On February 28th, 2023, the State Bank of Vietnam (SBV) – Hanoi branch held a conference of implementing the People’s Credit Fund (PCF) missions in 2023. Attending and directing the meeting included SBV Deputy Governor Dao Minh Tu; Representatives of the Banking Supervision Agency (BSA) and departments of SBV; The leaders of SBV Hanoi branch; The conference also included Chairman and Directors of 98 PCFs in Hanoi, representatives of the local government, the Vietnam Association of People’s Credit Fund (VAPCF); Representatives of Deposit Insurance of Vietnam (DIV)…
Cooperative Bank of Vietnam (Co-opBank)’s leaders included Chairman Nguyen Quoc Cuong; Ms. Nguyen Thanh Hanh – Standing member of BoD, Ms. Pham Thi Hong Minh – Deputy CEO, some departments’ managers at Co-opBank Head Office and leaders of Co-opBank branches such as: Transaction Center, Hai Ba Trung and Ha Tay…
Reporting at the conference, representatives of SBV Hanoi branch said that PCFs system has been directed by CBV, the People’s Committee of Hanoi and SBV Hanoi branch’s Board of Managers to consolidate and rectify drastically and comprehensively, ensuring the cooperative model principle. In Hanoi, following the Directives and guiding documents of SBV, in 2022, more than 500 documents were issued on licensing management, post-inspection supervision, micro-prudential supervision and direction for strengthening PCFs’ operations…
With the efforts of SBV Hanoi branch and all levels of local government, departments and each People’s Credit Fund, by the end of 2022, 98 PCFs in the area had an average total assets of about VND 153 billion. Classification by operation scale: There are 3 PCFs with total capital of over VND 500 billion. There are 17 PCFs with total capital from VND 200 billion to less than VND 500 billion. There are 78 PCFs with total capital under VND 200 billion. The number of members participating in PCFs is 132,552 members; Total capital reached VND 14,974 billion; Charter capital reached VND 497 billion; Mobilization capital reached VND 13,556 billion; Total outstanding loans reached VND 9,738 billion; Bad debt was VND 235 billion, accounting for 2.4% of total outstanding loans.
Regarding the implementation of the restructuring scheme associated with bad debt settlement: (According to the Prime Minister’s Decision No. 1058/QĐ-TTg and Resolution 42/QH14), most PCFs have made great efforts to complete the tasks and contents according to the approved plan; Accordingly, the human resource organizational structure has been renewed positively. Many PCFs have managed credit quality, recovered all bad debts during the year or did not let overdue debts or new bad debts arise. The operation quality of the majority of PCFs in the area has been improved, ensuring the operation safety ratios. The active activities of PCFs have provided timely capital support to members to develop their economies, improving living standards, creating jobs and contributing to the construction of new rural areas, gradually reduce usury loans in localities.
At the conference, on behalf of Co-opBank, Ms. Pham Thi Hong Minh – Deputy CEO highlighted that Co-opBank has made best efforts to affirm its role as the focal bank connecting the PCFs system for many aspects.
First, well perform the capital intermediation and liquidity support for the PCF system on preparing capital to meet all PCFs’ credit expansion needs for members. For PCFs facing liquidity difficulties, Co-opBank has coordinated with SBV province/city branches and Party committees and local authorities to implement measures to propagate and explain to depositors and members. At the same time, Co-opBank also considers and lends money to deal with temporary liquidity difficulties. Therefore, many PCFs have overcomed difficulties, maintained and restructured to return to normal operation stably;
Second, as the focal bank providing payment services and modern banking products and services for PCFs. Despite limited financial capacity, Co-opBank has made efforts to promote investment in technology modernization. Focused investment on developing modern banking products and services to provide PCFs and members. Currently, the CF-eBank electronic money transfer service has been deployed to 663 PCFs, including 28 PCFs in Hanoi, bringing Co-opBank’s internal transaction network to nearly 800 points. Especially, Co-opBank has thoroughly saved costs to support PCFs to focus on payment development. In particular: completely free-of-charge inter-bank and multilateral money transfer payments….
Third, Co-opBank implements inspection and supervision activities to PCFs; Co-opBank participates in supporting the handling of difficult PCFs which are restructured according to the direction of SBV and the requirements of professional activities. From 2019 to 2021, Co-opBank has carried out the inspection for 47 PCFs; In 2022, Co-opBank continued to inspect 42 PCFs with 4 PCFs in Hanoi. Co-opBank has actively coordinated with SBV branches in supporting the restructuring of troubled PCFs.
Fourth, Co-opBank is the focal point to provide training for the PCFs system. It has organized about 100 training courses on CF-eBank e-banking, application training and payment card product development for more than 1,800 staff of more than 930 PCFs across the country, including 67 PCFs Hanoi. Co-opBank had organized many short-term and long-term training courses for nearly 2,000 managers and executives of PCFs nationwide on credit, accounting, management and risk management in the banking and financial sector, internal audit and internal control for PCFs…
Fifth, Co-opBank promotes the effectiveness of Safety Fund to ensure the safety of the PCFs system. By the end of 2022, the total capital of the Safety Fund reached VND 725.2 billion, outstanding loans were VND 61.7 billion. Loan outstanding reached VND 208.2 billion for 34 PCFs, debt collection reached VND 146.5 billion.
At the conference, representatives of VAPCF, local government and a number of PCFs also presented and made some recommendations to ensure safe operation and sustainable development for PCF system.
Speaking at the conference, SBV Deputy Governor Dao Minh Tu noted that Hanoi had the largest number of PCFs in the country and most of them are operating effectively, strictly complying with regulations and making great contributions to the local socio-economic development.
He emphasized that Hanoi had the largest number of PCFs which are the most difficult to manage, but recently, SBV Hanoi branch is still the most drastic and effective organization in the management and supervision of the PCFs system in the 57 provinces and cities where PCFs are present. Deputy Governor Dao Minh Tu also highly appreciated the interest of local government committees, police agencies and departments in coordinating management and improving the PCFs’ quality operationsd.
Orienting the development of a stable, safe and healthy PCFs system in the coming time, Deputy Governor Dao Minh Tu said that PCFs must continue to be consolidated and restructured. Large and healthy PCFs must also be restructured to be stronger while small and weak PCFs must be restructured to reduce difficulties and avoid insecurity. In addition, in the coming time, it is necessary to continue improving the legal framework, clarifying the role of members, which is critical for the cooperative organization and operation.
Deputy Governor Dao Minh Tu shared that PCFs must consider members to be the soul of PCFs. The operating mechanism and organization of PCFs are based on the Members’ General Meeting and taking care of members is the ultimate goal of PCFs. The members’ connection and decision is the existence and development of PCFs. If we don’t set up that target, we cannot operate the cooperative model successfully.
Besides that, Deputy Governor Dao Minh Tu pointed out that Co-opBank must be the central bank of PCFs, it is necessary to optimize resources, urgently develop and effectively implement the restructuring plan associated with bad debt settlement in the period of 2021-2025. In which, developing a plan of increasing Co-opBank’s charter capital from legal sources; growth in operation scale, improving the quality of own capital, raise capital adequacy ratio in accordance with regulations of SBV; improving governance, administration and risk management efficiency in accordance to modern banking standards… continuing to implement effectively the digital transformation strategy, expanding the cooperation with other financial and non-financial organizations to develop a variety of digital, safe and convenient banking services suitable for PCFs and Co-opBank’s customers, etc; enhancing the quality of human resources to meet the requirements of digital transformation…
Deputy Governor Dao Minh Tu requested the SBV branch in Hanoi to strictly implement the programs set out under the direction of SBV and in Directive No. 01/CT-NHNN on the implementation of key tasks of the banking sector in 2023, especially for the PCF system with very clear guidelines. At the same time, it should strengthen the inspection, examination and supervision activities…
Some pictures from the conference:
SBV Standing Deputy Governor Dao Minh Tu delivered a speech at the Conference
Co-opBank’’s Chairman Nguyen Quoc Cuong (2nd from left) attended the Conference
Overview of the conference
SBV Hanoi Deputy Manager Nguyen Minh Tuan speaks at the Conference
Co-opBank’s Deputy CEO Pham Thi Hong Minh speaks at the Conference
