at least 30 members.

Article 7. Rights of People's Credit Funds

2. To receive financial support from the State, organizations, and individuals both domestically and internationally.

3. To request borrowers to provide financial, production, and business-related documents related to the loan.

4. To select, employ, train labor, choose remuneration forms, and exercise other rights of employers as prescribed by law.

5. To admit new members, handle members leaving the People's Credit Funds, and expel members according to the Bylaws of People's Credit Funds.

5. Admitting new members, handling the departure of members from the People's Credit Fund, and excluding members according to the provisions of the People's Credit Fund Charter.

7. To decide on rewards and penalties for members.

8. To refuse requests from organizations and individuals that violate the law.

9. To lodge complaints and initiate lawsuits against acts violating the legitimate rights and interests of People's Credit Funds.

9. To exercise other related rights as prescribed by law.

Article 8. Obligations of People's Credit Funds

2. To accurately implement accounting, statistics, and auditing regulations as prescribed by law.

2. Implementing the Accounting and Statistics Ordinance and complying with inspection and audit systems as stipulated in Articles 58 and 59 of this Decree.

4. To repay deposits, loans, and other debts according to the agreed terms; be financially responsible within the scope of the charter capital, accumulated capital, and other sources of capital of People's Credit Funds as prescribed by law.

4. Being responsible for repaying deposits, loans, and other debts on time; being liable for debts and other obligations with the entire capital and assets owned by the People's Credit Fund.

5. Paying taxes as prescribed by law.

7. To care for education, training, and enhancing the capabilities of members to actively participate in building and managing People's Credit Funds.

8. To ensure the benefits of members and fulfill economic commitments to members.

8. Ensuring the rights of members and fulfilling delicate commitments to members.

10. To contribute to social insurance for staff and employees (or workers) who work regularly and receive salaries at People's Credit Funds according to the Bylaws of People's Credit Funds consistent with the law on social insurance. The salary level used as the basis for mandatory social insurance contributions must be reported through the Member Congress and registered with the provincial-level labor administration agency where the People's Credit Funds' headquarters is located.

Article 9. Linkages between People's Credit Funds

1. People's Credit Funds may link with each other to:

a) Unify and coordinate activities aimed at mutual assistance among members;

b) Ensure safety and development of each People's Credit Fund and the entire system through tasks such as capital adjustment; establishing a systemic safety fund for People's Credit Funds; training staff; organizing audits; exchanging information, experience, and advice on management, organization, and operational conduct.

2. People's Credit Funds may establish a linkage organization for system development. The functions, tasks, authorities, organizational structure, name, and finances of the linkage organization shall be stipulated in the organization's charter and must be approved by the Governor of the State Bank. During the period when conditions are not yet met to establish a linkage organization for the People's Credit Fund system, the State Bank will guide the implementation of the linkage contents specified in Clause 1 of this Article.

Article 10. State Policy towards People's Credit Funds

The State protects the ownership rights, rights, and legitimate interests of People's Credit Funds, ensuring equal rights for People's Credit Funds in their operations; issuing legal documents and policies to encourage the development of People's Credit Funds; implementing policies to assist and support members in poverty alleviation, equality, fairness, and social progress through People's Credit Funds. The State respects the autonomy and responsibility in the operation of People's Credit Funds, without interfering in the management and lawful activities of People's Credit Funds.

 

Chapter II
ESTABLISHMENT AND BUSINESS REGISTRATION

Article 11. Founders

1. Founders are individuals initiating the establishment of a People's Credit Fund and joining the basic People's Credit Fund.

2. Founders of the basic People's Credit Fund must report in writing to the People's Committee with competent authority as stipulated in Articles 67 and 68 of this Decree regarding the intention to establish, direction, and program and plan of activities of the basic People's Credit Fund. Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).3. After receiving approval in writing from the People's Committee, founders proceed with the following tasks:

d) Preparing other tasks for the establishment meeting; Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).4. For the Central People's Credit Fund, specific regulations will apply.

b) Developing the direction of activities;

c) Organizing propaganda and mobilization;

d) Preparing other necessary tasks for the founding assembly.

Establishment Meeting

1. The establishment meeting of the People's Credit Fund is organized by the founders. Participants include the founders and individuals or organizations wishing to become members of the People's Credit Fund.

Article 12. 2. The meeting discusses and votes by majority on the following issues:

d) Approving the charter capital of the People's Credit Fund and the contribution level of members;

e) Electing the Board of Directors and the Supervisory Board;

a) Approving the list of members;

b) Approving the name and emblem of the People's Credit Fund;

c) Approving the draft Charter and internal regulations of the People's Credit Fund;

g) Approving the minutes of the People's Credit Fund establishment meeting.

đ) Approving the operational plan;

e) Elect the Board of Directors, Supervisory Board;

g) Approve the minutes of the founding meeting of the People's Credit Fund.

Article 13. Charter of People's Credit Fund

1. Each People's Credit Fund shall have its own Charter. The Charter of the People's Credit Fund must comply with the provisions of the Law on Credit Institutions, the Law on Cooperatives, and other relevant laws.

2. The Charter of the People's Credit Fund must contain the following main contents:

a) The name of the People's Credit Fund and the location of its headquarters;

b) Content and scope of operations;

c) Term of operation;

d) Registered Capital and Contribution Methods;

đ) Organizational Structure of the People's Credit Fund; tasks, powers of the Board of Directors, General Director (Director), and Supervisory Board;

e) Procedures for convening the Members' Assembly and passing decisions of the Members' Assembly;

g) Rights and obligations of members;

h) Financial principles, accounting, inspection, and internal audit;

i) Cases and procedures for splitting, merging, consolidating, acquiring, dissolving, and bankruptcy;

k) Procedures for amending the Charter.

3. The Charter of the People's Credit Fund shall only be implemented after being approved by the State Bank.

Article 14. Conditions for Issuing a License to Establish and Operate

1. There is a need to operate banking activities within the area; approval by local authorities regarding the establishment of the People's Credit Fund.

2. Having the statutory capital as prescribed by the Government.

3. Founding members are organizations or individuals with reputation and financial capacity.

4. Managers and executives must have full civil capacity and meet the ethical, qualification, and professional standards stipulated by the State Bank.

5. Have a Charter of organization and operation that complies with Article 13 of this Decree.

6. Must have a feasible business plan.

Article 15. Issuance of License to Establish and Operate

1. The application dossier for issuing a license to establish and operate includes:

a) Application for issuance of a license to establish and operate;

b) Minutes of the Founding Meeting of the People's Credit Fund;

c) Draft Charter of the People's Credit Fund approved at the founding meeting;

d) Three-year business plan;

đ) List, curriculum vitae, and certificates proving the qualifications and professional expertise of founding members, board members, supervisory board members, and general director (director);

e) Contribution levels, contribution methods, and list of contributing members;

g) Request letter from Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).the People's Committee of commune, ward, town Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).approved by the People's Committee of district, city district, provincial town regarding establishment and location of the People's Credit Fund branch (for branch-level People's Credit Funds). Approval letter from Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).the People's Committee of province, centrally governed city regarding location of the Central People's Credit Fund (for central People's Credit Funds).

2. Regulations on licensing authority, license issuance period, licensing fee, license usage, operating conditions, and license revocation of People's Credit Funds shall be carried out according to the Law on Credit Institutions and regulations of the State Bank.

Article 16. Business Registration

After obtaining the license to establish and operate, the People's Credit Fund must register its business with the provincial or centrally governed city business registration agency.

Article 17. Changes Requiring Approval

1. The People's Credit Fund must obtain written approval from the State Bank before making changes in any of the following points:

a) The name of the People's Credit Fund;

b) Increasing or decreasing registered capital beyond the limit set by the State Bank;

c) The location of the headquarters, branch offices, and representative offices;

d) Content and scope of operations;

đ) Board of Directors members, supervisory board members, and general director (director).

2. After receiving approval from the State Bank, the People's Credit Fund must register the changes specified in Clause 1 of this Article with the business registration certificate issuing agency.

Article 18. Legal Status of the People's Credit Fund

The People's Credit Fund has legal status, registered capital, and its own seal; it maintains independent economic accounts and is responsible before its members and the law for its activities. The People's Credit Fund acquires legal status from the date of issuance of the business registration certificate.

Article 19. Establishing Branches, Subsidiaries, Representative Offices

1. The Central People's Credit Cooperative Fund may establish branches, subsidiaries, and representative offices in places where there is a need for operations after receiving written approval from the State Bank.

2. The application procedures for establishing branches, subsidiaries, and representative offices of the Central People's Credit Cooperative Fund shall be carried out in accordance with the regulations of the State Bank.

Article 20. Splitting, Merger, Acquisition, Takeover, Dissolution

The splitting, merger, acquisition, takeover, and dissolution of People's Credit Cooperative Funds must be approved in writing by the State Bank and implemented in accordance with the provisions of the law.

 

Chapter III
MEMBERS

Article 21. Conditions to Become a Member

1. Members of the grassroots People's Credit Fund include:

a) Vietnamese citizens aged 18 years or older who have full civil capacity and reside legally within the operational area of the grassroots People's Credit Cooperative Fund;

b) A household selects a representative who meets the conditions and standards to become a member of the grassroots People's Credit Cooperative Fund;

c) Other subjects as specified by the Governor of the State Bank.

2. Members of the Central People's Credit Fund include:

a) Basic People's Credit Funds;

b) Credit institutions;

c) Other subjects as specified by the Governor of the State Bank.

3. Individuals specified in Clause 1 and Clause 2 of this Article, who voluntarily join, agree to the Charter, and contribute sufficient capital can become members of the People's Credit Cooperative Fund.

Article 22. Rights of Members

1. To attend the Member Congress or elect representatives to attend the Member Congress, participate in meetings of members to discuss and vote on matters of the People's Credit Fund.

2. To nominate and be elected to the Board of Directors, Supervisory Board, and other positions elected by the People's Credit Cooperative Fund.

3. To deposit money, borrow funds, and share profits according to their contributed capital.

4. To enjoy common social benefits of the People's Credit Fund as prescribed by law.

5. To be rewarded for significant contributions to the construction and development of the People's Credit Fund.

6. To receive necessary information related to the operation of the People's Credit Fund.

7. To raise issues, reflect concerns, and make recommendations regarding the activities of the People's Credit Cooperative Fund and request responses; demand that the Board of Directors and Supervisory Board convene an extraordinary General Assembly to address urgent matters.

8. To transfer their contributed capital and associated rights and obligations to another person in accordance with the law and the Charter of the People's Credit Cooperative Fund.

9. To have the right to apply to leave the People's Credit Fund in accordance with the provisions of the Statutes of the People's Credit Fund.

10. To be refunded their contributed capital and other rights when leaving the People's Credit Cooperative Fund as stipulated in Article 24 of this Decree. In cases where a member dies, the contributed capital and other rights and obligations of the member will be settled according to the provisions of the law on inheritance.

Article 23. Obligations of Members

1. To comply with the Charter of the People's Credit Cooperative Fund and resolutions of the General Assembly of Members.

2. To contribute capital as prescribed in the Charter; the maximum amount of capital contribution of each member, including transferred capital during each period, shall not exceed 30% (thirty percent) of the total charter capital of the People's Credit Cooperative Fund at the time of contribution and transfer, as determined by the Governor of the State Bank.

3. To cooperate and support each other among members, contributing to building and promoting the development of the People's Credit Cooperative Fund.

4. To jointly bear responsibility for risks and losses of the People's Credit Cooperative Fund within the scope of their contributed capital.

5. To repay the principal and interest of loans from the People's Credit Cooperative Fund as agreed.

6. To compensate for damages caused to the People's Credit Cooperative Fund according to the provisions of the Charter and decisions of the General Assembly of Members.

Article 24. Termination of Membership Status

1. The membership status of the People's Credit Fund will terminate in the following cases:

a) Individual members who die or lose their civil capacity;

b) Members accepted for withdrawal from the People's Credit Cooperative Fund according to the Charter;

c) Corporate members when the organization is dissolved or declared bankrupt;

d) The member has been expelled by the Member Congress;

d) Members who have transferred all their contributed capital and membership rights and obligations to others;

e) Other cases as provided for in the Charter of the People's Credit Cooperative Fund.

2. When terminating membership status, members may transfer their contributed capital and associated rights and obligations to another person. In cases specified in point a, c, and d of Clause 1 of this Article, if the contributed capital cannot be transferred to another person, it will be refunded. The refund of contributed capital must be based on the following factors:

a) The financial situation of the People's Credit Fund;

b) All financial obligations of the member towards the People's Credit Cooperative Fund have been settled.

 

Chapter IV
ORGANIZATION AND MANAGEMENT OF PEOPLE'S CREDIT COOPERATIVE FUNDS

Article 25. Members' General Meeting

The provisions on the Members' General Meeting, the number of representatives and voting at the General Meeting shall be implemented in accordance with the Law on Cooperatives and other relevant laws.

Article 26. Contents of the Members' General Meeting

The Member Congress discusses and decides on the following matters:

1. Report on the results of operations for the year, report on the activities of the Management Board and the Supervisory Board.

2. Public financial accounting report, projected profit distribution, and handling of losses (if any).

3. Direction of business operations for the next year.

4. Increase or decrease in the Charter Capital; contribution levels of members.

5. Electing, electing additional members or dismissing the Chairman of the Management Board, members of the Management Board, members of the Supervisory Board of the People's Credit Fund.

6. Approving the plan proposed by the Management Board regarding remuneration for members of the Management Board, the Supervisory Board, salary of the General Director (Director), and employees working at the People's Credit Fund.

7. Approving the list of new members admitted and members leaving the People's Credit Fund reported by the Management Board; deciding to expel members.

8. Splitting, merging, consolidating, acquiring, or dissolving the People's Credit Fund.

9. Amending the Charter of the People's Credit Fund.

10. Other issues proposed by the Management Board, the Supervisory Board, or at least one-third (one third) of the total number of members.

Article 27. Approval of Positions

The Chairman and other members of the Management Board, the Head and other members of the Supervisory Board, the Director of the grassroots People's Credit Fund, and the General Director of the Central People's Credit Fund (hereinafter referred to collectively as the Director) must be approved by the Governor of the State Bank or authorized by the Governor of the State Bank to approve.

Article 28. Management Board

1. The Board of Directors has the function of managing the Credit Cooperative Fund in accordance with the provisions of the law.

2. The number of members of the Management Board is decided by the Members' General Meeting, but there must be a minimum of three people; the Chairman and other members of the Management Board are directly elected by secret ballot at the Founding Assembly or the Members' General Meeting.

3. Members of the Management Board must be members of the People's Credit Fund, have good moral character, be trustworthy, have management capabilities, and understand banking operations. Members of the Management Board may not simultaneously be members of the Supervisory Board, Chief Accountant, Cashier of the People's Credit Fund, nor may they be the father, mother, wife, husband, child, or full brother or sister of these individuals.

4. The term of office of the Board of Directors is determined by the Member Assembly, but must be at least two years and a maximum of five years.

5. The Board of Directors is responsible for its decisions before the Member Assembly and the law.

6. The Chairman and other members of the Management Board may not delegate their duties and powers to persons who are not members of the Management Board.

Article 29. Duties and Powers of the Management Board

1. Implementing resolutions of the Members' General Meeting.

2. Decide on organizational and operational issues of the People's Credit Fund (except for matters within the authority of the Members' Congress).

3. Appoint, remove the Director, Deputy Director, Chief Accountant; decide on the number of employees, organizational structure, and specialized business units of the People's Credit Fund.

4. Prepare the agenda for the Members' Congress and convene the Members' Congress.

5. Developing plans to be submitted to the Members' General Meeting regarding remuneration for members of the Management Board, the Supervisory Board, salary of the Director, and employees working at the People's Credit Fund.

6. Examine and admit new members, handle requests for withdrawal from the People's Credit Fund (excluding expulsion cases) and report to the Members' Congress for approval.

7. Handling non-recoverable loans and other losses in accordance with state regulations.

8. Performing other tasks and exercising other powers as prescribed by law concerning the Charter of the People's Credit Fund.

Article 30. Chairman of the Management Board

1. The Chairperson of the Board of Directors represents the People's Credit Fund before the law.

2. The Chairman of the Central People's Credit Fund Management Board may not concurrently hold the position of General Director of the Central People's Credit Fund. The Chairman of the grassroots People's Credit Fund Management Board may concurrently hold the position of Director of the grassroots People's Credit Fund according to the regulations of the State Bank.

3. The Chairman of the Management Board may not concurrently participate in another Management Board or manage another credit organization; however, the Chairman of the grassroots People's Credit Fund Management Board may participate in the Central People's Credit Fund Management Board.

4. The Chairman of the Management Board is responsible for organizing the implementation of the tasks of the Management Board as stipulated in Article 29 of this Decree; convening and chairing meetings of the Management Board; assigning and supervising members of the Management Board in implementing resolutions of the Members' General Meeting and decisions of the Management Board; urging and overseeing the management of the Director of the People's Credit Fund.

Article 31. Supervisory Board

1. The Supervisory Board is responsible for monitoring and inspecting all activities of the People's Credit Fund in accordance with the law and the Charter of the People's Credit Fund.

2. The Supervisory Board shall be directly elected by the General Assembly of Members. In principle, the Supervisory Board must have at least three members, including at least one full-time supervisor. The Supervisory Board elects a Chairperson to manage its operations. For small-scale People's Credit Funds, only one full-time supervisor may be elected according to the guidance of the State Bank. The term of office of the Supervisory Board is the same as that of the Management Board.

3. Members of the Supervisory Board must meet the requirements for professional qualifications and occupational ethics as prescribed by the State Bank.

4. Members of the Supervisory Board shall not concurrently be members of the Management Board, Chief Accountant, or Cashier of the People's Credit Fund, nor shall they be the father, mother, wife, husband, child, or full sibling of any such individuals.

Article 32. Duties and Powers of the Supervisory Board

1. Inspect and supervise the Credit Cooperative Fund's operations in accordance with the law.

2. Inspect and monitor compliance with the Charter of the People's Credit Fund; resolutions of the General Assembly of Members, and resolutions of the Management Board.

3. Inspect financial matters, accounting, income distribution, loss handling, use of funds of the People's Credit Fund, use of assets and state support.

4. Receive and resolve complaints and reports related to the activities of the People's Credit Fund within their authority.

5. The Chairperson or representative may attend meetings of the Management Board but shall not participate in voting.

6. Request relevant persons in the People's Credit Fund to provide documents, books, vouchers, and other necessary information for inspection purposes, but shall not use these materials and information for other purposes.

7. May use the internal audit system (if available) of the People's Credit Fund to perform the tasks of the Supervisory Board.

8. Prepare programs and convene extraordinary Member Assemblies when any of the following circumstances occur:

a) When the Management Board does not correct or fails to effectively correct violations of the law, violations of the Charter, and resolutions of the General Assembly of Members that the Supervisory Board has requested;

b) When the Management Board does not convene an extraordinary General Assembly of Members upon the request of a member as stipulated in Clause 4, Article 26 of the Law on Cooperatives.

9. Report to the Management Board, report to the General Assembly of Members, and the State Bank on the results of supervision; recommend to the Management Board and Director to address weaknesses and violations in the operation of the People's Credit Fund.

Article 33. Director

1. The Director of the People's Credit Fund shall be appointed by the Management Board.

2. The Director of the People's Credit Fund is responsible to the Management Board for managing daily operations in accordance with assigned duties and powers.

3. The Director of the People's Credit Fund must possess moral integrity, professional qualifications, and management capabilities as prescribed by the State Bank.

4. In the absence of the Director, the Deputy Director or a member of the Management Board may be authorized to manage the operations of the People's Credit Fund; the person authorized shall not delegate this authority to another person.

Article 34. Duties and Authorities of the Director

1. Be responsible for managing all activities of the People's Credit Fund in accordance with the law, the Charter, and the resolutions of the Member Assembly and the Board of Management.

2. Select and propose to the Board of Directors for the appointment or dismissal of the Deputy Director (if applicable) and the Chief Accountant.

3. Hire, discipline, and terminate employees working at the People's Credit Fund.

4. Sign reports, documents, contracts, and vouchers; submit reports on the situation and results of the People's Credit Fund's operations to the Board of Directors.

5. The Director, who is not a member of the Board of Management, may attend meetings of the Board of Management but does not have voting rights.

6. Prepare reports on operations, final accounts, proposed profit distribution plans, loss handling plans, risk management plans (if applicable), and develop operational guidelines for the following year to be reviewed by the Board of Management and submitted to the Member Assembly.

7. Refuse to implement decisions of the Chairman of the Board of Management, members of the Board of Management if they contravene the law, the Charter, and the resolutions of the Member Assembly; simultaneously report to the State Bank for appropriate measures.

Article 35. Persons Not Eligible to be Members of the Board of Management, Supervisory Board, or Executives

1. The following persons shall not be elected to the Board of Management, Supervisory Board, or appointed as Director or Deputy Director (if any):

a) Currently being pursued for criminal responsibility;

b) Those who have been convicted of serious crimes endangering national security, violating socialist public property and citizens' assets, and serious economic crimes;

c) Those who have been convicted of other crimes and have not yet had their sentences expunged;

d) Those who were previously members of the Board of Management or Directors of organizations that have gone bankrupt, except in cases stipulated in Clause 2, Article 50 of the Enterprise Bankruptcy Law;

đ) Those who were previously legal representatives of organizations whose operations were suspended due to serious violations of the law.

2. The father, mother, wife, husband, children, brothers, sisters, and half-siblings of members of the Board of Management or the Director shall not be members of the Supervisory Board, Chief Accountants, or of the same People's Credit Fund.

Article 36. Internal Audit and Inspection

The provisions regarding internal audit and inspection of People's Credit Funds shall be implemented in accordance with the regulations set forth in Section 4, Chapter II of the Law on Credit Organizations and other relevant laws.

 

Chapter V
ACTIVITIES OF THE PEOPLE'S CREDIT FUND

Section 1
ACTIVITIES OF THE PEOPLE'S CREDIT FUND AT THE LOCAL LEVEL

Article 37. Capital Mobilization

1. The local-level People's Credit Fund may accept demand deposits and term deposits from members and non-members.

2. The local-level People's Credit Fund may borrow funds from the Central People's Credit Fund and other credit institutions that are not People's Credit Funds, in accordance with the regulations of the State Bank.

Article 38. Lending Activities

1. The local-level People's Credit Fund may lend to members and poor households that are not members within its operating area. Lending to poor households shall be carried out in accordance with the Charter of the People's Credit Fund, but the ratio of outstanding loans to poor households compared to the total outstanding loans shall not exceed the ratio prescribed by the Governor of the State Bank. The local-level People's Credit Fund may lend to customers who deposit money at the People's Credit Fund in the form of collateral using deposit certificates issued by the local-level People's Credit Fund itself.

2. Procedures for loan application, loan approval, monitoring of loan usage, termination of lending, debt collection, interest rate adjustment, and record keeping must comply with the regulations of the State Bank.

3. The local-level People's Credit Fund may carry out other lending activities as prescribed by the State Bank.

Article 39. Payment Services and Treasury Operations

1. The local-level People's Credit Fund may open deposit accounts with the State Bank, the Central People's Credit Fund, and other credit institutions (excluding other local-level People's Credit Funds).

2. The local-level People's Credit Fund may provide payment services and treasury operations primarily serving members.

Article 40. Other Activities

1. The grassroots People's Credit Fund may use its registered capital and reserve fund to contribute capital to the Central People's Credit Fund and organizations for developing the system.

2. The grassroots People's Credit Fund may accept agency and representative services in monetary activities according to the guidance of the State Bank.

3. The grassroots People's Credit Fund may carry out other activities when permitted by the State Bank.

Section 2
ACTIVITIES OF THE CENTRAL PEOPLE'S CREDIT FUND

Article 41. Capital Mobilization

1. The Central People's Credit Fund may accept deposits from members and other organizations and individuals in the form of demand deposits, term deposits, and other types of deposits.

2. The Central People's Credit Fund may issue deposit certificates, bonds, and other securities to mobilize capital when approved by the Governor of the State Bank.

3. The Central People's Credit Fund may borrow funds on the domestic money market and from foreign credit institutions according to the regulations of the State Bank.

4. The Central People's Credit Fund may borrow funds from the State Bank according to current regulations.

5. The Central People's Credit Fund may implement other forms of capital mobilization when approved by the Governor of the State Bank.

Article 42. Credit Activities

1. The Central People's Credit Fund mainly lends to members; lending to non-member entities shall be carried out in accordance with the Charter of the Central People's Credit Fund and shall not exceed the maximum ratio prescribed by the Governor of the State Bank.

2. The Central People's Credit Fund may perform discounting, rediscounting, pledge of commercial bills and other short-term negotiable instruments; bank guarantees and other forms of credit as prescribed by the State Bank, mainly in relation to members.

3. The procedures for loan application, loan approval, loan usage inspection, loan termination, debt handling, debt adjustment, interest rate adjustment, and record keeping must be implemented by the Central People's Credit Fund in accordance with current regulations.

Article 43. Payment Services and Treasury Management

1. The Central People's Credit Fund may open accounts at the State Bank and other credit institutions.

2. The Central People's Credit Fund may provide the following payment services, mainly serving members:

a) Providing payment instruments;

b) Providing domestic payment services for customers;

c) Providing collection and disbursement services;

d) Providing other payment services as prescribed by the State Bank.

3. The Central People's Credit Fund may provide cash receipt and payment services for customers.

Article 44. Other Activities

1. The Central People's Credit Fund may use its registered capital and reserve fund to contribute capital to organizations for developing the system.

2. The Central People's Credit Fund may participate in the money market organized by the State Bank, including treasury bill auctions, domestic and foreign interbank markets, and other short-term negotiable instrument markets; it may engage in foreign exchange trading when permitted by the State Bank; it has the right to act as agent, accept agency, and represent in areas related to banking activities.

3. The Central People's Credit Fund may provide advisory services and other services related to banking activities as prescribed by the State Bank.

Section 3
LIMITATIONS TO ENSURE SAFETY IN OPERATIONS
OF THE PEOPLE'S CREDIT FUND

Article 45. Cases Where Lending Is Not Permitted

The grassroots credit cooperative fund shall not directly lend to or deposit funds with each other; it shall not lend to objects outside those specified in Clause 1 of Article 38 of this Decree.

Article 46. Credit Limitations

1. The grassroots credit cooperative fund shall not grant preferential loans to members of the Board of Directors, Supervisory Board, General Director, Deputy General Director, employees working at the grassroots credit cooperative fund, and members who are their parents, spouses, or children.

2. The central credit cooperative fund shall not grant unsecured loans or provide preferential conditions for loans to the following objects:

a) Auditing organizations, auditors conducting audits at the unit, and inspectors;

b) Enterprises where one of the objects specified in Clause 1 of Article 77 of the Law on Credit Institutions owns more than 10% of the charter capital of that enterprise.

Article 47. Loan Limits

1. The total outstanding loan balance to a customer shall not exceed 15% of the grassroots credit cooperative fund's own capital, except for loans from entrusted funds of other organizations and individuals and collateralized loans from deposit certificates issued by the same credit cooperative fund.

2. In the case of the central credit cooperative fund, if the customer's borrowing demand exceeds the 15% limit of the central credit cooperative fund's own capital, it may participate in joint lending in accordance with the regulations of the State Bank.

Article 48. Capital Contribution Limits

The level of capital contribution of the grassroots credit cooperative fund and the central credit cooperative fund as stipulated in Clause 1 of Article 40 and Clause 1 of Article 44 of this Decree shall be regulated by the State Bank.

Article 49. Safety Assurance Ratio and Risk Reserve Ratio

The safety assurance ratio and risk reserve ratio of the credit cooperative fund shall be implemented according to the Law on Credit Institutions and guidelines of the State Bank.

Article 50. Deposit Safety and System Organization

1. The credit cooperative fund has the responsibility to participate in deposit insurance according to current regulations.

2. The credit cooperative fund may participate in the Credit Cooperative Fund System Safety Fund according to the regulations of the State Bank.

3. The deposit insurance participation fee shall be implemented according to the regulations of the Government. The fee for participating in the Credit Cooperative Fund System Safety Fund shall be determined by the Governor of the State Bank after consulting with the Minister of Finance. The credit cooperative fund may account for the deposit insurance participation fee and the participation fee in the Credit Cooperative Fund System Safety Fund as operating expenses.

 

Chapter VI
FINANCE, ACCOUNTING, REPORTS AND CONFIDENTIAL INFORMATION

Article 51. Charter Capital

1. The charter capital of the grassroots credit cooperative fund is the total amount of capital contributed by members and recorded in the charter of the grassroots credit cooperative fund, which must be at least equal to the statutory minimum capital level prescribed by the Government. The minimum and maximum contribution levels of a member are decided by the Member Assembly in accordance with the regulations of the State Bank.

2. The charter capital of the central credit cooperative fund is the total amount of capital contributed by members and recorded in the charter of the central credit cooperative fund, which must be at least equal to the statutory minimum capital level prescribed by the Government.

The Government's support capital for the credit cooperative fund system shall be included in the charter capital of the central credit cooperative fund; the Government entrusts the State Bank to manage this capital.

Article 52. Financial Revenue and Expenditure and Funds

1. The People's Credit Union shall implement financial revenue and expenditure regimes as prescribed by law. The Minister of Finance shall guide the implementation of the financial regime for the People's Credit Union in accordance with the cooperative economic model.

2. Annually, the People's Credit Union must set aside from post-tax profits to establish and maintain funds as prescribed by law.

Article 53. Fiscal Year

The fiscal year of the People's Credit Union begins on January 1 and ends on December 31 of each calendar year.

Article 54. Accounting

The People's Credit Union must implement accounting according to the system of accounting accounts and document regulations as prescribed by laws on accounting and statistics, and guidelines of the State Bank.

Article 55. Purchase and Investment in Fixed Assets

The People's Credit Union is permitted to purchase and invest in fixed assets directly used for business operations at a ratio prescribed by the Governor of the State Bank but not exceeding 50% of its own capital.

Article 56. Reporting

1. The People's Credit Union must implement financial reporting systems as prescribed by laws on accounting and statistics, and periodic business activity reports as prescribed by the Governor of the State Bank.

2. In addition to regular reports, the People's Credit Union has the responsibility to immediately report to the State Bank in the following cases:

a) Overdue debts exceed the prescribed ratio and show an increasing trend;

b) Members withdraw more than 30% of the charter capital or member withdrawals reduce the charter capital of the People's Credit Union below the legal minimum;

c) Customers withdraw more than 30% of the total deposit balance, posing a risk of the People's Credit Union losing payment capability;

d) Other unusual developments in organization and operation that may significantly impact the operational situation of the People's Credit Union.

3. Within ninety days from the end of the fiscal year, the People's Credit Union must submit annual reports to the State Bank as prescribed by law.

Article 57. Information and Confidentiality

The People's Credit Union must strictly comply with account holder information regimes, information exchange between credit institutions, information exchange between the State Bank and credit institutions, and bank information confidentiality as prescribed by the State Bank and other relevant laws.

 

Chapter VII
INSPECTION BY THE STATE BANK, AUDITING,
SPECIAL SUPERVISION, LIQUIDATION, DISSOLUTION, WINDING UP

Article 58. Inspection by the State Bank

The People's Credit Unions must be subject to inspection by the State Bank as stipulated in Section I Chapter IX of the Law on Credit Organizations and other relevant laws.

Article 59. Auditing

Auditing of the People's Credit Unions shall be carried out in accordance with the regulations of the State Bank.

Article 60. Special Supervision

Special supervision of the People's Credit Union shall be implemented in accordance with the provisions of Section 1 Chapter V of the Law on Credit Organizations and regulations of the State Bank.

Article 61. Bankruptcy of the People's Credit Union

After the State Bank has issued a document regarding the non-application or termination of measures to restore payment capability of the People's Credit Union, and the system of People's Credit Unions has employed all support measures but the People's Credit Union still loses the ability to pay maturing debts, it may be subject to bankruptcy proceedings initiated by the court in accordance with the law on enterprise bankruptcy.

Article 62. Dissolution of People's Credit Funds

The People's Credit Fund shall be dissolved in the following cases:

1. Voluntary dissolution pursuant to the Resolution of the Member Assembly if it has the ability to settle all debts and is approved by the State Bank.

2. When the term of operation expires without requesting an extension or requesting an extension but not being approved by the State Bank.

3. Being compulsorily dissolved by a competent state agency; the State Bank revokes the license for establishment and operation.

Article 63. Liquidation of People's Credit Funds

1. In the case where the People's Credit Fund is declared bankrupt, the liquidation shall be carried out in accordance with the provisions of the law.

2. Upon dissolution, the People's Credit Fund shall carry out liquidation in accordance with the provisions of the law under the supervision of the State Bank.

3. All costs related to the liquidation shall be borne by the People's Credit Fund subject to liquidation.

 

Chapter VIII
STATE MANAGEMENT OF PEOPLE'S CREDIT FUNDS

Article 64. Responsibilities of the State Bank

The State Bank shall implement state management over People's Credit Funds in the main contents as follows:

1. Studying and building strategic goals, planning, and guiding plans for the development of People's Credit Funds nationwide; directing and guiding People's Credit Funds to implement them.

2. Issuing and guiding the implementation of regulatory legal documents on the organization and operation of People's Credit Funds.

3. Issuing and revoking licenses for the establishment and operation of People's Credit Funds.

4. Studying, building, and summarizing the implementation of policies of the Party and the State towards People's Credit Funds; submitting to the Government for amendments and supplements to policies aimed at promoting the development of the People's Credit Fund system.

5. Building and submitting to the Government for approval or approving within its authority programs and projects funded by countries and international organizations to develop the People's Credit Fund system; directing and inspecting the implementation of these programs and projects.

6. Inspecting and supervising People's Credit Funds in accordance with the provisions of the law.

Article 65. Responsibilities of Ministries and Sectors

Ministries, ministerial-level agencies, and agencies under the Government within their respective tasks and authorities shall have the responsibility to support and create favorable conditions for People's Credit Funds to operate.

Article 66. Responsibilities of Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).provincial people's committees, municipal people's committees directly under the central government

Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).provincial people's committees, municipal people's committees directly under the central government (hereinafter referred to as Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).provincial people's committees) shall perform state management functions over People's Credit Funds in the following areas:

1. Coordinating with the State Bank and relevant ministries and sectors to direct and urge People's Credit Funds operating in the locality to implement the Law on Credit Organizations and other related legal documents.

2. Directing and supervising the issuance and revocation of business registration certificates for grassroots People's Credit Funds and Central People's Credit Funds in the area. Creating favorable conditions to assist People's Credit Funds in resolving difficulties during operations. Deciding on compulsory dissolution of grassroots People's Credit Funds that violate the law.

3. Resolving complaints and denunciations and handling according to their authority acts of law violation, protecting the legitimate rights and interests of People's Credit Funds and their members.

4. Proposing amendments and supplements to policies aimed at developing People's Credit Funds.

5. Directing Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).district, town, city district, provincial city people's committees to supervise and assist People's Credit Funds in implementing consolidation and improvement plans, while performing well their state management functions in accordance with the law to ensure safe and effective development of People's Credit Funds in the area.

Article 67. Responsibilities of Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).the People's Committee of districts, towns, urban districts, and provincial cities

Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).(hereinafter referred to collectively as the district-level People's Committee) shall perform state management functions over Credit Cooperatives according to the following contents: Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).1. Promoting propaganda, mobilization, and creating conditions for the formation and development of Credit Cooperatives in their localities.

2. Considering the proposals of

the People's Committee of communes, wards, and towns to issue documents approving or not approving the establishment of grassroots Credit Cooperatives. Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).3. Directing relevant departments in handling existing issues and obstacles in the operation of Credit Cooperatives.

4. Resolving complaints, denunciations, and violations of laws concerning Credit Cooperatives within their authority; protecting the legitimate rights and interests of Credit Cooperatives within the scope and limits granted.

The People's Committee of communes, wards, and towns supervise and assist grassroots Credit Cooperatives in implementing consolidation and rectification plans while effectively performing state management functions as prescribed by law to ensure safe and efficient development of grassroots Credit Cooperatives in their areas.

5. Directing Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).Article 68. Responsibilities of

the People's Committee of communes, wards, and towns Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).the People's Committee of communes, wards, and towns shall manage state functions over grassroots Credit Cooperatives organized and operating in their areas according to the following contents:

Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).1. Organizing propaganda, dissemination, guidance, and creating favorable conditions for the establishment of grassroots Credit Cooperatives in accordance with legal regulations.

2. Examining the establishment project and operational plan of grassroots Credit Cooperatives proposed by initiators, responding in writing whether to agree or disagree with the establishment based on legal provisions; in case of agreement, issuing a written proposal

to the district-level People's Committee regarding the establishment of grassroots Credit Cooperatives. Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).3. Being responsible for participating in examining the allocation of managerial, supervisory, and operational staff of grassroots Credit Cooperatives, creating conditions for stable and effective work for Credit Cooperative staff.

4. Directing relevant departments in handling existing issues and obstacles in the operation of grassroots Credit Cooperatives.

5. Supervising and assisting grassroots Credit Cooperatives in implementing consolidation and rectification plans while effectively performing state management functions as prescribed by law to ensure safe and efficient development of Credit Cooperatives in their areas; bearing responsibility for consequences caused by collectives or individuals under their management to grassroots Credit Cooperatives.

Article 69. Awards

 

Chapter IX
REWARD AND DISCIPLINE

Organizations, individuals, and members of Credit Cooperatives who have outstanding achievements in building and developing Credit Cooperatives, making significant contributions to the effectiveness of Credit Cooperative operations shall be awarded according to legal regulations.

Article 70. Disciplinary Actions

1. Any person violating the Charter and internal regulations of Credit Cooperatives shall, depending on the nature and degree of violation, be reprimanded, warned, expelled from Credit Cooperatives, or subject to administrative penalties, criminal prosecution; if causing damage, they must compensate according to the law.

2. Any organization or individual misusing the name of Credit Cooperatives for personal gain activities; violating laws on currency and banking operations shall, depending on the nature and degree of violation, be subject to disciplinary actions, administrative penalties, or criminal prosecution; if causing damage, they must compensate according to the law.

2. Any organization or individual who takes advantage of the name of the People's Credit Fund to operate for personal gain; violates laws on currency and banking activities shall be subject to disciplinary action, administrative handling, or criminal prosecution depending on the nature and extent of the violation; if causing damage, they must compensate according to the provisions of the law.

 

Chapter X
IMPLEMENTING PROVISIONS

Article 71. Adjustment when the Law on Credit Organizations and the Law on Cooperatives Differ

In cases where this Decree does not provide for certain contents, if there are differences between the provisions of the Law on Credit Organizations and the Law on Cooperatives, the provisions of the Law on Credit Organizations shall be implemented.

Article 72. Adjustment of Activities for People's Credit Funds

From the date this Decree takes effect, within the time limit specified by the State Bank, each People's Credit Fund must adjust its operating area, organizational structure, and operational content to comply with the provisions of this Decree and the guiding documents issued by the State Bank.

Article 73. Guidance on Implementation

The Governor of the State Bank and relevant ministries and sectors are responsible for providing guidance on the Articles that this Decree assigns the responsibility to specify in detail.

Article 74. Effective Date

This Decree replaces Government Decree No. 42/CP dated April 29, 1997, and takes effect 15 days after the date of signature; previous regulations contrary to this Decree are abolished.

Article 75. Organization of Implementation

Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairmen Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).Provincial People's Committees within their authority and responsibilities shall organize the implementation of this Decree.