VBSP: Savings mobilization product from the community at commune in Vietnam

(VBSP News) VBSP mobilizes savings deposits at commune transaction point helping people save money and time.

Customers deposit savings at transaction point in Na Khoa commune, Nam Po district, Dien Bien province.

VBSP is currently engaged in receiving savings deposits from the poor through Savings and Credit group. Poor people can save money with small amount, thus, creating habit of savings for the poor to create their own equity and be familiar with financial activities.

VBSP mobilizes savings deposits of SCGs’ members by collaborating with the SCGs. Savings practice is in accordance to a general agreement of the group and savings needs and capabilities of each member. Every month, basing on the savings agreement, heads of SCGs shall collect deposits of members. Each member making savings deposit has a savings account to withdraw at VBSP’s commune transaction point or VBSP’s offices. Savings interest rate is as applicable to demand deposit.

The savings product for the poor has given them a chance to make deposit with just a tiny amount from several thousand dongs to accumulate as provision for debt repayment. The product has stimulated needs of local non-poor people for making savings deposits close at home rather than going to an office of a commercial bank. Thus, VBSP has conducted a research and carry out savings mobilization at commune transaction points for the non-poor who are not members of SCGs with various term deposits and smaller minimum amount as compare to such of commercial bank. Interest rate is as applicable to term deposit interest rate quoted in local VBSP office.

Depositors can deposit money at commune transaction points on transaction days or at VBSP’s office on other days. Savings mobilization in commune transaction points can take advantage of the broad transaction network of VBSP as well as diversify products and services of VBSP. At the same time, the service help popularize financial services to remote and isolated areas.

Target customers: Customers who are Vietnamese individuals making deposits in Vietnam dong at commune transaction points of VBSP; provincial and distrit branches in VBSP network.

For commune transaction points, which cannot be reached and operate in one day, the service is temporarily unavailable.

Requirements for savings deposit transactions:

Firstly, Vietnamese individuals of 18 years and older , with full civil capacity in accordance to the Civil Code an make transactions relating to savings deposits. A customer must make savings transaction directly by him/herself. As depositing or withdrawing money, the customer must present valid identity card/passport.

Secondly, Vietnamese individuals from 15 to 18 years old, without restriction on civil capacity but having private assets enough to ensure performance of civil obligations under the provisions of the Civil Code, can perform transactions relating to savings. As depositing or withdrawing money, the customer must present valid identity card/passport and proof of bank deposits as their personal assets, such as: inheritance, donation or other documents to prove ownership to the money deposited in VBSP.

Thirdly, for individuals under 15 years old, or individual who has lost the capacity for civil acts, had difficulties in cognitive, behavioral control, be restricted with civil capacity as prescribed by law, can only carry out transactions related to savings through a guardian or a legal representative. When performing deposit transactions, the guardian or legal representative, in addition to a valid identity card/passport, must present legal proof to be the guardian, legal representative of the juvenile, or individual who has lost the capacity for civil acts, had difficulties in cognitive, behavioral control, be restricted with civil capacity as prescribed by law.

Location of depositing and withdraw savings: Commune transaction points of VBSP

Savings withdrawal at commune transaction points is applicable for Savings books opened at commune transaction points only. In case a customer deposited savings at a commune transaction point but would like to withdraw money on other days than the commune transaction day, the customer shall go to local VBSP office where his/her savings book was opened.

Form of savings deposits: demand deposit and term deposit.

Interest rate: as applied to same type and term of deposit at local VBSP office.

Interest payment:

Demand deposit: interest is paid (or accumulate to principal) monthly and at the date of account settlement in adherence to prevailing regulations of the General Director. In case, a customer withdraws savings before maturity, maximum interest rate is equal to interest rate of demand deposits at the time of withdrawal.

Minimum deposit for each time of depositing into a savings book depends on each type of savings product but shall not lower than VND 500,000 (five hundred thousand dongs). This minimum amount is much lower than such of commercial banks, usually at VND 1.000.000.

Withdrawal of deposits before maturity: customer can withdraw savings before maturity as prescribed by regulations. Withdraw location is at commune transaction points on the date of transaction or at VBSP office where the savings book was opened. If a customer want to withdraw before maturity an amount of VND 20 million or over at a commune transaction point, the customer should inform VBSP where the savings book was opened at least 1 working day before the transaction day through phone or in written document. The account department of VBSP shall receive such information.

The guidance shall be effective from 30/9/2016.