Circular 27/2024/TT-NHNN stipulating the cooperative bank, the deduction, management, and use of the System Safety Guarantee Fund of the People's Credit Fund
Circular 27/2024/TT-NHNN on regulations concerning cooperative banks, the contribution, management, and use of the People's Credit Fund System Safety Guarantee Fund
On June 28, 2024, the Governor of the State Bank of Vietnam issued Circular 27/2024/TT-NHNN on regulations concerning cooperative banks, the contribution, management, and use of the People's Credit Fund System Safety Guarantee Fund.
Circular 27/2024/TT-NHNN applies to the following subjects:
- Cooperative banks
- People's credit funds
- Organizations and individuals related to Licenses; organization, management, operation of cooperative banks and the contribution, management, and use of the People's Credit Fund System Safety Guarantee Fund.
Circular 27/2024/TT-NHNN takes effect from July 1, 2024, and simultaneously repeals the following regulations:
- Circular 31/2012/TT-NHNN on regulations concerning cooperative banks
- Circular 09/2016/TT-NHNN amending Circular 31/2012/TT-NHNN on regulations concerning cooperative banks
- Circular 03/2014/TT-NHNN on regulations concerning the People's Credit Fund System Safety Guarantee Fund
- Article 1; Article 5 of Circular 21/2019/TT-NHNN amending Circular on regulations concerning cooperative banks, people's credit funds, and the People's Credit Fund System Safety Guarantee Fund
- Article 1 of Circular 24/2023/TT-NHNN amending the Circulars related to submission, presentation, and provision of information, documents on population when carrying out administrative procedures in the field of establishment and operation of banks
- Article 2 of Circular 21/2023/TT-NHNN amending the Circular related to business activities under the management scope
Circular 27/2024/TT-NHNN on regulations concerning cooperative banks, the contribution, management, and use of the People's Credit Fund System Safety Guarantee Fund (Image from the Internet)
What activities do People's Credit Funds undertake from July 1, 2024?
Based on Article 17 of Circular 27/2024/TT-NHNN, which specifies activities for member people's credit funds:
Activities for member people's credit funds
- Accept capital balancing deposits, provide capital balancing loans for member people's credit funds according to the Capital Balancing Regulation. The establishment and content of the Capital Balancing Regulation must ensure the following principles:
a) Member people's credit funds make non-term deposits, term deposits at cooperative banks to balance capital. In case of early withdrawal, the people's credit fund must notify the cooperative bank in advance;
b) Member people's credit funds can receive capital balancing loans from cooperative banks when in need of capital to expand credit;
c) The deposit interest rate mechanism ensures support, and the capital balancing loan interest rate must be clear and transparent, not driven by profit motives, and have a link between the cooperative bank and the member people's credit funds;
...
Thus, from July 1, 2024, people's credit funds have the following activities:
- Accept capital balancing deposits, provide capital balancing loans for member people's credit funds according to the Capital Balancing Regulation
- Open payment accounts, provide payment instruments for member people's credit funds.
- Provide loans to member people's credit funds to address temporary liquidity difficulties.
- Develop, support, and apply new products and services in the operations of member people's credit funds to meet the needs of people's credit fund members and serve community development benefits in the area.
- Inspect and supervise people's credit funds as required by the State Bank.
- Perform internal audits for member people's credit funds.
- Assign personnel to hold the positions of Chairman of the Board of Directors, Director, and Deputy Director of the people's credit fund under early intervention or under special control when required by the State Bank branch in the province/city where the people's credit fund is located.
- Issue and publish the sample of blank savings books and provide blank savings books to people's credit funds to accept savings deposits from customers.
- Other activities specified in Article 21 of Circular 27/2024/TT-NHNN.
What is the maximum duration of operation recorded in the License for a cooperative bank?
Pursuant to Article 5 of Circular 27/2024/TT-NHNN regulating the duration of operation and the operational scope:
Duration of operation, scope of operation
The duration of operation of a cooperative bank recorded in the Establishment and Operation License (hereinafter referred to as the License) is a maximum of 99 years.
The operational scope of a cooperative bank: within the territory of Vietnam.
Thus, the maximum duration of operation of a cooperative bank recorded in the License is 99 years.
