Circular No. 04/2003/TT-NHNN guiding the maintenance of deposit balances by state credit institutions at the Social Policy Bank

CIRCULAR

OF THE STATE BANK OF VIETNAM NUMBER 04/2003/TT-NHNN DATE FEBRUARY 24, 2003 ON GUIDELINES FOR STATE CREDIT ORGANIZATIONS TO MAINTAIN BALANCES DEPOSITED WITH THE SOCIAL POLICY BANK

PURSUANT TO CLAUSE 2, ARTICLE 8 OF THE DECREE NO. 78/2002/NĐ-CP OF OCTOBER 4, 2002 OF THE GOVERNMENT ON CREDIT FOR POOR PEOPLE AND OTHER POLICY OBJECTIVES, THE GOVERNOR OF THE STATE BANK OF VIETNAM GUIDES THE MATTERS CONCERNING STATE CREDIT ORGANIZATIONS TO MAINTAIN BALANCES DEPOSITED WITH THE SOCIAL POLICY BANK AS FOLLOWS:

1. STATE CREDIT ORGANIZATIONS SHALL OPEN ACCOUNTS AND MAINTAIN BALANCES DEPOSITED WITH THE SOCIAL POLICY BANK, INCLUDING:

a. STATE COMMERCIAL BANKS: VIETNAM AGRICULTURAL AND RURAL DEVELOPMENT BANK; VIETNAM INDUSTRIAL AND COMMERCIAL BANK; VIETNAM FOREIGN TRADE BANK; VIETNAM INVESTMENT AND DEVELOPMENT BANK; VIETNAM HOUSING DEVELOPMENT BANK IN THE MISSIONARY RIVER DELTA AND OTHER STATE COMMERCIAL BANKS.

b. NON-BANK STATE CREDIT ORGANIZATIONS: STATE FINANCE COMPANIES; STATE LEASE COMPANIES; EXCLUDING FINANCE COMPANIES AND LEASE COMPANIES UNDER THE CREDIT ORGANIZATION.

2. THE BALANCE OF DEPOSITS OF STATE CREDIT ORGANIZATIONS MAINTAINED AT THE SOCIAL POLICY BANK IS DETERMINED AS FOLLOWS:

a. ANNUALLY, STATE CREDIT ORGANIZATIONS ARE RESPONSIBLE FOR MAINTAINING BALANCES DEPOSITED WITH THE SOCIAL POLICY BANK AT 2% OF THE BALANCE OF DOMESTIC CURRENCY FUNDS RAISED AT THE END OF DECEMBER OF THE PREVIOUS YEAR.

b. THE BALANCE OF DOMESTIC CURRENCY FUNDS RAISED BY STATE CREDIT ORGANIZATIONS AT THE END OF DECEMBER OF THE PREVIOUS YEAR INCLUDES THE BALANCE OF ALL ACCOUNTS ON THE BALANCE SHEET AT THE END OF DECEMBER OF THE PREVIOUS YEAR AS FOLLOWS:

- DOMESTIC CURRENCY DEPOSITS FROM DOMESTIC CUSTOMERS.

- DOMESTIC CURRENCY SAVINGS DEPOSITS.

- DOMESTIC CURRENCY DEPOSITS FROM FOREIGN CUSTOMERS.

- SHORT-TERM SECURITIES ISSUED IN DOMESTIC CURRENCY.

- LONG-TERM SECURITIES ISSUED IN DOMESTIC CURRENCY.

c. HANDLING CASES OF ADDITIONAL OR REDUCTION OF BALANCES DEPOSITED BY STATE CREDIT ORGANIZATIONS AT THE SOCIAL POLICY BANK AS FOLLOWS:

- IN THE CASE WHERE THE BALANCE OF DEPOSITS TO BE MAINTAINED IN THE FOLLOWING YEAR IS GREATER THAN THE BALANCE OF DEPOSITS OF THE PREVIOUS YEAR, THEN STATE CREDIT ORGANIZATIONS MUST SUPPLEMENT THE BALANCE OF DEPOSITS BY THE AMOUNT OF THE DIFFERENCE.

- IN THE CASE WHERE THE BALANCE OF DEPOSITS TO BE MAINTAINED IN THE FOLLOWING YEAR IS LESS THAN THE BALANCE OF DEPOSITS OF THE PREVIOUS YEAR, THEN STATE CREDIT ORGANIZATIONS MAY WITHDRAW THE AMOUNT OF THE DIFFERENCE OR CONTINUE TO MAINTAIN THE BALANCE OF DEPOSITS OF THE PREVIOUS YEAR.

3. INTEREST RATE ON DOMESTIC CURRENCY DEPOSITS OF STATE CREDIT ORGANIZATIONS AT THE SOCIAL POLICY BANK.

a. THE INTEREST RATE ON DOMESTIC CURRENCY DEPOSITS IS DETERMINED AS FOLLOWS:

Where:

(1) IS THE AVERAGE (%/YEAR) OF THE DOMESTIC CURRENCY FUND RAISING INTEREST RATE AT THE END OF DECEMBER OF THE PREVIOUS YEAR OF STATE CREDIT ORGANIZATIONS, CALCULATED ACCORDING TO THE WEIGHTED AVERAGE INTEREST RATE METHOD OF VARIOUS TYPES OF FUNDS RAISED AS PROVIDED FOR IN POINT B, CLAUSE 2 OF THIS CIRCULAR.

(2) IS THE AVERAGE FUND RAISING COST AGREED BETWEEN THE SOCIAL POLICY BANK AND STATE CREDIT ORGANIZATIONS BUT NOT MORE THAN 1.35%/YEAR.

b. THE PERIOD OF INTEREST PAYMENT ON DEPOSITS IS AGREED BY THE SOCIAL POLICY BANK WITH STATE CREDIT ORGANIZATIONS IN ACCORDANCE WITH THE REGULATIONS OF THE STATE BANK OF VIETNAM ON METHODS OF CALCULATION AND PAYMENT OF INTEREST.

4. PROCEDURES AND FORMALITIES FOR DEPOSITS AT THE SOCIAL POLICY BANK ARE IMPLEMENTED AS FOLLOWS:

a. STATE CREDIT ORGANIZATIONS SHALL OPEN FIXED TERM DEPOSIT ACCOUNTS AT THE HEADQUARTERS OF THE SOCIAL POLICY BANK.

b. THE SOCIAL POLICY BANK SHALL ENTER INTO DEPOSIT CONTRACTS FOR THE YEAR 2003 WITH STATE CREDIT ORGANIZATIONS IN ACCORDANCE WITH THE GUIDELINES SET OUT IN THIS CIRCULAR. FOR SUBSEQUENT YEARS, IF THE BALANCE OF DEPOSITS AND INTEREST RATES CHANGE, THE PARTIES SHALL AGREE TO AMEND THE CONTRACT THROUGH APPENDICES.

c. BEFORE JANUARY 15 EACH YEAR, STATE CREDIT ORGANIZATIONS SHALL SUBMIT STATISTICAL TABLES TO THE RELEVANT UNITS:

- SUBMIT THE STATISTICAL TABLE OF BALANCES OF FUNDS RAISED AND INTEREST RATES FOR EACH TERM IN DOMESTIC CURRENCY ACCOMPANYING THIS CIRCULAR TO THE MONETARY POLICY DEPARTMENT OF THE STATE BANK OF VIETNAM. THE MONETARY POLICY DEPARTMENT WILL CALCULATE AND NOTIFY THE AVERAGE DOMESTIC CURRENCY FUND RAISING INTEREST RATE OF STATE CREDIT ORGANIZATIONS AT THE END OF DECEMBER OF THE PREVIOUS YEAR TO STATE CREDIT ORGANIZATIONS AND THE SOCIAL POLICY BANK BEFORE JANUARY 20 EACH YEAR TO SERVE AS THE BASIS FOR DETERMINING THE INTEREST RATE ON DEPOSITS FOR THE YEAR.

- SUBMIT THE STATISTICAL TABLE OF THE BALANCE OF DEPOSITS FOR THE YEAR ACCOMPANYING THIS CIRCULAR TO THE SOCIAL POLICY BANK AND BE RESPONSIBLE FOR THE ACCURACY OF THE DATA.

d. BY THE LATEST DATE OF JANUARY 31 EACH YEAR, STATE CREDIT ORGANIZATIONS AND THE SOCIAL POLICY BANK MUST COMPLETE THE AMENDMENTS TO THE APPENDICES OF THE DEPOSIT CONTRACT AND ADDITION OR REDUCTION OF THE BALANCE OF DEPOSITS IN ACCORDANCE WITH THIS CIRCULAR.

5. Implementation

a. THIS CIRCULAR TAKES EFFECT FROM THE DATE OF SIGNATURE.

b. WITHIN 15 DAYS AFTER THE EFFECTIVE DATE OF THIS CIRCULAR, STATE CREDIT ORGANIZATIONS MUST COMPLETE THE DEPOSIT OF FUNDS AT THE SOCIAL POLICY BANK AT 2% OF THE BALANCE OF DOMESTIC CURRENCY FUNDS RAISED AT THE END OF DECEMBER 2002.

c. HEADS OF UNITS UNDER THE STATE BANK OF VIETNAM, BRANCH MANAGERS OF THE STATE BANK OF VIETNAM IN PROVINCES AND CITIES, BOARDS OF MANAGEMENT AND GENERAL DIRECTORS OF STATE CREDIT ORGANIZATIONS, AND THE SOCIAL POLICY BANK SHALL IMPLEMENT THIS CIRCULAR.