Rights and obligations of the people’s credit funds in Vietnam

Rights and obligations of the people’s credit funds in Vietnam (Image from the internet)

1. Rights of the people’s credit funds in Vietnam

- To be supported by the cooperative bank in developing products and services; professional training.

- To be supported by the cooperative bank in banking activities according to the provisions of the law.

- To be supported by the cooperative bank in conducting internal audits according to the regulations of the State Bank regarding cooperative banks.

- To receive funding from the State, organizations, individuals domestically and internationally.

- To request borrowers to provide materials on production, business, services, livelihood related to the loan, and other information as required by law.

- To refuse requests from organizations or individuals that are contrary to legal regulations.

- To exercise other rights as stipulated by law.

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

2. Obligations of the people’s credit funds in Vietnam

- To operate business in accordance with the business activities recorded in the issued License.

- To contribute capital to the cooperative bank as required by law.

- To deposit money in the cooperative bank for capital balancing according to the regulations of the State Bank regarding cooperative banks.

- To participate in the Safety Assurance Fund for the system of people’s credit fundss as required by law.

- To provide reports to the cooperative bank for the purpose of capital balancing, inspection, supervision, internal auditing, managing the Safety Assurance Fund for the system of people’s credit fundss according to internal regulations issued by the cooperative bank in accordance with the regulations of the State Bank regarding cooperative banks.

- To be subject to inspection, supervision, internal audit of the cooperative bank according to regulations of the State Bank regarding cooperative banks.

- The people’s credit funds must publicly post and retain the information stipulated in Clause 1 Article 49 Law on Credit Institutions 2024 at the head office of the people’s credit funds and send a written report to the State Bank branch within 7 working days from the date the people’s credit funds receives the provided information. Annually, the people’s credit funds must disclose the information stipulated in Points a, b, and d Clause 1 Article 49 Law on Credit Institutions 2024 to the General Meeting of Members of the people’s credit funds.

(Article 30 Circular 29/2024/TT-NHNN)

3. Conditions to Become a Member of the people’s credit funds

- For individuals:

+ Vietnamese citizens aged 18 and above, with full civil act capacity, registered permanent residence or temporary residence in the operating area of the people’s credit funds. In the case of temporary residence registration, the individual must have production, business activities, or be a laborer working in the operating area of the people’s credit funds and must provide documentation proving this activity;

+ Officials and public employees working at organizations or agencies having their main office located in the operation area of the people’s credit funds;

+ Not being under criminal investigation, not serving a prison sentence; not undergoing administrative treatment at a compulsory detoxification center or compulsory education institution; not being prohibited by the court from holding positions, practicing professions or doing certain work; not having been convicted of serious crimes or higher without a criminal record expungement.

- For households:

+ Is a household with members permanently residing in the operating area of the people’s credit funds; the members in the household have shared assets to serve the production and business activities of the household;

+ The household members must appoint one member to act as the representative to exercise the rights and perform the obligations of the people’s credit funds member. The household representative must be authorized in writing by the household members as per legal regulations and must meet the conditions stipulated in Clause 1 Article 8 Circular 29/2024/TT-NHNN.

- For legal entities:

+ Is a legal entity (excluding Social Funds, Charity Funds) that is legally operating and has its main office located in the operating area of the people’s credit funds;

+ The representative of the legal entity participating as a member of the people’s credit funds is the legal representative of the legal entity or an individual authorized by the legal representative of the legal entity.

- Individuals, households, legal entities must voluntarily apply to become a member of the people’s credit funds following the form in Appendix 01, Appendix 02, and Appendix 03 issued together with Circular 29/2024/TT-NHNN, agree with the Charter, and contribute enough capital as required in Article 10 Circular 29/2024/TT-NHNN.

- Each entity stipulated in Clauses 1, 2, and 3 Article 8 Circular 29/2024/TT-NHNN is only allowed to participate as a member of one (1) people’s credit funds.

- The Board of Directors decides on the admission of members and compiles a list of admissions during the reporting period at the next General Meeting of Members.

- The people’s credit funds must stipulate in the Charter the conditions and procedures for admitting members.

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

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