Decision No. 131/QD-TTg On providing interest rate support to organizations and individuals borrowing from banks for production and business activities

Pursuant to …;

Regarding Support for Interest Rates for Organizations and Individuals Borrowing from Banks for Production and Business Operations

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PRIME MINISTER

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

Pursuant to the Law on the State Bank of Vietnam dated December 12, 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam dated June 17, 2003;

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

Pursuant to Resolution No. 30/2008/NQ-CP dated December 11, 2008 of the Government on Urgent Measures to Prevent Economic Downturn, Maintain Economic Growth, and Ensure Social Welfare;

Considering the proposal of the Governor of the State Bank of Vietnam, the Minister of Finance, and the Minister of Planning and Investment,

DECISION:

Article 1. In 2009, the State will support interest rates for organizations and individuals borrowing from banks for production and business operations, with the aim of reducing product costs, maintaining production and business activities, and creating jobs under the condition that the economy is affected by global financial crises and economic downturns.

Article 2. Scope of Application

2. Short-term loans in Vietnamese dong made pursuant to credit contracts signed and disbursed in 2009 by organizations (enterprises, cooperatives, cooperative groups, households, etc.) and individuals for working capital for production and business operations, which are reported according to the regulations of the State Bank of Vietnam on statistical reporting systems; excluding loans in sectors and fields listed in the Appendix attached to this Decision.

Article 3. Principles, Duration, Amount of Loan, and Level of Interest Rate Support

1. The principle of interest rate support is that commercial banks provide working capital loans for production and business operations through normal credit mechanisms and implement interest rate support in accordance with the regulations of the Prime Minister and the guidance of the State Bank of Vietnam; they may not refuse interest rate support if the loan falls within the scope of supported loans; they must report periodically to the State Bank of Vietnam for inspection and supervision of interest rate support.

2. The maximum duration for interest rate support is eight months for loans under credit contracts signed and disbursed during the period from February 1 to December 31, 2009.

3. The level of interest rate support for borrowers is 4% per annum, calculated based on the actual amount borrowed and the actual lending period within the time frame specified in Clause 2 of this Article; when collecting interest from borrowers, commercial banks deduct the amount of interest due to the borrower.

Article 4. Implementation

1. This Decision takes effect from the date of signature.

2. The State Bank of Vietnam shall take the lead and coordinate with the Ministry of Finance to guide and supervise the strict implementation of this Decision.

3. Responsibilities of Commercial Banks and Borrowers

a) For commercial banks:

- Implement interest rate support for borrowers in accordance with the regulations of the Prime Minister and the guidance of the State Bank of Vietnam;

- Within the first ten days of February 2009, submit registration papers and plans for interest rate support to the State Bank of Vietnam and immediately implement interest rate support for borrowers;

- Apply normal lending mechanisms and interest rates when signing credit contracts; at the end of the loan repayment period, commercial banks shall deduct the interest amount equivalent to 4% per annum based on the actual amount borrowed and the actual lending period occurring in 2009; commercial banks shall be reimbursed for the deducted interest amount from the State Bank of Vietnam based on quarterly reports;

- On the tenth day of the first month of each quarter, submit reports on the amount of interest rate support and register the amount of interest rate support for the next quarter to the State Bank of Vietnam.

b) Borrowers eligible for interest rate support shall submit requests for interest rate support to commercial banks where they borrow funds to receive interest rate support.

4. The Governor of the State Bank of Vietnam, Ministers, Heads of Ministries equivalent to Ministries, Heads of Agencies under the Government, Chairmen of Provincial People's Committees, Chairmen of Municipal People's Committees directly under the Central Government, Chairmen of Management Boards, and General Directors of commercial banks are responsible for implementing this Decision.