Decision No. 07/2013/QD-TTg On the Financial Regime of the State Bank of Vietnam

REGULATIONCONTENTDECREE

On the financial regime of the State Bank of Vietnam

Pursuant to the Law on the Organization of the Government dated December 25, 2001;

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on State Budget dated December 16, 2002;

At the proposal of the Governor of the State Bank of Vietnam and the Minister of Finance;

The Prime Minister promulgates this Decision on the financial regime of the State Bank of Vietnam.

Article 1. This Decision sets forth the financial regime of the State Bank of Vietnam.

Article 2. This Decision takes effect from March 15, 2013. The financial regimes prescribed in this Decision shall be implemented from January 1, 2013.

Article 3. The Governor of the State Bank of Vietnam, the Minister of Finance, the Ministers, Heads of ministerial-level agencies, Heads of government-level agencies, Chairpersons of provincial People's Committees under central city administrations are responsible for implementing this Decision./.

FINANCIAL REGIME

OF THE STATE BANK OF VIETNAM

(Issued along with Decision No. 07/2013/QĐ-TTg dated 24 ENVIRONMENTJune 2024;Article 01

of 2013 of the Prime Minister"b) In addition to the lists of public services issued according to the provisions of Clause 2, Article 4 of this Decree, specialized agencies under provincial People's Committees shall report to the provincial People's Committee for decision-making on amending, supplementing, or issuing the list of public services funded by the state budget within their jurisdiction and consistent with the local budget capacity within the approved budget by the Provincial People's Assembly, and send it to the Ministry of Finance and relevant ministries and sectors for supervision during implementation."Government)

Chapter I

GENERAL PROVISIONS

Article 1. This regime stipulates the financial regime applicable to the State Bank of Vietnam (hereinafter referred to as the State Bank).

This regime does not apply to public service units that have implemented the self-management and self-responsibility regime regarding the performance of tasks, organizational structure, staffing, and finance as prescribed by the State, and independent economic accounting enterprises directly subordinate to the State Bank.

Article 2. Revenue and expenditure of the State Bank shall, in principle, be carried out in accordance with the Law on State Budget and the Law on the State Bank of Vietnam.

Article 3. The State Bank may use its revenue sources to cover its operational costs. After setting aside funds according to the provisions of the Law on the State Bank of Vietnam and specific provisions of this regime, the remaining balance shall be remitted to the state budget.

Article 4. The State Bank is exempt from all types of taxes on its business operations and banking services.

Article 5. The Governor of the State Bank is responsible before the Prime Minister for planning revenue and expenditure; managing safely, using for proper purposes, and efficiently the capital and assets assigned by the State.

Article 6. The Ministry of Finance performs the state management function over finance, and is responsible for guiding and inspecting the revenue and expenditure activities of the State Bank.

Chapter II

CAPITAL AND FUNDS

Article 7. The State Bank manages and uses the following types of capital:

1. Statutory capital.

2. Money issued into circulation to implement national monetary policy.

3. Deposits from credit organizations and the National Treasury.

4. Borrowed capital.

5. Other capital

Article 8. The statutory capital of the State Bank is 10,000 (ten thousand) billion VND.

Any change in this statutory capital shall be decided by the Prime Minister based on the proposal of the Governor of the State Bank and the Minister of Finance.

The statutory capital of the State Bank is formed from the following sources:

1. Existing capital sources: Capital from the state budget and investment in construction and fixed asset purchases.

2. Supplementary capital:

a) State budget capital (if any).

b) An amount equal to 12% of the average annual value of fixed assets as stipulated in Clause 7, Article 13 of this regime.

c) Increase due to revaluation of fixed assets as prescribed by law.

d) Other capital sources (if any)

Article 9. The State Bank may establish a risk reserve fund and record it as an expense equal to 10% of the revenue-expenditure difference excluding the risk reserve fund. The balance of the risk reserve fund shall not exceed the amount required to be set aside as a risk reserve fund according to the regulations applicable to the State Bank. The risk reserve fund shall be used to offset losses or deemed losses in the State Bank's operations, including:

1. Losses arising from lending activities:

- Debts written off according to the decision of the Prime Minister, but without the Government providing funding to compensate the State Bank.

- Debts and payments made on behalf of credit organizations that are definitively uncollectible when such organizations are dissolved or declared bankrupt according to the law.

2. Losses in payment and cash operations:

- Losses incurred during payment transactions due to technical failures in payment networks, technology...

- Losses involving money, gold, precious assets, and securities occurring in cash operations.

3. Losses arising from managing the national foreign exchange reserves and intervening in the domestic gold market:

- Losses involving money, gold, and securities deposited at foreign banks due to force majeure such as war, terrorism, bankruptcy, natural disasters in the country where the State Bank deposits money, and the foreign bank being unable to pay.

- Risks from declines in the value of securities investments on international financial markets; risks in quality testing of gold and declines in gold prices.

4. Other losses during operations that are definitively uncollectible or where the debtor is definitively unable to pay.

5. Processing payments with the state and the state budget according to the approval of the Prime Minister.

6. Other cases as decided by the Governor of the State Bank.

The balance of the risk reserve fund established since the issuance of Decree No. 100/1998/NĐ-CP dated December 10, 1998 of the Government shall be transferred to the initial balance of the risk reserve fund established under this regime for continued use as prescribed.

The State Bank shall take the lead and coordinate with the Ministry of Finance to issue regulations on the management and use of the risk reserve fund.

Article 10. The State Bank shall allocate from the annual revenue-expenditure difference as stipulated in Article 16 of this regime to supplement the Fund for Implementing National Monetary Policy and the Financial Reserve Fund:

1. The Fund for Implementing National Monetary Policy.

The actual balance of the Fund shall not exceed one time the statutory capital of the State Bank. The Governor of the State Bank decides to use the Fund for Implementing National Monetary Policy for the following purposes:

- To provide loans to support credit organizations affected by incidents impacting the safety of the banking system;

- To provide loans to participants in the payment system to support the payment system in case of incidents threatening the safety of payment operations and the stability of the banking system;

- Lending to the Vietnam Deposit Insurance Corporation to implement measures contributing to maintaining the stability of credit institutions, ensuring safe and sound banking operations after the deposit insurance has utilized its capital sources but it remains insufficient;

- Contributing capital, purchasing shares of credit institutions under special control as stipulated in Clause 2 and 3, Article 149 of the Law on Credit Institutions 2010;

- Other items arising related to the implementation of monetary policy that have been approved by the Prime Minister regarding the policy direction;

In case the balance of the Fund for Implementing Monetary Policy is insufficient to meet the demand for use, the State Bank shall coordinate with the Ministry of Finance to propose and submit to the Prime Minister measures to address the shortfall;

The State Bank shall take the lead and coordinate with the Ministry of Finance to promulgate regulations on the management and utilization of the national fund for implementing monetary policy;

2. Financial Reserve Fund: The maximum level of the reserve fund shall not exceed 25% of the statutory capital of the State Bank. The financial reserve fund shall be used:

- To compensate for the remaining losses and damages to assets occurring during the course of operation after being compensated by the compensation money from organizations and individuals causing the loss, from the insurance organization, and from the risk reserve established in expenses;

- To compensate for the annual deficit in expenditures exceeding revenues (if any) due to the impact of managing the national monetary policy;

The Ministry of Finance shall provide detailed guidance on the management and utilization of this fund. In case the financial reserve fund is insufficient to cover the losses, damages, and annual deficits in expenditures exceeding revenues (if any), the State Bank shall coordinate with the Ministry of Finance to submit to the Prime Minister measures to address the shortfall;

Article 11. The State Bank shall carry out depreciation of fixed assets in accordance with the regulations of the Ministry of Finance;

The State Bank shall invest in basic construction, purchase fixed assets from the following sources: state budget allocation; retained depreciation of fixed assets in accordance with regulations; contributions from costs at 12% of the average annual value of fixed assets, and other lawful sources;

The management and utilization of funds for investment in construction, purchase of fixed assets, transfer, liquidation, inventory, and revaluation of assets of the State Bank shall be carried out in accordance with the provisions of the law;

Chapter III

FINANCIAL INCOME AND EXPENDITURE

Article 12. The State Bank shall have the following income sources:

1. Income from deposit, credit, and investment activities, including: Interest income from loans, interest income from deposits, income from securities investments, and other income from credit activities;

2. Income from open market operations;

3. Income from foreign exchange (foreign currency and gold) buying, selling, and trading activities;

4. Income from payment services, information, and treasury;

5. Fees and charges as prescribed by law;

6. Income derived from equity contributions to special enterprises;

7. Other income;

Article 13. The State Bank shall have the following expenditure items:

1. Expenditure on business activities and banking services:

a) Payment of interest on deposits, interest on loans; expenditure on foreign exchange buying, selling, and trading activities; expenditure on open market operations;

b) Costs for printing, minting, storage, protection, transportation, delivery, issuance, recall, replacement, and destruction of currency; costs for payment and information services; other costs for business activities;

c) Expenditure on anti-money laundering activities;

2. Expenditure for civil servants, employees, and contractual staff of the State Bank, including:

a) Salary and allowances according to the salary system prescribed by the State for civil servants; supplementary income under the quota mechanism;

b) Monthly lunch expenses, capped at the minimum wage prescribed for state civil servants;

c) Uniforms and labor protective equipment expenses;

d) Rewards, periodic and extraordinary welfare expenses for civil servants and employees of the State Bank; the annual expense for these two items shall equal the total payroll implemented in the year;

3. Contributions based on salary (trade union fees, social insurance, health insurance, and other contributions as prescribed), expenditure for mass organizations' activities;

4. Hardship allowances and termination benefits as prescribed by law;

5. Expenditure for management and public service activities, including: office supplies costs; postal and telecommunications costs; electricity, water, health, and sanitation costs; fuel costs; travel expenses; reception, ceremonial, conference costs; costs for auditing and inspecting the State Bank's activities; training, vocational education, scientific research, technological innovation costs; costs for literature, books, magazines, libraries, propaganda, advertising, and other public service activities and management;

6. Expenditure on assets:

a) Depreciation of fixed assets;

b) Maintenance and repair costs of assets; purchase and supply costs of tools; asset rental costs;

c) Liquidation costs of assets;

7. A contribution of 12% of the average annual value of fixed assets to develop technical and banking technology; this expenditure shall continue until the State Bank has sufficient statutory capital as prescribed in Article 8 of this Regulation;

8. Reward expenditure for outstanding contributions to the State Bank's activities by collectives and individuals in various sectors; the maximum expenditure shall be equivalent to one month of the average annual salary;

9. Expenditure from the state budget allocated according to the prescribed system;

10. Expenditure for establishing risk reserves as prescribed in Article 9 of this Regulation;

11. Expenditure on equity contribution activities in special enterprises (excluding the portion of equity contribution);

12. Other expenditures as prescribed by law;

Article 14. Regarding the mechanism for allocating operating funds for the State Bank;

1. Principles for allocating operating funds:

a) Determining the allocation level for the State Bank's expenditure items, excluding those specified in Clause 1, Clause 6, Sub-clause a, Clause 7, Clause 8, Clause 9, Clause 10, and Clause 11 of Article 13 of this Regulation, based on the staffing levels of the State Bank, current government spending standards, the previous year's implementation situation, the annual increase in the consumer price index (CPI), and any unexpected expenditures (if any);

b) Allocate a portion of the revenue-expenditure differential of the State Bank to supplement the budgeted funds.

c) The portion of funds saved from implementing cost allocation and extracted from the revenue-expenditure surplus of the State Bank shall be used to supplement income for State Bank staff at a maximum level not exceeding 0.8 times the actual salary and allowances implemented in the year, and used for other purposes according to the guidance of the Ministry of Finance.

The Governor of the State Bank decides on the distribution of income based on results and quality of work completion by officials, civil servants, employees, and workers in accordance with principles of fairness and reasonableness, linking income to work effectiveness.

d) The Ministry of Finance guides the mechanism for cost allocation and determines the level of management cost allocation for each period of three years or more, divided by year.

2. Adjustment of the level of allocated operating expenses:

a) During the implementation period of the cost allocation plan, starting from the second year, the State Bank is allowed to adjust the allocation level of the year according to the principle:

- For expenditures on officials and civil servants (salary, allowance, lunch, welfare rewards, contributions according to salary...), they are re-determined based on the current year's general minimum wage level and the number of authorized personnel assigned;

- Other expenditures are adjusted, with a maximum increase equal to the Consumer Price Index (CPI) increase announced by the General Statistics Office;

- The State Bank is responsible for readjusting the aforementioned allocation level and reporting to the Ministry of Finance for management and monitoring.

- The State Bank must report and request the Ministry of Finance to adjust the cost allocation plan in the following cases:

- Due to the addition of functions and tasks according to the decision of the authorized authority;

- Due to natural disasters, enemy actions, and other objective reasons;

- When the revenue-expenditure surplus realized decreases by 20% or more compared to the plan due to the implementation of national monetary policy.

Article 15. The State Bank has the responsibility to record fully, accurately, and promptly all revenues and expenditures in accordance with the provisions of the accounting and statistical laws. Revenues and expenditures of the State Bank are recorded according to the accrual accounting principle. Foreign currency and gold expenditures must be converted into Vietnamese Dong according to the exchange rate ratio specified by the State Bank at the time of transaction occurrence.

Article 16. The annual revenue-expenditure surplus of the State Bank, after deducting the portion of allocated costs on the revenue-expenditure surplus under the cost allocation mechanism, shall be handled as follows:

1. Establishing a fund for implementing national monetary policy: The amount established is 20% of the annual revenue-expenditure surplus.

2. Establishing a financial reserve fund: The amount established is 10% of the annual revenue-expenditure surplus.

3. Contributing to international organizations that the State Bank represents for the Government of Vietnam (if there is any occurrence during the fiscal year).

4. The remaining amount is submitted to the state budget.

The submission to the state budget is carried out quarterly through provisional payment; the provisional payment amount equals 60% of the actual revenue-expenditure surplus of the quarter, the remainder will be submitted to the state budget after the annual financial settlement report has been approved by the Governor of the State Bank. In case of necessity, the Ministry of Finance may request the State Bank to provisionally pay a higher amount than 60% of the actual revenue-expenditure surplus of the quarter, ensuring that the total provisional payment for the year does not exceed the annual revenue-expenditure surplus required to be paid.

Chapter IV

BUDGET AND REPORTING OF REVENUE AND EXPENDITURE

Article 17. The fiscal year of the State Bank begins on January 1 and ends on December 31 of the Gregorian calendar year.

Article 18. The annual budget revenue and expenditure plan of the State Bank is prepared, sent to the Ministry of Finance for review and consolidation into the state budget estimate according to the provisions of the State Budget Law.

The State Bank implements accounting records and voucher systems in accordance with the provisions of the accounting and statistical laws.

Article 19. The annual final financial revenue and expenditure report is prepared according to the guidance of the Ministry of Finance, approved by the Governor of the State Bank and submitted to the Ministry of Finance no later than February 15 each year.

The auditing and verification of the annual final financial report of the State Bank is conducted by the National Audit Office. The audit results are reported to the National Assembly, the Prime Minister, and notified to the Ministry of Finance.

Chapter V

IMPLEMENTATION

Article 20. The Ministry of Finance coordinates with the State Bank to guide the implementation of this Regulation./.