Circular No. 312/2016/TT-BTC on Financial Regime for the Deposit Insurance of Vietnam

CIRCULAR

Regulations on financial regime for Pursuant to Decree No. 68/2013/NĐ-CP dated June 28, 2013 of the Government detailing and guiding the implementation of the Law on Deposit Insurance;

On the basis of Law on Deposit Insurance No. 06/2012/QH13 Pursuant to Decree No. 87

On the basis of Law on Management and Use of State Capital for Investment in Production and Business Operations at Enterprises No. 69/2014/QH13 November 26, 2014;

Decree No. Decree No. 68/2013/NĐ-CP dated June 28, 2013 of the Government detailing and guiding implementation of Law on Deposit Insurance;

Decree No. 215/2013/NĐ-CP dated December 23, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Decree No. 91/2015/NĐ-CP dated October 13, 2015 on state capital investment in enterprises and management and use of capital and assets at enterprises;

Decree No. 87/2015/NĐ-CP dated October 6, 2015 of the Government on supervision of state capital investment in enterprises; financial supervision, evaluation of operational efficiency and public disclosure of financial information of state-owned enterprises and enterprises with state capital;

Pursuant to Decision No. Decision No. 1394/QĐ-TTg dated August 13, 2013 of the Prime Minister on establishment of Vietnam Deposit Insurance Corporation;

Pursuant to Decision No. Decision No. 1395/QĐ-TTg dated August 13, 2013 of the Prime Minister on approval of charter regarding organization and operation of Vietnam Deposit Insurance Corporation;

Pursuant to Decision No. Decision No. 527/QĐ-TTg dated April 1, 2016 of the Prime Minister on amendment and supplementation of certain articles of the Charter regarding organization and operation of Vietnam Deposit Insurance Corporation issued together with Decision No. Decision No. 1395/QĐ-TTg dated August 13, 2013 of the Prime Minister;

At the proposal of the Director of the Department of Financial Affairs of Banks and Financial Institutions,

The Minister of Finance issues this Circular to regulate the financial regime for Vietnam Deposit Insurance Corporation.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

This Circular regulates the financial regime for Vietnam Deposit Insurance Corporation established pursuant to Decision No. 1394/QĐ-TTg dated August 13, 2013 of the Prime Minister on establishment of Vietnam Deposit Insurance Corporation.

Article 2. Principles of Financial Management

1. Vietnam Deposit Insurance Corporation is a state financial organization operating under the model of a limited liability company wholly owned by the State, having legal personality, seal, separate accounts according to Vietnamese law, operating not for profit, ensuring capital safety and self-covering costs.

2. Revenue of Vietnam Deposit Insurance Corporation is exempt from all types of taxes as prescribed by law.

3. Vietnam Deposit Insurance Corporation shall centralize accounting throughout the system, implement revenue and expenditure and settle revenue and expenditure according to the provisions of this Circular and other relevant legal documents.

Article 3. Responsibility Regime

1. The Board of Directors of Vietnam Deposit Insurance Corporation shall be responsible before the law and before state management agencies for managing capital and assets, using capital, complying with financial, accounting, and auditing regimes of Vietnam Deposit Insurance Corporation.

2. The responsibility regime of the Chairman and members of the Board of Directors, General Director, Deputy General Director, Auditor, Chief Accountant of Vietnam Deposit Insurance Corporation shall be implemented in accordance with the provisions of law on responsibility for the Chairman and members of the Board of Members, General Director, Deputy General Director, Auditor, Chief Accountant in a limited liability company wholly owned by the State.

Chapter II

MANAGEMENT OF CAPITAL AND ASSETS

Article 4. Operating Capital of Vietnam Deposit Insurance Corporation

The operating capital of Vietnam Deposit Insurance Corporation includes registered capital provided by the state budget, revenue from deposit insurance premiums, revenue from activities investing idle temporary funds, and other lawful revenues as prescribed by law, specifically as follows:

1. Registered Capital:

a) Registered capital of 50 trillion VND from the state budget and other lawful sources;

b) When there is a request to change the level of registered capital, the Board of Directors of Vietnam Deposit Insurance Corporation shall report to the State Bank of Vietnam so that the State Bank of Vietnam can coordinate with the Ministry of Finance to submit to the Prime Minister for consideration and decision.

2. Business reserve fund formed from the following sources:

a) Annual premium income from deposit insurance;

b) Income from activities investing idle temporary funds after setting aside a portion to cover operational expenses of Vietnam Deposit Insurance Corporation as stipulated in Clause 3, Article 6 of this Circular;

c) Amounts of insurance not claimed as prescribed in Clause 6, Article 26 of the Law on Deposit Insurance;

d) Remaining amount (if any) from liquidation of assets of participating organizations as prescribed in Clause 2, Article 16 of this Circular;

đ) Remaining financial surplus after annual revenue and expenditure after setting aside development investment fund and incentive and welfare fund as stipulated in Point đ, Clause 2, Article 21 of this Circular (if any).

3. Development Investment Fund.

4. Other capital as prescribed by law, including:

a) Support capital received as prescribed by the Law on Deposit Insurance and related legal documents;

b) Legal sponsorship capital from domestic and foreign organizations and individuals (if any);

c) Differences arising from asset revaluation (if any);

d) Unallocated revenue and expenditure differences (if any);

đ) Other lawful capital.

Article 5. Principles for Using Capital

1. The Vietnam Deposit Insurance Corporation may use capital to serve its operations in accordance with the provisions of the law. The use of capital by the Vietnam Deposit Insurance Corporation must ensure the principles of capital preservation and development.

2. The Vietnam Deposit Insurance Corporation has the responsibility to monitor all existing capital and assets, implement accounting and statistical records in accordance with current regulations, fully, accurately, and promptly reflect changes in capital and assets during the course of operations, clearly define the responsibilities of each department and individual in cases of capital loss, asset damage, or loss.

3. Investment in and procurement of fixed assets shall be carried out by the Vietnam Deposit Insurance Corporation in accordance with the provisions of the law applicable to a limited liability company wholly owned by the State. The Vietnam Deposit Insurance Corporation may procure and invest in fixed assets serving its operations according to the principle that the remaining value of fixed assets does not exceed 30% of the paid-in capital and the development fund recorded in the accounting books. Investments and procurements of fixed assets must comply with state regulations, ensuring thrift and prevention of waste within the annual plan approved by the Board of Directors.

4. The Vietnam Deposit Insurance Corporation may use temporarily idle capital to invest, purchase government bonds, central bank bills, and deposit money at the State Bank of Vietnam.

5. The operational reserve fund shall be used to pay insurance money to depositors in accordance with the law on deposit insurance.

a) In the event that the operational reserve fund is insufficient to pay insurance money to depositors, the Vietnam Deposit Insurance Corporation may accept support or borrow from credit institutions or other organizations guaranteed by the Government in accordance with the Law on Deposit Insurance and guiding documents.

b) In the event that the Vietnam Deposit Insurance Corporation must sell government bonds or central bank bills to pay insurance money to depositors, the difference between the selling price and the purchase price (positive or negative difference) shall be recorded in the operational reserve fund.

Article 6. Management of Proceeds from Investment Activities of Temporarily Idle Capital

1. The Vietnam Deposit Insurance Corporation must monitor and record separately the proceeds from investment activities of temporarily idle capital as stipulated in Clause 4, Article 5 of this Circular.

2. The Vietnam Deposit Insurance Corporation may allocate a portion of the proceeds from investment activities of temporarily idle capital to cover expenses.

a) Annually, the Vietnam Deposit Insurance Corporation establishes the amount to be allocated from the proceeds of investment activities of temporarily idle capital to be recorded as income and submitted to the Ministry of Finance before October 30 of the year preceding the planning year, accompanied by a plan for capital utilization, projected income, expenses, and other relevant documents.

b) Within 60 days from receiving complete documentation, based on the request of the Vietnam Deposit Insurance Corporation, the Ministry of Finance, in coordination with the State Bank of Vietnam, will determine the specific amount to be allocated for the planning year for the Vietnam Deposit Insurance Corporation.

c) The allocation amount may be reviewed and adjusted based on the proposal of the Vietnam Deposit Insurance Corporation if, during the planning year, the State changes policies related to deposit insurance or there are unforeseeable and uncontrollable reasons as stipulated in Clause 4, Article 7 of this Circular affecting the revenue from investment activities of temporarily idle capital of the Vietnam Deposit Insurance Corporation.

3. The Vietnam Deposit Insurance Corporation shall record the remaining amount after allocating a portion to cover operating expenses as stipulated in Clause 2 of this Article into the operational reserve fund.

Article 7. Preservation of Capital of the Vietnam Deposit Insurance Corporation

1. The Vietnam Deposit Insurance Corporation shall be responsible for preserving and developing capital. Any changes in state capital at the Vietnam Deposit Insurance Corporation must be reported to the State Bank of Vietnam and the Ministry of Finance for monitoring and supervision.

2. The preservation of state capital at the Vietnam Deposit Insurance Corporation shall be carried out through the following measures:

a) Adhering to the regulations on the management and use of capital and assets, distribution of revenue and expenditure differences, financial management systems, and accounting systems as prescribed by law.

b) Purchasing asset insurance as prescribed by law.

c) Promptly handling the value of lost assets, unrecoverable debts, and setting aside risk provisions as prescribed by law.

d) Other measures for preserving state capital at the Vietnam Deposit Insurance Corporation as prescribed by law.

3. Annually, the Vietnam Deposit Insurance Corporation must assess the level of capital preservation of the Vietnam Deposit Insurance Corporation using the following methods:

a) If the operational results of the Vietnam Deposit Insurance Corporation do not generate negative revenue and expenditure differences or have positive revenue and expenditure differences, it will be assessed as having preserved its capital.

b) If the operational results of the Vietnam Deposit Insurance Corporation generate negative revenue and expenditure differences (including cases where cumulative revenue and expenditure differences remain negative), it will be assessed as failing to preserve its capital.

4. When assessing the level of capital preservation, the Vietnam Deposit Insurance Corporation may exclude external factors affecting capital and income, including:

a) The State adjusts deposit insurance policies: adjusting deposit insurance premium rates, adjusting insurance payment limits;

b) The business contingency fund of the Vietnam Deposit Insurance Corporation decreases due to insurance payments made to depositors at participating organizations, thereby reducing the capital and income of the Vietnam Deposit Insurance Corporation for that year.

4. When the company implements public goods products and services ordered by the State, assigned plans, or tendered contracts, the corresponding planned salary fund for the volume of public goods products and services is determined based on the volume of public goods products and services ordered by the State, assigned plans, or tender contracts.

Article 8. Investment, Construction, and Purchase of Fixed Assets

The authority to decide, procedures, and processes for investment, construction, and purchase of fixed assets of the Vietnam Deposit Insurance Corporation shall be implemented according to the laws applicable to limited liability companies wholly owned by the State, wherein the authority of the Board of Directors of the Vietnam Deposit Insurance Corporation to decide on investment, construction, and purchase of fixed assets shall be carried out according to the laws governing the authority of the Board of Members of a limited liability company wholly owned by the State.

Article 9. Internal Regulations on Asset Management at the Vietnam Deposit Insurance Corporation

The Vietnam Deposit Insurance Corporation must establish and promulgate internal regulations to manage and utilize various types of assets of the Vietnam Deposit Insurance Corporation; these regulations must clearly define the coordination of each management department within the Vietnam Deposit Insurance Corporation, specify the compensation responsibilities of each department and individual in cases of asset damage, loss, or impairment causing losses to the Vietnam Deposit Insurance Corporation.

Article 10. Inventory and Revaluation of Assets

1. Inventory of Assets:

The Vietnam Deposit Insurance Corporation must organize regular or ad hoc inventory checks when closing the accounting books to prepare annual financial reports; after natural disasters or enemy attacks; or due to any other reasons causing asset fluctuations at the Vietnam Deposit Insurance Corporation; or as prescribed by the State. The Vietnam Deposit Insurance Corporation must statistically record excess and missing assets, identify the causes and responsibilities of related organizations and individuals, and determine material compensation levels as prescribed.

The Vietnam Deposit Insurance Corporation shall handle asset inventory checks according to the laws applicable to enterprises wholly owned by the State with 100% capital contribution.

2. Revaluation of Assets:

a) The Vietnam Deposit Insurance Corporation shall conduct revaluation of assets based on decisions by competent state authorities;

b) The revaluation of assets must comply with the relevant state regulations. Differences in value increases or decreases resulting from revaluation as stipulated in point a of this clause shall be handled according to the laws applicable to specific cases.

Article 11. Depreciation of Fixed Assets

The Vietnam Deposit Insurance Corporation shall implement depreciation of fixed assets according to the laws applicable to enterprises.

Article 12. Handling of Property Losses

All property losses of the Vietnam Deposit Insurance Corporation (excluding losses covered by the deposit insurance commitment of the Vietnam Deposit Insurance Corporation) must be documented to determine the value of the loss, cause, responsibility, and handled according to the following principles:

1. If the loss is due to subjective reasons, the person causing the loss shall compensate for it. The Board of Directors of the Vietnam Deposit Insurance Corporation decides on the amount of compensation and is responsible for its decision.

2. For insured property, it shall be handled according to the insurance contract.

3. The value of the loss, after recovery and compensation with personal or collective funds, insurance organizations, risk reserves, shall be recorded as expenses for the period if there is a shortfall.

4. In cases where losses are caused by natural disasters, enemy actions, or other force majeure events resulting in severe damage that the Vietnam Deposit Insurance Corporation cannot overcome, the Board of Directors of the Vietnam Deposit Insurance Corporation shall develop a plan to handle the loss and report it to the State Bank of Vietnam for submission to the Prime Minister for decision.

5. The Vietnam Deposit Insurance Corporation has the responsibility to promptly handle property losses. If property losses are not handled in accordance with regulations, the Board of Directors and General Director shall bear legal responsibility.

Article 13. Leasing of Assets

1. The Vietnam Deposit Insurance Corporation has the right to lease assets based on the principle of efficiency, capital preservation, and development in accordance with the laws applicable to state-owned enterprises holding 100% of the charter capital.

2. The use of assets for leasing must comply strictly with the provisions of the Civil Code and other relevant laws.

Article 14. Liquidation and Sale of Fixed Assets

1. The Vietnam Deposit Insurance Corporation has the right to proactively and implement the sale and liquidation of fixed assets that are damaged, technologically obsolete, unused, or unusable to recover capital on the principle of transparency and capital preservation in accordance with current laws.

2. The authority to decide, methods, procedures, and formalities for the liquidation and sale of fixed assets by the Vietnam Deposit Insurance Corporation shall be carried out in accordance with the laws applicable to a single-member limited liability company held 100% by the state, including the authority of the Vietnam Deposit Insurance Corporation's Board of Directors to decide on the liquidation and sale plans of fixed assets, which shall be implemented according to the provisions regarding the authority of the members' council of a single-member limited liability company held 100% by the state.

Article 15. Management of Receivables and Payables

The Vietnam Deposit Insurance Corporation shall manage receivables and payables in accordance with the laws applicable to a single-member limited liability company held 100% by the state.

Article 16. Handling of Proceeds from the Liquidation of Assets of Participating Organizations in Deposit Insurance That Have Gone Bankrupt

1. The liquidation of assets of participating organizations in deposit insurance that have gone bankrupt shall be carried out in accordance with the law.

2. The proceeds from the liquidation of assets of participating organizations in deposit insurance by the Vietnam Deposit Insurance Corporation shall be added to the operational reserve fund.

Chapter III

INCOME AND EXPENSES

Article 17. Management of Revenue and Expenses of the Vietnam Deposit Insurance Corporation

1. The Board of Directors of the Vietnam Deposit Insurance Corporation shall be responsible to the State Bank of Vietnam and under the law for strictly organizing the management, ensuring the accuracy, honesty, and legality of all revenue and expenses of the Vietnam Deposit Insurance Corporation.

2. All revenue and expenses arising from the operations of the Vietnam Deposit Insurance Corporation must have complete documentation and vouchers as prescribed by law and must be fully reflected in the accounting books of the Vietnam Deposit Insurance Corporation according to the accounting regulations stipulated by the Ministry of Finance.

3. The revenue and expenses of the Vietnam Deposit Insurance Corporation shall be determined in Vietnamese Dong; in cases where revenue or expenses are in foreign currency, they must be converted into Vietnamese Dong in accordance with current legal provisions.

4. The Vietnam Deposit Insurance Corporation must accurately calculate its operational costs, cover all expenses through its revenues, and bear responsibility for the results of its operations.

Article 18. Revenue of the Vietnam Deposit Insurance Corporation

1. The revenue of the Vietnam Deposit Insurance Corporation includes:

1.1. Financial activity revenue: This is the revenue derived from a portion of the income from the annual investment of temporarily idle funds as stipulated in Clause 2, Article 6 of this Circular.

1.2. Deposit insurance business activity revenue:

a) Revenue from fines imposed on participating organizations that violate regulations regarding the amount of deposit insurance premiums to be paid and the payment deadlines;

b) Other deposit insurance business activity revenue related to the business.

1.3. Other activity revenue:

a) Revenue from asset liquidation and sale;

b) Revenue from asset leasing;

c) Revenue from consulting and training services provided to participating organizations.

d) Other income as prescribed by law.

2. Principles for Revenue Accounting

The revenue of the Vietnam Deposit Insurance Corporation must be determined in accordance with accounting standards and relevant legal provisions, accompanied by valid invoices or vouchers, and must be fully recorded as income. Specifically, for financial activity revenue:

2.1. At the end of each month or quarter, the Vietnam Deposit Insurance Corporation bases its calculations on the permissible ratio of revenue from the annual investment of temporarily idle funds as stipulated in Clause 2, Article 6 of this Circular to cover operational costs and the revenue from the temporary investment of idle funds for that month or quarter, which is temporarily recorded as income (by multiplying the ratio by the investment revenue from temporarily idle funds); the remaining revenue from the investment of temporarily idle funds is recorded in the business reserve fund. In cases where the ratio of revenue from the annual investment of temporarily idle funds to cover operational costs has not been approved by the Ministry of Finance, the Vietnam Deposit Insurance Corporation temporarily records it at eighty percent of the previous year's ratio.

2.2. At the end of the year, based on the revenue from the annual investment of temporarily idle funds, the Vietnam Deposit Insurance Corporation is responsible for accurately recording the revenue as income and the revenue from the investment of temporarily idle funds after deducting a portion to cover costs as stipulated in Clause 2, Article 6 of this Circular into the business reserve fund.

2.3. After receiving the National Audit Office’s report on the financial statements for the year or conclusions from competent authorities regarding the financial transactions of the Vietnam Deposit Insurance Corporation, if there are changes in the revenue from the investment of temporarily idle funds, the Vietnam Deposit Insurance Corporation is responsible for adjusting the allocation of revenue into income and the revenue from the investment of temporarily idle funds after deducting a portion to cover costs as stipulated in Clause 2, Article 6 of this Circular into the business reserve fund.

Article 19. Expenditures of the Vietnam Deposit Insurance Corporation

1. The expenditures of the Vietnam Deposit Insurance Corporation include:

1.1. Interest payments on borrowed funds when the capital of the Vietnam Deposit Insurance Corporation temporarily lacks sufficient funds to pay insurance money as stipulated in Clause 12, Article 13 of the Law on Deposit Insurance.

1.2. Payment service fees, agency fees.

1.3. Costs related to participating in special control processes; managing and liquidating assets of organizations participating in deposit insurance.

1.4. Payment for debt collection services (if any) provided by permitted organizations under the law to recover overdue debts that are difficult to collect and debts where the Vietnam Deposit Insurance Corporation becomes the creditor upon liquidation of the assets of deposit-insured organizations that have gone bankrupt according to the law.

1.5. Exchange rate differences as prescribed in accounting standards and legal regulations.

1.6. Expenditure for the dissemination, education of laws, and promotion of policies on deposit insurance. The content and level of expenditure shall be carried out in accordance with the law. The total expenditure of this item shall not exceed 3% of total reasonable and lawful expenses.

1.7. Expenditure for staff:

a) Salary and remuneration of management personnel of the Vietnam Deposit Insurance Corporation in accordance with guidelines from the Ministry of Labor, Invalids, and Social Affairs;

b) Salary, wages, and other expenditure of a salary nature payable to employees decided by the Board of Directors in accordance with guidelines from the Ministry of Labor, Invalids, and Social Affairs;

c) Meal allowance for staff in accordance with legal provisions on corporate income tax;

d) Expenditure for female workers in accordance with established regulations;

đ) Uniform expenditure paid in cash or in kind; the maximum expenditure shall not exceed the uniform expenditure paid in cash as stipulated in legal provisions on corporate income tax;

e) Occupational safety and health expenditure as prescribed;

g) Severance and unemployment benefits;

h) Regular medical examination expenditure for employees and other medical expenditure as prescribed;

i) Annual leave payment;

k) Social insurance, health insurance, unemployment insurance, trade union fees, and other contributions as prescribed;

l) Welfare expenditure directly benefiting employees in accordance with legal provisions on corporate income tax (if applicable).

1.8. Management activity expenditure, including:

a) Office supplies expenditure;

b) Postal, telecommunication, telegram, leased communication channel, telex, fax charges based on invoices from postal authorities;

c) Electricity, water, health, sanitation, and environmental expenditure;

d) Fuel expenditure;

đ) Reception, external transactions, ceremonial, conference expenditure as prescribed by current law and must be linked to the activities of the Vietnam Deposit Insurance Corporation. These expenditures shall not exceed 5% of total reasonable and lawful expenses;

e) Travel expense for staff traveling domestically;

g) Travel expense for staff traveling abroad: Implemented within the approved annual outbound delegation plan by the Vietnam Deposit Insurance Corporation's Board of Directors. Content and levels of expenditure shall comply with state regulations on travel expense allowances for civil servants and employees of administrative and public institutions traveling abroad for short-term stays funded by the state budget;

h) Staff training and retraining expenditure: Implemented within the approved staff training and retraining plan by the Vietnam Deposit Insurance Corporation's Board of Directors. Content and levels of expenditure shall comply with state regulations on the management and use of training and retraining funds for state civil servants and employees;

i) Scientific research expenditure: Implemented within the approved scientific research plan by the Vietnam Deposit Insurance Corporation's Board of Directors. Content and levels of expenditure shall comply with regulations for scientific and technological projects using state budget funding;

k) Expenditure for hiring domestic and foreign experts within the approved annual plan by the Vietnam Deposit Insurance Corporation's Board of Directors;

l) Inspection, audit, and review expenditure;

m) Contract breach penalty expenditure due to unforeseeable and irresistible causes;

n) Incentive expenditure for innovation, productivity improvement, material conservation, and cost reduction. The incentive level is determined by the General Director based on the effectiveness of the work but shall not exceed the cost savings generated by such work within one year. The Vietnam Deposit Insurance Corporation must issue an award regulation and bear legal responsibility for its effectiveness and accuracy;

o) Environmental protection expenditure;

p) Enforcement fee and charge expenditure (if any);

q) Other management expenditure as prescribed.

1.9. Risk reserve expenditure as prescribed by law for enterprises.

1.10. Asset expenditure:

a) Depreciation expenditure on fixed assets: Based on legal regulations on the management, use, and depreciation of fixed assets for enterprises, the Vietnam Deposit Insurance Corporation's Board of Directors specifies the depreciation rate for each type of asset in the internal financial regulations to suit operational characteristics;

b) Insurance expenditure on assets;

c) Purchase expenditure for labor tools;

d) Maintenance and repair expenditure on assets: The annual maximum expenditure shall not exceed 5% of the average value of fixed assets in the year;

đ) Lease payment expenditure for assets under lease agreements between lessors and the Vietnam Deposit Insurance Corporation. In cases where lease payments are made in one lump sum for multiple years, the lease payments shall be gradually allocated to expenses over the years of asset usage;

e) Liquidation and sale expenditure of assets (including residual asset values and liquidation and sale costs);

g) Expenditure for remaining asset losses after compensation from prescribed sources.

1.11. Other expenditure:

a) Expenditure for Party and mass organizations in cases where their funding is insufficient to cover operational costs as prescribed;

b) Fire prevention, defense, and security expenditure;

c) Tax, fee, and charge payment expenditure;

d) Expenses for membership fees of domestic and foreign industry associations that the Vietnam Deposit Insurance Corporation participates in according to the fee levels set by these associations;

đ) Other reasonable and legitimate expenses necessary for the operation of the Vietnam Deposit Insurance Corporation, arising during its operations and not specified in this Circular, shall be reviewed, decided upon, and the Vietnam Deposit Insurance Corporation shall bear responsibility under the law by the Board of Directors of the Vietnam Deposit Insurance Corporation;

2. Principles for expense accounting

2.1. The expenses of the Vietnam Deposit Insurance Corporation are those related to the activities of the Vietnam Deposit Insurance Corporation, complying with the principle of matching income and expenses and having valid invoices and supporting documents in accordance with the law, and included in the annual financial plan approved by the State Bank of Vietnam. The determination of expenses shall be consistent with accounting standards and tax laws on corporate income tax and other relevant laws.

2.2. Items that the Vietnam Deposit Insurance Corporation may not account for as expenses:

a) Penalties imposed on individuals for violations of the law as stipulated by the law;

b) Expenses unrelated to the activities of the Vietnam Deposit Insurance Corporation, or expenses without valid invoices or supporting documents;

c) Expenses covered by other sources of funding;

d) Other unreasonable or invalid expenses.

Chapter IV

FINANCIAL INCOME AND EXPENSE DIFFERENCES AND ESTABLISHMENT OF FUNDS

Article 20. Financial Income and Expense Differences

The financial income and expense difference realized in a year is the result of the Vietnam Deposit Insurance Corporation's operations, determined by subtracting total reasonable and valid expenses from total income.

Article 21. Handling Annual Financial Income and Expense Differences

The financial income and expense differences of the Vietnam Deposit Insurance Corporation shall be distributed as follows:

1. To offset the financial income shortfall compared to expenses in previous years.

2. The remaining amount shall be treated as 100% and handled as follows:

a) Up to 30% shall be allocated to the development investment fund of the Vietnam Deposit Insurance Corporation.

b) Establish two funds for employee rewards and welfare benefits for the Vietnam Deposit Insurance Corporation:

- In the case where the Vietnam Deposit Insurance Corporation is classified as type A, the maximum allocation shall not exceed three months' salary for both reward and welfare funds;

- In the case where the Vietnam Deposit Insurance Corporation is classified as type B, the maximum allocation shall not exceed one and a half months' salary for both reward and welfare funds;

- In the case where the Vietnam Deposit Insurance Corporation is classified as type C, the maximum allocation shall not exceed one month's salary for both reward and welfare funds;

- In the case where the Vietnam Deposit Insurance Corporation does not implement classification, it shall not establish the reward and welfare funds.

The ratio of allocation to the two reward and welfare funds shall be decided by the Board of Directors of the Vietnam Deposit Insurance Corporation.

c) Establish a management bonus fund:

- In the case where the Vietnam Deposit Insurance Corporation is classified as type A, the maximum allocation shall not exceed one and a half months' salary for the management of the Vietnam Deposit Insurance Corporation;

- In the case where the Vietnam Deposit Insurance Corporation is classified as type B, the maximum allocation shall not exceed one month's salary for the management of the Vietnam Deposit Insurance Corporation;

- In the case where the Vietnam Deposit Insurance Corporation is classified as type C or does not implement classification, it shall not establish a management bonus fund.

d) In the event that the remaining financial income and expense difference after allocating to the development investment fund as specified in point a of this clause is insufficient to allocate to the reward fund, welfare fund, and management bonus fund according to the prescribed level, the Vietnam Deposit Insurance Corporation may reduce the financial income and expense difference allocated to the development investment fund to supplement the source for fully establishing the reward, welfare, and management bonus funds according to the prescribed level, but the maximum reduction shall not exceed the amount allocated to the development investment fund in the fiscal year.

đ) The remaining amount shall be supplemented to the business reserve fund.

3. The assessment of operational effectiveness and enterprise classification for the Vietnam Deposit Insurance Corporation serves as the basis for establishing the reward and welfare funds and the management bonus fund in accordance with the provisions of the law applicable to a limited liability company wholly owned by the state and the guidance of the State Bank of Vietnam, taking into account the specific nature of the Vietnam Deposit Insurance Corporation's operations.

Article 22. Management and use of funds established from revenue-expenditure differences

1. The use of funds of the Vietnam Deposit Insurance Corporation must be in accordance with their intended purposes and designated recipients.

a) The Vietnam Deposit Insurance Corporation shall establish and promulgate regulations on the management and use of funds in accordance with the provisions of the law for internal application within the Vietnam Deposit Insurance Corporation; such regulations must ensure democracy and transparency, involving the Executive Committee of the Vietnam Deposit Insurance Corporation's Trade Union, and be publicly disclosed within the Vietnam Deposit Insurance Corporation before implementation.

b) Within each fiscal year, the Vietnam Deposit Insurance Corporation shall proactively implement temporary fund allocations based on the results of its operations with positive revenue-expenditure differences to have resources available for using the funds according to the pre-established purposes.

2. The development investment fund shall be used to implement development investment projects of the Vietnam Deposit Insurance Corporation and to supplement the charter capital of the Vietnam Deposit Insurance Corporation according to the Prime Minister's decision based on the proposal of the State Bank of Vietnam after obtaining the opinion of the Ministry of Finance.

3. The incentive fund shall be used for:

a) Year-end bonuses, regular bonuses, special bonuses, and bonuses stipulated by the law on competition and rewards for employees of the Vietnam Deposit Insurance Corporation. The incentive fund of the Vietnam Deposit Insurance Corporation shall not be used to pay bonuses to managers of the Vietnam Deposit Insurance Corporation and state-appointed supervisors except for bonuses stipulated by the law on competition and rewards.

b) Incentives for individuals and units outside the Vietnam Deposit Insurance Corporation who have made significant contributions to the activities and management work of the Vietnam Deposit Insurance Corporation.

c) The level of incentives shall be implemented in accordance with the regulations on the management and use of funds of the Vietnam Deposit Insurance Corporation.

4. The welfare fund shall be used for:

a) Investing in the construction or repair of welfare facilities of the Vietnam Deposit Insurance Corporation.

b) Expenditures for welfare activities for employees of the Vietnam Deposit Insurance Corporation including managers of the Vietnam Deposit Insurance Corporation and state-appointed supervisors.

c) Contributing part of the capital to invest in the construction of welfare facilities with other units according to contracts.

d) Using part of the welfare fund to provide emergency assistance to employees facing sudden difficulties, including those retiring, losing their health, falling into difficult circumstances without support, or engaging in charitable social work.

đ) The level of expenditure using the fund shall be implemented in accordance with the regulations on the management and use of funds of the Vietnam Deposit Insurance Corporation.

5. The manager reward fund shall be used for:

a) Annual rewards; rewards at the end of term for the Chairman and members of the Board of Directors, General Director, Deputy General Director, Supervisor, Chief Accountant of the Vietnam Deposit Insurance Corporation.

b) The annual reward amount and the reward amount at the end of term shall be decided by the State Bank of Vietnam based on performance criteria for managers and supervisors and the effectiveness of the Vietnam Deposit Insurance Corporation's operations, based on the proposal of the Chairman of the Board of Directors of the Vietnam Deposit Insurance Corporation.

c) In cases where the Chairman and members of the Board of Directors, General Director, Deputy General Director, Supervisor, Chief Accountant of the Vietnam Deposit Insurance Corporation are rewarded according to the law on competition and rewards, the Vietnam Deposit Insurance Corporation shall use the incentive fund of the Vietnam Deposit Insurance Corporation to pay rewards to the aforementioned recipients according to the reward levels prescribed by the law on competition and rewards for each form of competition and reward.

Chapter V

ACCOUNTING SYSTEM, STATISTICAL RECORDS, AUDITING AND FINANCIAL PLANNING REGIME

Article 23. Accounting and Statistics

1. The Vietnam Deposit Insurance Corporation must implement accounting and statistical systems in accordance with the provisions of the law and guiding documents issued by the Ministry of Finance.

2. The fiscal year of the Vietnam Deposit Insurance Corporation begins on January 1 and ends on December 31 of the Gregorian calendar.

Article 24. Financial Plan

1. The Vietnam Deposit Insurance Corporation is responsible for preparing and submitting to the State Bank of Vietnam a draft financial plan (in the form of a report template established according to Appendix 1 attached to this Circular) before March 1 of the planning year.

2. The State Bank of Vietnam shall take the lead and coordinate with the Ministry of Finance to review the financial plan and assign certain indicators to the Vietnam Deposit Insurance Corporation before April 30 of the planning year, including:

a) Planning Indicators:

- Total income minus total expenses excluding salaries;

- Travel expenses for staff traveling abroad;

- Research and development expenses;

- Training and staff development expenses;

- Expenses for hiring domestic and foreign experts.

During the implementation of the financial plan, if the Vietnam Deposit Insurance Corporation is unable to meet the financial indicators assigned by the State Bank of Vietnam, it must submit a written request for adjustment to the State Bank of Vietnam and can only proceed after receiving written approval from the State Bank of Vietnam (after obtaining the agreement of the Ministry of Finance).

b) Performance Evaluation Indicators and Classification of the Vietnam Deposit Insurance Corporation. These evaluation indicators shall not be adjusted throughout the implementation period (except in cases of force majeure).

3. Based on the planning indicators assigned by the State Bank of Vietnam under point a, Clause 2 of this Article, the Chairman of the Board of Directors of the Vietnam Deposit Insurance Corporation shall approve detailed financial plans for implementation.

Article 25. Reporting System

Periodically (quarterly, annually), the Vietnam Deposit Insurance Corporation is responsible for preparing and submitting business reports, statistical reports, financial statements, and other periodic and ad hoc reports as prescribed by the Ministry of Finance and the General Statistics Office.

1. Types of Reports:

a) Monthly third-level account balance sheet;

b) Accounting balance sheet (summary asset statement);

c) Report on operational results;

d) Notes to the financial statements:

- Changes in fixed assets;

- Implementation of labor, wages - income;

- Changes in sources of funds and their utilization;

- Establishment and use of reserve funds.

e) Annual report on financial supervision, performance evaluation, and classification as prescribed by law.

2. The Chairman of the Board of Directors and the General Director of the Vietnam Deposit Insurance Corporation are responsible for the accuracy and truthfulness of these reports.

3. Reporting deadlines and submission locations:

a) Monthly reports must be submitted within ten days following the end of the month to the State Bank of Vietnam;

b) Quarterly reports must be submitted within thirty days following the end of the quarter to the Ministry of Finance and the State Bank of Vietnam;

c) Annual reports of the Vietnam Deposit Insurance Corporation, approved by the Board of Directors, must be submitted to the Ministry of Finance and the State Bank of Vietnam within ninety days following the end of the fiscal year.

Article 26. Audit

1. The Vietnam Deposit Insurance Corporation shall implement internal audit systems in accordance with current regulations.

2. The annual financial statements of the Vietnam Deposit Insurance Corporation must be audited by the State Audit Agency and confirmed. The results and reports on the implementation of the audit of the financial statements of the Vietnam Deposit Insurance Corporation must be submitted to the Ministry of Finance and the State Bank of Vietnam.

Chapter VI

RESPONSIBILITIES OF THE SUPERVISORY AUTHORITY

Article 27. Responsibilities of the Ministry of Finance

1. To conduct financial inspections in accordance with the laws on financial inspection.

2. To inspect and evaluate the compliance with financial regulations in order to improve the financial system of the Vietnam Deposit Insurance Corporation.

3. To coordinate with the State Bank of Vietnam to handle issues related to the finances of the Vietnam Deposit Insurance Corporation.

Article 28. Responsibilities of the State Bank of Vietnam

1. To perform state management functions regarding deposit insurance in accordance with the law.

2. To supervise the finances of the Vietnam Deposit Insurance Corporation and submit to the Ministry of Finance plans for financial supervision and reports on the results of financial supervision according to the law applicable to state-owned enterprises.

3. To conduct comprehensive inspections and audits of the activities of the Vietnam Deposit Insurance Corporation; to notify the Ministry of Finance of any violations (if any) concerning the financial regulations of the Vietnam Deposit Insurance Corporation discovered during the inspection, audit, and supervision processes, and measures to address such violations.

4. To perform the function of representing the state ownership in the Vietnam Deposit Insurance Corporation.

a) To decide and be responsible for decisions made within the scope of authority granted by the Prime Minister under the law.

b) To take the lead and coordinate with the Ministry of Finance to present to the Prime Minister for consideration and decision matters related to finance exceeding the scope of authority.

c) To base on the provisions of the law and the specific nature of the operations of the Vietnam Deposit Insurance Corporation to establish and guide the assessment of operational effectiveness and classification of the corporation as a business entity.

d) To take the lead and coordinate with the Ministry of Finance to present to the Prime Minister for decision to change the charter capital level of the Vietnam Deposit Insurance Corporation based on the proposal of the Board of Directors of the Vietnam Deposit Insurance Corporation.

đ) To take the lead and coordinate with the Ministry of Finance to present to the Prime Minister for consideration and decision on financial support for the Vietnam Deposit Insurance Corporation in cases where its temporarily idle capital is insufficient to cover deposit insurance payments.

Chapter VII

IMPLEMENTATION

Article 29. Effective Date

1. This Circular takes effect from January 10, 2017.

2. This Circular replaces Circular No. 41/2014/TT-BTC dated April 8, 2014 of the Ministry of Finance on the financial regime for the Vietnam Deposit Insurance Corporation.

3. Based on the provisions of this Circular and relevant laws, within 120 days from the date of issuance of this Circular, the Board of Directors of the Vietnam Deposit Insurance Corporation must issue internal financial regulations as a basis for implementation.

4. In the course of implementation, if there are difficulties, they should be reported to the Ministry of Finance for study, consideration, and resolution./.