Circular No. 01/2006/TT-NHNN guiding certain contents regarding capital contribution to establish a Guarantee Fund for small and medium-sized enterprises

CIRCULAR

Guidelines on certain matters concerning capital contribution to establish credit guarantee funds

 for small and medium-sized enterprises

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To implement Decision No. 193/2001/QD-TTg dated December 20, 2001, Decision No. 115/2004/QD-TTg dated June 25, 2004 of the Government Chairman regarding the issuance of regulations on the establishment, organization, and operation of credit guarantee funds for small and medium-sized enterprises, and Directive No. 40/2005/CT-TTg dated December 16, 2005 of the Government Chairman on further promoting assistance in developing small and medium-sized enterprises, the Governor of the State Bank of Vietnam guides certain matters related to capital contribution for establishing credit guarantee funds for small and medium-sized enterprises (hereinafter referred to as credit guarantee funds) by credit institutions as follows:

1. The State Bank of Vietnam branch at provincial and centrally governed city level:

a) Coordinate with relevant departments and agencies at the local level, advise the Chairman of the People's Committee of the province or centrally governed city on the establishment of credit guarantee funds.

b) Appoint representatives to participate in the Preparatory Board for the establishment of credit guarantee funds and the Management Board of credit guarantee funds, upon the proposal of the People's Committee of the province or centrally governed city.

c) Report to the Governor of the State Bank of Vietnam on the progress of the establishment and operation of credit guarantee funds at the local level.

2. Credit institutions:

Based on the actual situation of their charter capital and reserve fund, and the need for the establishment of credit guarantee funds in each locality, credit institutions shall decide to contribute capital to credit guarantee funds established by the People's Committee of the province or centrally governed city.

a) The amount of capital contributed by a credit institution to a credit guarantee fund shall not exceed 11% of the charter capital of the credit guarantee fund.

b) The total amount of capital contributed to credit guarantee funds and other commercial investments shall not exceed 40% of the charter capital and reserve fund of the credit institution.

c) Appoint representatives to participate in the Preparatory Board for the establishment of credit guarantee funds, upon the proposal of the People's Committee of the province or centrally governed city.

d) Participate in the Management Board of credit guarantee funds to represent the contributed capital of the credit institution, according to the decision of the Chairman of the People's Committee of the province or centrally governed city.

e) Cooperate with credit guarantee funds to develop procedures and processes for credit guarantees, monitor and supervise the use of loan funds and repayment by customers, ensuring the safety of capital.

This Circular takes effect 15 days from the date of publication in the Official Gazette. The provisions of Circular No. 06/2003/TT-NHNN dated April 10, 2003 of the Governor of the State Bank of Vietnam on guidelines for certain matters concerning capital contribution to establish credit guarantee funds for small and medium-sized enterprises by credit institutions according to Decision No. 193/2001/QD-TTg dated December 20, 2001 of the Government Chairman and Resolution No. 02/2003/NQ-CP dated January 17, 2003 of the Government cease to be effective.

In the process of implementing this Circular, if difficulties arise, please report in writing to the State Bank of Vietnam (Credit Department) for resolution./.