Circular No. 36/2019/TT-NHNN on the management and use of the Fund for Implementing National Monetary Policy

CIRCULAR

Regulations on management and use

National Monetary Policy Implementation Fund

Pursuant to the Law on the State Bank of Vietnam 2010;

Pursuant to the Law on Credit Institutions 2010; the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions 2017;

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;

Pursuant to the Prime Minister's Decision No. 07/2013/QĐ-TTg dated January 24, 2013 on the financial system of the State Bank of Vietnam;

At the proposal of the Director of the Department of Finance and Accounting;

The Governor of the State Bank of Vietnam issues this Circular regulating the management and use of the National Monetary Policy Implementation Fund.

Article 1. Scope of Regulation

This Circular regulates the management and use of the National Monetary Policy Implementation Fund.

Article 2. Applicability

1. The State Bank of Vietnam (hereinafter referred to as the State Bank).

2. Credit institutions and other organizations related to the use of the National Monetary Policy Implementation Fund.

Article 3. Principles for managing and using the National Monetary Policy Implementation Fund

1. Management and use of the National Monetary Policy Implementation Fund must ensure strictness, safety, transparency, and compliance with intended purposes.

2. The use of the National Monetary Policy Implementation Fund aims to support the achievement of national monetary policy objectives, ensuring the safety of banking operations and the credit institution system.

3. Sources for repaying the National Monetary Policy Implementation Fund from loans are recovery of debts, sources to offset loan amounts (if any) from credit institutions. In cases where repayment sources are insufficient to repay the National Monetary Policy Implementation Fund, the State Bank shall handle according to its financial regulations.

Article 4. Establishment, accounting, and management of the National Monetary Policy Implementation Fund

1. The State Bank (Department of Finance - Accounting) shall establish the National Monetary Policy Implementation Fund in accordance with Decision No. 07/2013/QĐ-TTg dated January 24, 2013, of the Prime Minister on the financial regime of the State Bank of Vietnam.

2. In cases where the balance of the National Monetary Policy Implementation Fund is insufficient to meet usage needs, the State Bank shall coordinate with the Ministry of Finance to propose and submit measures to the Prime Minister for handling the shortfall.

3. Any surplus balance of the National Monetary Policy Implementation Fund that remains unused in a year may be carried forward for use in subsequent years.

4. The National Monetary Policy Implementation Fund shall be centrally accounted for and managed at the Department of Finance - Accounting.

Article 5. Use of the National Monetary Policy Implementation Fund

The National Monetary Policy Implementation Fund shall be used to cover the following expenses:

1. Loans to support credit institutions experiencing difficulties affecting the safety of the banking system.

2. Loans to credit institutions participating in the payment system to support the payment system in cases of incidents threatening the safety of payment operations and the banking system.

3. Other expenses arising from the implementation of monetary policy approved by the Prime Minister regarding policy direction.

Article 6. Authority to decide on the use of the National Monetary Policy Implementation Fund

1. The Governor of the State Bank decides to use the National Monetary Policy Implementation Fund to cover expenses as stipulated in Article 5 of this Circular.

For expenses requiring approval by the Prime Minister regarding policy direction, the State Bank shall report to the Prime Minister for such approval before deciding to use the National Monetary Policy Implementation Fund.

2. The use of the National Monetary Policy Implementation Fund for specific cases shall be implemented according to the decision of the Governor of the State Bank.

Article 7. Procedures and formalities for using the National Monetary Policy Fund

1. Decision on using the National Monetary Policy Fund

a) Providing loans to support credit organizations experiencing difficulties affecting the safety of the banking system:

The Banking Inspection and Supervision Agency, in coordination with the Monetary Policy Department, the Finance and Accounting Department, and related units, shall submit to the Governor of the State Bank of Vietnam for issuance of a decision regarding the use of the National Monetary Policy Fund to provide loans to credit organizations experiencing difficulties that affect the safety of the banking system.

The document submitted to the Governor of the State Bank of Vietnam must include the following contents: Purpose of fund usage (including an assessment of the impact on the safety of the system); Borrower; Loan amount; Loan form; Expected results.

The decision on using the National Monetary Policy Fund shall clearly specify: Borrower; Loan amount; Loan form; Purpose of loan and other relevant terms.

b) Providing loans to credit organizations participating in the payment system to support the payment system in cases where incidents threaten the security of payment operations and the safety of the banking system:

The Banking Inspection and Supervision Agency, in coordination with the Payment Department, Trading Floor, Monetary Policy Department, Finance and Accounting Department, and related units, shall submit to the Governor of the State Bank of Vietnam for issuance of a decision regarding the use of the National Monetary Policy Fund to provide loans to credit organizations participating in the payment system to support the payment system in cases where incidents threaten the security of payment operations and the safety of the banking system.

The document submitted to the Governor of the State Bank of Vietnam must include the following contents: Purpose of fund usage (including an assessment of the incident's impact on the payment system's security and the safety of the banking system); Borrower; Loan amount; Loan form; Expected results.

The decision on using the National Monetary Policy Fund shall clearly specify: Borrower; Loan amount; Loan form; Purpose of loan and other relevant terms.

c) Other items arising in connection with the implementation of monetary policy:

Units under the State Bank of Vietnam proposing to use the National Monetary Policy Fund for items related to the implementation of monetary policy outside the provisions of points a and b of this clause shall coordinate with the Finance and Accounting Department, Monetary Policy Department, and related units to submit to the Minister of Finance for comments before presenting to the Prime Minister for approval. The document submitted to the Prime Minister must include the following contents: Purpose of fund usage; Amount of funds used; Method of reporting on fund usage results.

After receiving the Prime Minister's approval document, the lead unit shall submit to the Governor of the State Bank of Vietnam for issuance of a decision regarding the use of the National Monetary Policy Fund for each specific expenditure item.

The decision on using the National Monetary Policy Fund shall clearly specify: Purpose of fund usage; Amount of funds used and other relevant terms.

2. Based on the Governor of the State Bank of Vietnam's decision, the Finance and Accounting Department shall guide the accounting for the use of the National Monetary Policy Fund and the accounting for repayments to the National Monetary Policy Fund in cases where there are repayments.

3. Based on the Governor of the State Bank of Vietnam's decision and accounting guidance, the Finance and Accounting Department shall cooperate with the Trading Floor and related units under the State Bank of Vietnam to carry out detailed accounting and tracking of each item used from the National Monetary Policy Fund according to accounting laws and related laws.

Article 8. Responsibilities of units under the State Bank

1. Department of Finance and Accounting:

a) Implement the establishment, guide the accounting for the use of the Fund for implementing national monetary policy;

b) Serve as the focal point, coordinate with the Trading Department and related units to organize accounting, management, and monitoring of the use of funds from the Fund for implementing national monetary policy according to the Decision of the Governor of the State Bank;

c) Report to the Governor on the situation of fluctuations in the Fund for implementing national monetary policy and send to the Ministry of Finance according to the financial regulations of the State Bank.

2. Trading Department:

Implement accounting, management, and monitoring of the use of funds from the Fund for implementing national monetary policy for loans to credit institutions according to the Decision of the Governor of the State Bank.

3. Banking Inspection and Supervision Authority:

Serve as the focal point, coordinate with related units to submit to the Governor of the State Bank decisions on the use of the Fund for implementing national monetary policy as stipulated in point a and point b, Clause 1, Article 7 of this Circular.

Article 9. Effective Date

This Circular takes effect from February 20, 2020.

Article 10. Implementation Organization

The Head of the Office, the Director of the Department of Finance and Accounting, and the Heads of units under the State Bank are responsible for organizing the implementation of this Circular./.

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