Circular No. 21/2021/TT-NHNN on the requirement for state credit institutions to maintain deposit balances with the Vietnam Bank for Social Policies

CIRCULAR

Regulations on State-owned Credit Institutions Maintaining Deposit Balances with the Social Policy Bank

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010, and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions dated November 20, 2017;

Pursuant to Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government on credit for the poor and other policy beneficiaries;

Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Article 1.

The Governor of the State Bank of Vietnam issues this Circular to regulate State-owned Credit Institutions maintaining deposit balances with the Social Policy Bank.

Article 1. Scope of Regulation

This Circular regulates State-owned Credit Institutions, which include commercial banks wholly owned by the state and joint-stock commercial banks where the state holds more than 50% of the charter capital, maintaining deposit balances with the Social Policy Bank.

Article 2. Applicability

1. State-owned Credit Institutions. State-owned Credit Institutions are not required to comply with the regulations on maintaining deposit balances with the Social Policy Bank during the period when the State Bank of Vietnam places them under special control.

2. Social Policy Bank.

Article 3. Deposit Balances of State-owned Credit Institutions Maintained at the Social Policy Bank

1. State-owned Credit Institutions shall be responsible for maintaining deposit balances equal to 2% of their domestic currency deposit balance as of December 31 of the previous year at the Social Policy Bank.

2. The domestic currency deposit balance of State-owned Credit Institutions includes:

a) Deposits from organizations (excluding credit institutions and foreign bank branches established and operating in Vietnam) and individuals at State-owned Credit Institutions in the forms of demand deposits, term deposits, savings deposits, and dedicated capital deposits;

b) Funds obtained from issuing deposit certificates, bills, promissory notes, and bonds by State-owned Credit Institutions;

c) Other deposits at State-owned Credit Institutions according to the principle of full repayment of principal and interest to depositors as agreed (excluding performance guarantees; other deposits from credit institutions, foreign bank branches established and operating in Vietnam).

Article 4. Interest Rates on Deposit Balances of State-owned Credit Institutions at the Social Policy Bank

1. The interest rate on deposit balances is determined as follows:

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b) Is the average of the deposit rates at the end of December of the previous year of State-owned Credit Institutions, calculated using the weighted average method based on various types of deposit sources specified in Clause 2, Article 3 of this Circular.

c) Is the average cost of funds agreed upon between the Social Policy Bank and State-owned Credit Institutions but not exceeding 1.3% per annum.

2. Based on reports of domestic currency deposit balances and deposit rates for each term of State-owned Credit Institutions attached as Appendix 01 issued along with this Circular, the State Bank (Department of Monetary Policy) calculates the average deposit rate of State-owned Credit Institutions as of December 31 of the previous year and notifies State-owned Credit Institutions and the Social Policy Bank before January 31 each year to serve as the basis for determining the interest rate on deposit balances for the year.

3. In case the State Bank (Department of Monetary Policy) receives a request from a State-owned Credit Institution or a request from the Social Policy Bank to adjust the average deposit rate due to significant fluctuations in deposit rates of State-owned Credit Institutions compared to the previously announced rates, the State Bank requires State-owned Credit Institutions to submit a special report according to Appendix 01 issued along with this Circular and reviews and decides to adjust the average deposit rate, notifying State-owned Credit Institutions and the Social Policy Bank to serve as the basis for determining the interest rate on deposit balances applicable for the remaining part of the year. Within 45 days from receiving the request to adjust the interest rate from a State-owned Credit Institution or the Social Policy Bank, the State Bank will notify the State-owned Credit Institution and the Social Policy Bank about the adjustment or maintenance of the average deposit rate of State-owned Credit Institutions.

4. The interest calculation period for deposit balances is agreed upon by the Social Policy Bank and State-owned Credit Institutions in accordance with the State Bank's regulations on interest calculation methods in deposit-taking and lending activities between credit institutions and customers.

Article 5. Deposit of funds and adjustment (supplement or withdraw) of deposit balances at the Social Policy Bank

1. State credit institutions shall maintain deposit balances at the Social Policy Bank in accordance with the deposit agreement and its appendices signed between the state credit institution and the Social Policy Bank.

2. By no later than March 1st each year, state credit institutions and the Social Policy Bank shall complete the signing of the deposit agreement appendices, supplementing or withdrawing deposit balances at the Social Policy Bank.

a) The state credit institution supplements deposit balances at the Social Policy Bank by the amount of the larger difference when the deposit balance required to be maintained during the implementation year is greater than the deposit balance of the previous year.

b) The state credit institution may withdraw deposit balances at the Social Policy Bank by the amount of the smaller difference or continue maintaining the current deposit balance when the deposit balance required to be maintained during the implementation year is less than the deposit balance of the previous year.

3. Within fifteen working days from the date of the annual financial report of the state credit institution being audited, state credit institutions and the Social Policy Bank shall review and sign the deposit agreement appendices, supplementing or withdrawing deposit balances at the Social Policy Bank in case of any differences arising:

a) The state credit institution supplements deposit balances at the Social Policy Bank by the amount of the larger difference when the deposit balance according to the annual financial report of the state credit institution that has been audited is greater than the current deposit balance being implemented.

b) The state credit institution may withdraw deposit balances at the Social Policy Bank by the amount of the smaller difference or continue maintaining the current deposit balance when the deposit balance according to the annual financial report of the state credit institution that has been audited is less than the current deposit balance being implemented.

4. Handling cases of supplementing or withdrawing deposit balances of state credit institutions at the Social Policy Bank due to special supervision or termination of special supervision:

b) In the case where the state credit institution is under special supervision while maintaining deposit balances at the Social Policy Bank, the state credit institution may withdraw the entire deposit balance at the Social Policy Bank within a maximum period of three months from the date of special supervision.

Article 6. Responsibilities of state credit institutions and the Social Policy Bank

1. Responsibilities of state credit institutions

a) Implement the maintenance and adjustment of deposit balances in accordance with the provisions of this Circular;

b) Regularly before January 15th each year, state credit institutions report the deposit balance of domestic currency mobilized funds and interest rates for each term at the end of December of the previous year or submit reports promptly upon request of the State Bank according to Appendix 01 issued together with this Circular to the State Bank (Department of Monetary Policy);

c) Regularly before January 15th each year, state credit institutions notify the deposit balance at the Social Policy Bank according to Appendix 02 issued together with this Circular to the Social Policy Bank;

d) Bear responsibility for the accuracy of data submitted to the State Bank and the Social Policy Bank.

a) Coordinate in implementing deposits and adjusting deposit balances in accordance with the provisions of this Circular;

b) Report the results of maintaining deposit balances of state credit institutions according to Appendix 03 issued together with this Circular to the State Bank (Bank Inspection and Supervision Agency, Department of Monetary Policy, Department of Credit for Economic Sectors) by no later than March 5th each year;

c) Report to the State Bank (Bank Inspection and Supervision Agency, Department of Monetary Policy, Department of Credit for Economic Sectors) the results of maintaining deposit balances according to Appendix 04 issued together with this Circular within five working days from the date when state credit institutions and the Social Policy Bank complete the review and adjustment of deposit balances based on the annual financial report of the state credit institution that has been audited.

Article 7. Responsibilities of units under the State Bank

1. The Monetary Policy Department shall be responsible for:

a) Calculating and announcing the average deposit interest rate to serve as the basis for determining the deposit balance interest rate before January 31 each year, and considering and deciding to adjust the average deposit interest rate according to the provisions of Clause 3, Article 4 of this Circular;

b) Handling issues related to maintaining deposit balances of state credit institutions at the Social Policy Bank during the implementation of this Circular.

2. The Credit Policies for Economic Sectors Department shall coordinate in monitoring the situation of deposit balances maintained by state credit institutions at the Social Policy Bank to serve management, oversight functions, and cooperate with the Social Policy Bank in implementing state policy credit programs.

a) Monitoring, inspecting, and supervising the implementation of the provisions of this Circular and handling violations according to the law;

b) Based on inspection conclusions, notifying the content of violations and the handling of violations stipulated in this Circular (if any) to relevant units under the State Bank for their knowledge and coordination in handling according to their functions and tasks.

Article 8. Implementation clause

1. This Circular takes effect from February 11, 2022.

2. This Circular abolishes:

a) Circular No. 23/2013/TT-NHNN dated November 19, 2013, of the Governor of the State Bank on the maintenance of deposit balances by state credit institutions at the Social Policy Bank;

b) Circular No. 41/2015/TT-NHNN dated December 31, 2015, of the Governor of the State Bank amending and supplementing certain articles of Circular No. 23/2013/TT-NHNN dated November 19, 2013, of the Governor of the State Bank on the maintenance of deposit balances by state credit institutions at the Social Policy Bank.

3. For deposit contracts and deposit contract appendices signed before the date this Circular takes effect, state credit institutions and the Social Policy Bank shall continue to implement the contents of the signed deposit contracts and deposit contract appendices or agree to amend and supplement the deposit contracts and deposit contract appendices in accordance with the provisions of this Circular.

Article 9. Implementation Organization

The Director of the Office, the Head of the Monetary Policy Department, the Heads of units under the State Bank; state credit institutions and the Social Policy Bank are responsible for organizing the implementation of this Circular./.