Decision No. 108/QD-NH on the issuance of the Compulsory Reserve Ratio Regulations for Credit Institutions

Pursuant to …;

Regarding the issuance of the "Regulation on Compulsory Reserves for Credit Institutions"

GOVERNOR OF THE STATE BANK OF VIETNAM

- Based on the Law on the Council of Ministers dated July 4, 1981;

- Based on the Ordinances on the State Bank of Vietnam and the Ordinance on Banks, Cooperative Credit and Financial Companies under numbers 37/LTC-HDNN8 and 38/LTC-HDNN dated May 24, 1990;

Pursuant to Decree No. 196/HĐBT dated December 11, 1989 of the Council of Ministers stipulating the tasks, powers, and responsibilities of state management of Ministries;

At the proposal of the Director of the Department of Banks and Credit Institutions of the State Bank of Vietnam,

DECISION:

Article 1: The attached decision hereby promulgates the "Regulation on Compulsory Reserves for Credit Institutions."

Article 2: This Decision shall take effect from the date of signing.

Article 3: Matters arising from the old mechanism related to the implementation of compulsory reserves shall be handled according to separate regulations.

Article 4: The Director of the Department of Banks and Credit Institutions, the Directors of relevant Departments of the State Bank of Vietnam shall guide the implementation of this regulation.

Article 5: The Heads of the Office, the Inspectorate, units under the Central State Bank of Vietnam, Branch Governors of the State Bank of Vietnam in provinces and cities, General Directors of State-owned Commercial Banks and Investment and Development Banks; Chairmen of Management Boards of non-state-owned credit institutions shall implement this decision./.

REGULATION

COMPULSORY RESERVES FOR CREDIT ORGANIZATIONS

(Issued pursuant to Decision No. 108/QĐ-NH5 dated June 9, 1992)
of the Governor of the State Bank)

Article 1: Credit institutions must maintain a compulsory reserve amount on their accounts opened at the State Bank of Vietnam.

Article 2:

2.1. Compulsory reserves apply to all credit institutions in Vietnam (including foreign bank branches and joint venture banks) that mobilize deposits in Vietnamese dong.

2.2. Credit institutions that mobilize foreign currency deposits will implement compulsory reserves according to separate regulations issued by the Governor of the State Bank of Vietnam.

Article 3: Based on monetary policy at each period, the Governor of the State Bank of Vietnam announces the compulsory reserve ratio from 10% to 35% of total deposits at credit institutions. The compulsory reserve amount within this limit shall not exceed 35%, and any amount above this limit will be paid interest by the State Bank of Vietnam.

Article 4: The Regulation on Compulsory Reserves does not apply to credit institutions placed in conservation or bankruptcy status.

Article 5: The amount of compulsory reserves is calculated monthly based on the compulsory reserve ratio specified in Article 3 of this regulation on the average total deposits of customers at credit institutions in the previous month.

Article 6: The compulsory reserve account is opened at the State Bank of Vietnam's Trading Department or Branch where the credit institution has its main deposit account.

Article 7: On the 20th of each month, the State Bank of Vietnam's Trading Department or Branch where the credit institution has its main deposit account shall, based on the report of the credit institution:

a) Check the reported data, calculate the compulsory reserve amount to be implemented in that month, and notify the credit institution.

b) Compare the balance of the compulsory reserve account with the compulsory reserve amount to be implemented in that month and handle it according to Article 8 below.

Article 8: The State Bank of Vietnam's Trading Department and Branches handle excess or insufficient compulsory reserves as follows:

a) In case of excess, transfer the excess amount from the compulsory reserve account to the main deposit account of the credit institution.

b) In case of insufficiency, transfer the insufficient amount from the main deposit account to the compulsory reserve account of the credit institution; if the balance of the main deposit account is insufficient, the credit institution must make up the shortfall in cash or borrow.

Article 9: Reporting, summarizing, and analyzing compliance with compulsory reserves:

9.1. By the 15th of each month, credit institutions must submit a calculation of the compulsory reserve amount for that month to the State Bank of Vietnam where they have their main deposit account.

9.2. By the 25th of each month, the State Bank of Vietnam's Branches in provinces and cities, and Trading Departments shall submit a consolidated report on the compliance with compulsory reserves in the previous month of credit institutions under their jurisdiction to the Central State Bank of Vietnam (Department of Banks and Credit Institutions).

9.3. The Department of Banks and Credit Institutions shall compile the monthly situation of compulsory reserves and report it to the Governor of the State Bank of Vietnam.

Article 10: Credit institutions have the right to appeal to the State Bank of Vietnam regarding decisions on handling compliance with compulsory reserves that are deemed unsatisfactory. During the time of unresolved appeals, credit institutions must still comply with the decisions of the State Bank of Vietnam.

Article 11: Handling Violations

All violations of this regulation shall be dealt with according to the penalty regulations for violations issued by the Governor of the State Bank of Vietnam.

Article 12: Any amendments or supplements to the provisions of this regulation shall be decided by the Governor of the State Bank of Vietnam.