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State Bank Socialist Republic of Vietnam
of Vietnam Independence - freedom - Happiness
No : 155QD/NH17 htmlhtmlhtmlhtml
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Hanoi, August 16,1993.
- Pursuant to the Decree of the Government No 15/CP dated March 2,1993, defining duties, rights, and State administration, responsibilities of ministries and institutions at the ministry level.
- Pursuant to the Decision of the Prime Minister No 390/TTG dated July 27,1993 concerning the implementation of the testing project of people's credit funds system.
- Having considered the proposal of the head of the finance Institutions Department of the State Bank and the chief of the Executive Board on Testing People's Credit funds.
Decides
Article 1 :
To promulgate "the Regulation on Organization and Operation of People's Credit fund" herewith
Article 2 :
The Executive Board on Testing People's Credit funds shall be responsible for guiding the people's credit funds to implement this regulation.
Article 3 :
This decision comes into force from the date of its signing.
Article 4 :
The chief of the Governor Office, the head of the finance Institutions Department, the chief of the Executive Board on Testing People's Credit funds, heads of Departments of the State Bank branches in provinces and cities, the chairman of the board of dir ectors and the managing director of people's credit funds shall be obliged to implement this Decision.
for The State Bank Deputy Governor
CHU VAN NGUYEN (Signed)
State Bank of Vietnam Socialist Republic of Vietnam
Independence-freedom-Happiness
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Article 1 :
People's credit funds (hereinafter referred to as credit funds) are credit organizations in the form of cooperative whose members are individuals, legal entities. They deal with credit, monetary activities and banking services in order to help members to promote production, trade and living standard on the basis of mutual help and mutual interest.
Article 2 :
The establishment of credit funds bases on the following principles.
- freewill, democracy, cooperation, mutual help and mutual interest.
- Autonomy and self-responsibility for its finance capacity.
Article 3 :
Credit funds shall be established in areas where there are demand for credit and banking services. The operating scope of a credit funds may cover one commune or a living area (transcommune, district, town).
Article 4 :
Each credit funds is a legal entity with authorized share capital, its own seal and balance sheet. It has an office that suits the operation of the fund.
Article 5 :
Credit fund shall coordinate its operation with other funds of the system through regional credit funds and the Central Credit fund. Credit funds are voluntary members of the system and may enjoy services provided by regional credit funds and the Central Credit fund.
Article 6 :
Credit funds shall operate under the license granted by the State Bank. The operation of credit funds shall be subject to the management, supervision and inspection of the State Bank.
Chapter 2
Article 7 :
Each credit fund shall consist of at least 12 (twelve) founders. These founders shall enjoy the privileges as the charter prescribes. An interim board of directors (Consisting of at least 3 (three) persons) shall be appointed by these founders in order t o accelerate the establishment of the credit fund.
Article 8 :
Members of each credit fund are individuals, legal entities that subscribe to qualification shares as provided in the charter of the credit fund. There are two kinds of member :
8.1 Official members : Individuals and legal entities with permanent residence and work place in the commune; founders and joining members. Members of this kind shall have the right to vote, to stand candidate for the leadership of the fund.
8.2 Unofficial members : Individuals and legal entities without permanent residence and work place in the commune. Members of this kind do not have the right to vote, to stand candidate for leadership of the fund.
Chapter 4 Operation of Credit funds
Part 1 Working capital
Article 9 :
Authorized share capital consists of
9.1 Qualification shares : Subscribed by members as prescribed by the charter of each credit fund. Denomination of this kind of share shall be stipulated by the charter and the minimum nominal is 30,000 Vietnam Dong (VND)
9.2 Permanent shares : Every year, credit fund issue debentures. Permanent shares bear no interest, dividends of this kind of share shall depend upon the result of operation of the fund after one fiscal year. Denomination of permanent shares shall be pro vided by the credit fund.
Article 10 :
Mobilized Capital
Credit fund may use mobilized capital for business purpose an shall pay back both the principal and the interest to depositors as scheduled. Credit funds may mobilize capital in reasonable manner as stipulated by the State Bank, including any kind of sav ing of individuals, economic organizations, social organizations....
Article 11 :
Borrowed capital
In accordance with the regulation on guarantee issued by the State Bank, a credit fund may borrow money from other financial and credit institutions when a regional credit fund stands surety for it.
Article 12 :
Credit fund may receive assistance fund, entrusted investment fund from domestic or foreign individuals and legal entities.
Article 13 :
Capital extracted from annual net profit and other kinds of capital that may be constituted in the operating process (because of the revaluation of fixed assets, undivided earnings, unused funds...)
Part 2 Usage of Capital and other services
Every credit fund :
Article 14 :
Shall consider the capital volume and characteristics of capital resources and make short-term, medium-term, long-term loans to its members.
Article 15 :
Shall be entrusted by the Government, domestic or foreign individuals and organizations to provide credit and financial services to development programs in rural and agricultural areas.
Article 16 :
May use the share capital and Professional and Technical Development fund to purchase fixed assets and equipment needed for its operation.
Article 17 :
May open deposit and lending account at regional credit fund.
Part 3 Accounting costs, profit
Article 18 :
18.1 The fiscal year of a credit fund begins at the 1st of January and end at the last day of December.
18.2 Credit funds shall be subject to stipulations of the Decree-Law on accountancy and statistics, and relating regulations promulgated by the State bank and the Ministry of finance concerning books keeping, cost accounting, reports, data and papers pres ervation.
18.3 Basing on fiscal results, expenditure accounting statement approved by the members assembly; the undivided gross earning shall be used as follow :
- from 10 to 20% (ten to twenty percent) of the undivided earnings shall be set aside to set up regular reserve (The extraction and usage of this kind of reserve shall be stipulated by the State Bank.
- Pay income-tax
- Set up special reserve
- Establish professional and technical development fund, welfare fund and bonus fund.
- To reward to members who are also depositors at the same time as prescribed at the charter of the credit fund.
- The remain shall be distributed to shareholders as dividends.
The aforesaid extracted sums for each kind of fund, dividends and rewards shall be provided at the charter of the credit fund.
Article 19 :
In case of loss, regular reserve shall be extracted to make up losses. If the loss is not recovered yet, special reserve shall be extracted. And the extraction shall be recovered by the profit of the following fiscal year.
Article 20 :
In case the credit fund incurs losses which are equal to 30% (thirty percent) of the authorized share capital, the chairman of the board of directors can convene a special members assembly to discuss remedial measures.
Part 4 Duties and Powers of Credit funds
Article 21 :
As provided by the Government and the State Bank credit fund shall
21.1 Seriously observe the policies and laws of the Government.
21.2 Be subject to every regulation of the State Bank concerning credit, monetary, foreign exchange and banking operation.
21.3 Open deposit accounts at regional credit funds in that province or city; and at the branch of the State Bank in case regional credit fund is not yet established.
21.4 Be subject to the regulation on risk sharing when making loans, apply a flexible interest rate scale in conformity with interest rates in the market as specified by the State Bank.
21.5 By subject to regulation on commission and charges.
21.6 Ensure its solvency, security when doing business. Though regional credit fund, obligatory reserve shall be established.
21.7 Participate in deposit insurance, credit guarantee activities in conformity with the charter of insurance and deposit guarantee organizations.
Article 22 :
Credit funds are entitled to :
22.1 Request borrowers of the credit fund to furnish necessary information on their finance capacity, on their legal properties that shall be used as collateral.
22.2 Apply penalty to borrowers who do not reimburse loans on due time (both the principal and interest) as stipulated in existing laws and the charter of the members assembly.
Chapter 4 Management and Operation of Credit funds
Part 1 Members assembly
Article 23 :
Members assembly (including initial meetings, annual meeting and special meeting) is the chief policy-making body of the credit fund. The resolution of the members assembly shall be valid only with the participation of two - thirds of the total members.
23.1 The initial meeting shall be convened by the chairman of the interim board of directors (as mentioned at article 8 of this regulation) to
- Pass the charter of the credit fund
- Pass the plan of operation for the 2 initial years.
- Elect the members of the board of directors.
- Elect supervisors and supervisor-in-chief.
- Decide on the participation in the regional credit fund.
23.2 Annual meeting :
Annual meeting is convoked by the chairman of the board of directors, in order to :
- Approve the report on the execution of the last assembly's resolutions.
- Consider and approve the summary of operation after one fiscal year.
- Set forth the orientation, targets, duties, and operating plan for the next fiscal year.
- Decide upon the distribution of net profit, extraction for other reserves, dividends for permanent shareholders.
- Decide upon the bonus scale of depositors and borrowers of the credit fund.
- Elect and remove members of the board of directors, supervisors and supervisor-in-chief.
- Decide on amendments and additions to the charter.
23.3 Special meeting :
Special meeting is called by the chairman of the board of directors with the participation of at least two-thirds of the official members or two-thirds of the members of board of directors or of the supervisor-in-chief. Special meeting can also be called at the request of the managing director of the regional credit fund in order to discuss urgent problems concerning the operation, existence and development of the credit fund.
Part 2
Article 24 :
The Board of Directors
24.1 The board of directors shall consist of at least 3 directors and 9 directors at most. They must be competent and reliable. They must have knowledge on economic and credit management. The members assembly shall elect the board by ballot. The chairman and vice-chairmen are elected by the board itself. Office term of each director is from 2 (two) years to 3 (three) years. Members of the board may be re-elected.
24.2 Members of the board of directors shall be approved by the State Bank.
Article 25:
Duties and Powers
25.1 Board of directors shall be authorized to act on behalf of the credit fund to cope with problems concerning the operation of the credit fund not with the problem within the administration of the members assembly.
25.2 Board of directors shall be responsible to the members assembly to :
a. Manage the credit fund in conformity with existing State laws. Decree - law on the State bank of Vietnam regulation on organization and operation of credit funds, charter of credit fund and the resolution in writing of the members assembly.
b. Submit to the members assembly the following issues for approval :
- framework, officers and employees, salary fund, internal disciplines of the credit fund.
- Increase, decrease and transfer of share capital.
- Solution to lost capital or loans risking to be lost.
- Project for external professional operation.
c. Submit to the members assembly the summary of operation, proposed distribution of net profit, dividends, bonus, plan of operation for the following year.
Consult the fixed scale promulgated by the State Bank of Vietnam and decide :
- Concrete interest rate for deposits and loans.
- Rate of commission, charges and fine.
d. Determine concrete extraction for reserves, concrete dividends, bonus and concrete of any kind of reserve on accordance with the resolution of the members assembly.
e. Appoint or remove managing director, deputy-managing director, chief accountancy of the credit fund (Other posts of the credit fund shall be appointed by the managing director with the approval of the members assembly).
f. Supervise the management of the managing director
g. Consider then proceed against individuals or entities who do harm to the credit fund assets.
h. Make proposal concerning the amendments and additions of the charter.
i. Decide to convoke the members assembly.
k. Decide on salary, bonus of the employee of the credit fund.
m. Be responsible for the law violations, charter violations and mismanagement which is detrimental to the credit fund.
n. Consider the damage to the credit fund, caused by the managing director and find suitable remedial measures.
Article 26 :
Meeting of Board of Director
26.1 The board of directors shall meet regularly once a fortnight or once a month or once two months interval, but not more than 3 months interval. When necessary, the board of directors may hold a special meeting at the request of the chairman of the boa rd of directors or supervisor-in-chief of managing director or two-thirds of the board of directors.
26.2 The meeting of the board of directors is valid only with the participation of at least two-thirds of its members. The decision shall be made according to the opinion of the majority. In case of a tie in vote, the vote of the chairman or vice-chairman of the board of directors who presides over the meeting shall be the decisive vote.
26.3 Every meeting of the board of directors must have its minutes with the signature of the president and the secretary of the meeting.
Part 3 Credit fund Management
Article 27 :
The day-to-day operation of the credit fund shall be conducted by the managing director who can be appointed or removed by the of directors and approved by the State Bank. At the proposal of the managing director, the board of directors shall appoint 1 or 2 assistant managing director.
The chairman of the board of directors can be concurrently the managing director of the credit fund.
Article 28 :
Duties of the board of directors : Conduct the operation of the credit fund in conformity with the resolution of the members assembly and the board of directors.
Article 29 :
Powers of the managing director :
The managing director :
- May attend every meeting of the board of directors but not have vote (If he is not the member of the board).
- May appoint or remove any post of the credit fund, with the approval of the board of directors (except the post of vice-managing director and supervisor-in-chief)
Article 30 :
30.1 Supervisory committee shall be elected by the members assembly (The supervisory committee consists of one to three supervisors, among them one shall be supervisor-in-chief). Supervisor must be competent at technical and professional operation of cre dit funds, and at least one of them must be good at accountancy.
30.2 Supervisors and supervisor-in-chief must be members of the credit fund but
a. Can not be concurrently members of the board of directors, managing director or vice-managing director, chief accountant of the credit fund.
b. Can not be wives, husband or relatives of the immediate family related by blood within 3 (three) generations of the aforesaid subjects in the clause (a) of this article.
30.3 Supervisors and supervisor-in-chief shall be the office term of the board of directors. Supervisors and supervisor-in-chief can be re-elected.
Article 31 :
Supervisor-in-chief shall give assignment to subordinate supervisors. And supervisors :
31.1 Shall supervise every business operation of the credit fund and examine accounting books, assets, reports, balance sheet of the credit fund.
31.2 May request officers and employees of the credit fund to furnish data, documents and demonstration on operation of the credit fund.
31.3 Shall submit to the members assembly the report on examination of the fund's balance sheet.
31.4 Shall report to the members assembly unusual event relating the finance of the credit fund, the good points and defaults of the board of directors in financial management together with their subjective opinions.
Supervisors shall be concluded to violate the law if they do not report the defaults of the board of directors which were found by them.
Supervisors shall have individual responsibility for their conclusion to the members assembly.
31.5 Participate in every meeting of the board of director, give opinions and make proposals but do not have vote. When disagreeing with the resolution of the board of directors, they can have their opinions written on the minutes of the meeting and dire ctly report to the members assembly
31.6 The supervisor-in-chief or two-thirds of the supervisors may request the board of directors to call a special meeting or request the chairman of the board of director to convene a special members meeting.
31.7 Supervisors shall receive compensations as stipulated by the members assembly.
Part 5 Credit Committee
Article 32:
32.1 Members of the credit committee shall be :
- Chairman of the board of directors, member in service, chairman.
- Managing director of the credit fund, member in service, standing member.
- One member of the board of directors, elected by the members assembly (At annual meeting)
32.2 Members of the credit committee can not use their posts to guarantee for the loans of the credit fund's customer.
32.3 When violating the regulations on credit funds, member of the committee shall be removed. The members assembly shall decide upon removal of this kind.
32.4 Chairman of the board directors, managing director who are no longer in office shall certainly cease to be members of the credit committee.
Article 33 :
Duties and powers of credit committee.
33.1 Credit committee shall have obligation of implementing regulations of the State Bank on prevention of risks, on security in the operation of the credit fund.
33.2 Credit committee shall consider applications for loans, and relating documents of customers.
33.3 Credit committee may authorize the managing director or standing member of the committee to deal with small loans for production expenditure and living expenses of customer. The scale of these loans shall be instructed by the regional credit fund.
The board of directors shall decide on this scale in case the regional is not yet established.
Chapter 5 Relations of Credit funds
Article 34 :
The interrelations with regional credit funds with the Central funds and with other credit funds.
34.1 Credit funds shall be subject to the instructions and direction of regional credit fund and the Central Credit fund. Credit funds shall coordinate with these organizations in distributing and harmonizing cash and capital.
34.2 Credit funds shall be members of regional credit fund (Or the Central Credit fund if the regional credit fund is not yet established)
34.3 Credit funds interrelate in payment between customers of the system, information supply and experience exchange.
34.4 The Central Credit fund shall act as an intermediary in relations between whole system and the State Bank, the Government and international finance credit organizations.
34.5 The Central Credit fund shall hold the central management on security reserves, insurance funds of every credit of the system.
Article 35:
The relations with the State Bank.
35.1 Credit funds shall be subject to the macro-management on monetary, credit, baking and foreign currency policies of the State Bank and shall be supervised and inspected by the State Bank.
35.2 Credit funds shall be furnished necessary information by the State Bank and may participate in intensive courses, workshops or meeting held by the State Bank.
35.3 Credit funds must send all reports as stipulated by the State Bank, and shall be object to any punishment of the State Bank if violating any stipulation of the State Bank or the Government. The punishment shall be carried out by the State Bank.
Article 36
Relations with the local authority.
36.1 Credit funds shall be obliged to observe every State Laws, under the administration of the local authority.
36.2 Credit funds shall be given favorable conditions, assistance from the local authority in order to operate more efficiently.
Article 37 :
Relations with other credit funds, finance organizations.
Credit funds may establish relations with other credit and finance organizations on the basis of equality and mutual interest.
Article 38 :
Relations with its members and customers of other kinds.
Credit funds shall establish a solidarity and a spirit of mutual help between its members with the fund, between customers of other sorts with the fund, encourage creativeness of individuals and the whole employee, create favorable conditions for the sake of the customer in order to promote the economic development in the countryside.
Article 39:
Merger of credit fund
Credit fund, with the approval of the members assembly of each credit fund, merge with one or more other credit funds to establish a new credit fund. This new credit fund shall organize members assembly as prescribed in this statute.
Article 40:
Incorporation of the credit fund.
Credit fund may apply for a voluntary incorporation with another credit fund. The incorporation shall be decided by the regional credit fund in writing, at the discretion and with the approval of the director of the State Bank branch in provinces or citie s. The incorporation shall be instructed by the State Bank.
Part 2 Proceedings and disputes Liquidation and dissolution
Article 40: Proceedings and disputes
40.1 The chairman of the board of directors shall be the duly-authorized representative of the fund to the law.
40.2 In case of proceedings or disputes, the equality of the credit with other individuals and legal entities shall be ensured.
Article 41 :
Liquidation and dissolution.
Credit fund shall be dissolved when :
- Seriously violating the law
- The operating license is convoked by the Governor of the State Bank. Before dissolving, the credit fund shall be liquidated under the supervision of the State Bank and the finance Office.
Chapter 6 Provision on implementations
Article 43:
With the instructions of the State Bank, existing credit funds which are operating in rural areas with granted operating licenses the in accordance with the Decree-Law on Banks, Credit Cooperatives and finance Companies shall be allowed to adapt to the ne w model set forth in this regulation.
Article 44 :
This regulation shall come into force from the date of its signing. The amendments, additions to the regulation shall be decided by the Governor of the State Bank of Vietnam.
for The State Bank Deputy Governor
CHU VAN NGUYEN (Signed)