Circular No. 04/TT-NH14 guiding the implementation of Decision No. 256/TTg dated April 24, 1996 of the Prime Minister regarding preferential loans for households under policy benefits and poor households in the Mekong Delta region to raise the ground level or construct floor on piles.

CIRCULAR

Of the State Bank of Vietnam number 04/TT-NH14 dated May 16, 1996 on guiding the implementation of Decision No. 256/TTG dated April 24, 1996 of the Prime Minister regarding loans to households under policy benefits and poor households in the Mekong Delta for raising ground levels or constructing floor slabs on piles

On April 24, 1996, the Prime Minister issued Decision No. 256/TTg on providing loans to households under policy benefits and poor households in the Mekong Delta for raising ground levels or constructing floor slabs on piles. The State Bank of Vietnam guides commercial banks designated by the State Bank of Vietnam to implement the provisions of the aforementioned Decision as follows:

I. PURPOSE OF THE LOAN:

The State provides long-term loans with preferential terms to households under policy benefits and poor households in the Mekong Delta flood-prone areas to raise ground levels or construct floor slabs on piles to ensure safety of people and property during floods.

II. SCOPE AND CONDITIONS FOR LOANS:

1. Households eligible for loans are those households under policy benefits and poor households in the Mekong Delta flood-prone areas as defined by the State and the People's Committee of the province.

2. Households under policy benefits and poor households eligible for loans are those living in deep-flooded areas where water levels exceed one meter during floods and have difficulties in raising ground levels or constructing floor slabs on piles, residing in houses built in planned residential areas within flood-prone zones that are annually flooded, recognized by the collective household groups in their villages and recommended by the People's Committee of the commune according to the regulations of the provincial People's Committee and approved by the provincial People's Committee. These households do not need to collateralize or pledge assets but must have a credit guarantee from political-social organizations in accordance with the Civil Code and guiding documents.

During the period before the Civil Code takes effect, the guarantee for loans to households under policy benefits and poor households shall be implemented through credit guarantees provided by village-level People's Committees, economic-social organizations, professional associations, family groups, and mass organizations in accordance with the "Regulations on Policies for Production Households to Borrow Capital for Developing Agriculture, Forestry, Fisheries, Salt Industry, and Rural Economy" issued pursuant to Decree No. 14/CP dated March 2, 1993 of the Government and guiding documents of the State Bank of Vietnam.

3. Borrowing households must comply with loan regulations; borrowed capital must be used for the intended purpose and construction progress as planned; they must fully repay principal and interest on time and bear legal responsibility for any breaches of commitments with lending banks and related organizations.

III. AMOUNT, TERM, AND INTEREST RATE OF THE LOAN:

1. Each eligible household may borrow up to five million dong, with the specific amount depending on the flooding situation in each locality, the self-reliance capacity of each household, and based on construction standards and unit prices guided by the provincial Construction Department and approved by the provincial People's Committee.

2. The loan term is determined based on the requested loan amount and the borrower's repayment capability, but the maximum loan term does not exceed five years. The loan term runs from the date the borrower receives the first loan installment to the date all debts are repaid.

3. The lending bank collects interest at a rate of 0.7% per month on the loan amount. The State (Ministry of Finance) subsidizes the difference between the lending bank's interest rate (within the range announced by the Governor of the State Bank of Vietnam for each period) and the interest rate that borrowers must pay to the lending bank (0.7% per month) as stipulated by

IV. RESPONSIBILITIES AND LIMITATIONS OF DESIGNATED LENDING BANKS:

1. Mobilize funds according to current funding regulations to provide loans according to the annual loan demand plan established by the Ministry of Agriculture and Rural Development. In cases where the designated lending bank cannot mobilize sufficient funds to meet the annual loan demand plan of the Ministry of Agriculture and Rural Development, it must report to the Governor of the State Bank of Vietnam to designate additional banks to participate in lending.

2. Based on the content of Decision No. 256/TTg dated April 24, 1996 of the Prime Minister and this Circular, guide specific loan and collection procedures for households under policy benefits and poor households borrowing capital, creating favorable conditions for easy access to loans, timely provision of capital, simplified procedures, and preventing any negative phenomena.

3. Directly provide loans to eligible households under policy benefits and poor households borrowing capital. The loan implementation period is three years, from 1996 to December 31, 1998.

4. The lending bank has the right to refuse loans to applicants who do not meet loan conditions; suspend loan disbursements and recover any previously disbursed loans when borrowers misuse loan funds and fail to comply with loan regulations of the bank and must immediately report in writing to the provincial People's Committee and the superior bank.

5. The lending bank is entitled to receive subsidies from the State (Ministry of Finance) for the difference between the lending bank's interest rate and the interest rate that borrowers must pay to the lending bank (0.7% per month) as stipulated by

6. In cases of unforeseen risks where borrowers cannot repay their debts, the State will consider handling them according to current laws.

V. IMPLEMENTATION ORGANIZATION:

1. At this initial stage, the State Bank of Vietnam designates the Vietnam Agricultural Bank as the lending bank.

2. Based on Decision No. 256/TTg dated April 24, 1996 of the Prime Minister and this Circular, the General Director of the Vietnam Agricultural Bank guides specific measures and loan and collection procedures; organizes the effective implementation of this Circular. During the implementation process, if there are any issues, they should be reported to the Governor of the State Bank of Vietnam for consideration and resolution.

3. This Circular takes effect from the date of issuance. Relevant units at the Central State Bank of Vietnam and branches of the State Bank of Vietnam in the Mekong Delta provinces within their scope of responsibility shall guide and monitor the implementation of this Circular.