Law Amending and Supplementing Certain Articles of the Law on the State Bank of Vietnam No. 10/2003/QH11

LAW

Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam

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Pursuant to the Constitution of the Socialist Republic of Vietnam in 1992, amended and supplemented by Resolution No. 51/2001/QH10 dated December 25, 2001 of the National Assembly, tenth session;

This Law amends and supplements certain provisions of the Law on the State Bank of Vietnam dated December 12, 1997.

Article 1. Amending and supplementing certain provisions of the Law on the State Bank of Vietnam:

1- Article 9 is amended and supplemented as follows:

"Article 9. Interpretation of Terms

In this Law, the following terms shall be understood as follows:

1. Currency is a means of payment, including banknotes, coins, and negotiable instruments such as money.

2. Money market is a short-term capital market where short-term negotiable instruments are bought and sold, including treasury bills, State Bank bills, deposit certificates, and other negotiable instruments.

3. Banking activities are currency trading and banking service operations with the regular content of receiving deposits and using these funds to provide credit and supply payment services.

4. Open market operation is a short-term purchase and sale of negotiable instruments conducted by the State Bank on the money market to implement national monetary policy.

5. Required reserve is the amount of money that credit organizations must deposit at the State Bank to implement national monetary policy.

6. Foreign exchange includes foreign currency, international standard gold, negotiable instruments, and foreign currency payment instruments.

7. Foreign exchange activities include investment, borrowing, lending, guarantee, buying, selling, and other transactions involving foreign exchange.

8. Exchange rate is the ratio between the value of the Vietnamese dong and the value of foreign currency.

9. International reserves are state foreign exchange reserves managed by the State Bank and foreign exchange reserves of credit organizations permitted to engage in foreign exchange activities.

10. Refinancing is a form of secured credit provided by the State Bank to supply short-term funds and payment means to banks.

11. Re-lending according to credit files is a form of refinancing by the State Bank for banks that have lent to customers.

12. Base interest rate is the interest rate announced by the State Bank as the basis for credit organizations to determine business interest rates.

13. Refinancing interest rate is the interest rate applied by the State Bank when providing refinancing.

14. Rediscount interest rate is a form of refinancing interest rate applied when the State Bank rediscounts commercial bills and other negotiable instruments for credit organizations.

15. Short-term negotiable instrument is a negotiable instrument with a term of less than one year.

16. Long-term negotiable instrument is a negotiable instrument with a term of one year or more from issuance to maturity.

17. Short-term purchase and sale is the purchase and sale of negotiable instruments with a term of less than one year."
2- Article 17 is amended and supplemented as follows:
"Article 17. Forms of State Bank Refinancing The State Bank implements refinancing for banks through the following forms:

1. Re-lending according to credit files;

2. Discounting and rediscounting of commercial bills and other negotiable instruments;

3. Secured loans with collateral of commercial bills and other negotiable instruments."
3- Article 21 is amended and supplemented as follows:

Article 21. Open Market OperationsThe State Bank shall conduct open market operations through the short-term purchase and sale of Treasury bills, deposit certificates, State Bank bills, and other negotiable instruments in the money market to implement national monetary policy.

4- Article 32 is amended and supplemented as follows:

Article 32. Advance Payment for the State Budget

The State Bank shall provide advance payment to the central budget to address temporary shortages in the state budget fund according to the decision of the Prime Minister. This advance payment must be repaid within the fiscal year, except in special cases decided by the Standing Committee of the National Assembly.

Article 2

Remove the phrase "government agencies" from the name of Article 6 and Clause 1 of Article 6; replace the phrase "Ministry of Home Affairs" with the phrase "Ministry of Public Security" in Clause 2 of Article 28.

Article 3

1. This Law takes effect from August 1, 2003.

2. The Government shall provide detailed regulations and guidance on the implementation of this Law.

This Law was passed by the National Assembly of the Socialist Republic of Vietnam, the eleventh session, third meeting on June 17, 2003.