Cooperative Bank, Deduction, Management, and Use of the Safety Assurance Fund for the System of People’s Credit Funds according to Circular 27/2024/TT-NHNN
Circular 27/2024/TT-NHNN regulations on cooperative banks, contribution, management, and use of the Safety Assurance Fund for the People's Credit Fund system?
On June 28, 2024, the Governor of the State Bank of Vietnam issued Circular 27/2024/TT-NHNN regulating cooperative banks, the contribution, management, and use of the Safety Assurance Fund for the People's Credit Fund system.
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, use of the Safety Assurance Fund for the People's Credit Fund system.
Circular 27/2024/TT-NHNN will take effect from July 1, 2024, replacing the following regulations:
- Circular 31/2012/TT-NHNN regulating cooperative banks- Circular 09/2016/TT-NHNN amending Circular 31/2012/TT-NHNN regulating cooperative banks- Circular 03/2014/TT-NHNN on the Safety Assurance Fund for the People's Credit Fund system- Article 1; Article 5 of Circular 21/2019/TT-NHNN amending Circulars regulating cooperative banks, People's Credit Funds, and the Safety Assurance Fund for the People's Credit Fund system- Article 1 of Circular 24/2023/TT-NHNN amending Circulars related to the submission, presentation, provision of information, residential documents when performing administrative procedures in the establishment and operation of banks- Article 2 of Circular 21/2023/TT-NHNN amending the Circulars related to business activities within the scope of management functions
Circular 27/2024/TT-NHNN regulating cooperative banks, contribution, management, and use of the Safety Assurance Fund for the People's Credit Fund system? (Image from the Internet)
What activities will People's Credit Funds have from July 1, 2024?
Based on Article 17 of Circular 27/2024/TT-NHNN regulating activities for member People's Credit Funds:
Activities for member People's Credit Funds
- Receiving capital adjustment deposits, providing capital adjustment loans to member People's Credit Funds according to the Capital Adjustment Regulation. The construction and content of the Capital Adjustment Regulation must ensure the following principles:
a) Member People's Credit Funds deposit demand deposits, and term deposits at cooperative banks to adjust capital. In case of early withdrawal, the member People's Credit Fund must notify the cooperative bank in advance;
b) Member People's Credit Funds are granted capital adjustment loans by cooperative banks when there is a need for capital to expand credit;
c) The interest rate mechanism for deposits ensures support, and the interest rates for capital adjustment loans must be clear, transparent, not for profit, with a linkage between cooperative banks and member People's Credit Funds;
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Thus, from July 1, 2024, People's Credit Funds will engage in the following activities:
- Receiving capital adjustment deposits, providing capital adjustment loans to member People's Credit Funds according to the Capital Adjustment Regulation- Opening payment accounts, providing payment means for member People's Credit Funds.- Providing loans to member People's Credit Funds to address temporary liquidity difficulties.- Developing, supporting the development, and applying new products and services in the activities of member People's Credit Funds to meet the needs of members and serve the community's interests in the area.- Inspecting, supervising People's Credit Funds as required by the State Bank- Conducting internal audits for member People's Credit Funds- Assigning personnel to hold the positions of Chairman of the Board, Director, and Deputy Director of People's Credit Funds that are subject to early intervention or under special control as requested by the State Bank's branches where the People's Credit Funds are located.- Issuing and publishing blank savings books and providing blank savings books to People's Credit Funds to receive savings deposits from customers- Other activities as stipulated in Article 21 of Circular 27/2024/TT-NHNN.
What is the maximum operating period of a cooperative bank recorded in the License?
Based on Article 5 of Circular 27/2024/TT-NHNN regulating the operating term and operating area:
Operating term, operating area
The operating term of a cooperative bank recorded in the Establishment and Operation License (hereinafter referred to as License) is a maximum of 99 years.
The operating area of a cooperative bank: within the territory of Vietnam.
Thus, the maximum operating period of a cooperative bank recorded in the License is 99 years.
