Decision No. 108/2006/QĐ-TTg On the establishment of the Vietnam Development Bank

 Pursuant to …;

Regarding the establishment of the Vietnam Development Bank

PRIME MINISTER

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

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

Pursuant to the Law on Credit Organizations dated December 12, 1997, and the Law Amending and Supplementing Certain Provisions of the Law on Credit Organizations dated June 15, 2004;

Pursuant to Resolution No. 06/2006/NQ-CP dated May 4, 2006 of the Government on the regular meeting of the Government in April 2006;

Considering the proposal of the Minister of Finance.

Pursuant to …;

Article 1. Establish the Vietnam Development Bank (hereinafter referred to as the Development Bank) based on restructuring the Development Support Fund (established pursuant to Decree No. 50/1999/NĐ-CP dated July 8, 1999) to implement the State's investment credit development policy and export credit policy.

International trade name: The Vietnam Development Bank

Abbreviation: VDB

The Development Bank has legal personality, registered capital, a seal, and is entitled to open accounts at the State Bank, the National Treasury, domestic and foreign commercial banks, participate in the payment system with other banks, and provide payment services in accordance with the law. The Development Bank inherits all rights and obligations from the Development Support Fund.

Article 2The activities of the Development Bank are not for profit purposes, the required reserve ratio is 0% (zero percent), and it is exempt from deposit insurance participation.

The Government guarantees the payment capacity of the Development Bank and exempts it from taxes and state budget contributions in accordance with the law.

The registered capital of the Development Bank is 50,000 billion VND (fifty thousand billion VND) from the existing registered capital of the Development Support Fund.

Adjustments and supplements to the registered capital depend on specific requirements and tasks, ensuring the safety ratio of the Development Bank, and are subject to examination and decision by the Prime Minister.

The organization and operation of the Development Bank are regulated in this Decision and the Charter of Organization and Operation of the Development Bank approved by the Prime Minister.

The term of operation of the Development Bank is 99 years, starting from the date this Decision takes effect.

Article 3Sources of operating capital of the Development Bank:

1. Capital from the state budget

a) Registered capital of the Vietnam Development Bank;

b) Capital provided by the state budget for projects according to the annual plan;

c) ODA capital assigned by the Government.

2. Raised capital:

a) Issuing bonds and deposit certificates in accordance with the law;

b) Borrowing from Postal Savings, Social Insurance Fund, and financial and credit organizations both domestically and internationally.

3. Accepting entrusted deposits from organizations both domestically and internationally.

4. Voluntary contributions without repayment from individuals, economic organizations, financial and credit organizations, political and social organizations, associations, societies, and organizations both domestically and internationally.

5. Entrusted capital for disbursement and lending from local authorities, economic organizations, political and social organizations, associations, societies, organizations, and individuals both domestically and internationally.

6. Other sources of capital as prescribed by law.

Article 4. Functions and tasks of the Development Bank:

1. Mobilizing and receiving capital from domestic and foreign organizations to implement the State's investment credit development and export credit policies as stipulated by the Government.

2. Implementing the investment credit development policy:

a) Providing investment loans;

b) Post-investment support;

c) Guaranteeing investment credit.

3. Implementing the export credit policy:

a) Providing export loans;

b) Guaranteeing export credit;

c) Tender guarantee and performance guarantee for export contracts.

4. Accepting entrustment to manage ODA capital lent by the Government; accepting entrustment, disbursing loans, and recovering debts from customers through entrustment agreements between the Development Bank and entrusting organizations.

5. Entrusting financial and credit organizations to perform the bank’s credit operations.

6. Providing payment services to customers and participating in the domestic and international payment systems to serve the activities of the Development Bank in accordance with the law.

7. Implementing international cooperation tasks in the field of investment credit development and export credit.

8. Performing other tasks assigned by the Prime Minister.

Article 5. Organizational structure of the Development Bank:

1. The organizational structure of the Development Bank includes:

a) Board of Management;

b) Supervisory Board.

c) Administrative machinery including:

- Head office located in Hanoi, the capital city;

- Branches, Sub-branches, Representative offices both domestically and internationally.

The tasks, powers, and organizational structure of the Board of Management, Supervisory Board, and administrative machinery of the Development Bank shall be implemented in accordance with the Charter on Organization and Operation of the Development Bank approved by the Prime Minister.

2. The Development Bank organizes management and operational machinery in some provinces and centrally-administered cities in accordance with the requirements and scope of its activities, ensuring efficiency and streamlined operations.

Article 6. Deciding leadership positions in the Development Bank

1. The Prime Minister decides on the appointment and removal of members of the Board of Management and General Director upon the proposal of the Minister of Home Affairs, after consulting the Minister of Finance and relevant agencies.

2. The Board of Management decides on the appointment and removal of positions including Deputy General Directors, Chairperson of the Supervisory Board, and Chief Accountant.

3. The General Director appoints and removes the remaining positions in the Development Bank.

Article 7. The Prime Minister decides on the Financial Management Regulations of the Development Bank upon the proposal of the Minister of Finance..

Article 8. Responsibilities and powers of state agencies, local governments, and related organizations towards the Development Bank:

1. Ministry of Finance:

a) Submitting to competent authorities for issuance or issuing within its authority national investment credit development and export credit policies; guiding the implementation of the Financial Management Regulations of the Development Bank;

b) Submitting to the Prime Minister for decision-making on amendments and supplements to the Charter of Organization and Operation and the Financial Management Regulations of the Development Bank;

c) Supervise, inspect, and audit the activities of the Development Bank. Monitor the management and use of state capital and assets entrusted or delegated by the Ministry of Finance to the Development Bank for relending and debt recovery to repay the state budget;

d) Guide the implementation of accounting regulations of the Development Bank;

đ) Serve as the focal point for handling general and inter-departmental issues of the Development Bank before submitting them to the Prime Minister for decision;

2. The State Bank of Vietnam:

a) Guide the Development Bank in performing business operations related to development investment credit and export credit;

b) Supervise the Development Bank in performing business operations in accordance with the provisions of the law;

3. The Ministry of Planning and Investment

Perform tasks related to development investment credit and export credit according to their functions and authorities;

4. The Ministry of Trade

Perform tasks related to the state's export credit policy according to their functions and authorities;

5. The Ministry of Home Affairs:

a) Appraise the positions of the Chairman of the Management Board, members of the Management Board, and General Director of the Vietnam Development Bank before submitting them to the Prime Minister for appointment;

b) Guide the Development Bank in properly implementing personnel management and training policies and regulations;

6. The Ministry of Labor, Invalids and Social Affairs:

a) Guide the Development Bank in implementing labor policies and wage and allowance systems;

b) Inspect and supervise the Development Bank in implementing decisions of the Prime Minister regarding wage and allowance systems for employees of the Development Bank;

7. Other competent ministries and agencies

Other ministries and agencies shall manage the Development Bank according to their functions and authorities;

Article 9. This Decision takes effect fifteen days from the date of publication in the Official Gazette;

Article 10. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of People's Committees of centrally governed cities and provinces, Chairman of the Management Board and General Director of the Development Bank are responsible for implementing this Decision./.