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THE STATE BANK
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No.
05/1997/TT-NHNN17
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Hanoi, October
25, 1997
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CIRCULAR
GUIDING THE CONVERSION
AND REGISTRATION OF THE PEOPLE'S CREDIT FUNDS AND CREDIT COOPERATIVES UNDER
DECREE No.16-CP OF FEBRUARY 21, 1997 OF THE GOVERNMENT
On February 21, 1997 the Government
promulgated Decree No.16-CP on the conversion and registration of cooperatives
and organization of operations of the Union of Cooperatives; the State Bank
hereby provides the following guidance for the implementation of a number of
concrete points:
A. GENERAL PROVISIONS
1. Subject to this Circular are:
a/ Grassroots People's Credit Funds (PCFs)
established and operating under Decision No.390-TTg of July 27, 1993 of the
Prime Minister on the experimental establishment of the People's Credit Fund.
b/ Credit Cooperatives (CCs) which have been
granted operation licenses under the Ordinance on Banks, Credit Cooperatives
and Financial Companies.
2. The Central People's Credit Fund (CPCF) and
the regional People's Credit Funds (RPCF) are associate organizations, to
ensure safety for the operation of the system of PCFs and, therefore, shall not
be subject to conversion.
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4. The PCFs and CCs shall not be converted under
the Law on Cooperatives in the following cases:
- The members' Congress decides to dissolve it
of their own accord;
- They are forced to be dissolved for serious
violations of law or because of prolonged losses which are past recovery.
B. CONTENTS AND ORDER OF CONVERSION
I. ESTABLISHMENT OF THE PREPARATORY COMMITTEE
FOR CONVERSION:
1. The preparatory committee for conversion of a
PCF or CC shall include a head who is the President of the Managing Board and
other members who are chief controller, Executive Director, a representative of
the Fund's or Cooperative's members and a representative of the local
authority.
The establishment of the preparatory committee
for the conversion of a PCF or CC shall be decided by the district steering
committee for the conversion of cooperatives.
2. The preparatory committee for the conversion
of a PCF or CC shall cease its operation after fulfilling the conversion,
re-registration or dissolution procedures.
II. TASKS OF THE PREPARATORY COMMITTEE FOR
CONVERSION:
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1. To popularize and explain the objectives,
significance, contents and requirements of the PCF's or CC's conversion so that
it may operate in accordance with the Law on Cooperatives.
2. To inventory and evaluate all assets and ital
in comparison with the balance sheet, the copies of inventories and other
related documents. After checking the accuracy of data, certifying the origins
of assets and classifying them, the loans and debts of the PCF or CC, to
propose solutions for handling the assets and ital to be submitted to the
members' Congress for consideration.
3. Basing itself on the Law on Cooperatives, the
Ordinance on Banks, Credit Cooperatives and Financial Companies and the Model Statute
of the People's Credit Fund to elaborate a new statute and work out the plan of
operation;
4. With regard to a PCF or CC operating in an
inter-ward or inter-communal area, the preparatory committee for conversion
shall have to re-determine the scope of its operation in accordance with Decree
No.42-CP of April 29, 1997 of the Government.
5. To convene the members' Congress (or Congress
of the members' delegates) to decide the conversion or dissolution of the PCF
or CC. For a PCF, its conversion shall be decided by the annual Congress.
III. ORGANIZATION OF THE MEMBERS' CONGRESS:
1. For a PCF: If the members' Congress decides
the conversion and business registration of the PCF according to the Law on
Cooperatives, it shall have to pass the following contents:
a/ The resolution on the conversion of the PCF
and its business registration in accordance with the Law on Cooperatives;
b/ The new statute conforming with the Model
Statute;
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d/ The plan of operation of the PCF in the
coming period;
e/ The election of the Managing Board and
President of the Managing Board, the Control Commission and the Executive
Director, at the end of their term; or additional election, replacement of
members of the Managing Board, the President of the Managing Board, the Control
Commission or the Executive Director, pending the expiry of its term.
2. For a CC: If the Congress of members of the
cooperative decides to convert the Cooperative into a People's Credit Fund, it
shall have to approve the following contents:
a/ The resolution on the conversion of the CC
into a PCF which shall operate under the Law on Cooperatives;
b/ The membership of the PCF;
c/ The name and emblem of the PCF;
d/ The statute and operational regulations of
the PCF;
e/ The amount of its statutory ital, certifying
ital and regular ital;
f/ The plan of operation;
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h/ The plan for handling the ital and assets of
the Credit Cooperative:
When approving the plan for the ital and assets
of the Credit Cooperative, attention should focus on the following:
- The loans: it is necessary to classify the
recoverable and unrecoverable loans, determine the reasons as well as
responsibilities therefor. More concretely:
+ For recoverable loans, it is necessary to
calculate them, collect interests thereon up to the time of conversion, and
make new loan agreements.
+ For loans and other sources of revenue which
cannot be recovered due to objective causes and the existing losses, they must
be reported to the Congress of cooperative members for resolution to deduct the
indivisible funds to cover. If such deduction is not enough, deduction from the
members' ital contributions is required.
+ For loans and other sources of revenue which
cannot be recovered due to subjective causes, it is necessary to determine the
responsibility for such loans and request the concerned people to pay
compensation as prescribed.
- For deposits of citizens and organizations, it
is necessary to calculate and pay interests to the depositors, and change the
depositors' books.
- For indivisible ital and funds, after
deducting losses (if any), they shall be wholly transferred to the PCF.
As for ital contributed by members of the old
Credit Cooperative: after deducting losses (if any), it shall be turned into
certifying ital and regular ital of members of the PCF, who shall have to
contribute enough ital as prescribed by the PCF's statute.
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3. For those PCFs and CCs which are not allowed
to be converted, the preparatory committee for conversion shall submit a plan
to the Congress for handling the ital, assets, loans and debts:
- For loans and debts:
+ To recover all loans (including interests) and
other revenues;
+ To pay all debts: deposits and borrowings
(including interests to be paid) and other spendings.
- Losses (if any) shall be settled in the
following order:
+ Deduction from indivisible funds;
+ Deduction from contributed ital;
+ Deduction from the money collected from the
liquidation of assets.
- Publicly supported ital and assets shall be
handed over to the local authority.
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- In cases where the value of the remaining
assets, ital and funds fail to cover the debts, the procedures on bankruptcy of
enterprises shall apply.
C. REGISTRATION OF OPERATION AND BUSINESS
I. REGISTRATION OF OPERATION:
1. A PCF which has been granted operation license
by the State Bank, when being converted under the Law on Cooperatives, shall
not have to fill procedures for a new operation license but shall have to
obtain permission from the State Bank for the application of its operational
statute and ratification of the list of members of the Managing Board, the
Control Commission and the Executive Director. The PCF shall have to submit to
the State Bank the following documents:
- The minutes of the members' Congress that
approves the conversion;
- The PCF statute which has been adopted by the
members' Congress;
- The plan to handle the ital and assets;
- The plan of operation of the PCF;
- The list and curricula vitae of the members of
the Managing Board, the Control Commission and the Executive Director.
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- The minutes of the Congress of cooperative
members that approves the conversion;
- The application for an operation license;
- The PCF's statute which has been adopted by
the members' Congress;
- The list and curricula vitae of the members of
the Managing Board, the Control Commission and the Executive Director;
- The plan of operation for the first years and
the long-term plan;
- The list of registering members and their
respective ital contributions;
- The certificate granted by the commune/ward
People's Committee on the ownership right over or the right to use the PCF's
head office;
- The plan for settlement of the remaining
problems of the old Credit Cooperative.
II. BUSINESS REGISTRATION:
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- The application for business registration
certificate attached with the approved minutes of the members' Congress;
- The operation license granted by the State
Bank;
- The statute already adopted by the members'
Congress (two copies);
- The list and personal resumes of the members
of the Managing Board, the Control Commission and the Executive Director;
- The list of the registering members and their
respective ital contributions;
- The plan of operation of the PCF;
- The certificate granted by the communal
People's Committee on the ownership right over or the right to use the PCF's
head office.
D. ORGANIZATION OF IMPLEMENTATION
1. This Circular takes effect 15 days after its
signing. The earlier provisions which are contrary to this Circular shall cease
to be effective.
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3. The PCFs and CCs shall conduct the conversion
according to the time-limit prescribed by the Government.
The CCs converted into PCFs under the Law on
Cooperatives shall have to renew all books and documents according to the forms
provided for the PCF.
4. The Head of the State Bank Governor's Office,
the Head of the Department for the Management of People's Credit Organizations
and the heads of the relevant units attached to the central State Bank, the
directors of the State Bank's branches in provinces and cities, the Presidents
of the Managing Boards of the PCFs and CCs shall have to organize the strict
implementation of this Circular.
5. The directors of the State Bank's branches in
provinces and cities shall have to report to the provincial/municipal People's
Committees on the contents of this Circular and submit the plans of conversion
and registration of the PCFs in their respective localities.
In the course of implementation, any arising
problem shall be promptly reported to the Central State Bank for settlement.
THE STATE BANK
DEPUTY GOVERNOR
Le Duc Thuy