Case of changing the charter capital of the people's credit funds in Vietnam from July 1, 2024

Case of changing the charter capital of the people's credit funds in Vietnam from July 1, 2024 (Internet image)

On June 28, 2024, the Governor of the State Bank issued Circular 29/2024/TT-NHNN stipulating some contents related to the management, operation, organization, and operations of people's credit funds in Vietnam.

Case of changing the charter capital of the people's credit funds in Vietnam from July 1, 2024

According to Article 13 of Circular 29/2024/TT-NHNN, the rules for changing the charter capital are as follows:

- The Board of Directors decides on the increase or decrease of charter capital and reports to the General Meeting of Members at the nearest General Meeting of Members in the following cases:

+ Receiving capital contributions from members due to the admission of new members or additional capital contributions from existing members;

+ Returning capital contributions to members who terminate their membership in the following cases:

++  Individual  members  who  are  deceased  or  missing;

++  Legal  entity  members  who  cease  to  exist;

++  Members  who  no  longer  meet  the  conditions  to  become  members  as  per  the  regulations,  except  in  cases  where  sufficient  capital  contributions  are  not  guaranteed;

++  Members  who  voluntarily  leave  and  are  approved  by  the  Board  of  Directors  to  exit  the  people's  credit  fund;

- The General Meeting of Members decides on the increase or decrease of charter capital in the following cases:

+ Using reserve funds to supplement charter capital, other funds as per legal regulations, and other legitimate sources to supplement charter capital;

+ Returning capital contributions to members who terminate their membership in the case of expulsion: Members expelled by the General Meeting of Members from the people's credit fund for:

++  Failing  to  ensure  sufficient  capital  contribution;

++  Engaging  in  fraudulent  or  forged  member  documentation;

++  Other  cases  as  stipulated  in  the  Charter  of  the  people's  credit  fund.

- Monthly, no later than the 5th of the following month, the people's credit fund must report to the State Bank branch on the number of new members admitted, the number of members removed, the total contributed capital of members, and the total returned capital for management and supervision purposes.

- The procedure and dossier for requesting amendments and supplements to the License of the people's credit fund regarding charter capital shall follow the regulations of the Governor of the State Bank on changes that must be approved by the State Bank for credit institutions as cooperatives.

Regulations on capital contributions of members of people's credit funds in Vietnam

1. Members' capital contributions include membership establishment contributions and additional capital contributions:

   - The minimum membership establishment contribution is VND 300,000 and is stipulated in the Charter;

   - Additional capital contributions are made according to the regulations in the Charter.

2. The total maximum capital contribution of an individual member of the people's credit fund shall not exceed 10% of the charter capital of the people's credit fund or a lower percentage as stipulated in the Charter.

3. The General Meeting of Members decides the specific membership establishment contribution levels, additional capital contribution levels, methods of payment, and the maximum total capital contribution of an individual member as per clauses (1) and (2).

4. The recognition of members' capital contributions as per clause (1) into charter capital is carried out as follows:

   - Membership establishment contributions are recorded into charter capital upon the Board of Directors' decision to admit new members;

   - Additional capital contributions are recorded into charter capital after members have completed their capital contributions.

5. Based on the actual capital contributions of members as per clauses (1) and (2), the people's credit fund performs:

   - Issuance of Membership Cards according to the template guided uniformly by the cooperative bank system, Capital Contribution Books according to Appendix No. 04 attached to this Circular for new members after being admitted by the Board of Directors;

   - Updating changes in capital contributions into the Capital Contribution Book for members after the members complete their additional capital contributions.

6. The people's credit fund must maintain records of capital contributions; transferring, receiving the transfer of capital contributions, and refunding capital contributions of members.

(Article 10 of Circular 29/2024/TT-NHNN)

Nguyen Ngoc Que Anh

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