Circular No. 136/NH-TT guiding the implementation of special measures for mobilizing savings deposits and lending interest rates of the State Bank.

CIRCULAR

Guidelines for Implementing Special Measures to Mobilize Savings Deposits and Loan Interest Rates

of the State Bank

Pursuant to Decision No. 119-HĐBT dated October 4, 1986 of the Council of Ministers on special measures to mobilize savings deposits and expand credit of the Bank, the State Bank hereby provides guidance as follows:

I- INTEREST RATES AND INSURANCE ON SAVINGS DEPOSITS

As of October 1, 1986, the following shall be implemented:

1. The Council of Ministers assigns the Chairmen of People's Committees of provinces, cities, and special zones to select specific goods for calculating insurance on savings deposits based on retail prices, ensuring that depositors receive an equivalent amount of goods when withdrawing their money as they had converted at the time of deposit. Localities should choose commonly available goods in the market for conversion (such as rice, paddy, agricultural products, foodstuffs, construction materials, etc.) and only select one easily monitored item with simple price difference calculations at each period end.

Savings deposits with insurance not specified for a term shall enjoy a monthly interest rate of 2% (two percent per month) calculated on the amount deposited.

Those who have deposited savings under the insurance scheme by converting to paddy for terms from six months to twelve months may now switch to the new conversion method.

Open account number 127 "Insurance Payment Due" to record the amount payable for insurance on savings deposits.

2. In the immediate future, the interest rates for savings deposits without insurance shall be as follows:

a) Unspecified-term savings deposits 6%/month.

b) Long-term savings deposits for three years 7%/month.

c) Long-term savings deposits for five years 8%/month.

Specifically, savings deposits of elderly individuals placed in the Pension Fund shall enjoy an interest rate of 8%/month.

These types of savings deposits shall accrue and pay interest monthly. If depositors do not collect monthly interest, the Pension Fund will automatically compound the interest into the principal every quarter (three months).

By the end of September 1986, local Pension Funds shall calculate and pay interest to depositors at the old interest rate levels. For those who do not collect their interest, it will be compounded into the principal according to the above regulations.

II- ADJUSTMENT OF LOAN INTEREST RATES FOR THE SOCIALIST SAVINGS FUND

Simultaneously with raising deposit interest rates, the Governor of the State Bank instructs Branch Governors of the State Bank and Directors of Socialist Savings Funds in provinces, cities, and special zones to calculate and adjust loan interest rates for specific categories within the framework of the prescribed interest rate range, aiming to better serve production, people's livelihoods, and ensure the implementation of economic accounting and socialist business operations of the Savings Fund.

The loan interest rate for developing family economies, addressing difficulties in work tools, living conditions, and housing for workers, civil servants, cooperative members, and working-class citizens ranges from 6.6% to 7.5%/month.

The loan interest rate for small-scale industrial production cooperatives, transportation, construction, and service organizations ranges from 7.5% to 8.4%/month.

The loan interest rate for individual agricultural, forestry, fishery, and small-scale industrial producers ranges from 7.5% to 9%/month.

The loan interest rate for private households permitted to engage in production and business services in cities, towns, and townships ranges from 8.4% to 10.2%/month.

The loan interest rate from 6.6% to 7.5%/month applies to agencies, schools, research institutes, and military units capable of utilizing labor, land, and research facilities to produce products, recover capital, and generate profits.

The loan interest rate from 8.1% to 9%/month applies to state-owned and collective economic organizations with urgent needs not yet included in plans or contracts with the State Bank. From now on, normal loans for purchasing and selling cooperatives will be handled by State Bank branches according to credit regulations for collective economies. When there are urgent needs, purchasing and selling cooperatives can also borrow from the Savings Fund as in the cases mentioned above. Loans to meet urgent capital needs will be made individually, with repayment periods agreed upon flexibly, conveniently, and easily, without strictly adhering to established credit procedures.

The loan interest rate for continuing capital for credit cooperatives in operation and paid to credit cooperatives with funds deposited in the Savings Fund is 6.6%/month.

Adjustments according to the aforementioned interest rate framework must be reported and approved by the Chairman of the People's Committee of the province, city, or special zone before being announced and implemented locally.

For cases where loans were taken out at the old interest rates but have not been fully repaid, the remaining amount shall be repaid at the new interest rate from the date of the announcement of the interest rate adjustment.

The Director of the Central Socialist Savings Fund is responsible for guiding, inspecting, and implementing this Circular.