Decision No. 191/1999/QD-NHNN on the reserve requirement ratio for credit institutions.

Pursuant to …;

On the Required Reserve Ratio for Credit Institutions

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GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 and the Law on Credit Institutions No. 02/1997/QH10 dated December 12, 1997;

Pursuant to the Government Decree No. 15/CP dated March 2, 1993 on the tasks, powers, and responsibilities for state management of ministries and ministerial-level agencies;

Pursuant to the proposal of the Director of the Monetary Policy Department,

Pursuant to …;

Article 1. - The required reserve ratio for credit institutions (including both VND and foreign currencies) shall be as follows:

1- For demand deposits and time deposits with terms under 12 months of State-owned commercial banks, city commercial joint-stock banks, foreign bank branches, joint venture banks, and finance companies: 6% of the total deposit balance.

2- For demand deposits and time deposits with terms under 12 months of rural commercial joint-stock banks, cooperative banks, central people's credit funds, and regional people's credit funds: 4% of the total deposit balance.

3- For time deposits with terms of 12 months or more: 0% of the total deposit balance.

4- For deposits of credit institutions with a deposit balance subject to the required reserve ratio below 500 million VND and deposits of grassroots people's credit funds, credit cooperatives, and poverty service banks, the required reserve ratio is 0%.

5- In cases where credit institutions are permitted by the Governor of the State Bank of Vietnam to mobilize capital in physical gold and lend in physical gold, the required reserve ratio for such mobilized capital in physical gold is 0%. In cases where credit institutions are permitted by the Governor of the State Bank of Vietnam to mobilize capital in physical gold but convert the mobilized physical gold into money capital for lending, the converted money capital must comply with the required reserve ratio as stipulated for money reserves. Details of the types of deposits are specified in Article 11 of the Circular on Required Reserves issued together with Decision No. 51/1999/QĐ-NHNN dated February 10, 1999, of the Governor of the State Bank of Vietnam.

Article 2. - Required reserves in VND of credit institutions deposited in non-interest-bearing accounts at the State Bank of Vietnam's Trading Department or at the State Bank of Vietnam's branch in the province or city where the credit institution is headquartered; Required reserves in foreign currency of credit institutions deposited in non-interest-bearing accounts at the State Bank of Vietnam's Trading Department.

Article 3. - Required reserves of credit institutions deposited at the State Bank of Vietnam within the scope of the applicable required reserve ratio shall be subject to an interest rate of 0%/month.

Article 4. - The State Bank of Vietnam pays interest on excess required reserves of credit institutions (including both VND and foreign currencies) deposited in non-interest-bearing accounts at the State Bank of Vietnam as follows:

1- For excess required reserves in VND: The State Bank of Vietnam pays interest at the rate of interest on non-interest-bearing deposits in VND of credit institutions deposited at the State Bank of Vietnam as determined by the Governor of the State Bank of Vietnam for each period.

2- For excess required reserves in foreign currency: The State Bank of Vietnam pays interest at the rate of interest on non-interest-bearing foreign currency deposits of credit institutions deposited at the State Bank of Vietnam as determined by the Governor of the State Bank of Vietnam for each period.

Article 5. - The State Bank of Vietnam imposes penalties on credit institutions for insufficient required reserves during the maintenance period specified in Article 14 of the Circular on Required Reserves issued together with Decision No. 51/1999/QĐ-NHNN dated February 10, 1999, of the Governor of the State Bank of Vietnam, as follows:

1- For insufficient required reserves in VND during the "required reserve maintenance period," the penalty rate is 150% of the rediscount rate published by the State Bank of Vietnam for each period, calculated on the shortfall for the entire "required reserve maintenance period."

2- For insufficient required reserves in foreign currency during the "required reserve maintenance period," the penalty rate is 150% of the ceiling lending rate in US dollars for economic organizations as determined by the Governor of the State Bank of Vietnam for each period, calculated on the shortfall for the entire "required reserve maintenance period."

Article 6. - This Decision takes effect from June 1, 1999, and applies to the calculation of the required reserve maintenance period for June 1999.

This Decision replaces Decision No. 52/1999/QĐ-NHNN dated February 10, 1999, of the Governor of the State Bank of Vietnam.

Article 7. - The Head of the Office, the Chief Inspector of the State Bank of Vietnam, Heads of units under the State Bank of Vietnam, Directors of State Bank of Vietnam branches in provinces and cities, Chairmen of the Board of Directors, and General Managers (Directors) of credit institutions are responsible for implementing this Decision.