Management of blank savings account passbooks at People's Credit Funds – A perspective from the examination results of the Deposit Insurance of Vietnam’s Mekong River Delta Regional Branch

15:10-14/10/2021

The State Bank of Vietnam (SBV) regularly directs and pays attention to the management and usage of blank savings account passbooks at people's credit funds (PCFs) in order to ensure strict management and prevent illegal violations related to the usage of blank savings account passbooks not in accordance with the regulations by officials and employees at the PCFs. In the past time, the Mekong River Delta Regional Branch of the Deposit Insurance of Vietnam (DIV) has always given close attention to the management and usage of essential printed materials, particularly blank savings account passbooks, in their examination operations.

In the past time, some PCFs have made violations related to the management and usage of blank savings account passbooks, leading to violations of the law by officials and PCFs being put under special control by the SBV. These violations all stemmed from subjective causes due to the lax management and misuse of the principle of blank savings account passbooks during the operation of the PCFs. The SBV has issued many documents regulating, directing and rectifying related to the management and usage of blank savings account passbooks in the PCFs system. The prevention and reduction of violations arising related to the improper usage of blank savings account passbooks at PCFs can be done when the PCFs have strict management in compliance with the SBV’s regulations.

Currently, the management and usage of blank savings account passbooks at PCFs is specified in Circular No. 21/2019/TT-NHNN dated November 14, 2019 of the Governor of the SBV. Accordingly, PCFs may use blank savings account passbooks in the only form provided by the Cooperative Bank to receive savings deposits from customers, and at the same time, PCFs must issue internal regulations on management and usage of blank savings account passbooks to apply at their units. The minimum contents of internal regulations are also specified by the SBV to ensure the strict management and usage and enhance the roles and responsibilities of each department and individual at the PCFs. In addition, the SBV also requires PCFs to manage blank savings account passbooks like money/valuable papers, so they must perform import, export, delivery, transportation, preservation, usage and inventory activities the same as money/valuable papers (specified at point a(i) Clause 3 Article 36a Circular 21/2019/TT-NHNN dated November 14,2019 and Clause 2 of the Official dispatch No. 382/NHNN-TCKT dated January 20, 2017 by the Governor of the SBV on the rectification of the observance of the accounting regime for capital mobilization and printing management at PCFs).

Examination of the management and usage of blank savings account passbooks is part of the content of the examination of the accounting and management of deposit accounts, records, books and documents related to insured deposits of the DIV. The examination includes reviewing and evaluating the compliance of the PCFs in issuing internal regulations on the management and usage of blank savings account passbooks and the actual results of the management and usage of blank savings account passbooks at PCFs according to regulations of the SBV.

Most of the PCFs have been aware of the importance of strictly managing the blank savings account passbooks and have issued internal regulations on the management and usage of the blank savings account passbooks, especially focusing on the process of registering to buy blank savings account passbooks, counting, handing over, importing and exporting, preserving, using, checking, daily inventory and handling lost and damaged blank savings account passbooks. However, most of the internal regulations still lack some important contents such as: lack of specific regulations on responsibilities of the Board of Directors, Chairman of the Board of Directors, Director (Deputy Director), Control Board; no stipulation on the process of handling the responsibility of individuals and departments involved in the management and usage of blank savings account passbooks and loss of blank savings account passbooks. Therefore, the minimum contents as prescribed by the SBV have not been fully ensured, the process is not tight and the roles and responsibilities of the head, related individuals and departments related to the management and usage of blank passbooks at the PCFs are not fully integrated.

PCFs have also implemented the management and usage of blank savings account passbooks to ensure compliance with regulations of the SBV and specific regulations in the process of management and usage of blank savings account passbooks of the issuing units. Accordingly, the blank savings account passbooks are strictly managed at all stages and used for the right purposes, specifically:

PCFs, based on the situation of the usage of blank savings account passbooks at their units, determine the time to buy (distributed quarterly, every 6 months) and when the need arises, always send documents to the Cooperative Bank to propose to buy blank savings account passbooks according to regulations. The process of transporting and handing over blank savings account passbooks from the Cooperative Bank to the PCFs is implemented in accordance with the cash transport process, making a delivery record between the parties; implementing the tally, stamping the affixed seal between the card sent to the customer and the card saved on all blank savings account passbooks immediately upon purchase, seal and hand over to the management department (treasurer) for storage in the vault or safe for the PCFs has not yet arranged a vault for daily monitoring, importing, exporting and using. The exporting for daily transactions is done according to the actual arising needs with the consent of the leaders in charge, opening the monitoring books, delivery and receipt between the management department and the users. The blank savings account passbooks that have not been used within the day will be handed over to the management staff for storing, reconciliation and inventory at the end of the day. The exported blank savings account passbooks are used for the right purpose of mobilizing deposits at the fund, shown on the accounting documents, deposit statements, and matching the quantity and serial number between the recorded data and the actual amount used. Damaged or torn blank savings account passbooks during printing are kept, listed, handed over to the management department for monitoring and reporting.

The blank savings account passbooks are inventoried daily together with the cash fund check. The Inventory Board ensures that the contents are sufficient, the inventory minutes are fully signed by the Chairman and related parties. Reporting forms are also being followed by the PCFs in accordance with regulations.

The strict management and usage of blank savings account passbooks, in accordance with regulations at PCFs, has prevented risks related to deposit mobilization activities and other violations related to blank savings account passbooks of employees and staff of the PCFs.

However, there are also a few PCFs that pay insufficient attention to the management, preservation, usage and inventory of blank savings account passbooks such as: when buying blank savings account passbooks, they do not count, stamp and hand over according to regulations; blank savings account passbooks are not exported based on actual demand and passbooks unused in the day are not handed over to the management department for preservation; blank savings account passbooks are arbitrarily exported, not in sequential order of serial number, causing difficulties in tracking and reporting; some units do not implement a periodical total inventory; the inventory is still a formality, which is easy to cause loss and to take advantage of.

A common situation, according to the examination results of the DIV’s Mekong River Delta Regional Branch over the past time, is that most PCFs have not focused on individual responsibility in the management and usage of blank savings account passbooks. According to the SBV, PCFs must specify the responsibilities of the Board of Directors, the Chairman of the Board of Directors, the Director (Deputy Director), the Supervisory Board and relevant individuals and departments in the management and usage of blank savings account passbooks. However, there are still many PCFs that do not regulate or only provide general and unclear regulations, especially ignore the responsibilities of the Chairman of the Board of Directors and the Supervisory Board. This does not ensure compliance with the requirements of the SBV and causes laxity in management of blank savings account passbooks that can be exploited and took advantage of.

Through the examination results and the current situation of the management and usage of blank savings account passbooks at PCFs, the Branch has proposed and recommended to the SBV branch of the province or city where the PCFs is located to request the PCFs to review, amend and supplement internal regulations to ensure full contents and strict implementation of the management and usage of blank savings account passbooks in accordance with the regulations of the SBV and the issued internal regulations./.

Research and international cooperation department