Circular No. 111/2003/TT-BTC guides the interest rate differential subsidy for loans under the Public Passenger Bus Transport Vehicle Investment Project in Ho Chi Minh City.

CIRCULAR

Guidelines for subsidizing interest rate differences for loans under the Public Passenger Transport Vehicle Investment Project using buses in Ho Chi Minh City

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Pursuant to Circular No. 91/TB-VPCP dated May 24, 2002 of the Government Office announcing the conclusions of Deputy Prime Minister Nguyen Tan Dung at a working session with the People's Committee of Ho Chi Minh City;

Pursuant to Circular No. 1124/CP-CN dated August 21, 2003 of the Government regarding the public passenger transport vehicle investment project using buses in Ho Chi Minh City.

The Ministry of Finance provides guidelines for the mechanism to subsidize interest rate differences for the project as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. The State budget (central budget) will subsidize the interest rate difference for loans under the public passenger transport vehicle investment project using buses in Ho Chi Minh City based on the actual loan interest rate compared to the preferential loan interest rate stipulated by the Prime Minister at 3% per annum. The source of the interest rate subsidy will be allocated within the annual state budget estimate.

2. The Ministry of Finance will directly subsidize the interest rate difference to the Urban Development Investment Fund of Ho Chi Minh City (the entity responsible for consolidating loans) on a six-month provisional basis; the official annual subsidy amount will be determined after the Urban Development Investment Fund’s settlement has been approved.

3. The People's Committee of Ho Chi Minh City is responsible for balancing and allocating the subsidy budget to assist the investor in repaying the loan according to the schedule; Directing the Urban Development Investment Fund to develop and approve the additional subsidy plan for the year, report to the Ministry of Planning and Investment and the Ministry of Finance for the basis of interest rate subsidy.

4. The Urban Development Investment Fund of Ho Chi Minh City will directly receive the interest rate subsidy from the state budget and distribute it to participating organizations according to their share of the consolidated loan.

II. SPECIFIC PROVISIONS

1. Developing the Interest Rate Subsidy Plan

1.1. Procedure for developing, compiling, and announcing the plan

- Based on the progress of implementing the project, the loan plan, debt recovery plan, and anticipated loan interest rates for the planning year, the Urban Development Investment Fund will develop the interest rate subsidy plan for the planning year to be submitted to the People's Committee of Ho Chi Minh City for reporting to the Ministry of Planning and Investment and the Ministry of Finance (attached with Form 01/CBCLLS) before September 15 each year.

- On the basis of the proposal of the People's Committee of Ho Chi Minh City and the budget balance capacity of the state budget, the Ministry of Planning and Investment and the Ministry of Finance will coordinate to balance the overall budget in the annual state budget estimate and report to the Government for consideration and approval by the National Assembly.

- Based on the approved state budget estimate, the Ministry of Finance will notify the interest rate subsidy plan to the People's Committee of Ho Chi Minh City, and simultaneously send it to the Urban Development Investment Fund.

1.2. Method for calculating the subsidy plan

The annual interest rate subsidy plan is determined according to the following formula:

Determination method:

(1) Average loan balance in the planning year = (beginning year balance + end year balance)/2.

(2) Loan interest rate in the planning year equals the arithmetic average of the expected 12-month deposit interest rate of four state-owned commercial banks in Ho Chi Minh City (Vietcombank Ho Chi Minh City, VietinBank Ho Chi Minh City, Agribank Ho Chi Minh City, BIDV Ho Chi Minh City) plus (+) management fee of 1.2% per annum.

(3) The preferential loan interest rate stipulated by the Prime Minister is 3% per annum.

2. Implementing the Interest Rate Subsidy

2.1. Principles of Subsidization

- The Ministry of Finance will directly subsidize the interest rate difference to the Urban Development Investment Fund of Ho Chi Minh City. The subsidy amount is determined based on the interest rate difference and the actual average loan balance of the project.

- The subsidy will be provided on a provisional six-month basis, equivalent to 75% of the interest rate difference subsidy generated during the period. At the end of the year, the Ministry of Finance will determine the official annual subsidy amount for adjustment and supplementary payment.

- The central government's subsidy interest rate adjustment schedule will align with the loan repayment schedule committed by the People's Committee of Ho Chi Minh City.

- The interest rate subsidy calculation period for each loan is the actual loan period within the limit set by the Urban Development Investment Fund and not exceeding 10 years.

2.2. Method for Calculating the Subsidy

- The subsidy amount for the period (six months, year) is calculated according to the following formula:

+ Actual average loan balance in the period = (total monthly average loan balance)/number of months with loan balance in the period.

+ Monthly average loan balance = (beginning-of-month loan balance + end-of-month loan balance)/2.

(2) Loan interest rate is determined annually, equal to the arithmetic average of the 12-month deposit interest rate of four state-owned commercial banks in Ho Chi Minh City plus (+) management fee of 1.2% per annum. The six-month loan interest rate is determined based on the conversion of the 12-month deposit interest rate and the management fee for the year.

In case state-owned commercial banks collect funds with varying interest rates, the deposit interest rate of each bank is determined by the arithmetic average of the 12-month deposit interest rate in the period for that bank.

(3) The preferential loan interest rate for the project is 3% per annum. The six-month preferential loan interest rate is determined based on the conversion from the annual preferential loan interest rate.

2.3. Procedure for Subsidization

a) Provisional subsidy for six months

- Before July 15, based on data on loan disbursement, debt collection, loan balance, and interest rate difference subsidy generated in the first six months of the year, the Urban Development Investment Fund will report to the People's Committee to issue a letter requesting the Ministry of Finance (attached with Form 02/CBCLLS) to subsidize the interest rate difference.

- Based on the request of the People's Committee of Ho Chi Minh City, the Ministry of Finance will review and decide on the interest rate difference subsidy for the six-month period according to the principles stated in Point 2.1, Section 2, Part II of this Circular.

b) Annual subsidy

- On the proposal of the People's Committee of Ho Chi Minh City, the Ministry of Finance shall examine and decide on the number of interest rate differential subsidies for six months in accordance with the principle stated in Point 2.1, Section 2, Part II of this Circular.

b) Annual subsidy

- At the end of the fiscal year, based on the officially approved final settlement figures by the Management Board, the Ho Chi Minh City Urban Development Investment Fund determines the official annual subsidy amount, and reports to the People's Committee of Ho Chi Minh City with a request letter sent to the Ministry of Finance (attached with Form 02/CBCLLS).

- Based on the annual subsidy plan allocated in the state budget expenditure estimate; based on the request of the People's Committee of Ho Chi Minh City and related documents, the Ministry of Finance reviews and decides the official annual subsidy amount; it offsets the interim subsidy granted for the first six months of the year and supplements the remaining portion.

c) Allocation of the interest rate subsidy difference

Based on the subsidy amount received during the period (six months, year) and the ratio of joint capital provided by credit institutions, the Ho Chi Minh City Urban Development Investment Fund calculates and determines the subsidy level enjoyed by each unit and pays to participating units.

3. Handling the difference between the official subsidy amount and the planned subsidy amount

The difference between the official subsidy amount and the planned subsidy amount will be handled as follows:

- If the official annual interest rate subsidy difference exceeds the amount allocated in the announced plan, the Ministry of Finance will allocate additional funds for supplementation in the following year.

- If the official annual interest rate subsidy difference is lower than the amount allocated in the plan, the excess amount will be retained for subsidy in the following year (in case the following year still generates a subsidy difference) or refunded to the state budget (in case the following year does not generate a subsidy difference).

4. Reporting and Settlement

4.1. Quarterly, the Urban Development Investment Fund reports to the Ministry of Finance, the Ministry of Planning and Investment, and the People's Committee of Ho Chi Minh City on the implementation of lending, debt collection, outstanding debts, and the projected interest rate subsidy difference for the quarter (according to Form 03/CBCLLS).

4.2. Annually, the Urban Development Investment Fund reports and settles accounts with the People's Committee of Ho Chi Minh City and the Ministry of Finance regarding the receipt and use of the interest rate subsidy capital for projects.

III. IMPLEMENTATION

1. This Circular takes effect fifteen days from the date of publication in the Official Gazette.

2. The Chairman of the People's Committee of Ho Chi Minh City, the Director of the Ho Chi Minh City Urban Development Investment Fund, and the heads of relevant units are responsible for implementing this Circular./.