Strengthening measures to firmly consolidate the system of People’s Credit Funds

Prime Minister issued Directive No. 06 / CT-TTg on strengthening solutions to ensure operational safety and solidify the system of People's Credit Funds (PCFs).

According to the contents of the Directive, with the drastic implementation of restructuring solutions, the PCF system has been continuously strengthened and developed according to the Party's and State's orientations and policies on developing organizational forms. credit is a cooperative, contributing to creating capital to serve members to develop production and business, improve living standards, create jobs and contribute to hunger elimination and poverty reduction, limiting heavy lending Interest in rural areas.

The Prime Minister asked ministries, branches, People's Committees of provinces and cities directly under the Central Government and related agencies and units to concentrate on successfully implementing the task of restructuring the PCF system according to the Scheme. "Restructuring the system of credit institutions associated with dealing with bad debts in the period of 2016 - 2020" issued together with the Prime Minister's Decision No. 1058 / QD-TTg dated July 19, 2017 according to the orientation " Continue to improve, strengthen and improve the safety and effectiveness of the existing PCFs in parallel with firmly expanding new PCFs in rural areas; The main scope of PCF activities is to mobilize capital and lend to members in the area. Especially in rural areas, to mobilize local resources to contribute to local economic development, hunger elimination, poverty reduction and repression of high-interest loans; ensure People's Credit Fund operates on the principle of voluntariness, autonomy,

At the same time, improve the capacity and qualifications, especially the sense of law observance of the PCF's management and administration staff; promote the role and responsibility of internal control and auditing of PCFs; ensure PCFs operate safely and effectively, in accordance with the principles, purposes, operational principles and legal provisions; strengthen the role, responsibility and coordination of state management agencies to prevent, limit and resolutely handle violations of law.

In order to achieve these goals, the Prime Minister requested the State Bank of Vietnam (SBV) to continue to improve the legal framework and regulations on operational safety, management, administration and risk management. and other regulations for PCFs in accordance with the Law on amendments and supplements to a number of articles of the Law on Credit Institutions; renovate the management mechanism of PCFs in the direction of decentralization according to the scale of assets, risk management conditions and staff capacity. Effectively implementing the scheme "Consolidating and developing the PCF system by 2020 and orientations to 2030".

At the same time, strengthening the role and assigning the Vietnam Cooperative Bank and Deposit Insurance of Vietnam to coordinate and support and supervise the State Bank's monitoring and supervision functions for PCFs; well implementing the role of the system of cooperating responsibility of the Cooperative Bank in capital regulation, supporting lending to PCFs facing financial and liquidity difficulties; actively participate in handling weak PCFs or signs of unsafe in operation; study and propose the amendment of the Deposit Insurance Law to use the deposit insurance premium to handle weak credit institutions.

The contents of the Directive also stated that the Ministry of Finance shall assume the prime responsibility and coordinate with the State Bank and relevant agencies in studying and amending according to its competence regulations (on financial regimes, setting up risk provisions, ...) to facilitate organizations (Vietnam Credit Institutions, Deposit Insurance, etc.) to participate in handling weak PCFs; study and propose the issuance and amendment of tax policies to encourage the development of PCFs in rural and disadvantaged areas with the orientation, the solution specified in Decision No. 1058 / QD-TTg dated 19- 7-2017 of the Prime Minister approved the scheme "restructuring the system of credit institutions associated with dealing with bad debts in the period of 2016 - 2020".

The Ministry of Public Security actively and proactively cooperates with the State Bank and local authorities to promptly handle law violations in the activities of PCFs; maintaining security and order in the area, contributing to ensuring social order and safety; direct local police to support and coordinate with functional agencies in recovering PCFs' capital and assets according to the provisions of law.

The Prime Minister requested the People's Committees of provinces and cities directly under the Central Government to actively and actively coordinate with the State Bank in supervising and supporting PCFs in the locality; strengthening and proactively propagating and stabilizing people's psychology, ensuring the security and order situation in the area when problems arise; struggling with false information causing psychological panic, affecting the operational safety of the PCF system.

The People's Committees of the provinces and cities directly under the Central Government shall direct the administrations at the district, ward and commune levels to strengthen the state management of the personnel working in PCFs, preventing moral violations and risks; coordinate with the State Bank's branches in provinces and cities to strengthen the management of PCF activities to ensure stability and soundness in accordance with law provisions and general development orientation of the PCF system; pay attention to and support facilities and working offices for PCFs to ensure that PCFs operate stably and safely.

Vietnam Cooperative Bank and PCFs strictly implement legal provisions in mobilizing and lending activities; strengthen management and education of cadre ethics, prevent risks in operations; actively deploy synchronously and drastically solutions to handle bad debts such as urging debt recovery, selling, handling debts, handling security assets, using provisions and other measures as prescribed to push fast progress of bad debt handling ...

Source: STATE BANK OF VIETNAM