Decision No. 696/2003/QD-NHNN On Amending and Supplementing Certain Points of Circular No. 09/2001/TT-NHNN dated October 8, 2001 guiding the implementation of Decree No. 48/2001/NĐ-CP dated August 13, 2001 of the Government on the organization and operation of People's Credit Funds.

DECISION OF THE GOVERNOR OF THE STATE BANK OF VIETNAM

Regarding the amendment and supplementation of certain points in Circular No. 09/2001/TT-NHNN dated October 8, 2001 08/10/2001 guiding the implementation of Decree No. 48/2001/NĐ-CP dated August 13, 2001 13/8/2001 of the Government on the organizationand operation

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 GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated December 12, 1997 Maleof People's Credit Funds 12/12/1997

Pursuant to the Law on Credit Organizations dated 20/3/1996;

Pursuant to Decree No. 86/2002/NĐ-CP dated 05/11/2002 of the Government on functions, tasks, powers, and organizational structure of Ministries and ministerial-level agencies;

Pursuant to Decree No. 48/2001/NĐ-CP dated August 13, 2001 13/8/2001 of the Government on the organization and operation of People's Credit Funds;

At the proposal of the Director of the Department of Cooperative Credit Organizations,

Pursuant to …;

Article 1. Amending and supplementing certain points in Circular No. 09/2001/TT-NHNN dated October 8, 2001 guiding the implementation of Decree No. 48/2001/NĐ-CP dated August 13, 2001 of the Government on the organization and operation of People's Credit Funds as follows:

1. Supplement Point 4 into Section I as follows:

"4. The maximum operating period for a grassroots People's Credit Fund from the date it is granted a license to operate is 50 years. At the end of this period, an extension may be considered. Each extension shall not exceed the initial approved period."

2. Paragraph 2.1 (a) of Point 2 in Section II is amended and supplemented as follows:

"a. Individuals who are Vietnamese citizens aged 18 or older with full civil capacity and permanent residence registration within the operational area of the grassroots People's Credit Fund. For individuals with assets, production and business organizations, and temporary residence registration within the operational area of the grassroots People's Credit Fund, they may also be considered for membership (in cases without temporary residence registration, they must have a Business Registration Certificate or be confirmed by the People's Committee of the commune, ward, or town to be engaged in production and business activities within the operational area of the grassroots People's Credit Fund)."

3. Paragraph 2.2 of Point 2 in Section II is amended and supplemented as follows:

"2.2. Members contribute capital according to the Articles of Association; the minimum capital contribution of each member is 50,000 VND (fifty thousand dong), but the maximum (including transferred capital) does not exceed 30% (thirty percent) of the total charter capital of the grassroots People's Credit Fund at the time of contribution and transfer. When contributing the minimum amount, members receive a Member Card; contributions above the minimum are recorded in the Capital Contribution Book according to the prescribed form of the State Bank."

4. Paragraph 3.2 of Point 3 in Section II is amended and supplemented as follows:

"3.2. The Management Board of the grassroots People's Credit Fund has the authority to decide on increasing or decreasing the charter capital up to a maximum of 10% (ten percent) of the total charter capital most recently approved by the State Bank, but not exceeding 50,000,000 VND (fifty million dong). The Management Board must compile the results of increasing or decreasing the charter capital and report to the provincial or municipal branch of the State Bank quarterly, and before the annual General Assembly of Members.

In cases where the increase or decrease in charter capital exceeds the specified limit, it must be approved by the General Assembly of Members and confirmed in writing by the provincial or municipal branch of the State Bank."

5. Paragraph 3.4 (a) of Point 3 in Section II is amended and supplemented as follows:

"a. The Supervisory Board of the grassroots People's Credit Fund is directly elected by the General Assembly of Members through secret ballot. The Supervisory Board must have a minimum of three members, including at least one full-time supervisor; for grassroots People's Credit Funds with fewer than 500 members and operating capital under 2,000,000,000 VND (two billion dong), only one full-time supervisor may be elected."

6. Paragraph 4.1 (a) of Point 4 in Section II is amended as follows:

"4.1. Capital Mobilization.

a. Grassroots People's Credit Funds can mobilize capital from organizations and individuals within their operational area in the form of demand deposits and term deposits.

Grassroots People's Credit Funds can accept deposits from organizations and individuals outside their operational area up to a maximum of 40% (forty percent) of the total deposit balance. The maximum deposit acceptance ratio from outside the area will be adjusted based on the quality of operations of the grassroots People's Credit Funds. For grassroots People's Credit Funds classified as weak (rated D or having overdue loans exceeding 5% of total outstanding loans), the Director of the provincial or municipal branch of the State Bank may consider and decide to reduce the maximum deposit acceptance ratio from outside the area or terminate the acceptance of deposits from outside the area for such grassroots People's Credit Funds."

7. Paragraph 4.2 (b) of Point 4 in Section II is amended as follows:

"b. Other Activities

Grassroots People's Credit Funds can purchase and invest in fixed assets directly serving business operations, following the principle that the remaining value of fixed assets does not exceed 50% (fifty percent) of the grassroots People's Credit Fund's own capital.

Capital Contributions: Grassroots People's Credit Funds can use Charter Capital and Supplementary Reserve Fund to contribute capital to the Central People's Credit Fund. The capital contribution level to establish membership status in the Central People's Credit Fund is 10,000,000 VND (ten million dong) and can contribute more than 10,000,000 VND but the maximum (including transferred capital) does not exceed 10% (ten percent) of the total Charter Capital of the Central People's Credit Fund at the time of contribution and transfer."

8. Paragraph 2.1 of Point 2 in Section III is amended as follows:

"2.1. The Central People's Credit Fund primarily lends to members, and lending to non-members is regulated by the Articles of Association of the Central People's Credit Fund. The average annual total loan balance to non-members (excluding entrusted loan balances) shall not exceed 50% (fifty percent) of the average annual operational capital of the Central People's Credit Fund, provided that the Central People's Credit Fund ensures the reasonable capital needs of grassroots People's Credit Funds."

9. Paragraph 2.3 of Point 2 in Section III is amended as follows:

"The Central People's Credit Fund can purchase and invest in fixed assets directly serving business operations, following the principle that the remaining value of fixed assets does not exceed 50% (fifty percent) of the Central People's Credit Fund's own capital."

Article 2. This Decision shall take effect fifteen days after its publication in the Official Gazette. Matters not specified in this Decision shall continue to be implemented in accordance with Circular No. 09/2001/TT-NHNN dated October 8, 2001, issued by the Governor of the State Bank of Vietnam guiding the implementation of Decree No. 48/2001/NĐ-CP dated August 13, 2001, of the Government on the organization and operation of People's Credit Funds.

Article 3. The Heads of the Office, the Department of Cooperative Credit Organizations, the Heads of relevant units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam Branches in provinces and centrally governed cities, the Chairmen and members of the Management Councils, the Heads and members of the Supervisory Boards, the General Directors of Central People's Credit Funds, and the Directors of grassroots People's Credit Funds are responsible for implementing this Decision./.