Vietnam: Conditions to become a member of the People's Credit Fund

Conditions to become a member of the People's Credit Fund (Image from the internet)

On June 28, 2024, the Governor of the State Bank of Vietnam issued Circular 29/2024/TT-NHNN stipulating the People's Credit Fund.

Conditions to become a member of the People's Credit Fund

(1) For individuals:

- Vietnamese citizens aged 18 years or older, having full civil act capacity, having permanent or temporary residence registration in the operational area of the People's Credit Fund. In the case of temporary residence registration, individuals must engage in production, business activities, or be workers employed within the operational area of the People's Credit Fund and must provide documentation to prove this;

- officials and public employees working at organizations, agencies with main offices located within the operational area of the People's Credit Fund;

- Not subject to criminal prosecution, not serving a prison sentence; not under administrative handling measures at a mandatory detoxification center, mandatory education institution; not being banned by the court from holding positions, practicing certain professions or doing specific jobs; not having committed serious crimes or higher level offenses without having their criminal records expunged.

(2) For households:

- Households with members residing permanently within the operational area of the People's Credit Fund; household members having shared assets to serve the household's production and business activities;

- Household members must appoint one member to represent the household in exercising the rights and obligations of a People's Credit Fund member. The household representative must be authorized by the household members in writing as per legal regulations and must meet the conditions stipulated in clause 1 of this Article.

(3) For legal entities:

- Legal entities (excluding Social Funds, Charitable Funds) that are legally operating and have their main office located in the operational area of the People's Credit Fund;

- The representative of the legal entity participating as a member of the People's Credit Fund is the lawful representative of the legal entity or an individual authorized by the lawful representative of the legal entity to participate.

(4) Individuals, households, and legal entities must submit a voluntary application to join the People's Credit Fund according to the templates in Appendix No. 01, Appendix No. 02, and Appendix No. 03 issued with this Circular, agree with the Charter, and contribute sufficient capital as stipulated in Article 10 of this Circular.

(5) Each entity as stipulated in (1), (2), and (3) may only participate as a member of 01 (one) People's Credit Fund.

(6) The Board of Directors decides on member admission and consolidates the admission list in the reporting period at the nearest Members' Meeting.

(7) The People's Credit Fund must stipulate in the Charter the conditions and procedures for admitting members.

(Article 8 Circular 29/2024/TT-NHNN)

Operating area of the People's Credit Fund

The People's Credit Fund operates within the territory of a commune, ward, or commune-level town (hereinafter collectively referred to as a commune). The People's Credit Fund is not allowed to expand its operational area beyond the commune where its main office is located, except in cases specified below.

The People's Credit Fund is allowed to operate in an adjacent commune to the commune where its main office is located within the same province or central city due to administrative boundary division or separation as decided by a competent state authority.

The dossier and procedure for amending and supplementing the People's Credit Fund's License regarding the operational area are to be implemented in accordance with the regulations of the Governor of the State Bank on changes that require approval from the State Bank for cooperative credit institutions.

(Article 7 Circular 29/2024/TT-NHNN)

More details can be found in Circular 29/2024/TT-NHNN of the State Bank of Vietnam, effective from July 1, 2024.

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