DECREE NO. 69/2005/ND-CP Amending and Supplementing Certain Provisions of Decree No. 48/2001/NĐ-CP dated August 13, 2001 of the Government on the Organization and Operation of People's Credit Funds

DECREE OF THE GOVERNMENT

Regarding the amendment and supplementation of 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
On the basis of the Law on Cooperatives No. 18/2003/QH11 dated November 26, 2003;

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

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 the Law on Credit Institutions No. 02/1997/QH10 dated December 12, 1997 and the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions No. 20/2004/QH11 dated June 15, 2004;

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

DECREE:

Article 1. Article 5. Principles of organization and operation of People's Credit Funds

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

1. Voluntary: every individual, household, legal entity, and other subjects meeting the conditions stipulated in Article 21 of this Decree may become members of People's Credit Funds; members have the right to leave the People's Credit Funds according to the Bylaws of People's Credit Funds.

2. Democratic, equal, and transparent: 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. Autonomous, responsible for their own actions, and mutual benefit: People's Credit Funds operate autonomously and are responsible for the results of their activities; they decide on income distribution. After fulfilling tax obligations and covering losses of the People's Credit Funds, interest is allocated to various funds of the People's Credit Funds, part distributed according to capital contributions and efforts of members, and the remainder distributed to members based on the extent of their use of services provided by the People's Credit Funds.

4. Cooperation and community development: members must promote the spirit of building collectives and cooperate with each other within the People's Credit Funds, and among People's Credit Funds both domestically and internationally as prescribed by law.

Article 7.

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

Rights of People's Credit Funds 1. To raise capital, lend capital, and provide other banking services according to the business license; have the right to independently conduct business and be responsible for the results of their operations.

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.

6. To decide on income distribution and handle losses according to the law and the Bylaws of People's Credit Funds.

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.

10. To exercise other rights related to the law.

Article 8. Obligations of People's Credit Funds

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

1. To conduct business operations according to the issued license; comply with state regulations on currency, credit, and banking services.

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

3. To preserve and develop the operational capital of People's Credit Funds; manage and use assets effectively.

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.

5. To pay taxes and fulfill other financial obligations as prescribed by law.

6. To participate in organizing linkages aimed at developing the system to ensure the safety, efficiency, and sustainable development of People's Credit Funds.

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.

9. To implement labor contracts; respect the dignity and personality of workers.

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.

11. To fulfill other obligations as prescribed by law.

Article 10 is amended as follows:

"Article 10. State policy towards People's Credit Funds

1. The State uniformly manages the activities of People's Credit Funds, builds a system of People's Credit Funds capable of meeting the capital and service needs of People's Credit Fund members, contributing to implementing national monetary policy, ensuring the safety of the People's Credit Fund system, and protecting the legitimate interests of depositors.

2. The State protects property rights and other legitimate rights and interests in the activities of People's Credit Funds to create conditions for members to assist each other in production, business, services, and improve living standards."

"Article 11. Founders

5. Article 11 is amended and supplemented as follows:

1. Founders are individuals, households, legal entities, and other subjects initiating the establishment of People's Credit Funds and joining them.

2. Founders of grassroots People's Credit Funds must report in writing to the People's Committee with competent authority as stipulated in Articles 67 and 68 of this Decree about the establishment, location of the headquarters, direction, and activity plan of the grassroots People's Credit Funds.

3. After receiving written approval from the competent People's Committee, founders proceed with the following tasks:

a) Drafting the Bylaws;

b) Developing the direction of activities;

c) Organizing propaganda and mobilization;

d) Preparing other necessary tasks for the founding assembly.

4. For Central People's Credit Funds, specific provisions will apply."

"Article 12. Founding Assembly

6. Article 12 is amended and supplemented as follows:

"Article 12. Founding Congress

1. The founding meeting of the People's Credit Fund shall be organized by the founders. Participants at the meeting include the founders, individuals, households, legal entities, and other subjects expressing their willingness to become members of the People's Credit Fund.

2. The meeting shall discuss and vote by majority on the following issues:

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;

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

đ) Approving the operational plan;

e) Deciding whether to establish a separate management and operation structure for the grassroots People's Credit Fund according to the guidelines of the State Bank.

For grassroots People's Credit Funds that establish a single structure for both management and operations, the board of directors and the director shall be elected; the director of the People's Credit Fund concurrently serves as the chairman of the board of directors; the number of deputy directors of the grassroots People's Credit Fund shall be decided.

For grassroots People's Credit Funds that establish separate management and operation structures, the board of directors and the chairman of the board of directors shall be elected from among the members of the board of directors; it shall decide whether to select the director from among the members of the People's Credit Fund or to hire a director (who is not a member of the People's Credit Fund); the number of deputy directors of the grassroots People's Credit Fund shall be decided.

g) Electing the supervisory board and the head of the supervisory board from among the members of the supervisory board;

h) Approving the minutes of the founding meeting of the People's Credit Fund."

7. Article 13 is amended and supplemented as follows:

"Article 13. Charter of the 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 method of capital contribution;

đ) The organizational structure of the People's Credit Fund; the tasks and powers of the board of directors, general director (director), and supervisory board;

e) The procedure for convening and passing decisions at the General Assembly of Members;

g) Rights and obligations of members;

h) Financial principles, accounting, auditing, and internal control;

i) Principles and objects of mandatory social insurance contributions;

k) Principles of salary, allowances, and remuneration for public service, handling losses, profit distribution based on capital contribution, effort contribution of members, and usage of services provided by the People's Credit Fund; establishment, management, and utilization of funds of the People's Credit Fund;

l) Procedures for managing, using, preserving, and disposing of common assets and accumulated capital of the People's Credit Fund during its operation and upon dissolution;

m) Circumstances and procedures for splitting, merging, consolidating, acquiring, dissolving, and bankruptcy;

n) Procedures for amending the Charter;

o) Other provisions determined by the General Assembly of Members but not contrary to the law.

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

8. Article 14 is amended and supplemented as follows:

"Article 14. Conditions for Obtaining 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 individuals, households, legal entities, and other subjects with good reputation and the ability to contribute capital to establish the People's Credit Fund.

4. Managers and operators have full capacity for civil acts and meet the ethical standards, qualifications, and professional expertise as stipulated by the State Bank.

5. Having a Charter in compliance with the provisions of Article 13 of this Decree.

6. Having a feasible operational plan."

9. Article 17 is amended and supplemented as follows:

"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 the charter capital beyond the limits set by the State Bank;

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

d) Content, scope, and duration of operation;

đ) Members of the board of directors, members of the supervisory board, and general director (director).

2. After obtaining approval from the State Bank, the People's Credit Fund must register with the agency issuing the business registration certificate regarding the changes specified in Clause 1 of this Article and must publish in central newspapers (for Central People's Credit Funds) or local newspapers (for grassroots People's Credit Funds) according to the law concerning the contents specified in Points a, c, and đ of Clause 1 of this Article."

10. Article 21 is amended and supplemented as follows:

"Article 21. Conditions for Becoming a Member

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

a) Individuals who are Vietnamese citizens aged 18 years or older with full capacity for civil acts, residing, working, or legally engaging in production and business activities within the operating area of the People's Credit Fund. Individuals who do not meet these conditions or are under criminal investigation, individuals serving a prison sentence, individuals deprived of their professional qualifications by a court due to violations of criminal law, and individuals currently undergoing education or treatment in institutions are not eligible to become members of the People's Credit Fund;

b) Civil servants (excluding officers, non-commissioned officers, and professional military personnel in people's armed forces units) who meet the conditions stipulated in Point a of Clause 1 of this Article. Civil servants shall not directly participate in management, operation, supervision, and specialized professional positions of the People's Credit Fund;

c) A household family where the members of the household have common assets for economic activities such as: the area of land currently being used for agricultural, forestry, and fishery production; other fixed assets serving the production and business operations of the household. When joining the People's Credit Fund as a member, the household must appoint a representative (with a power of attorney) who meets all the conditions stipulated in point a, Clause 1, Article of this Law and according to the Statutes of the People's Credit Fund. If they wish to change the representative, the household must submit a request to the Board of Directors for consideration and decision.

d) Legal entities are organizations and agencies (excluding social funds and charitable funds) as prescribed by law; these legal entities must have their main office located within the operational territory of the People's Credit Fund. The person named in the application to join the People's Credit Fund must be the legal representative of the legal entity. The legal representative of the legal entity may authorize another individual who is part of the leadership structure of the legal entity to act as a representative in the People's Credit Fund.

e) 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.

If the above subjects are legal entities, when joining the Central People's Credit Fund, they must appoint a legal representative to participate as a member.

3. The subjects specified in Clauses 1 and 2 of this Article, upon submitting an application to join, agreeing with the Statutes, and contributing sufficient capital as prescribed, can become members of the People's Credit Fund.

11. Article 22 is amended and supplemented as follows:

"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 Fund, except for members who are civil servants or government officials.

3. To deposit money, borrow capital, and share profits according to their capital contribution and the extent of their use of services provided by the People's Credit Fund.

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, reflect, and propose issues related to the operation of the People's Credit Fund and demand responses; to request the Board of Directors and Supervisory Board to convene an extraordinary Member Congress to address urgent issues.

8. To transfer their capital contribution and rights and obligations to others in accordance with the provisions of the law and the Statutes of the People's Credit 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. Under the condition that the People's Credit Fund operates profitably and the withdrawal of capital by members does not affect the operation of the People's Credit Fund, members are entitled to be refunded their capital contribution and other rights according to the provisions of the Statutes of the People's Credit Fund and relevant laws.

11. Members who are not subject to mandatory social insurance may voluntarily contribute to social insurance at the People's Credit Fund if the People's Credit Fund has the capacity and the Statutes of the People's Credit Fund provide for voluntary social insurance contributions for members."

12. Article 24 is amended and supplemented as follows:

"Article 24. Termination of membership status

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

a) The member is an individual who has died, disappeared, lost civil capacity, or is restricted in civil capacity; the member is a household without a representative meeting the legal requirements and the Statutes; the member is a legal entity when the organization is dissolved, bankrupt, or does not have a representative meeting the legal requirements and the Statutes;

b) The member has been accepted to leave the People's Credit Fund in accordance with the law and the Statutes;

c) The member has transferred all their capital contribution and rights and obligations to another person in accordance with the law and the Statutes;

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

e) Other cases as specified in the Statutes of the People's Credit Fund.

2. Upon termination of membership status, the member may transfer their capital contribution and rights and obligations to another person. In cases specified in point a and d, Clause 1 of this Article and members who have been accepted to leave the People's Credit Fund due to relocation of residence, workplace, or place of production and business outside the operational territory of the People's Credit Fund, if unable to transfer the capital contribution to another person, they shall be refunded the capital contribution; in other cases, upon termination of membership status, the capital contribution shall be refunded according to the regulations of the State Bank. The transfer or refund of capital contribution for members who are individuals who have died, disappeared, lost civil capacity, or are restricted in civil capacity and legal entities that have been dissolved or bankrupted shall be carried out in accordance with the law. The refund of capital contribution must take into account the following factors:

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

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

13. Article 25 is amended and supplemented as follows:

"Article 25. Member Congress

Provisions regarding the Member Congress, the number of delegates, and voting in the Member Congress, and the notification of the convening of the Congress shall be implemented in accordance with the Law on Cooperatives and guidelines of the State Bank."

14. Article 26 is amended and supplemented as follows:

"Article 26. Content of the Member Congress

The Member Congress discusses and decides on the following matters:

1. Report on the results of business operations in the year, report on the activities of the Board of Directors 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 charter capital; level of member contributions."

5. Decide on the establishment of a separate management and operational machinery or not, as provided for in point e, Clause 2, Article 12 of this Decree.

6. Elect and remove the Chairman of the Board of Directors (in case of establishing a separate management and operational machinery), the Director (in case of not establishing a separate management and operational machinery), members of the Board of Directors, the Audit Committee, the Head of the Audit Committee.

7. Approve the plan established by the Board of Directors regarding the level of salaries, allowances, and remuneration for the Chairman of the Board of Directors and other members of the Board of Directors, the Head of the Audit Committee and other members of the Audit Committee, the General Director (Director), Deputy General Director (Deputy Director), and employees working at the Credit Cooperative Fund.

8. Approve the list of new members admitted and members leaving the Credit Cooperative Fund reported by the Board of Directors; decide on the expulsion of members.

9. Split, merge, consolidate, acquire, or dissolve the Credit Cooperative Fund.

10. Amend the Charter of the Credit Cooperative Fund.

11. The subjects covered by the Credit Cooperative Fund for social insurance contributions.

12. Other matters proposed by the Board of Directors, the Audit Committee, or at least one-third (one-third) of the total number of members.

15. Article 28 is amended and supplemented as follows:

"Article 28. Board of Directors

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 Board of Directors members is decided by the Member Assembly, but must be at least three people; the Chairman and other members of the Board of Directors are directly elected by the Member Assembly in accordance with the regulations of the State Bank.

3. Members of the Board of Directors must be members of the Credit Cooperative Fund (individuals or legal representatives of organizations) with good moral character, trustworthiness, management capability, and knowledge of banking activities. Board of Directors members cannot simultaneously be members of the Audit Committee, Chief Accountant, or Cashier of the Credit Cooperative Fund, nor can they be the father, mother, wife, husband, child, or full brother or sister of them.

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 Board of Directors may not delegate their duties and powers to non-members of the Board of Directors.

16. Article 31 is amended and supplemented as follows:

"Article 31. Audit Committee

1. The Audit Committee is the supervisory and inspection body overseeing all activities of the Credit Cooperative Fund according to the law and the Charter of the Credit Cooperative Fund.

2. The Audit Committee is directly elected by the Member Assembly. The Audit Committee must have a minimum of three people, including at least one dedicated auditor. For small-scale Credit Cooperative Funds, only one dedicated auditor may be elected according to the guidelines of the State Bank. The term of office of the Audit Committee is the same as that of the Board of Directors.

3. The Audit Committee is responsible to the Member Assembly for the performance of assigned tasks.

4. Members of the Audit Committee must be members of the Credit Cooperative Fund. Members of the Audit Committee must meet the requirements for professional standards and occupational ethics set by the State Bank.

5. Members of the Audit Committee cannot simultaneously be members of the Board of Directors, Chief Accountant, or Cashier of the Credit Cooperative Fund, nor can they be the father, mother, wife, husband, child, or full brother or sister of them.

17. Article 32 is amended and supplemented as follows:

"Article 32. Duties and Powers of the Audit Committee

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

2. Check compliance with the Credit Cooperative Fund's Charter; resolutions of the Member Assembly, Board of Directors. Supervise the activities of the Board of Directors, the Director, and Credit Cooperative Fund members in accordance with the law and the Credit Cooperative Fund's Charter.

3. Inspect financial activities, monitor adherence to accounting systems, income distribution, loss handling, fund usage, asset utilization, and state support; ensure safety in the Credit Cooperative Fund's operations, conduct internal audits periodically and by sector to accurately assess business operations and financial status.

4. Receive complaints and reports related to the Credit Cooperative Fund's activities; resolve or refer to competent authorities for resolution in accordance with the law and the Credit Cooperative Fund's Charter.

5. The Head of the Audit Committee or a representative thereof may attend meetings of the Board of Directors but shall not participate in voting.

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

7. Utilize the internal inspection and control system (if available) of the Credit Cooperative Fund to perform the Audit Committee's duties.

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

a) When there are violations of the law, the Credit Cooperative Fund's Charter, and Member Assembly resolutions, and the Audit Committee has requested but the Board of Directors does not implement or fails to effectively implement measures to prevent such violations;

b) When the Board of Directors does not convene an extraordinary Member Assembly within fifteen (15) days from receiving sufficient petitions from at least one-third (one-third) of the total number of members requesting such a meeting.

9. Report to the Board of Directors, report to the Member Assembly and the State Bank on the results of supervision; recommend to the Board of Directors and the Director to address weaknesses and violations in the Credit Cooperative Fund's operations.

18. Article 36 is amended as follows:

"Article 36. Internal Inspection and Control System:"

Provisions on internal inspection and supervision of People's Credit Funds shall be implemented in accordance with the provisions of Section 4, Chapter II of the Law on Credit Organizations and other relevant laws.

19. Article 37 is amended and supplemented as follows:

"Article 37. Capital Mobilization

1. Basic People's Credit Funds may accept deposits from organizations, individuals, and other credit institutions in accordance with the regulations of the State Bank.

2. Basic People's Credit Funds may borrow capital from Central People's Credit Funds and other credit institutions in accordance with the regulations of the State Bank."

20. Article 38 is amended and supplemented as follows:

"Article 38. Credit Activities

1. Basic People's Credit Funds may lend to members and poor households that are not members within the operating area of the Basic People's Credit Fund. The 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. Basic People's Credit Funds may lend to customers who deposit money at the People's Credit Fund in the form of collateral in the form of deposit certificates issued by the same Basic People's Credit Fund.

2. The procedures for loan application and processing, loan approval, application of loan guarantees, monitoring of loan usage, termination of loans, debt collection, interest rate adjustment, and retention of loan files of Basic People's Credit Funds shall be carried out in accordance with the regulations of the State Bank.

3. Basic People's Credit Funds may carry out other credit activities in accordance with the regulations of the State Bank."

21. Article 39 is amended and supplemented as follows:

"Article 39. Payment Services and Cash Management

1. Basic People's Credit Funds may open deposit accounts at the State Bank, Central People's Credit Funds, and other credit institutions in accordance with the regulations of the State Bank.

2. Basic People's Credit Funds may provide payment services and cash management primarily to serve members."

22. Article 40 is amended and supplemented as follows:

"Article 40. Other Activities

1. Basic People's Credit Funds may use charter capital and reserve funds to invest in accordance with the regulations of the State Bank.

2. Basic People's Credit Funds may accept agency mandates, act as agents, and perform other business operations in the field of monetary activities when permitted by the State Bank."

23. Article 41 is amended and supplemented as follows:

"Article 41. Capital Mobilization

1. Central People's Credit Funds may accept deposits from organizations, individuals, and other credit institutions.

2. Central People's Credit Funds may issue deposit certificates, bonds, and other securities to mobilize capital in accordance with the regulations of the State Bank.

3. Central People's Credit Funds may borrow capital in the domestic money market, borrow from foreign credit institutions, and the State Bank in accordance with current regulations.

4. Central People's Credit Funds may implement other forms of capital mobilization when approved by the Governor of the State Bank."

24. Article 42 is amended and supplemented as follows:

"Article 42. Credit Activities

1. Central People's Credit Funds may lend capital to support and enhance the operational efficiency of member Basic People's Credit Funds; lending to other 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. Central People's Credit Funds may perform discounting, rediscounting of commercial bills and other securities; bank guarantees and other forms of credit in accordance with the regulations of the State Bank.

3. The procedures for loan application and processing, loan approval, application of loan guarantees, monitoring of loan usage, termination of loans, debt collection, interest rate adjustment, and retention of loan files of Central People's Credit Funds shall be carried out in accordance with the regulations of the State Bank."

25. Article 44 is amended and supplemented as follows:

"Article 44. Other Activities

1. Central People's Credit Funds may use charter capital and reserve funds to invest in accordance with the regulations of the State Bank.

2. Central People's Credit Funds may participate in the money market organized by the State Bank, including treasury bill auctions, domestic currency and foreign exchange interbank markets, and other securities markets; may engage in foreign exchange trading when permitted by the State Bank; have the right to act as agent, accept mandates, and act as agent in areas related to banking activities.

3. Central People's Credit Funds may provide advisory services and other services related to banking activities in accordance with the regulations of the State Bank."

26. Article 45 is amended as follows:

"Article 45. Cases Not Permitted to Lend

Basic People's Credit Funds shall not lend to entities outside those specified in Clause 1 of Article 38 and shall not carry out other credit activities without permission from the State Bank as stipulated in Clause 3 of Article 38 of this Decree."

27. Article 47 is amended and supplemented as follows:

"Article 47. Loan Limits, Guarantees, and Discounting

1. The total outstanding loans to a single customer shall not exceed 15% of the People's Credit Fund's own capital, except for loans from entrusted capital of other organizations and individuals and loans secured by deposit certificates issued by the same People's Credit Fund.

2. In cases where the borrowing needs of a customer exceed the 15% limit of the People's Credit Fund's own capital, the People's Credit Fund may lend through syndicated loans in accordance with the regulations of the Governor of the State Bank.

3. The level of guarantees, discounting of commercial bills, and other securities provided by People's Credit Funds to a single customer shall not exceed the ratio relative to the People's Credit Fund's own capital as prescribed by the Governor of the State Bank."

28. Article 73 is amended and supplemented as follows:

"Article 73. Issuance of Model Guidelines for Charter Development

The Governor of the State Bank shall be responsible for issuing Model Guidelines for Developing the Charter of Basic People's Credit Funds."

Article 2.

1. Repeal Articles 29, 30, 33, 34 and replace them with Articles 29, 30 as follows:

"Article 29. People's Credit Funds establish a management and operation structure."

1. The Board of Directors has the following rights and responsibilities:

a) Appointing and dismissing the Deputy Director upon the proposal of the People's Credit Fund Director;

b) Appointing, dismissing, hiring, or terminating the employment contract of the Chief Accountant (if the People's Credit Fund has such a position);

c) Deciding on the organizational structure of specialized business units of the People's Credit Fund;

d) Organizing the implementation of resolutions of the Member Assembly;

đ) Preparing reports on the business operation plan and profit distribution of the People's Credit Fund, and the activities report of the Board of Directors to be submitted to the Member Assembly;

e) Preparing the agenda of the Member Assembly and convening the Member Assembly;

g) Handling non-recoverable loan accounts and other losses in accordance with the provisions of the law;

h) Evaluating the results of the business operations of the People's Credit Fund; approving the financial settlement report to be submitted to the Member Assembly;

i) Organizing the implementation of the rights and obligations of the People's Credit Fund as stipulated in Articles 7 and 8 of this Decree;

k) Considering the admission of new members and resolving the issue of members leaving the People's Credit Fund (except for cases of expulsion of members) and reporting to the Member Assembly for approval;

l) Representing the owner of the assets of the People's Credit Fund and its subsidiaries when the People's Credit Fund has subsidiaries;

m) Inspecting and evaluating the work of the Director and Deputy Directors of the People's Credit Fund according to the decisions of the Board of Directors;

n) Being responsible for their own decisions before the Member Assembly and the law;

o) Other rights and responsibilities as prescribed by the Charter of the People's Credit Fund.

2. The Director of the People's Credit Fund has the following rights and responsibilities:

a) Representing the People's Credit Fund under the law;

b) Implementing the business plan and managing daily operations of the People's Credit Fund;

c) Organizing the implementation of decisions of the People's Credit Fund Board of Directors;

d) Appointing, dismissing, and assigning positions within the Board of Directors of the People's Credit Fund, except for positions within the authority of the Member Assembly and the Board of Directors;

đ) Signing contracts on behalf of the People's Credit Fund;

e) Submitting the annual financial settlement report to the Board of Directors;

g) Proposing to the Board of Directors about the organizational structure arrangement plan of the People's Credit Fund;

h) Recruiting labor, except for cases within the authority of the Board of Directors;

l) Other rights as prescribed in the Charter of the People's Credit Fund, Resolutions of the Member Assembly;

k) Being responsible to the Member Assembly and the Board of Directors for assigned tasks.

When absent, the Director delegates a Deputy Director to manage the operations of the People's Credit Fund.

Article 30. The People's Credit Fund establishes a separate management and operational system

1. The Board of Directors has the following rights and responsibilities:

a) Appointing and dismissing the Director through the resolution of the Member Assembly;

b) Appointing and dismissing Deputy Directors upon the proposal of the Director.

In addition to the above rights and responsibilities, the Board of Directors of the People's Credit Fund also has the rights and responsibilities specified in Points b, c, d, đ, e, g, h, i, k, l, m, n, and o Clause 1 Article 29 of this Decree.

2. The Chairman of the Board of Directors has the following rights and responsibilities:

a) Representing the People's Credit Fund under the law;

b) Establishing programs and plans for the activities of the Board of Directors;

c) Convening and chairing meetings of the Board of Directors;

d) Being responsible to the Member Assembly and the Board of Directors for assigned tasks;

đ) Signing documents of the Member Assembly and the Board of Directors;

e) Other rights and responsibilities as prescribed by the Charter of the People's Credit Fund.

The Governor of the State Bank shall prescribe the full-time or part-time working regime of the Chairman of the Board of Directors of the grassroots People's Credit Fund.

3. The Director of the People's Credit Fund has the following rights and responsibilities:

a) Signing contracts on behalf of the People's Credit Fund authorized by the Board of Directors;

b) Recruiting labor authorized by the Board of Directors of the People's Credit Fund;

c) Other rights as prescribed in the Charter of the People's Credit Fund, Resolutions of the Member Assembly, or according to the contract signed with the Board of Directors of the People's Credit Fund;

d) Being responsible to the Board of Directors for assigned tasks.

In addition to the above rights and responsibilities, the Director of the People's Credit Fund also has the rights and responsibilities specified in Points b, c, e, g Clause 2 Article 29 of this Decree.

When absent, the Director delegates a Deputy Director to manage the operations of the People's Credit Fund.

If the Director is a member of the People's Credit Fund or a member of the Board of Directors, in addition to fulfilling all the rights and responsibilities of the Director as prescribed in this Article, they must also fulfill the rights and obligations of a member of the People's Credit Fund or a member of the Board of Directors.

If the Director is hired, they must fully implement the rights and responsibilities of the Director as prescribed in this Article and in the Director's employment contract. The Director may participate in meetings of the Board of Directors and the Member Assembly but does not have voting rights and does not enjoy other rights of a member of the People's Credit Fund or a member of the Board of Directors.

2. Delete the phrase "government agency" in Article 65 and the phrase "head of government agency" in Article 75.

Article 3.

1. This Decree shall take effect fifteen days from the date of publication in the Official Gazette.

2. The Governor of the State Bank shall coordinate with relevant ministries and sectors to be responsible for guiding the implementation of this Decree./.