Inspectorate points out violations at Thai Hoa People's Credit Fund

The State Bank Inspectorate has discovered many violations at a credit fund in Nghe An, from capital management, loan approval to financial system safety. In this situation, the fund is required to immediately take remedial measures to avoid the risk of credit insecurity, while improving the quality of financial services for the people.

The Chief Inspector and Supervisor of the State Bank of Vietnam (SBV) Nghe An Province Branch has just issued Inspection Conclusion No. 22/KL-TTGS on the inspection of Thai Hoa People's Credit Fund headquartered in Thai Hoa town, Nghe An province.

Inspection of compliance with legal regulations on customer lending; credit quality; debt classification, risk provisioning; debt restructuring; debt extension and debt term adjustment; loan interest rates and operating fees; other receivables.

The inspection results showed many worrying violations in the fund's management, operation and internal control, raising concerns about credit safety and financial risks.

Thai Hoa People's Credit Fund.

Thai Hoa People's Credit Fund was established in 1995, operating in four wards of Thai Hoa town, including Hoa Hieu, Quang Tien, Quang Phong and Long Son. Its headquarters is located in Hoa Hieu ward, Thai Hoa town, Nghe An province. This is one of the financial institutions that plays an important role in providing credit to local people. However, recent inspection results have exposed many problems in the fund's operations.

One of the most notable issues is the loose internal control and organization system. According to the inspection conclusion, the fund has not issued all necessary internal regulations, while the minutes of board meetings are not fully recorded. Some board members have not fully performed their roles in supervising and operating the fund's operations, leading to loopholes in management. In particular, the internal control report is still lacking, not fully assessing the unit's operational efficiency.

Not only stopping at the management issue, the fund's lending activities also revealed many violations. The appraisal of loan applications was not strictly implemented, leading to a situation where many applications lacked documents proving the customers' income. Some loans did not fully meet legal conditions, while the information in the loan application did not match the customer's citizen identification. These loopholes not only increased credit risks but could also lead to the risk of capital loss if there were no timely control measures.

In addition, the fund's accounting and financial activities also have many shortcomings. The inspectorate discovered that some revenues and expenditures have not been accurately determined, affecting the transparency of operations. The storage of accounting records has not fully complied with regulations, which may cause difficulties for future financial audits and controls. The treasury system has not fully met safety standards, increasing the risk of asset loss.

The fund’s information technology system is also a matter of concern. According to the inspection conclusion, the fund does not have a detailed management list of information technology assets, and has not clearly assigned responsibilities for monitoring and protecting data security. In addition, access to and use of internal information systems are not strictly controlled, raising concerns about the risk of data leakage and loss of customer information security.

Although some digital banking services such as POS machines and cooperation contracts with other units have been deployed, the fund has not yet fully completed the process to ensure safe and transparent transactions. These shortcomings require timely adjustments to meet the requirements of financial safety in the digital age.

Based on the inspection results, the State Bank Inspectorate, Nghe An Province Branch requested Thai Hoa People's Credit Fund to implement 7 recommendations. Accordingly, the inspection agency requested the fund to review and develop a program and plan to overcome the recommendations in the conclusion.

"Comply with regulations in receiving savings deposits; supplement documents proving income sources for debt repayment, documents proving purpose of capital use to save in loan files" - the inspection agency noted.

Along with that, improve the quality of loan appraisal for customers, for customers who have been approved for loans, strengthen supervision of loan use, require customers to develop specific plans for each capital use. The Board of Directors develops a plan to overcome existing problems and violations of information technology system security.

Source: https://baodaknong.vn/thanh-tra-chi-ro-vi-pham-tai-quy-tin-dung-nhan-dan-thai-hoa-242889.html