Decision No. 1509/2003/QD-NHNN on the issuance of regulations for loans from the State Bank to state-owned commercial banks secured by special bonds

Pursuant to …;

Regarding the issuance of the Regulation on lending by the State Bank to State Commercial Banks with collateral in the form of special bonds

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated December 12, 1997, the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam No. 10/2003/QH11 dated June 17, 2003, and the Law on Credit Institutions No. 02/1997/QH10 dated December 12, 1997;
Pursuant to Decree No. 86/2002/NĐ-CP dated November 5, 2002 of the Government stipulating the functions, tasks, powers, and organizational structure of Ministries and ministerial-level agencies;
Pursuant to Decision No. 453/QD-TTg dated June 14, 2002 of the Prime Minister on the issuance of Government Bonds for supplementary capital increase for State Commercial Banks during the period 2002-2004;
After reaching consensus on relevant contents with the Minister of Finance;
At the proposal of the Director of the Credit Department,

DECISION:

Article 1. Issuing this Decision, the Regulation on lending by the State Bank to State Commercial Banks with collateral in the form of special bonds.

Article 2. This Decision shall take effect fifteen days from the date of publication in the Official Gazette and shall replace Decision No. 1035/2003/QD-NHNN dated September 4, 2003 of the Governor of the State Bank on the issuance of the Regulation on lending by the State Bank to State Commercial Banks with collateral in the form of special bonds.

Article 3. The Director of the Office, Heads of the Credit Department, Heads of units related to the State Bank, Chairmen of the Boards of Directors and General Directors of State Commercial Banks, Directors of Branches of the State Bank in Ho Chi Minh City are responsible for implementing this Decision.

REGULATIONS

LENDING BY THE STATE BANK TO STATE COMMERCIAL BANKS

WITH COLLATERAL IN THE FORM OF SPECIAL BONDS

(Issued pursuant to Decision No. 1509/2003/QD-NHNN dated November 14, 2003 of the Governor of the State Bank)

I. GENERAL PROVISIONS

Article 1. Scope of Regulation

This Regulation guides the re-lending business of the State Bank of Vietnam to State Commercial Banks (hereinafter referred to as banks) in the form of lending with collateral in the form of special bonds to provide short-term capital and payment means for the banks.

Article 2. Applicability

The banks eligible for lending under this Regulation are the banks that have been supplemented with additional charter capital during the period 2002-2004 according to Decision No. 453/QD-TTg dated June 14, 2002 of

1. Vietnam Industrial and Commercial Bank;

2. Vietnam Bank for Foreign Trade;

3. Vietnam Investment and Development Bank;

4. Vietnam Agricultural and Rural Development Bank;

5. Southern Vietnam Development Bank.

Article 3. Explanation of Terms

In this Regulation, the following terms shall be understood as follows:

1. Special bonds are bonds issued by the Government used to supplement the charter capital of State Commercial Banks during the period 2002-2004 according to Decision No. 453/QD-TTg dated June 14, 2002 of

2. Lending with collateral in the form of special bonds (hereinafter referred to as lending) is a form of lending by the State Bank of Vietnam to the banks based on the pledge of special bonds to secure the obligation to repay debt during the period when the bank has a loan.

3. Pledge of special bonds is the act of the State Bank of Vietnam holding the original Certificate of Ownership of special bonds of the bank with a loan at the State Bank to secure the obligation to repay debt for one or more loans at the State Bank, the total amount of which does not exceed the maximum lending limit corresponding to the face value of the special bonds accepted as collateral.

Article 4. Maximum lending amount

The maximum lending amount shall be 20% of the face value of the accepted special bonds as collateral.

Article 5. Principles for lending

1. Secured lending;

2. Providing short-term capital and payment means to banks;

3. Repaying principal and interest on loans fully and on time;

4. Special bonds may be used as collateral for multiple loan obligations at the State Bank of Vietnam, with the total of these loans not exceeding the maximum lending amount.

Article 6. Interest rate for lending

1. Applying the rediscount rate prescribed by the Governor of the State Bank of Vietnam during the same period;

2. Overdue debts secured by special bonds will be transferred to overdue debt status and must bear the overdue interest rate as stipulated by the Governor of the State Bank of Vietnam from the date of transfer.

Article 7. Hierarchical implementation of lending

1. The State Bank of Vietnam's Trading Department shall implement lending with special bond collateral for banks headquartered in Hanoi.

2. The Director of the State Bank of Vietnam's Branch in Ho Chi Minh City shall implement lending with special bond collateral according to the authorization of the Governor of the State Bank of Vietnam for the Southern Housing Development Bank.

Article 2. This Decision takes effect 15 days after its publication in the Official Gazette and replaces Decision No. 1035/2003/QĐ-NHNN dated September 4, 2003, issued by the Governor of the State Bank of Vietnam regarding the issuance of the Regulation on lending by the State Bank of Vietnam to state-owned commercial banks with special bond collateral.

II. SPECIFIC PROVISIONS

Article 8. Conditions for Accepting Lending

The State Bank of Vietnam shall consider and decide to approve lending when the requesting bank meets the following conditions:

1. Being the beneficiary and legally holding the special bonds;

2. Not having overdue debts at the State Bank of Vietnam up to the date of the loan request;

3. Not holding other negotiable instruments eligible for borrowing from the State Bank of Vietnam, except for special bonds;

4. Having a risk of losing payment capability.

Article 9. Loan Application Documents

The requesting bank shall submit one set of loan application documents to the State Bank of Vietnam, including:

1. A loan application form according to Form 01/CC-TPĐB;

2. A balance sheet of capital sources and usage, along with explanations of capital sources and usage up to the latest date;

3. The original certificate of ownership of the special bonds.

Article 10. Approval for Lending

1. In cases where the bank meets the conditions stipulated in Article 8, has a need for borrowing, and submits one set of application documents as prescribed in Article 9 to the State Bank of Vietnam, the State Bank of Vietnam shall determine the lending amount based on the face value of the special bonds according to the provisions of Article 4.

2. Within a maximum of two working days from the receipt of the loan application documents, the State Bank of Vietnam shall notify the requesting bank of the approval or non-approval for lending with special bond collateral (according to Form 02/CC-TPĐB or Form 03/CC-TPĐB).

Article 11. Determination of Collateral Period and Repayment Terms

The State Bank of Vietnam and the requesting bank shall agree on the lending period and determine the repayment terms based on the purpose of the loan and the repayment capacity of the requesting bank, with a maximum of 12 months but not exceeding the remaining maturity of the special bonds. Specific agreements on the lending period and repayment terms must be reflected in the Loan Agreement with Special Bond Collateral.

Article 12. Implementation of Loans

1. After receiving the Notification of Approval for Loan from the State Bank of Vietnam, the requesting bank shall establish a Loan Collateral Contract for Special Bonds (four original copies according to form number 04/CC-TPDB) and send it to the State Bank of Vietnam (Trading Department or Hanoi Branch of the State Bank of Vietnam in Ho Chi Minh City);

2. The State Bank of Vietnam and the requesting bank shall base on the notification of the State Bank of Vietnam regarding approval for loan to proceed with signing the Loan Collateral Contract for Special Bonds (four original copies). Each party retains two copies as the basis for accounting, transferring funds, and monitoring.

3. The loan amount shall be transferred into the deposit account of the borrowing bank at the State Bank of Vietnam;

4. After approving and implementing the loan, the State Bank of Vietnam shall implement the retention and preservation of the loan application file in accordance with regulations.

Article 13. Repayment of Principal and Interest on Borrowed Funds

1. The bank that has borrowed funds under the Collateral Loan Contract for Special Bonds shall be responsible and proactive in repaying the debt according to the time frame and term stipulated in the Collateral Loan Contract for Special Bonds.

2. The State Bank of Vietnam will not consider extending the repayment period for loans collateralized with Special Bonds.

Article 14. Debt Recovery Measures

In the event that the bank that has borrowed funds under the Collateral Loan Contract for Special Bonds fails to repay the debt upon maturity, the State Bank of Vietnam shall take the following measures:

1. Immediately deduct funds from the deposit account of the bank at the State Bank of Vietnam to compulsorily recover the due debt (principal and corresponding interest);

2. If the balance in the bank's deposit account is insufficient to compulsorily recover the debt, after deducting all funds from the bank's deposit account to recover the debt, the remaining principal debt will be overdue and must bear an overdue interest rate of 150% of the rediscount rate from the date of overdue debt transfer until the full recovery of the debt (principal and interest). During the period of overdue debt, the State Bank of Vietnam will continue to deduct from the bank's deposit account at the State Bank of Vietnam to recover the debt until the full recovery of the principal and interest (including overdue interest).

Article 15. Termination of Loan Relationship

1. The loan relationship between the State Bank of Vietnam and the borrowing bank under the Collateral Loan Contract for Special Bonds terminates in the following cases: The borrowing bank fully repays the Collateral Loan Contract for Special Bonds or the State Bank of Vietnam fully recovers the debt (principal and interest) through compulsory recovery.

2. Upon termination of the loan relationship, the State Bank of Vietnam shall process the return of the original Certificate of Ownership of Special Bonds to the borrowing bank.

III. IMPLEMENTATION

Article 16. Responsibilities of the Borrowing Bank

1. The requesting bank shall submit one set of loan application documents to the State Bank of Vietnam, specifically:

1.1. For banks headquartered in Hanoi: Submit one set of documents to the Credit Department including the documents specified in Article 9.

1.2. For the Southern Housing Development Bank:

a. Send one set of documents to the Credit Department via fax and mail including the documents specified in Clause 1 and 2 of Article 9 and a copy of the Certificate of Ownership of Special Bonds;

b. After receiving the Notification of Approval for Collateral Loan Contract for Special Bonds from the State Bank of Vietnam, the bank shall submit the original Certificate of Ownership of Special Bonds to the Hanoi Branch of the State Bank of Vietnam in Ho Chi Minh City to serve as collateral.

2. Provide complete and timely documents and materials as prescribed in this Regulation and bear legal responsibility for the legality and accuracy of the figures, documents, and materials provided;

3. Fulfill all commitments with the State Bank of Vietnam as stipulated in the Collateral Loan Contract for Special Bonds, use the borrowed funds for their intended purpose, and fully repay the loan on time;

4. Fully comply with procedures for borrowing and terminating the borrowing relationship.

Article 17. Responsibilities of units under the State Bank of Vietnam

1. Monetary Policy Department:

a. Determine the level of money supply for refinancing purposes on a quarterly and annual basis, submit to the Governor of the State Bank for decision, including the level of supply for special bond pledge business, and notify relevant units;

b. Coordinate with relevant units to resolve difficulties and issues arising during the implementation of special bond pledge lending;

2. Credit Department:

a. Receive and review the loan application dossier of the Bank;

b. Submit the special bond pledge loan request of banks to the Governor of the State Bank for approval; notify the Governor's opinion on granting special bond pledge loans and transfer the original approved dossier to the relevant unit;

Chapter c. Notify the bank requesting a loan about the approval or non-approval of the special bond pledge loan and implement lending and debt collection according to this Regulation;

Chapter d. Report to the Governor of the State Bank and the Ministry of Finance on the situation of special bond pledge lending by the State Bank of Vietnam, simultaneously sending to relevant units; e. Lead and coordinate with relevant units to resolve difficulties and issues arising during the implementation of special bond pledge lending;

3. Trading Department:

a. Receive the dossier already approved by the Governor (sent by the Credit Department);

b. Based on the dossier already approved by the Governor, proceed with signing the special bond pledge loan contract, implement lending and recover principal and interest according to the provisions of this Regulation;

Chapter c. Report to the Governor of the State Bank after implementing the special bond pledge lending business, simultaneously sending to the Credit Department;

Chapter d. Implement the safekeeping, preservation, handover of files, documents, pledged assets, and accounting according to regulations; e. Monthly compile information and data on special bond pledge lending, promptly identify difficulties and issues arising during implementation, send to the Credit Department for consolidation and reporting to the Governor of the State Bank;

4. The Accounting and Finance Department shall guide the accounting for special bond pledge lending;

5. The General Audit Department shall inspect and supervise the compliance with the Governor's regulations on special bond pledge lending at relevant units under the State Bank of Vietnam within their assigned functions and tasks;

6. The State Bank Branch in Ho Chi Minh City:

a. Receive the loan application dossier of the bank (sent by the Credit Department), the authorization document for lending from the Governor of the State Bank, and the original Certificate of Ownership of special bonds for the Mekong Delta Development Bank;

b. Proceed with signing the special bond pledge loan contract and implement lending upon receipt of the authorization document for lending from the Governor of the State Bank (fax copy); recover principal and interest according to the provisions of this Regulation;

Chapter c. Report to the Governor of the State Bank after implementing the special bond pledge lending business, simultaneously sending to the Credit Department;

Chapter d. Implement the safekeeping, preservation, handover of files, documents, pledged assets, and accounting according to regulations. e. Monthly compile information and data on special bond pledge lending, promptly identify difficulties and issues arising during implementation, send to the Credit Department for consolidation and reporting to the Governor of the State Bank;

Article 18. Effective Date

Amendments and supplements to this Regulation shall be decided by the Governor of the State Bank.