The year 2025 concluded with a number of significant milestones in the ongoing process of consolidating and developing the People’s Credit Funds (PCFs) network toward greater safety, soundness, and sustainability. As requirements for the management, supervision, and support of PCF operations grow increasingly stringent, strengthening coordination mechanisms among system stakeholders has become a fundamental priority. In this context, the signing and implementation of coordination regulations between Co-operative Bank of Vietnam (Co-opBank) and the regional branches of the State Bank of Vietnam (SBV) has emerged as a notable achievement, marking a meaningful step forward in raising standards for the management and support of the PCFs network
PCF A Distinctive Model Requiring Early Risk Detection
PCFs represent a distinctive category of credit institution operating under the cooperative model, deeply embedded in local communities and grassroots economies, predominantly in rural areas. Given their small scale, limited operational scope, and uneven financial and governance capacity, PCFs are particularly vulnerable to risks relating to liquidity, credit quality, governance and management, and regulatory compliance.
In practice, risks within PCFs rarely emerge suddenly but tend to accumulate gradually over time. If not identified early, promptly flagged, and addressed through appropriate support measures, such risks may directly compromise the operational safety of individual PCFs.
At present, three key institutional stakeholders share oversight responsibility for the PCFs network: the State Bank of Vietnam (SBV), which performs state management, inspection, and supervision functions over banking activities; Co-opBank, which serves as the bank of the PCFs network and directly carries out capital regulation, liquidity support, inspection and supervision, while accompanying PCFs in their day-to-day operations; and the Deposit Insurance of Vietnam (DIV), which is responsible for protecting the legitimate rights and interests of depositors. While each entity operates within its own defined functions, duties, and authority, they share the common objective of ensuring the safety and stability of the PCFs network. Accordingly, a clear, unified, and timely mechanism for coordinating information exchange is an essential prerequisite for enhancing the overall effectiveness of system oversight.
Overview of the signing ceremony of the Regulation on Information Provision and Exchange between Co-opBank and SBV Region 10
In practice, risks within PCFs rarely emerge suddenly but tend to accumulate gradually over time. If not identified early, promptly flagged, and addressed through appropriate support measures, such risks may directly compromise the operational safety of individual PCFs.
At present, three key institutional stakeholders share oversight responsibility for the PCFs network: the State Bank of Vietnam (SBV), which performs state management, inspection, and supervision functions over banking activities; Co-opBank, which serves as the bank of the PCFs network and directly carries out capital regulation, liquidity support, and inspection and supervision, while accompanying PCFs in their day-to-day operations; and the Deposit Insurance of Vietnam (DIV), which is responsible for protecting the legitimate rights and interests of depositors. While each entity operates within its own defined functions, duties, and authority, they share the common objective of ensuring the safety and stability of the PCFs network. Accordingly, a clear, unified, and timely mechanism for coordinating information exchange is an essential prerequisite for enhancing the overall effectiveness of system oversight.
Signing ceremony of the Coordination Regulation between SBV Region 8 and Co-opBank, together with agencies responsible for managing PCFs in Region 8
Gradually forming a unified coordination network
Drawing on the SBV’s strategic orientations and in line with the implementation of Decision No. 689/QD-TTg dated June 8, 2022, issued by the Prime Minister approving the Scheme on Restructuring the Credit Institution System in association with Bad Debt Settlement for the 2021–2025 period, as well as new SBV regulations on early intervention and special control for credit institutions, SBV Regional Offices have proactively coordinated with Co-opBank to develop and sign coordination regulations appropriate to the new organizational model.
Currently, the SBV operates through 15 Regional Branches, while Co-opBank maintains 32 branches nationwide. By the end of 2025, Co-opBank had signed coordination regulations with 10 SBV Regional Offices. The signing process has been carried out in a focused and targeted manner, tailored to the specific characteristics of each locality and its PCFs network — thereby establishing an important foundation for a unified coordination framework between the state management authority and the bank of the PCFs network
The coordination regulations that have been signed clearly define the principles of cooperation based on the functions, duties and authority of each party, and specify the contents, methods and responsibilities in information exchange. Notably, these regulations have expanded the scope of coordination to include substantive matters such as early risk warning, enhanced supervision, early intervention, special control and the handling of weak PCFs. The clarification of coordination mechanisms in implementing the SBV’s new regulations on special control and special lending has also created a clear legal framework for supporting and handling PCFs in difficult situations.
Leaders of SBV Region 6, leaders of Co-opBank and delegates at the signing ceremony of the Coordination Regulation between SBV Region 6 and Co-opBank in supervising the operations of PCFs in Hai Phong City and Quang Ninh Province
Effective coordination – affirming the role of the bank of the PCFs network
Practical implementation has demonstrated that the coordination regulations between Co-opBank and SBV Regional Offices have yielded clear and tangible results. Through this mechanism, findings from PCF inspections and supervision conducted by Co-opBank are promptly integrated into the supervisory system of SBV Regional Offices, providing state management authorities with an additional and ground-level source of information that closely reflects operational realities at the grassroots level. Conversely, information from SBV Regional Offices concerning enhanced supervision, early intervention, special control, or remediation plans for weak PCFs is shared with Co-opBank at an early stage, enabling Co-opBank to proactively develop support measures, manage capital flows, and mitigate the risk of contagion.
Signing ceremony of the Coordination Regulation between SBV Region 4 and Co-opBank
From Co-opBank’s perspective, the signing and implementation of the Coordination Regulation represent a clearer affirmation of its role as the bank of the PCFs network. Co-opBank not only fulfills its core functions of capital provision, capital regulation, and liquidity support, but also participates more meaningfully in the processes of risk identification, early warning, and supporting PCFs through periods of difficulty. Activities such as lending to address temporary liquidity shortfalls, special lending, and the supervision of fund utilization are closely aligned with the SBV’s management responsibilities — collectively contributing to the assurance of operational safety and the strengthening of compliance awareness across the PCFs network
For Co-opBank, the Coordination Regulation serves as a vital framework for the synchronized execution of inspection, supervision, and support activities for PCFs, in accordance with the strategic orientations of both the SBV and Co-opBank. The standardization of information exchange mechanisms enhances the quality of advisory functions, strengthens proactiveness in risk warning, and progressively reinforces discipline and operational order across the PCFs network.
Overview of the signing ceremony of the Regulation on Information Provision and Exchange between SBV Region 13 and Co-opBank
The fact that Co-opBank has signed coordination regulations with 10 out of 15 SBV Regional Offices clearly demonstrates its proactive commitment, sense of responsibility, and long-term vision in building a system-wide coordination framework. This achievement provides a solid foundation for extending the signing process to the remaining SBV Regional Offices, with the aim of achieving full coverage across all operational areas of Co-opBank’s 32 branches – thereby enhancing the effectiveness of management and support for the PCFs network in a synchronized and cohesive manner.
It can be firmly affirmed that the signing and implementation of coordination regulations between Co-opBank and SBV Regional Offices represent a significant milestone in efforts to raise management standards, reinforce operational safety, and promote the sustainable development of the PCFs network. Underpinned by close, responsible, and effective coordination among all parties involved, the PCFs network will be better positioned to continue fulfilling its vital role as a key channel for delivering capital to grassroots economies and member communities in this new stage of development.
Manh Ha
