Circular No. 08/2011/TT-NHNN detailing credit for rice export business pursuant to Government Decree No. 109/2010/NĐ-CP dated November 4, 2010

CIRCULAR

Detailed regulations on credit for rice export business pursuant to

Decree No. 109/2010/NĐ-CP dated November 4, 2010 of the Government

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Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Organizations No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Decree No. 109/2010/NĐ-CP dated November 4, 2010 of the Government on rice export business;

After reaching consensus with the Ministry of Finance, the Ministry of Agriculture and Rural Development, and the Ministry of Industry and Trade, the State Bank of Vietnam hereby provides detailed guidance on implementing credit for rice export business under Decree No. 109/2010/NĐ-CP dated November 4, 2010 of the Government on rice export business (hereinafter referred to as Decree No. 109/2010/NĐ-CP) as follows:

Article 1. Scope of Application

This Circular stipulates the lending activities of commercial banks to traders for rice export business of all types (hereinafter collectively referred to as rice commodities).

Article 2. Applicability

1. Lending bank: includes commercial banks established and operating in accordance with the Law on Credit Institutions that implement lending for rice commodity export business in accordance with this Circular and relevant laws.

2. Borrower customers at commercial banks include traders engaged in rice commodity export business in compliance with the Law on Commerce and Article 3 of Decree No. 109/2010/NĐ-CP.

Article 3. Lending for Rice Export Business

1. Commercial banks shall proactively balance and ensure funding sources for lending to traders engaged in rice commodity export business according to the planned allocation as prescribed in Decree No. 109/2010/NĐ-CP.

2. The lending by banks to traders for rice commodity export business shall be carried out in accordance with current regulations on lending by credit institutions to customers.

3. Traders borrowing funds for rice commodity export business, in addition to meeting the current loan conditions, must also obtain from the Ministry of Industry and Trade a Certificate of Eligibility for Rice Export Business in accordance with Article 6 of Decree No. 109/2010/NĐ-CP.

4. In cases where traders have not obtained a Certificate of Eligibility for Rice Export Business since the effective date of Decree No. 109/2010/NĐ-CP, they may still borrow funds from banks for rice export business in accordance with the transitional provisions set forth in Article 28 of Decree No. 109/2010/NĐ-CP.

Article 4. Lending for Price Stabilization of Rice Commodities for Export to Serve Rice Export Management as Directed by the Prime Minister

In cases where the market price of rice commodities is lower than the directed price, commercial banks shall lend funds to traders for purchasing rice in accordance with directives from the Prime Minister and guidelines from the State Bank of Vietnam during each period.

Article 5. Responsibilities of Commercial Banks and Units Under the State Bank of Vietnam

1. Responsibilities of Commercial Banks

- Proactively balance funding sources to ensure timely fulfillment of borrowing needs for eligible traders in rice business;

- Comply with legal regulations and guidelines from the State Bank of Vietnam regarding lending to traders for rice commodity export business to ensure domestic consumption stability and support exports;

- Report monthly, no later than the tenth day of the following month, on lending for rice commodity purchase for export and domestic consumption as per Appendix 1 attached to this Circular.

2. Responsibilities of Units Under the State Bank of Vietnam

a) Department of Credit

- Lead the implementation and coordinate with units under the State Bank of Vietnam to examine and handle issues arising from commercial banks' lending for rice commodity purchase;

- Aggregate results of lending for rice commodity purchase and report to the Governor upon request.

b) Department of Monetary Policy

Coordinate with the Department of Credit and other units under the State Bank to address concerns and difficulties faced by commercial banks, localities, organizations, and individuals in lending for rice export business.

c) Banking Inspection and Supervision Authority

Inspect and supervise commercial banks' lending for rice export business in accordance with current regulations.

d) Branches of the State Bank in provinces and cities

- State Bank branches in provinces and cities closely monitor lending for rice purchase in their areas. In cases of difficulties beyond their authority, banks shall report to the State Bank of Vietnam (Department of Credit) for consideration and resolution;

- Monthly aggregate and report on lending for rice commodity purchase for export and domestic consumption in their areas as per Appendix 2 attached to this Circular, no later than the tenth day of the following month.

Article 6. Implementation Organization

1. This Circular takes effect from May 22, 2011.

2. Documents becoming invalid: Circular No. 2311/NHNN-TD dated March 12, 2008 on balancing funding sources for rice purchase loans in 2008 and Circular No. 1671/NHNN-TD dated March 4, 2010 on ensuring funding for rice export in 2010.

3. The Head of the Office, Heads of the Credit Department, Heads of units under the State Bank of Vietnam, Governors of State Bank branches in centrally governed provinces and cities; Boards of Directors and General Managers (Directors) of commercial banks are responsible for implementing this Circular./.