JOINT CIRCULAR No. 01-057/TTLB REGULATING CERTAIN PRINCIPLES ON CAPITAL GRANTING AND LOANS WITHIN THE WORKING CAPITAL QUOTA FOR STATE OWNED TRANSPORT ENTERPRISES

JOINT CIRCULAR

Regulations on certain principles for capital allocation and loans within the working capital quota for state-owned transport enterprises
Implementing Decision 054-TTg dated February 19, 1959 of the Prime Minister regarding loans within the working capital quota for state-owned transport enterprises and Post Office, the Ministry of Finance, Ministry of Transport and Post, and the State Bank have issued Circular No. 362-TD-CTN dated August 27, 1959 to stipulate general principles for the State's provision of working capital and loans within the State Bank's working capital quota. After a period of implementation, the Joint Ministries noted that it was necessary to change some points in the regulations on the ratio of State capital allocation and bank loans within the quota to adapt to the current economic and financial characteristics of state-owned transport enterprises and further promote the principles of short-term socialist credit.

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The following are specific provisions:

1. Starting from 1963, for central state-owned transport enterprises, local state-owned transport enterprises, and public-private joint ventures, the State Bank will only participate in lending within the working capital quota for inventory factors with a regular turnover during the production reserve phase, and will not participate in lending for other factors such as "work in progress," "completed work," "special reserve materials" (long-term reserves or for unexpected work), and "pending fees."

2. The types of enterprises applying the above lending method include: automobile transport companies, inland waterway transport companies, marine transport companies, ports, wharfs, ferry terminals, and railway transport enterprises. Enterprises producing industrial goods and organizations with independent economic accounting that have been classified do not fall under the scope of this circular and will continue to apply the existing methods and measures for lending to state-owned industries and supply organizations of the State Bank.

3. For enterprise working capital quota factors that the Bank does not participate in lending within the quota, the State will directly provide 100% of the working capital quota. As for inventory items within the Bank's lending scope, the State will directly provide 60% to the enterprise, while the remaining portion will be transferred from the State Budget to the Bank for lending within the quota (for central state-owned transport enterprises). For local state-owned transport enterprises and public-private joint ventures, the ratio of Bank lending within the quota and the direct State provision to the enterprise will be specifically defined by local financial, transport, and banking authorities, but the general principle is that the local budget will directly provide a maximum of 70% of the working capital quota for the year approved in the plan, and the remainder will be transferred from the local budget to the Bank for lending within the quota according to the spirit of Decision 054-TTg of the Prime Minister dated February 19, 1959.

4. With this new lending method, there may be enterprises that have previously transferred excess capital to the Bank for lending within the quota compared to the new quota participation level. In principle, the Bank will not return the excess capital to each enterprise individually, but will resolve this issue together with the enterprise management authority based on the principle: If the total amount of capital transferred to the Bank for lending to all enterprises under the management authority from before exceeds the total amount of Bank participation in lending within the quota for all enterprises under the management authority in 1963, then the Bank will return the excess from account 1.07 to the management authority to directly refund to the enterprise. Conversely, if it is less, the management authority will transfer additional funds to the Bank.

Calculations for returning excess capital or transferring additional capital shortages will be carried out immediately after the management authority has reviewed the entire working capital quota for its enterprises. However, for enterprises that have been approved for 1963, where the Bank's participation in lending is lower than in 1962, leading to a potential initial capital shortage due to the management authority not providing the capital in time, the Bank will temporarily maintain the previous lending level and method until the end of April 1963 to allow the management authority sufficient time to directly provide the missing capital to the enterprise. For other enterprises without this situation, the new lending method and quota will be implemented immediately after the management authority has reviewed the working capital quota for the enterprise (for local enterprises and public-private joint ventures), or after the local bank receives the central bank's notification of the lending quota (for central state-owned enterprises).

Lending within the working capital quota for transport enterprises will still follow the current methods applicable to state-owned industrial enterprises, but will only cover factors within the lending scope (excluding low-value consumables).

This circular will replace Circular No. 362-TD-CTN dated August 27, 1959. Based on the content of this circular, each ministry will issue detailed directives as needed for their respective sectors to implement it.

Q. DIRECTOR