JOINT CIRCULAR No. 15 TT-LB/TC-NH GUIDING THE CONCENTRATION AND REGULATION OF SURPLUS CURRENT ASSETS FROM STATE ENTERPRISES TO SUPPORT ENTERPRISES LACKING CAPITAL IN ORDER TO IMPLEMENT POLICIES FOR IMPROVING AND EXPANDING BANK CREDIT

JOINT CIRCULAR

Guidelines for Concentrating and Regulating Excess Working Capital in State-Owned Enterprises Due to Implementation of Policies to Improve and Expand Bank Credit

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In accordance with Decision No. 32-CP dated February 11, 1977 of the Council of Ministers on policies to improve and expand bank credit and Circular No. 14-LB/TT dated February 24, 1977 of the Joint Ministry of State Bank and Finance, some ministries, general administrations, provinces, and cities have cooperated with the State Bank to regulate working capital in state-owned enterprises due to the implementation of policies to improve and expand State Bank credit. However, the work has been slow due to lack of clarity, hence the Joint Ministry of Finance and State Bank now provides the following guidelines for concentrating and regulating the excess working capital mentioned above so that ministries, general administrations, provinces, and cities can uniformly implement them.

I. PRINCIPLES FOR CONCENTRATING AND REGULATING EXCESS WORKING CAPITAL DUE TO IMPLEMENTATION OF POLICIES TO IMPROVE AND EXPAND BANK CREDIT.

1. The standard for working capital and the plan for ensuring sources of working capital are reviewed and approved by the ministry, general administration, department, or bureau in charge after consultation with the financial authority and the State Bank. These serve as the basis for determining the excess working capital due to the implementation of policies to improve and expand bank credit, which will be concentrated and regulated for use.

2. Each ministry, general administration, department, or bureau in charge may open an account at the State Bank specifically for this purpose and may use the excess working capital collected to increase the budget allocation for working capital for state-owned enterprises lacking working capital within their sector and locality, but it cannot be used for any other purposes. For local state-owned enterprises funded by the ministry or general administration, if there is excess working capital, it must be concentrated into the dedicated account of the ministry or general administration.

3. After adequately regulating working capital for enterprises lacking it, the ministries, general administrations, departments, or bureaus in charge must transfer the remaining excess working capital to the account specified by the Joint Ministry:

- For the excess working capital of ministries and general administrations, after regulation, the Ministry of Finance will use it to allocate working capital to other ministries and general administrations still in need, and the remainder will be used in the relationship between the central budget and the State Bank.

- For the excess working capital of provinces and cities, it should be returned to the provincial or municipal budget - the People's Committee of the province or city decides on its use, based on the principle of using it only for expanding and developing the local economy; not for consumption needs.

II. PROCEDURES FOR CONCENTRATING AND REGULATING EXCESS WORKING CAPITAL DUE TO IMPLEMENTATION OF POLICIES TO IMPROVE AND EXPAND BANK CREDIT

1. Each ministry or general administration in charge of enterprises may open an account at the Central State Bank (Department of Accounting and Budget Fund Management) under Account No. 04-012, "Excess Working Capital from Improving and Expanding Bank Credit" to concentrate and regulate working capital among state-owned enterprises under their management.

Each department or bureau in charge of enterprises may open a similar account at the State Bank of the province or city.

2. Based on the notification from the supervising authority regarding the level of excess working capital in enterprises due to improvements and expansion of credit, the enterprise makes a debt acknowledgment with the State Bank branch serving it. The State Bank branch records the debt in the loan account for working capital (within the plan, standard, circulation, and reserve of materials), and credits the inter-account to transfer the capital to Account No. 04-012/... of the respective department or bureau in charge, for enterprises in the province or city (for local state-owned enterprises) or Account No. 04-012/... of the respective ministry or general administration in charge, for enterprises at the Central Bank (for central state-owned enterprises).Upon receiving the debt notice from the bank, enterprises record the debt in Account No. 85-2, crediting Account No. 93-1 with the excess working capital.

3. Based on the amount of capital collected, the ministry or general administration in charge processes the withdrawal from Account No. 04-012... to provide additional working capital from the budget for other enterprises under their management. For provinces and cities, upon the proposal of the finance department or bureau, with approval from the Provincial or Municipal People's Committee, they may withdraw to regulate working capital for enterprises lacking capital in other departments or bureaus within the same locality (excluding local state-owned enterprises funded by the ministry or general administration as stated in Point 2 of Part I).

Enterprises receiving additional working capital must process the increase in national budget working capital.

4. After adequately regulating working capital for all enterprises within the same ministry or general administration or within the same locality, the remaining capital in Account No. 04-012/... of the ministries or general administrations is transferred entirely to Account No. 04-012/... of the Ministry of Finance for the Ministry of Finance to use in allocating working capital to other ministries or general administrations still in need, and the remainder will be used in the relationship between the central budget and the State Bank. The remaining capital in Account No. 04-012/... of the departments or bureaus is transferred to the provincial or municipal budget for the Provincial or Municipal People's Committee to decide on its use.

III. MEASURES FOR IMPLEMENTATION

1. Ministries, general administrations, departments, or bureaus in charge, and enterprises prepare a comprehensive review of the approved working capital for 1977 according to current regulations and send it to the relevant State Bank and finance authorities at the same level, while simultaneously notifying the decision on approving capital and reallocating capital to enterprises under their management.

State-owned enterprises must immediately contact the State Bank branch serving them to process the debt acknowledgment and transfer excess working capital to the account of the supervising authority so that ministries, general administrations, departments, or bureaus have funds to immediately regulate for enterprises lacking capital.

State-owned enterprises must immediately contact the State Bank serving them to process the procedures for recognizing debts and returning excess working capital to the account of their supervising authority so that the Ministries, General Departments, Bureaus, and Departments have funds to immediately adjust for enterprises lacking capital.

2. The concentration and harmonization of excess working capital in state-owned enterprises due to improvements and expansion of banking credit must be completed within a specified period of time. Upon completion of the harmonization of working capital as directed above, the State Bank shall transfer the entire balance of account 04-012... of Ministries, General Departments, and Bureaus into the account of the Ministry of Finance as mentioned in point 4 of Part II above, and transfer the balance of account 04-012... of Offices and Departments into the local budget.

The Ministry of Finance and the State Bank jointly request that Ministries, General Departments, Offices, and Departments in charge, and enterprises cooperate closely with financial and banking authorities at the same level, within their respective areas of responsibility, to assist and promote enterprises in complying with national regulations.

This Circular shall take effect upon issuance; all previous regulatory documents that conflict with this Circular shall be abolished.