Circular No. 02/2006/TT-BTC guiding certain provisions of Decision No. 270/2005/QD-TTg dated October 31, 2005 of the Government on organizing the mobilization, management, and utilization of postal savings funds.

CIRCULAR

Guidelines for certain provisions of Decision No. 270/2005/QĐ-TTg dated October 31, 2005 of the Prime Minister on organizing the mobilization, management, and utilization of postal savings funds

___________________________________________

I. GENERAL PROVISIONS

1. The Vietnam Post and Telecommunications Corporation shall organize postal savings services to mobilize idle funds from residents in accordance with Decision No. 270/2005/QĐ-TTg dated October 31, 2005 of the Prime Minister to transfer to the Development Support Fund and the Social Policy Bank for lending to investment projects, poor households, and policy beneficiaries as directed by the Government.

2. The Vietnam Post and Telecommunications Corporation shall provide some banking services in accordance with the Law on Credit Institutions No. 07/1997/QHX dated December 12, 1997 and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions No. 20/2004/QH11 dated June 15, 2004.

3. Organizations entrusted by the Vietnam Post and Telecommunications Corporation to implement postal savings services shall operate financial systems in accordance with the Financial Regulations of the Vietnam Post and Telecommunications Corporation, consistent with current State regulations on financial management for state-owned enterprises.

The Ministry of Finance shall perform its state management functions regarding finance for postal savings service activities.

II. SPECIFIC PROVISIONS

1. On Mobilizing and Utilizing Postal Savings Funds:

a) The Vietnam Post and Telecommunications Corporation shall be permitted to mobilize idle funds from residents through the following forms:

- Accepting time deposits and demand deposits;

- Issuing deposit certificates and other securities in accordance with the law.

b) Deposit interest rates must ensure alignment with market interest rates and the prevailing interest rate at each point in time.

c) Mobilized postal savings funds shall be concentrated and transferred to accounts opened by organizations implementing postal savings services at commercial banks and used as follows:

- Retain a portion as prescribed by the State Bank of Vietnam to ensure regular payments to depositors upon maturity or sudden withdrawal requests.

- Transfer funds to the Development Support Fund and the Social Policy Bank for lending according to government directives.

- Remaining funds, if the Development Support Fund and the Social Policy Bank do not require additional loans, may be used to purchase or repurchase securities issued by the Government, National Treasury, local governments, and guaranteed government bonds; repurchase bonds issued by the Development Support Fund and the Social Policy Bank.

2. Annually in the fourth quarter, the Vietnam Post and Telecommunications Corporation shall be responsible for coordinating with the Development Support Fund and the Social Policy Bank to unify the capital transfer plan for the planning year and report it to the Ministry of Planning and Investment and the Ministry of Finance.

3. The Vietnam Post and Telecommunications Corporation shall transfer funds to the Development Support Fund and the Social Policy Bank at the bond interest rate of the Government for the same term, issued through the most recent auction method in the month. In cases where there is no issuance of Government bonds of the same type in the month, the Development Support Fund and the Social Policy Bank shall work specifically with the Vietnam Post and Telecommunications Corporation to determine the interest rate, ensuring it does not exceed the ceiling interest rate for Government bonds of that month announced by the Ministry of Finance to the Development Support Fund and the Social Policy Bank.

The transfer, receipt, use, and repayment of postal savings funds between the Vietnam Post and Telecommunications Corporation and the Development Support Fund and the Social Policy Bank annually shall be carried out through a loan agreement between the Vietnam Post and Telecommunications Corporation and the Development Support Fund and the Social Policy Bank (Attachment Form 1). The Vietnam Post and Telecommunications Corporation shall be responsible for transferring sufficient and correct amounts of capital according to the agreed schedule in the loan agreement.

Each capital transfer shall be executed using a loan certificate issued by the organization implementing postal savings services (Attachment Form 2).

4. The Development Support Fund and the Social Policy Bank shall be responsible for receiving postal savings funds to lend to investment projects, poor households, and policy beneficiaries as stipulated by the Government; lending for the intended purpose, recovering borrowed funds, and fully repaying both principal and interest to the Vietnam Post and Telecommunications Corporation.

The repayment of principal and interest by the Development Support Fund and the Social Policy Bank to the Vietnam Post and Telecommunications Corporation shall be as follows:

- Principal: The Development Support Fund and the Social Policy Bank shall be responsible for allocating funds to repay the Vietnam Post and Telecommunications Corporation fully and promptly according to the loan agreement.

- Interest: Interest on the loan shall be calculated from the date the loan amount is transferred into the account of the Development Support Fund and the Social Policy Bank. Interest shall be calculated using the accrual method, with one year consisting of 365 days.

5. Organizations implementing postal savings services shall provide customers with various types of services as stipulated in Article 4 of Decision No. 270/2005/QĐ-TTg dated October 31, 2005 of the Prime Minister, including:

- Payment services;

- Cash transfer and remittance services;

- Agency services for issuing bonds and other financial agency services.

Organizations implementing postal savings services may only provide the above types of services when they meet the required conditions and obtain permission from competent state management agencies in accordance with current laws.

6. On Managing Revenue and Expenditure of Organizations Implementing Postal Savings Services:

a) Organizations implementing postal savings services shall be responsible for recording all revenue generated in full and in a timely manner, including:

- Interest income from deposits.

- Income from securities.

- Charging for providing various types of services: payment services; cash transfer and remittance services; agency services for issuing bonds on commission and other financial agency services.

- Other charges.

b) Postal savings service organizations may allocate funds for operations as follows:

- Payment of interest on postal savings deposits to residents in accordance with the principle of timely and accurate payment;

- Transfer costs;

- Costs to cover business risks including: risks in payments and cash fund risks due to objective reasons, handled according to current regulations;

- Management expenses of the organization implementing postal savings services such as salaries, training and professional instruction costs, reception and ceremonial costs, printing costs, etc., in accordance with State regulations;

- Other expenses;

7. Regarding accounting and financial reporting systems for organizations implementing postal savings services:

The Vietnam Post and Telecommunications Corporation is responsible for organizing accounting work, preparing final financial reports on postal savings services activities in accordance with the Accounting Law, decrees guiding the implementation of the Accounting Law, and the accounting system for postal savings services issued by the Ministry of Finance. These financial reports shall be submitted to relevant agencies as prescribed and simultaneously sent to the Ministry of Finance (Department of Banking and Financial Organization Finance).

8. Regarding planning: Annually, the Vietnam Post and Telecommunications Corporation is responsible for developing financial plans for postal savings services activities to be submitted to relevant agencies as prescribed, and simultaneously sent to the Ministry of Finance (Department of Banking and Financial Organization Finance) in the fourth quarter of the previous year, including:

- Capital source plan and capital utilization plan.

- Revenue and expense plans, business results, and state budget contribution targets.

III. IMPLEMENTATION

1. The Vietnam Post and Telecommunications Corporation is legally responsible for the use of capital, ensuring payments to residents, and subject to inspection by State financial authorities in accordance with laws and this Circular.

2. This Circular takes effect fifteen days from the date of publication in the Official Gazette. This Circular replaces Circular No. 40/1999/TT-BTC dated April 15, 1999, and Circular No. 68/1999/TT-BTC dated June 7, 1999, issued by the Ministry of Finance.

3. The Chairman of the Board of Directors of the Vietnam Post and Telecommunications Corporation, the General Director of the Vietnam Post and Telecommunications Corporation, and related units are responsible for implementing this Circular. Any difficulties encountered during implementation should be reported to the Ministry of Finance for consideration and timely supplementation or amendment./.