Circular No. 32/2012/TT-NHNN on the maximum interest rate for deposits in Vietnamese dong of organizations and individuals at credit institutions and foreign bank branches

CIRCULAR

Regulations on the maximum interest rate for deposits in Vietnamese dong

of organizations and individuals at credit institutions and foreign bank branches

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Organizations No. 47/2010/QH12 dated June 16, 2010;

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;

Article 1.

The Governor of the State Bank of Vietnam issues this Circular to regulate the maximum interest rate for deposits in Vietnamese dong of organizations (excluding credit institutions and foreign bank branches) and individuals at credit institutions and foreign bank branches,

Article 1. Credit institutions and foreign bank branches shall set the interest rate for deposits in Vietnamese dong of organizations (excluding credit institutions and foreign bank branches) and individuals, including promotional expenses under all forms, as follows:

1. The maximum interest rate applicable to demand deposits and term deposits under one month is 2% per annum.

2. The maximum interest rate applicable to term deposits from one month to less than twelve months is 8% per annum; specifically, for People's Credit Funds and Microfinance Organizations, the maximum interest rate for term deposits from one month to less than twelve months is 8.5% per annum.

3. The interest rate for term deposits of twelve months or longer shall be determined by credit institutions and foreign bank branches based on market supply and demand for capital.

Deposits include demand deposits, term deposits, savings deposits, deposit certificates, bills, discount notes, bonds, and other deposit-taking forms of organizations (excluding credit institutions and foreign bank branches) and individuals as stipulated in Clause 13, Article 4 of the Law on Credit Institutions.

Article 2. The maximum interest rate for deposits prescribed in Article 1 of this Circular applies to end-of-period interest payment methods and other interest payment methods converted to end-of-period interest payment methods.

Article 3. Credit institutions and foreign bank branches must publicly display the interest rate for deposits in Vietnamese dong at locations where deposits are accepted according to the regulations of the State Bank of Vietnam. Strictly prohibit credit institutions and foreign bank branches from conducting promotions in any form (cash, interest rates, and other forms) that do not comply with the provisions of the law and this Circular when accepting deposits.

Article 4. Implementation

This Circular takes effect from December 24, 2012, and replaces the following Circulars:

a) Circular No. 30/2011/TT-NHNN dated September 28, 2011, issued by the Governor of the State Bank of Vietnam regulating the maximum interest rate for deposits in Vietnamese dong of organizations and individuals at credit institutions and foreign bank branches.

b) Circular No. 19/2012/TT-NHNN dated June 8, 2012, issued by the Governor of the State Bank of Vietnam amending and supplementing certain articles of Circular No. 30/2011/TT-NHNN dated September 28, 2011, regulating the maximum interest rate for deposits in Vietnamese dong of organizations and individuals at credit institutions and foreign bank branches.

For term deposits in Vietnamese dong of organizations and individuals at credit institutions and foreign bank branches arising before the effective date of this Circular, they shall be implemented until their expiration; if the agreed term expires and the organization or individual does not withdraw the deposit, the credit institution or foreign bank branch shall determine the interest rate for the deposit according to the provisions of this Circular.

The Banking Inspection and Supervision Authority and the State Bank of Vietnam Branches in provinces and centrally-administered cities shall conduct inspections, audits, and supervision of the implementation of regulations on the interest rate for deposits in Vietnamese dong; apply measures within their authority to handle violations by credit institutions and foreign bank branches as stipulated in this Circular.

The Director of the Office, Heads of the Monetary Policy Department, and Heads of units under the State Bank of Vietnam, Directors of State Bank of Vietnam Branches in provinces and centrally-administered cities; Chairmen of the Board of Directors, Members of the Board of Management, and General Managers (Directors) of credit institutions and foreign bank branches and related organizations and individuals are responsible for implementing this Circular.