Circular No. 188/2012/TT-BTC guiding interest rate support for loans and compensation for interest rate differential due to implementation of policies aimed at reducing post-harvest losses for agricultural and aquatic products.

    CIRCULAR

Guidelines for interest rate support on loans and compensation for interest rate differential due to implementation of policies aimed at reducing post-harvest losses for agricultural products and aquatic products

Decision No. 63/2010/QD-TTg dated October 15, 2010 of the Government on policies to support reduction of post-harvest losses for agricultural products and aquatic products; Decision No. 65/2011/QD-TTg dated December 2, 2011 of the Government amending and supplementing certain provisions of Decision No. 63/2010/QD-TTg dated October 15, 2010 of the Government on policies to support reduction of post-harvest losses for agricultural products and aquatic products;

The Minister of Finance issues this Circular guiding interest rate support on loans and compensation for interest rate differential for state-owned commercial banks when implementing policies aimed at reducing post-harvest losses for agricultural products and aquatic products as follows:

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Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

On the basis of This Circular guides the conditions, documents, procedures, and processes for interest rate support and compensation for interest rate differential for state-owned commercial banks as stipulated in Clause 2 of this Article when implementing loans according to Clause 1 of Article 2 of Decision No. 63/2010/QD-TTg dated October 15, 2010 of the Government on policies to support reduction of post-harvest losses for agricultural products and aquatic products (hereinafter referred to as Decision No. 63/2010/QD-TTg) and Clause 1, Clause 2 of Article 1 of Decision No. 65/2011/QD-TTg dated December 2, 2011 of the Government amending and supplementing certain provisions of Decision No. 63/2010/QD-TTg (hereinafter referred to as Decision No. 65/2011/QD-TTg).

At the proposal of the Director of the Department of Banking and Financial Institutions;

a) State-owned commercial banks include: Vietnam Agriculture and Rural Development Bank, Mekong Delta Development Bank, Joint Stock Commercial Investment and Development Bank of Vietnam, Joint Stock Commercial Vietnam Trade Bank, Joint Stock Commercial Foreign Trade Bank of Vietnam (hereinafter collectively referred to as state-owned commercial banks) shall be supported by the state budget with interest rates when implementing loans according to Clause 1 of Article 1 of Decision No. 65/2011/QD-TTg. b) Vietnam Agriculture and Rural Development Bank shall be compensated by the state budget for interest rate differential when implementing loans according to Clause 1 of Article 2 of Decision No. 63/2010/QD-TTg and Clause 2 of Article 1 of Decision No. 65/2011/QD-TTg.

Article 1. Scope of Regulation and Applicability

2. Applicability:

Article 2. Conditions for state budget support for interest rate on loans and compensation for interest rate differential

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

1. State-owned commercial banks organize loan implementation according to Clause 1 of Article 2 of Decision No. 63/2010/QD-TTg; Clause 1, Clause 2 of Article 1 of Decision No. 65/2011/QD-TTg and guidance from the State Bank of Vietnam.

a) In accordance with the target and objectives specified in Clause 1 of Article 2 of Decision No. 63/2010/QD-TTg and Clause 1, Clause 2 of Article 1 of Decision No. 65/2011/QD-TTg.

b) Loans eligible for interest rate support and compensation for interest rate differential must be current loans at the time of interest rate support and compensation for interest rate differential; no interest rate support and compensation for interest rate differential shall be provided for overdue principal and interest loans calculated from the date of overdue and restructured loans for customers calculated from the restructuring date.

1. State commercial banks shall implement loans in accordance with the provisions set out in Clause 1, Article 2 of Decision No. 63/2010/QĐ-TTg; Clause 1 and Clause 2, Article 1 of Decision No. 65/2011/QĐ-TTg, and the guidance of the State Bank of Vietnam.

2.1 Loans must be directed at the correct target, have the correct purpose, and fully comply with the conditions stipulated in Article 1, Article 2, and Article 3 of Decision No. 68/2013/QĐ-TTg.

a) In compliance with the target groups and objectives specified in Clause 1, Article 2 of Decision No. 63/2010/QĐ-TTg and Clause 1 and Clause 2, Article 1 of Decision No. 65/2011/QĐ-TTg.

b) The interest rate support and interest differential compensation apply to loans for on-time debt repayment at the time of interest rate support and interest differential compensation; no interest rate support or interest differential compensation shall be provided for overdue principal and interest loans calculated from the date of overdue and for restructured loans calculated from the restructuring date.

Article 3. Level and Source of Funds for Interest Rate Subsidies and Differential Interest Rate Compensation

1.1 Loans for purchasing machinery and equipment specified in Clause 2, Article 1 of Decision No. 68/2013/QĐ-TTg shall be supported by the state budget at 100% interest rate for the first two years and 50% interest rate for the third year. The timing of interest rate support for each loan shall be calculated from the disbursement date.

a) Loans for interest rate subsidies to purchase machinery and equipment as specified in Clause 1, Article 1 of Decision No. 65/2011/QD-TTg shall be supported by the state budget with 100% interest rate subsidy for the first two years, and from the third year onwards, the state budget will support 50% of the interest rate, calculated from the disbursement date of the credit contract, promissory note (or equivalent documents).

b) Loans applying investment development credit interest rates to purchase machinery and equipment and invest in projects as specified in Clause 1, Article 2 of Decision No. 63/2010/QD-TTg and Clause 2, Article 1 of Decision No. 65/2011/QD-TTg shall be compensated by the state budget for the difference between the lending interest rate of the Vietnam Agricultural and Rural Development Bank and the state's investment development credit interest rate, calculated from the disbursement date of the credit contract, promissory note (or equivalent documents).

c) The level of lending interest rate of state commercial banks serving as the basis for the state budget to provide interest rate subsidies and differential interest rate compensation is the lowest lending interest rate applied by the bank for loans serving the agricultural and rural sectors during the same period and term.

State commercial banks have the responsibility to publicly announce the lowest lending interest rate applicable for loans supporting the subjects as stipulated in Article 1 of this Circular as the basis for interest rate subsidies and differential interest rate compensation.

d) The level of investment development credit interest rate implemented according to Clause 3, Article 2 of Decision No. 63/2010/QD-TTg is the state's investment development credit interest rate announced and applied for each period.

The source of funds for interest rate support and compensation for interest rate differences to implement policies aimed at reducing losses in agriculture shall be allocated from the annual state budget estimate for compensating interest rate differences for preferential credit loans (development capital).

The source of funds for interest rate subsidies and differential interest rate compensation implementing the policy to reduce post-harvest losses for agricultural and aquatic products is allocated within the annual budget estimate for compensating the differential interest rate of preferential credit. The Ministry of Planning and Investment is responsible for coordinating with the Ministry of Finance to allocate the budget estimate for interest rate subsidies and differential interest rate compensation to reduce post-harvest losses for state commercial banks as stipulated in Clause 5, Article 6 of Decision No. 63/2010/QD-TTg and the provisions of the State Budget Law.

Article 4. Documents and Procedures for Interest Rate Subsidies on Loan Capital and Differential Interest Rate Compensation

1. Establishing Plans for Interest Rate Subsidies and Differential Interest Rate Compensation:

Each year, no later than July 31, state commercial banks base on their assigned tasks, forecast the outstanding loan balance for purchasing machinery and equipment to serve the harvesting of agricultural and aquatic products and investing in construction projects of warehouses for the following year to develop plans for interest rate subsidies and differential interest rate compensation for the planning year (divided by quarters) and submit them to the Ministry of Finance (one copy) and the Ministry of Planning and Investment (one copy) at the time of preparing the budget revenue and expenditure plan for the next year according to the State Budget Law and guiding documents.

For the years 2012 and 2013, state commercial banks must establish and submit plans for interest rate subsidies and differential interest rate compensation to the Ministry of Finance and the Ministry of Planning and Investment no later than 15 days after the effective date of this Circular.

The establishment of the annual interest rate subsidy and differential interest rate compensation plan is carried out according to the following formula:

1.1 For subsidized interest rates on loans:

a) For existing outstanding balances that have already occurred (including the amount expected to be realized by December 31 of the previous year):

Where:

- The average outstanding loan balance is calculated by the state commercial bank based on the average of the actual outstanding debt balances.

- The average subsidized interest rate is 100% of the average lending interest rate of the state commercial bank for the first two years and 50% of the average lending interest rate of the state commercial bank from the third year onwards, as stipulated in Clause 1, Article 3 of this Circular.

b) For new outstanding balances expected to occur during the planning year:

In which:

- The average outstanding loan balance for the year receiving subsidy is calculated as the arithmetic mean between the beginning-of-year and end-of-year outstanding loan balances.

- The average subsidized interest rate is 100% of the average lending interest rate of the state commercial bank for the first two years and 50% of the average lending interest rate of the state commercial bank from the third year onwards, as stipulated in Clause 1, Article 3 of this Circular.

1.2 For interest rates on loans subject to differential interest rate compensation:

a) For existing outstanding balances that have already occurred (including the amount expected to be realized by December 31 of the previous year):

In which:

- The average outstanding loan balance eligible for differential interest rate compensation is calculated by the Vietnam Agricultural and Rural Development Bank based on the average of the actual outstanding debt balances.

- The average differential interest rate compensation is the difference between the average lending interest rate of the Vietnam Agricultural and Rural Development Bank and the state's investment development credit interest rate, calculated as the arithmetic mean between the beginning-of-year and end-of-year differential interest rate compensation levels.

b) For anticipated debts expected to arise in the planned year:

Where:

- The average outstanding loan balance for the year receiving differential interest compensation is calculated as the arithmetic mean between the beginning-of-year and end-of-year outstanding loan balances.

- The average differential interest rate compensation is the difference between the average lending interest rate of the Vietnam Agricultural and Rural Development Bank and the state's investment development credit interest rate, calculated as the arithmetic mean between the beginning-of-year and end-of-year differential interest rate compensation levels.

2. Quarterly provisional interest rate subsidies and provisional differential interest rate compensation:

Within a maximum of thirty days from the date of receipt of the quarterly implementation report accompanied by the bank's request, the Ministry of Finance will temporarily allocate eighty percent of the interest subsidy amount of the previous quarter but not exceeding the annual budget allocation. In cases where temporary allocation is not made, the Ministry of Finance shall issue a response to state-owned commercial banks within twenty working days.

3. Method for determining the amount of interest support and the amount of interest differential compensation:

3.1. For loans subject to interest rate subsidies as stipulated in Clause 1, Article 1 of Decision No. 65/2011/QĐ-TTg:

a) The amount of interest supported for a loan is calculated by multiplying the subsidy interest rate with the loan balance and the duration of the loan supported by interest subsidies according to the following formula:

 (tonnes CO

- The level of interest rate support is implemented according to Clause 1, Article 3 of this Circular and is calculated in units of: % per month.

- n is the number of days of outstanding balance during the period receiving interest rate support.

b) The actual amount of interest supported by state-owned commercial banks is the total actual interest support amount of all loans eligible for interest rate support.

c) State-owned commercial banks use the above formula to determine the amount of interest support requested to be compensated by the Ministry of Finance.

3.2. For loans subject to interest differential compensation as stipulated in Clause 1, Article 2 of Decision No. 63/2010/QĐ-TTg and Clause 2, Article 1 of Decision No. 65/2011/QĐ-TTg:

a) The actual amount of interest differential compensation for a loan is calculated using the product of the interest rate differential compensation level with the outstanding loan balance and the time of loan capital receiving interest rate compensation according to the following formula:

(tonnes CO

- The interest rate differential compensation level is specified in Clause 1, Article 3 of this Circular and is calculated in units of: % per month.

- n is the number of days of outstanding balance during the period receiving interest rate support.

b) The actual amount of interest differential compensation of the Vietnam Agricultural and Rural Development Bank is the total actual interest compensation amount of all loans eligible for interest rate compensation.

c) The Vietnam Agricultural and Rural Development Bank uses the above formula to determine the amount of interest differential compensation requested to be compensated by the Ministry of Finance.

4. Settlement of interest rate support for borrowing and interest differential compensation:

4.1. State-owned commercial banks must submit settlement proposal documents for interest rate support on borrowing and interest differential compensation to the Ministry of Finance no later than ninety days from the end of the fiscal year. For cases where the documents are not valid, the Ministry of Finance has the responsibility to notify the state-owned commercial banks in writing within ten days.

4.2. Settlement proposal documents:

a) Settlement Request Documents for Loans Eligible for Interest Rate Subsidies:

- A consolidated report on the settlement of interest rate support for borrowing throughout the system, audited by an Independent Auditor or State Audit Agency (Annex Table 1).

- A report on the settlement of interest rate support for borrowing by province (Annex Table 2).

b) Settlement Request Documents for Loans Eligible for Differential Interest Rate Compensation:

- A consolidated report on the settlement of interest rate differential compensation according to investment credit interest rates throughout the system, audited by an Independent Auditor or State Audit Agency (Annex Table 3).

- A report on the settlement of interest rate differential compensation according to investment credit interest rates by province (Annex Table 4).

4.3. State-owned commercial banks organize copies and retain detailed reports for each interest rate support item to ensure accuracy and transparency to facilitate the verification of settlement data for interest rate support and interest differential compensation as stipulated in Point 4.4, Clause 4.

4.4. Verification of settlement data for interest rate support on borrowing and interest differential compensation:

a) The Ministry of Finance conducts verification of settlement data for interest rate support on borrowing and interest differential compensation after receiving complete settlement proposal documents.

b) The Ministry of Finance issues a written notice to branches of state-owned commercial banks selected for settlement verification.

c) State-owned commercial banks have the responsibility to provide detailed documents for each loan, compiled by branch, for settlement verification as follows:

- Credit agreements, promissory notes, or equivalent documents to determine the borrower's identity, loan implementation status, outstanding balance, and repayment.

- A summary table to determine the amount of interest rate support grants and interest rate differential subsidies.

- A customer confirmation letter directly borrowing funds regarding the interest rate support and interest differential compensation received annually, listing each support under various forms.

The above documents are photocopies stamped as true copies by state-owned commercial banks (one set) and signed by responsible persons.

d) The verification of settlement data for interest rate support on borrowing and interest differential compensation is conducted within ninety days from the date of receipt of complete settlement documents from state-owned commercial banks.

4.5. Handling discrepancies between reported settlement data and temporarily allocated interest rate support and interest differential compensation:

- If there is a discrepancy between the reported settlement data confirmed by the auditing agency and the verified settlement data of the Ministry of Finance, state-owned commercial banks are responsible for adjusting their accounting records to accurately reflect the settlement data for interest rate support on borrowing and interest differential compensation.

- If the temporarily allocated interest rate support and interest differential compensation exceeds the verified settlement data, the excess amount will be recovered by the Ministry of Finance and deposited into the national treasury.

- The handling of discrepancies between verified settlement data and temporarily allocated interest rate support and interest differential compensation is carried out within forty-five days from the date of the verification settlement record.

- In cases where the processing time for discrepancies between settlement data and verified settlement data for interest rate support on borrowing and interest differential compensation needs to be extended or other special cases, they will be reviewed and decided by the Minister of Finance.

5. Handling recovery of previously provided interest rate support and interest differential compensation:

- In case during the support period, state commercial banks discover violations in the use of borrowed funds through customer checks, they shall convert the subsidized loan into a regular loan and immediately recover the temporarily advanced support funds from the borrowing customer.

- If violations by borrowing customers are discovered after settlement by state management agencies, state commercial banks are responsible for recovering the supported funds and returning them to the state budget.

- In cases where state commercial banks have exhausted all means to recover the interest subsidy funds but are unable to do so due to violations by borrowing customers, the banks must report each specific case to the Ministry of Finance for guidance on handling.

Article 5. Reporting System

1. For monthly/quarterly reports:

State commercial banks must submit monthly reports (no later than the 15th day of the following month) on the implementation results of interest rate subsidies under the policy aimed at reducing post-harvest losses for agricultural and aquatic products to the Ministry of Finance and the State Bank of Vietnam. Quarterly (no later than the 30th day of the first month of the next quarter), state commercial banks must compile system-wide interest subsidy data, assess the implementation situation, and submit it to the Ministry of Finance.

2. For annual reports:

Within 45 days from the end of the fiscal year, state commercial banks must submit annual implementation reports to the Ministry of Finance, including:

- The amount of interest rate support grants and interest rate differentials temporarily granted during the year.

- The actual amount of interest rate support grants and interest rate differentials generated during the year, requesting full-year funding.

- The application for settlement as stipulated in Point 4.2, Clause 4, Article 4 of this Circular.

Article 6. Implementation Organization

1. This Circular takes effect from December 28, 2012, and applies to loans provided for the purpose of reducing post-harvest losses for agricultural and aquatic products as specified in Decision No. 63/2010/QĐ-TTg and Decision No. 65/2011/QĐ-TTg; it replaces Circular No. 65/2011/TT-BTC dated May 16, 2011, issued by the Ministry of Finance, guiding interest rate subsidies and interest differential compensation for loans under the policy aimed at reducing post-harvest losses for agricultural and aquatic products.

2. During implementation, if any difficulties arise, they should be reported to the Ministry of Finance for consideration and resolution./.