The rights and responsibilities of cooperative banks in Vietnam

The rights and responsibilities of cooperative banks in Vietnam (Image from the internet)

On June 28, 2024, the Governor of the State Bank of Vietnam issued Circular 27/2024/TT-NHNN regulating cooperative banks, the deduction, management, and use of the People's Credit Fund Safety Assurance Fund.

The rights and responsibilities of cooperative banks in Vietnam

* Rights of cooperative banks

According to Article 22 of Circular 27/2024/TT-NHNN, the rights of cooperative banks are as follows:

- Provided with information related to the activities of the people's credit funds by the State Bank.

- Request people's credit funds to provide information and reports for the purpose of capital adjustment, internal auditing, and safety system monitoring.

- Other rights as stipulated in the Charter and Circular 27/2024/TT-NHNN.

* Responsibilities of cooperative banks

Based on Article 23 of Circular 27/2024/TT-NHNN, the responsibilities of cooperative banks are:

- Guide and train the banking profession, and information technology for member people's credit funds.

- Support banking activities for member people's credit funds as prescribed by law.

- Issue the Capital Adjustment Regulation, Inspection and Monitoring Regulation for people's credit funds, Internal Audit Regulation for people's credit funds as stipulated in Clauses 1, 5, and 6 of Article 17 of Circular 27/2024/TT-NHNN.

- Assign personnel to hold the positions of Chairman of the Board of Directors, Director, and Deputy Director of the people’s credit funds as per Clause 7 of Article 17 of Circular 27/2024/TT-NHNN, specifically:

+ Assign personnel to hold the positions of Chairman of the Board of Directors, Director, and Deputy Director of the people’s credit funds that are under early intervention or special control, when requested by the State Bank branch in the province or city where the people’s credit fund is located.

+ The personnel designated must meet the standards and conditions for holding the positions assigned according to the regulations on the standards and conditions for the Chairman of the Board of Directors, Director, and Deputy Director of the people's credit funds, except for the condition of being a member of the people's credit fund.

- Participate in handling member people's credit funds facing difficulties or showing signs of unsafe operations as prescribed by law.

- Other responsibilities as stipulated in the Charter and Circular 27/2024/TT-NHNN.

Other business activities of cooperative banks in Vietnam

- Cooperative banks can conduct other business activities as regulated by the Governor of the State Bank:

+ Cash management services; treasury services for credit institutions, foreign bank branches; asset preservation services, safe deposit box rental;

+ Non-account payment services including: money transfer services, collection and payment services, and other non-account payment services;

+ Consulting on banking activities and other business activities regulated in the License.

+ Entrustment, receiving entrustment, agency in banking operations, and payment agency delegation.

- Cooperative banks can conduct other business activities in accordance with relevant laws:

+ Buy, sell bonds of the Government of Vietnam;

+ Issue bonds.

- Insurance agency as follows:

+ When the License granted by the State Bank to the cooperative bank includes insurance agency activities, the cooperative bank is allowed to conduct insurance agency activities for types of insurance as regulated by the Law on Insurance Business;

+ When conducting insurance agency activities, cooperative banks must comply with the provisions of law on insurance business and relevant laws.

(Article 21 of Circular 27/2024/TT-NHNN)

Le Nguyen Anh Hao

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