Decision No. 135/1998/QD-NHNN on the ratio and structure of mandatory reserves for banks and credit institutions.

Pursuant to …;

On the ratio and structure of mandatory reserves for banks and credit organizations

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to the Ordinance on the State Bank of Vietnam and the Ordinance on Banks, Credit Cooperatives and Finance Companies promulgated by Decree No. 37/LCT-HĐNN8 and Decree No. 38/LCT-HĐNN8 dated May 24, 1990 of the Chairman of the Council of Ministers of the Socialist Republic of Vietnam;

Pursuant to the Government Decree No. 15/CP dated March 2, 1993 on the tasks, powers, and responsibilities of state management of ministries and ministerial-level agencies;

At the proposal of the Director of the Economic Research Department:

DECISION:

Article 1. The ratio of mandatory reserves for banks and credit organizations is 10% of the total amount of deposits specified in Article 11 of the Regulation on Mandatory Reserves for Banks and Credit Organizations issued together with Decision No. 396/1997/QĐ-NHNN1 dated December 1, 1997 of the Governor of the State Bank of Vietnam. Time deposits subject to mandatory reserves are those with terms under 12 months.

Article 2. The structure of mandatory reserve funds includes demand deposits at the State Bank of Vietnam and cash and banknotes still within their payment period kept in the vaults of banks and credit organizations:

2.1. The mandatory reserve funds of banks and credit organizations deposited in demand deposit accounts at the State Bank of Vietnam must be at least 70% of the total mandatory reserve funds of the banks and credit organizations.

2.2. Cash and banknotes still within their payment period kept in the vaults of banks and credit organizations may be counted as mandatory reserve funds up to a maximum of 30% of the total mandatory reserve funds of the banks and credit organizations. In cases where the average actual cash and banknotes still within their payment period kept in the vaults of banks and credit organizations exceed 30% of the mandatory reserve funds, only 30% will be counted. If the average actual cash and banknotes still within their payment period kept in the vaults of banks and credit organizations are less than 30% of the mandatory reserve funds, the actual amount will be counted, and the shortfall must be correspondingly increased and deposited in the mandatory reserve fund account at the State Bank of Vietnam.

Article 3. The State Bank of Vietnam pays interest on the portion of mandatory reserve funds of banks and credit organizations deposited in demand deposit accounts at the State Bank of Vietnam as follows:

For VND deposits: at 0.2% per month. For foreign currency deposits: at the interest rate for non-interest-bearing foreign currency deposits currently stipulated by the Governor of the State Bank of Vietnam for foreign currency deposits of credit organizations at the State Bank of Vietnam.

Article 4. The State Bank of Vietnam imposes penalties on the shortfall of mandatory reserve funds of banks and credit organizations during the reserve maintenance period as follows:

For the shortfall of mandatory reserve funds in VND during the maintenance period, the penalty rate is 200% of the rediscount rate published by the State Bank of Vietnam for each period, calculated on the entire shortfall for the maintenance period. For the shortfall of mandatory reserve funds in foreign currencies during the maintenance period, the penalty rate is 200% of the ceiling lending rate in US dollars for economic organizations stipulated by the Governor of the State Bank of Vietnam for each period, calculated on the entire shortfall for the maintenance period.

Article 5. Commercial joint-stock rural banks are exempt from maintaining mandatory reserves.

Article 6. This Decision takes effect from April 1, 1998 and applies to calculate the mandatory reserve maintenance period for April 1998. This Decision replaces Decision No. 397/1997/QĐ-NHNN1 dated December 1, 1997 of the Governor of the State Bank of Vietnam.

Article 7. The Chief of the Governor's Office, the Inspector General, Heads of units under the Central State Bank, Governors of Provincial and Municipal Branches of the State Bank of Vietnam, General Directors (Directors) of banks and credit organizations are responsible for implementing this Decision.