Circular No. 19/2010/TT-NHNN amending and supplementing certain Articles of Circular No. 13/2010/TT-NHNN dated May 20, 2010, issued by the Governor of the State Bank of Vietnam on the ratios ensuring safety in the operations of credit institutions.

CIRCULAR

Amending and supplementing certain Articles of Circular No. 13/2010/TT-NHNN dated May 20, 2010 May 20, 2010

of the Governor of the State Bank of Vietnam on the ratios ensuring safety in the operations of credit institutions safety ratio in the operation of credit institutions

Pursuant to the Law on the State Bank of Vietnam 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam 2003;

Pursuant to the Law on Credit Institutions 1997, and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions 2004;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

The State Bank of Vietnam (hereinafter referred to as the State Bank) amends and supplements certain Articles of Circular No. 13/2010/TT-NHNN dated May 20, 2010 of the Governor of the State Bank on the ratios ensuring safety in the operations of credit institutions, as follows:

Article 1. Amending certain Articles of Circular No. 13/2010/TT-NHNN dated May 20, 2010 of the Governor of the State Bank on the ratios ensuring safety in the operations of credit institutions:

1. Clause 2 of Article 1 shall be amended as follows:

“2. The safety ratios prescribed in this Circular include:

b) Liquidity ratio;

b) Credit limits;

c) Liquidity coverage ratio;

d) Limits on capital contribution and share purchase;

đ) Loan-to-deposit ratio from mobilized funds.”

2. Points 1.1.c and 1.1.d of Clause 1 of Article 12 shall be amended as follows:

“c) The balance of demand deposits, book value of non-demand gold deposits at other credit institutions, except for the Social Policy Bank;

d) The balance of time deposits, book value of time gold deposits due for payment at other credit institutions, except for the Social Policy Bank;”

3. Section 5 shall be amended as follows:

“Section 5. LOAN-TO-DEPOSIT RATIO FROM MOBILIZED FUNDS

Article 18. Loan-to-deposit ratio from mobilized funds

1. A credit institution may only use mobilized funds to provide loans under the condition that before and after providing the loan, it must ensure the liquidity ratio and other safety ratios prescribed in this Circular, and the loan-to-deposit ratio from mobilized funds does not exceed the following ratio:

1.1. For banks: 80%

1.2. For non-bank credit institutions: 85%

2. The provision of loans stipulated in Clause 1 of this Article includes various forms such as lending, financial leasing, factoring, discounting negotiable instruments, and transferable securities.

3. Mobilized funds referred to in Clause 1 of this Article include:

3.1. Personal deposits in the form of demand deposits and time deposits;

3.2. Time deposits of organizations, including time deposits of other credit institutions and branches of foreign banks;

3.3. 25% of demand deposits of economic organizations (excluding credit institutions);

3.4. Domestic organization loans, loans from other credit institutions with terms of three months or longer (excluding domestic credit institution loans to temporarily cover shortfalls in liquidity ratios as stipulated in Clause 1, Article 14) and loans from foreign credit institutions;

3.5. Funds raised from organizations and individuals through the issuance of negotiable instruments.”

4. Appendix 2 on the Monitoring Table of Liquidity Ratios shall be amended as follows:

a) “Unit: million dong” shall be amended to “Unit: million dong/EUR/GBP/USD”;

b) Limit prescribed: “Greater than 1” in column (5) shall be amended to “Greater than or equal to 1”.

Article 2. Effective Date

1. This Circular takes effect from October 1, 2010.

2. The amendment, supplementation, and replacement of this Circular shall be decided by the Governor of the State Bank.

3. The Director of the Office, the Director of Banking Inspection and Supervision, Heads of units under the State Bank, Governors of the State Bank Branches in provinces and centrally-administered cities, Chairmen of the Board of Directors, and General Managers (Directors) of credit institutions are responsible for implementing this Circular./.