Decision No. 145/2000/QD-TTg On the Issuance of the Financial Management Regulation for the Vietnam Deposit Insurance Corporation

DECISION OF THE PRIME MINISTER

Regarding the issuance of the Financial Management Regulation for the Vietnam Deposit Insurance Corporation

 

PRIME MINISTER

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

Pursuant to Decree No. 89/1999/NĐ-CP dated September 1, 1999 of the Government on deposit insurance;

Pursuant to Decision No. 218/1999/QĐ-TTg dated November 9, 1999 of the Prime Minister on the establishment of the Vietnam Deposit Insurance Corporation;

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

 

DECISION:

Article 1. This Decision promulgates the Financial Management Regulation for the Vietnam Deposit Insurance Corporation.

Article 2. This Decision takes effect fifteen days from the date of signature. Financial activities of the Vietnam Deposit Insurance Corporation arising before this Decision comes into force shall be adjusted according to the Regulation issued with this Decision.

Article 3. The Minister of Finance, the Chairman of the Board of Directors, and the General Director of the Vietnam Deposit Insurance Corporation are assigned to organize the implementation of this Decision.

Article 4. The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairmen of provincial People's Committees under the central government are responsible for implementing this Decision.

 

REGULATIONS

Financial management for the Vietnam Deposit Insurance Corporation

(Issued together with Decision No. 145/2000/QĐ-TTg dated December 19, 2000 of the Prime Minister)

PART I

GENERAL PROVISIONS

Article 1. This Regulation stipulates the financial management regime for the Vietnam Deposit Insurance Corporation established, organized, and operated pursuant to Decision No. 218/1999/QĐ-TTg dated November 9, 1999 of the Prime Minister.

Article 2. The Chairman of the Board of Directors and the General Director of the Vietnam Deposit Insurance Corporation are responsible to the Government for ensuring the safety of capital and assets, using capital, complying with financial, accounting, and auditing regulations as prescribed by law.

Article 3. The Ministry of Finance performs state management functions over finance, has the responsibility to guide and inspect the financial revenue and expenditure activities of the Vietnam Deposit Insurance Corporation.

Chapter II

CAPITAL AND ASSETS

Article 4. The operating capital of the Vietnam Deposit Insurance Corporation includes:

1. Charter capital of 10,000 billion VND provided by the State.

When there is a need to change the level of charter capital, the Chairman of the Board of Directors of the Vietnam Deposit Insurance Corporation reports to the Minister of Finance and the Governor of the State Bank of Vietnam for submission to the Prime Minister for decision.

2. Borrowed capital when permitted by the Prime Minister.

3. Legal capital contributions from organizations and individuals both within and outside the country (if any).

4. Differences arising from asset revaluation.

5. Operational reserve fund (from premium income).

6. Various funds: financial reserve fund, investment development fund, employment assistance reserve fund, reward fund, welfare fund.

7. Capital for basic construction and fixed asset purchases provided by the State (if any).

8. Other capital.

Article 5.The operational reserve fund is formed from annual premium income (after deducting the amount of premium added to the income of the Vietnam Deposit Insurance Corporation as stipulated in Article 12 of this Regulation).

The operational reserve fund is used to pay insurance money to depositors when participating organizations lose their ability to pay and have been officially ordered to cease operations by competent authorities. In cases where the capital of the Vietnam Deposit Insurance Corporation is insufficient to pay insurance to depositors, the Vietnam Deposit Insurance Corporation reports to the Ministry of Finance and the State Bank of Vietnam for submission to the Prime Minister for a resolution plan.

Article 6.

1. The Vietnam Deposit Insurance Corporation may use capital to serve its operations as prescribed in Decree No. 89/1999/NĐ-CP dated September 1, 1999 of the Government on deposit insurance and Decision No. 75/2000/QĐ-TTg dated June 28, 2000 of the Prime Minister approving the Charter on the organization and operation of the Vietnam Deposit Insurance Corporation. The use of capital by the Vietnam Deposit Insurance Corporation must ensure the principles of capital safety and development.

2. The Vietnam Deposit Insurance Corporation may purchase and invest in fixed assets serving its operations not exceeding 15% of its charter capital. Annual investments and purchases of fixed assets must comply with state regulations and within the approved annual plan.

3. The Vietnam Deposit Insurance Corporation may temporarily use idle capital for purposes as prescribed in Clause 8, Article 7 of Decision No. 75/2000/QĐ-TTg dated June 28, 2000 of the Prime Minister.

Article 7. Inventory taking and asset revaluation

1. The Vietnam Deposit Insurance Corporation conducts periodic annual inventory of existing assets and capital; accurately determines surplus, shortage, stagnant, deteriorated assets, causes, and responsibilities for handling them to serve as the basis for preparing financial statements.

2. The Vietnam Deposit Insurance Corporation conducts inventory and revaluation of assets according to the decision of the competent state authority.

3. Inventory and revaluation of assets must comply with legal provisions. Increases or decreases in value due to asset revaluation are recorded as increases or decreases in the capital of the Vietnam Deposit Insurance Corporation.

Article 8. The Vietnam Deposit Insurance Corporation implements depreciation of fixed assets according to regulations applicable to state enterprises and uses the depreciation amount for reinvestment, renewal of fixed assets, and other activities as prescribed by law.

Article 9. All asset losses of the Vietnam Deposit Insurance Corporation (excluding losses covered by the deposit insurance commitment of the Vietnam Deposit Insurance Corporation) must be documented to determine the extent, cause, responsibility, and handled according to the following principles:

1. If the loss is due to subjective reasons of a collective or individual, the party causing the loss must compensate according to the law. The Board of Directors or the General Director of the Vietnam Deposit Insurance Corporation decides on the compensation amount and is responsible for their decision.

2. Insured assets are handled according to the insurance contract.

3. The value of the loss after recovery and compensation by individuals, collectives, and insurance organizations, if still insufficient, is covered by the financial reserve fund. If the financial reserve fund is insufficient, the shortfall is recorded as an expense.

4. In cases of losses due to natural disasters or severe damage caused by objective reasons; losses from unrecoverable loans, guarantees, and debt purchases pursuant to the Prime Minister's directives, where such losses remain insufficient even after being covered by the financial reserve fund, the Board of Directors and General Director shall develop a loss management plan to report to the Ministry of Finance and the State Bank for review and submission to the Prime Minister for decision.

Article 10. Liquidation and Sale of Assets

1. The Vietnam Deposit Insurance Corporation may sell unused assets that can be used for more effective operational purposes.

2. The Vietnam Deposit Insurance Corporation may liquidate substandard, deteriorated, irreparable damaged assets; obsolete technical assets that are not needed or are not used effectively and cannot be sold in their original condition, to recover capital for more effective operational purposes.

3. When selling or liquidating assets, the Vietnam Deposit Insurance Corporation must establish an evaluation council to assess the current technical status of the assets, appraise their value, and organize auctions as required by law.

4. The difference between the proceeds from the sale or liquidation of assets and the remaining value of those assets, along with the costs associated with the sale or liquidation, shall be recorded in the operational results of the Vietnam Deposit Insurance Corporation.

Article 11. Liquidation of Assets of Insured Deposit Participating Organizations in Bankruptcy

1. The liquidation of assets of participating organizations in insured deposits that have gone bankrupt shall be carried out in accordance with the provisions of the law.

2. The funds obtained by the Vietnam Deposit Insurance Corporation from the liquidation of assets of participating organizations in insured deposits shall be used in the following order:

a) To repay the loans and guarantees provided to these organizations;

b) Any remaining amount (if applicable) shall be added to the business reserve fund.

Chapter III

INCOME AND EXPENSES

Article 12.The revenues of the Vietnam Deposit Insurance Corporation include actual receipts in the year, including:

1. Revenues from deposit insurance operations:

a) During the first three years of operation, the Vietnam Deposit Insurance Corporation records 12% of the total fees collected from participating organizations as income. After this period, if revenue remains difficult due to objective reasons, the Ministry of Finance will consider further measures;

b) Interest income from loans provided to support insured deposits;

c) Fees for guarantees when the Vietnam Deposit Insurance Corporation guarantees special loans for participating organizations to have funds to pay insured deposits;

d) Interest income from debt purchases;

đ) Penalties from participating organizations for late payment of fees as stipulated.

2. Financial activity revenues:

a) Interest income from investments in securities;

b) Interest income from deposits.

3. Other revenues:

a) Proceeds from the sale or liquidation of assets (the entire amount received from the sale or liquidation of assets);

b) Service fees for consulting and training staff for participating organizations in insured deposits;

c) Other revenues.

Article 13. The expenses of the Vietnam Deposit Insurance Corporation include actual expenditures in the year, including:

1. Expenses for deposit insurance operations:

a) Interest expense on loans;

b) Payment service and agency fees;

c) Other expenses for buying and selling debt operations, investment activities, and costs for recovering written-off debts and other operational expenses.

2. Staff expenses:

a) Salaries and wages, and other payments of a wage nature to employees as prescribed;

b) Allowances for part-time members of the Board of Directors and Supervisory Board;

c) Meal allowances for staff, with each staff member's allowance not exceeding the minimum wage set by the state for civil servants;

d) Expenses for female workers as prescribed;

đ) Uniforms and protective equipment expenses as prescribed;

e) Severance pay for employees as prescribed;

g) Hardship allowances as prescribed.

3. Social insurance, health insurance, trade union fees, and other contributions as prescribed.

4. Expenses for Party and mass organization activities when their funding sources are insufficient to cover operational costs.

5. Management expenses:

a) Office supplies expenses;

b) Postal, telecommunication, telegram, leased communication channel, telex, fax... expenses paid according to invoices from postal authorities;

c) Electricity, water, medical, office hygiene, and environmental expenses;

d) Fuel expenses;

đ) Travel expenses for staff traveling domestically and internationally;

e) Reception, ceremonial, conference, publicity, and advertising expenses. These expenses shall not exceed 7% of the annual total expenses in the first two years of establishment and not more than 5% in subsequent years;

g) Training and scientific research expenses;

h) Expenses for hiring domestic and foreign experts (if any);

i) Audit and inspection expenses;

k) Penalties for breach of economic contracts due to force majeure;

l) Other management expenses as prescribed.

The expenses under Clause 5 of this Article shall be implemented according to standards set by the Ministry of Finance, suitable for the specific operations of the Vietnam Deposit Insurance Corporation.

6. Asset expenses:

a) Depreciation expenses for fixed assets as prescribed for state-owned enterprises;

b) Insurance expenses for assets;

c) Purchase expenses for labor tools;

d) Maintenance and repair expenses for assets;

đ) Rent expenses for assets under asset rental contracts between lessors and the Vietnam Deposit Insurance Corporation;

e) Expenses related to the sale or liquidation of assets (including the remaining value of the assets and liquidation expenses);

g) Expenses for remaining asset losses after being compensated according to prescribed regulations.

7. Tax, fee, and stamp duty expenses.

8. Rewards for individuals and units outside the industry who contribute to the operations of the Vietnam Deposit Insurance Corporation. The level of expenditure is determined by the Ministry of Finance.

9. Other expenses.

Article 14. The Vietnam Deposit Insurance Corporation shall accurately record income and expenses as prescribed, comply with regulations on invoice and accounting documentation systems, and bear legal responsibility for the accuracy of all revenues and expenditures.

Article 15. The Vietnam Deposit Insurance Corporation shall not include the following items in its cost accounting:

1. Losses that have been supported by the Government or compensated by insurance agencies or the entities causing the losses;

2. Penalties for administrative violations, overdue interest due to subjective reasons, and financial system breaches;

3. Fines that collectives or individuals must pay for violating laws while performing their duties;

4. Expenses unrelated to the operations of the Vietnam Deposit Insurance Corporation such as basic construction investment costs; support expenses for other organizations and individuals;

5. Expenses from other funding sources such as public service expenses, reward and welfare expenses, and other expenses funded by other sources;

6. Other invalid expenses.

Chapter IV

INCOME AND EXPENSE DIFFERENTIALS AND RESERVE FUND ALLOCATION

Article 16. The income and expense differential realized during the year is the result of the Vietnam Deposit Insurance Corporation's operations, determined by subtracting total legitimate expenses incurred during the year from total revenue.

Article 17. Handling annual income and expense differentials

1. In cases where income exceeds expenses:

a) Offset the income shortfall from previous years;

b) Deduct fines for legal violations under the responsibility of the Vietnam Deposit Insurance Corporation;

c) The remaining amount is treated as follows:

- Allocate 10% to the financial reserve fund. When the balance of the financial reserve fund reaches 25% of the charter capital, no further allocations will be made;

- Allocate 50% to the development investment fund;

- Allocate 5% to the unemployment assistance reserve fund. When the balance of this fund equals six months' salary of the Vietnam Deposit Insurance Corporation, no further allocations will be made;

- Establish two reward and welfare funds. The allocation levels for these two funds are implemented according to regulations applicable to state-owned enterprises. The ratio of distribution between the two funds is decided by the Board of Directors of the Vietnam Deposit Insurance Corporation;

- The remainder is added to the development investment fund.

2. In cases where income is less than expenses:

The Vietnam Deposit Insurance Corporation may use the financial reserve fund to offset the income shortfall; if the balance of the financial reserve fund is insufficient to cover the shortfall, it will be carried over to subsequent years for continued offsetting.

Article 18.PRINCIPLES FOR USING THE FUNDS

1. The financial reserve fund is used for:

a) To offset income and expense differentials as stipulated in Clause 2, Article 17 of this Regulation;

b) To offset the remaining losses and damages to assets occurring during operations after compensation has been provided by the entities causing the losses and by insurance organizations;

c) To offset investment risks and support payments to participating organizations that lose their ability to pay.

2. The development investment fund is used for:

a) Expanding the scale of operations and modernizing equipment, working conditions of the Vietnam Deposit Insurance Corporation;

Based on the annual basic construction investment plan, investment needs, and the fund's capacity, the Board of Directors of the Vietnam Deposit Insurance Corporation decides on the form and methods of investment according to the principles of efficiency, safety, and capital growth;

b) Investing in securities in accordance with the provisions of the law.

3. The unemployment assistance reserve fund is used to provide assistance to employees who have worked at the Vietnam Deposit Insurance Corporation for at least one year and are temporarily unemployed in accordance with the law; training costs for employees due to changes in technology or new jobs, pre-job training for female employees of the Vietnam Deposit Insurance Corporation, and upgrading the professional skills of staff working at the Vietnam Deposit Insurance Corporation.

4. The reward fund is used for:

a) Year-end or regular bonuses for managers and employees. The bonus level is decided by the Chairman of the Board of Directors of the Vietnam Deposit Insurance Corporation based on the proposal of the General Director and the Trade Union, taking into account labor productivity and work achievements of each manager and employee within the Vietnam Deposit Insurance Corporation;

b) Special bonuses for individuals or groups with technical innovations or process improvements that bring about operational effectiveness. The bonus level is decided by the Board of Directors of the Vietnam Deposit Insurance Corporation.

5. The welfare fund is used for:

a) Building, repairing, or supplementing the capital for welfare facilities of the Vietnam Deposit Insurance Corporation;

b) Expenditures for sports, cultural, and public welfare activities for the collective of managers and employees of the Vietnam Deposit Insurance Corporation;

c) Other welfare expenditures. The General Director of the Vietnam Deposit Insurance Corporation coordinates with the Trade Union Executive Committee to manage and utilize this fund.

Chapter V

ACCOUNTING SYSTEM, STATISTICAL REPORTING, AUDITING, AND FINANCIAL PLANNING

Article 19.

1. The Vietnam Deposit Insurance Corporation must implement the current accounting and statistical systems and guidelines issued by the Ministry of Finance and the General Statistics Office.

2. The fiscal year of the Vietnam Deposit Insurance Corporation begins on January 1 and ends on December 31 of the Gregorian calendar.

Article 20. Annually, the Vietnam Deposit Insurance Corporation is responsible for preparing and submitting to the Ministry of Finance a financial income and expenditure plan. This plan is approved by the Board of Directors and serves as the basis for the Vietnam Deposit Insurance Corporation to execute and settle accounts with the financial authority.

Article 21. Periodically (quarterly, annually), the Vietnam Deposit Insurance Corporation is responsible for preparing and submitting business reports, statistical reports, financial statements, and other periodic or special reports as prescribed by the Ministry of Finance and the General Statistics Office.

1. The annual financial income and expenditure settlement report of the Vietnam Deposit Insurance Corporation is approved by the Board of Directors and submitted to the Ministry of Finance no later than 45 days after the end of the fiscal year.

2. Annually, based on the financial settlement report of the Vietnam Deposit Insurance Corporation, the Ministry of Finance will review and audit finances according to the functions of the state management agency.

Article 22. The Vietnam Deposit Insurance Corporation implements internal control systems in accordance with current regulations.

Article 23. Any amendments or supplements to this Regulation shall be proposed by the Board of Directors of the Vietnam Deposit Insurance Corporation to the Ministry of Finance for consideration and submission to the Prime Minister for decision./.