Circular No. 114/2014/TT-BTC guiding the interest rate subsidy for implementing credit policies under Decree No. 67/2014/NĐ-CP dated July 7, 2014 of the Government on certain policies to develop fisheries.

CIRCULAR

Guidelines for interest rate subsidies due to implementation of credit policies under Decree No. 67/2014/NĐ-CP dated July 7, 2014 of the Government on certain policies for fisheries development The Minister of Finance issues this Circular guiding interest rate subsidies due to implementation of credit policies for building new and upgrading fishing vessels as stipulated in Clause 1 and Clause 2, Article 4, and Clause 1, Article 8 of Decree No. 67/2014/NĐ-CP dated July 7, 2014 of the Government on certain policies for fisheries development.

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Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003, promulgated by the Government detailing and guiding the implementation of the Law on State Budget;

Pursuant to Decree No. 89/2015/ND-CP dated October 7, 2015 of the Government amending and supplementing certain articles of Decree No. 67/2014/ND-CP dated July 7, 2014 of the Government on some policies for developing fisheries;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Department of Banking and Financial Institutions;

This Circular guides the dossier, procedures, and processes for interest rate subsidies due to implementation of credit policies for building new and upgrading fishing vessels as stipulated in Clause 1, Article 4 of Decree No. 67/2014/NĐ-CP dated July 7, 2014 of the Government on certain policies for fisheries development and guidelines issued by the State Bank of Vietnam.

Commercial banks shall implement credit policies for building new and upgrading fishing vessels as stipulated in Clause 1, Article 4 of Decree No. 67/2014/NĐ-CP and guidelines issued by the State Bank of Vietnam.

Article 3. Conditions for receiving state budget interest rate subsidies

2. Loans eligible for interest rate subsidies are loans made to the correct borrowers and used for the intended purposes in accordance with the law, including:

1. Implementing credit policies for building new and upgrading fishing vessels in accordance with Clause 1, Article 4 of Decree No. 67/2014/NĐ-CP and guidelines issued by the State Bank of Vietnam.

1. Interest rate subsidy levels for commercial banks.

Article 5. Procedures for Interest Rate Subsidies

1. Preparing plans for interest rate subsidies.

a) Commercial banks shall prepare annual plans for interest rate subsidies according to the formula provided below:

- The interest rate subsidy level for the plan year shall be implemented according to Clause 1, Article 4 of this Circular.

Where:

- The average annual loan balance is calculated as the arithmetic mean between the beginning-of-year and end-of-year balances.

b) Each year, no later than July 31, commercial banks shall prepare annual plans for interest rate subsidies (divided into quarters) according to point a, Clause 1 of this Article; submit them to the Ministry of Finance (one copy), the Ministry of Planning and Investment (one copy), and the State Bank of Vietnam (one copy) for inclusion in the state budget estimate.

c) For the year 2014, based on the situation in the last months of the year, commercial banks shall compile reports to the Ministry of Finance to temporarily subsidize interest rates according to Clause 2 of this Article.

2. Temporary quarterly interest rate subsidies.

a) Within a maximum of 20 days from the date of receipt of quarterly reports on loan implementation and requests for temporary interest rate subsidies from commercial banks, the Ministry of Finance shall temporarily subsidize interest rates.

b) The amount of temporary quarterly interest rate subsidy is 95% of the interest rate subsidy amount generated in the previous quarter.

3. Settlement of interest rate subsidies.

In which: The interest rate subsidy level is stipulated in Clause 1, Article 4 of this Circular and is calculated in units of %/month; n is the number of days of the loan balance during the support period.

- The total amount subsidized is the sum of the actual interest amounts subsidized for all loans falling under the provisions of Decree No. 67/2014/NĐ-CP and guidelines issued by the State Bank of Vietnam.

- Commercial banks shall use the above formula to determine the annual interest rate subsidy amount to request state budget subsidies for the bank.

- Compile a comprehensive report on data for requesting settlement of interest rate subsidies for each loan audited independently or by the National Audit Office according to Appendix 01/BC attached to this Circular.

- A letter requesting the Ministry of Finance to settle interest rate subsidies, in which the amount requested for settlement does not exceed the figures confirmed by the auditing agency.

- Relevant documents (originals or certified copies stamped by the commercial bank) including: credit agreements, deeds, or equivalent documents to identify loan recipients, loan implementation status, balances, collections; tables of products to determine the interest subsidy amount; contracts for building new and upgrading fishing vessels. These documents are stored at the headquarters of the commercial bank for audit settlement purposes if necessary.

- The Chairman of the Board of Directors and General Director of commercial banks are responsible for the validity and accuracy of the settlement dossier and the data requested for state budget interest rate subsidies.

The Chairman of the Board of Directors and the General Director of commercial banks are responsible for the legality and accuracy of the settlement file and the figures proposed for state budget subsidies to cover interest rates.

- The actual interest amount subsidized for a loan is calculated using the method of summing up the products of the interest rate subsidy (divided by month) and the corresponding loan balance for the actual number of days, according to the following formula:

Not later than 120 days from the end of the fiscal year, commercial banks must prepare complete settlement files and submit to the Ministry of Finance a letter requesting settlement, reporting consolidated data on interest subsidy requests in accordance with point b, Clause 3 of this Article.

4. Audit the data for interest subsidy settlement requests.

a) Conduct the audit of the data for interest subsidy settlement requests.

The Ministry of Finance shall conduct the audit of the data for interest subsidy settlement requests of commercial banks within 60 days from the date of receipt of the settlement request letters for interest subsidies from commercial banks, and commercial banks must prepare complete settlement files in accordance with point b, Clause 3 of this Article.

b) Handling discrepancies in the data.

- In cases where there is a discrepancy between the requested settlement amount and the audited settlement amount by the Ministry of Finance, commercial banks shall adjust their accounting books for the settlement of interest subsidies according to the audited figures.

- The handling of discrepancies between the reviewed amount and the requested amount is carried out within forty-five days from the date the Ministry of Finance issues the approval notice for finalization.

- In cases where it is necessary to extend the time to handle discrepancies between the audited settlement amount and the requested settlement amount and other special cases, they shall be reviewed and decided by the Minister of Finance.

- If the state budget has temporarily subsidized interest rates to the bank at a higher amount than the audited settlement amount by the Ministry of Finance, the difference will be converted into a temporary advance for the following year or recovered and returned to the state budget.

c) Handling in cases where borrowers misuse loan funds: Upon discovering that borrowers have misused loan funds, commercial banks shall handle the situation in accordance with the law while returning the amount of interest subsidy received from the state budget for the misused portion of the loan (in cases where the state budget has provided interest subsidies) or excluding the misused portion of the loan from the outstanding loan balance proposed for state budget interest subsidies (in cases where the state budget has not yet provided interest subsidies).

Article 6. Reporting System

1. For quarterly reports.

Quarterly (no later than the 30th day of the first month of each quarter), commercial banks must submit quarterly reports on the results of new ship construction and vessel upgrade loans in accordance with Decree No. 67/2014/NĐ-CP to the Ministry of Finance and the State Bank of Vietnam in accordance with Appendix 02/BC attached to this Circular.

2. For annual reports.

Annually (no later than 90 days from the end of the fiscal year), commercial banks must submit annual reports on the results of new ship construction and vessel upgrade loans in accordance with Decree No. 67/2014/NĐ-CP to the Ministry of Finance and the State Bank of Vietnam in accordance with Appendix 03/BC attached to this Circular.

Article 7. Implementation Organization

1. This Circular takes effect from the date of signature and is applied from August 25, 2014.

2. During implementation, if any difficulties arise, they should be reported to the Ministry of Finance for consideration and resolution./.