Details of expenses of Cooperative Bank of Vietnam

Details of expenses of Cooperative Bank of Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is cooperative bank?

Cooperative bank means a bank of all people's credit funds established by people's credit funds and some legal entities by contributing capital under the Law on Credit Institutions 2010 for the main purposes of systematic link, financial support and capital balancing within the system of people's credit funds.

(Clause 7 Article 4 of the Law on Credit Institutions 2010)

2. Details of expenses of Cooperative Bank of Vietnam

According to Article 7 of Circular 19/2018/TT-BTC, the expenses of the Cooperative Bank of Vietnam include the expenses specified in Article 17 of Decree 93/2017/ND-CP.

Specifically:

(1) Interest and similar expenses:

- Payment of deposit interest: Payment of interest on deposits of members of people's credit funds; Paying interest on deposits of customers who are not members of people's credit funds.

- Payment of loan interest.

- Payment of interest on the issuance of valuable papers.

- Other expenses for credit activities.

(2) Service operating expenses:

- Payment for payment services.

- Spending on Treasury Services

- Spending on telecommunications services.

- Expenses on entrustment and agency operations.

- Expenses for consulting services.

- Paying commissions to agents, brokers, and entrustees for agency, brokerage, and entrustment activities permitted by law.

In which, for brokerage commissions, the following provisions shall apply:

+ The Bank is entitled to pay brokerage commissions for brokerage activities permitted by law.

+ Brokerage commission to pay to a third party (as an intermediary), not applicable to subjects who are agents of the Bank; managers, employees of the bank, and related persons of the Bank in accordance with the provisions of the Law on Credit Institutions and amendments, supplements, and replacement documents (if any).

+ The payment of brokerage commissions must be based on the contract or certification between the Bank and the receiving party, which must contain the following basic contents: name of the commission recipient; amount spent; spending levels; payment methods; execution and termination time; and responsibility of the parties.

+ For brokerage expenses to lease assets (including foreclosure and debt assignment): brokerage expenses for leasing each asset of the Bank shall not exceed 5% of the total proceeds from such asset leasing activities brought by the brokerage during the year.

+ For brokerage expenses to sell mortgaged or pledged properties: the amount of brokerage commissions for the sale of each mortgaged or pledged property of the Bank does not exceed 1% of the actual value obtained from the sale of such property through the brokerage.

+ The Board of Directors or the General Director of the Bank shall promulgate regulations on the payment of brokerage commissions for uniform and public application.

(3) Expenses for trading in securities permitted to be traded in accordance with the Law on Credit Institutions and other relevant legal documents.

(4) Other operating expenses:

- Expenses on debt trading.

- Expenses for other business activities as prescribed by law.

(5) Payment of taxes, fees, and charges.

(6) Expenses for officials and employees:

- Paying salary, remuneration, bonus, and allowance.

- Expenses for salary contribution: Social insurance, health insurance, unemployment insurance, purchase of personal accident insurance, trade union fees.

- Expenses for transactional costumes.

- Expenses for labor protection: are only spent on subjects who need to wear protective equipment while working.

- Subsidies payments.

- Shift meal expenses: The Bank shall pay for shift meals according to the prescribed rate of shift meal expenses for state-owned enterprises.

- Medical expenses include: Periodic medical examinations for employees, the purchase of preventive medicine, and other medical expenses under the responsibility of the enterprise in accordance with current law.

- Other expenses include: Annual leave, additional expenses for female employees in accordance with the labor law, and other expenses as prescribed by law.

(7) Expenses for management and public service activities:

- Expenses for printing materials and papers; business fee.

- Expenses for professional training and training, including: Expenses for professional training and training for the Bank's staff and expenditures on banking and information technology training for member people's credit funds.

- Expenses for research and application of science and technology include:

+ Expenses for setting up the science and technology development fund according to the provisions of law. The use of the fund shall comply with current regulations.

+ Expenses for the deficit in case the balance of the science and technology development fund is not enough to spend on research and application of science and technology in the year.

+ Expenses and rewards for initiatives, improvements, increases in labor productivity, and cost savings on the principle of being consistent with actual results. The Bank must develop and publicly announce the bonus payment regulations and establish a Council to take over the initiative.

+ Postage and telephone charges; expenditure on document publishing, propaganda, advertising, marketing, and promotion; spending on purchasing documents, books, and newspapers; spending on collective activities; expenses for electricity, water, and sanitation; expenses for conferences, receptions, celebrations, transactions, and foreign affairs; consulting and auditing expenses; spending on hiring domestic and foreign experts; expenditure on fire prevention and fighting; spending on environmental protection; and other expenses.

(8) Spending on assets:

- Depreciation of fixed assets used for business activities shall comply with the regulations on management, use and depreciation of fixed assets applicable to enterprises.

- Expenses for maintenance and repair of assets.

- Expenses for purchasing tools and tools.

- Expenses for property insurance.

- Fixed asset rental expenses: Fixed asset rental costs are made under the lease contract. In cases where the rental is paid once for many years, the rent is gradually amortized into business expenses according to the number of years spent using the property.

- Expenses for leasing services, management, and operation of assets and buildings according to the lease contract.

(9) Provision expenses:

- Provisions:

+ Expenses for setting up provisions for risks in operation as prescribed in Article 131 of the Law on Credit Institutions.

+ Expenses for setting up risk provisions for special bonds issued by Vietnam Asset Management Company according to the provisions of Point a, Clause 2, Article 21 of Decree 53/2013/ND-CP, and Clause 12, Article 1 of Decree 34/2015/ND-CP amending Decree 53/2013/ND-CP; instructions of the State Bank of Vietnam; and amended and supplemented legal documents (if any).

+ Expenses for making provision for devaluation of inventories, provision for loss of financial investments, provision for bad debts, and other provisions (if any) according to general regulations applicable to enterprises.

- The expense of setting up risk provisions to be deductible when determining corporate income tax shall comply with the law on corporate income tax.

(10) Deposit insurance and deposit insurance.

(11) Other expenses:

- Expenses for paying professional association fees in which the Bank participates.

- Expenses for party and mass organizations at the Bank (expenses outside the budget of party organizations and mass organizations shall be spent from prescribed sources).

- Expenses for sale and liquidation of assets and residual value of liquidated or sold fixed assets (if any).

- Expenses for the recovery of written-off debts and bad debt collection expenses are expenses for debt collection.
including payment of debt collection service fees to organizations authorized to perform debt collection services in accordance with the law and expenses for debt trading.

- Expenses for handling the remaining property loss after compensating by sources as prescribed in Clause 4, Article 12 of Decree 93/2017/ND-CP.

- Expenses that have been recorded as revenue but are not actually collected.

- Expenses for social work in accordance with the tax law.

- Expenses for paying fines for administrative violations, except for fines that individuals must pay as prescribed by law.

- Other costs include:

+ Expenses for payable debts, which have been determined to be lost by the owner and recorded in income, but later the creditor is identified.

+ Paying fines and compensation for breaches of economic contracts under the responsibility of the Bank.

+ Expenses for paying fines for administrative violations, except for fines that individuals must pay as prescribed by law.

+ Court costs and judgment enforcement fees are the responsibility of the Bank.

+ Other expenses as prescribed by law.

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