Circular No. 37/2011/TT-NHNN amending and supplementing certain provisions of Circular No. 17/2011/TT-NHNN dated August 18, 2011 on secured lending by pledge of negotiable instruments issued by the State Bank of Vietnam for credit institutions.

CIRCULAR

Amending and supplementing certain provisions of Circular No. 17/2011/TT-NHNN dated August 18, 2011 on lending secured by pledge of negotiable instruments of the State Bank of Vietnam to credit institutions is secured by pledge of negotiable instruments held by the State Bank of Vietnam for credit institutions

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

Pursuant to the Law on Credit Institutions 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;

The State Bank of Vietnam (hereinafter referred to as the State Bank) amends and supplements certain provisions of Circular No. 17/2011/TT-NHNN dated August 18, 2011 on lending secured by pledge of negotiable instruments of the State Bank to credit institutions (hereinafter referred to as Circular No. 17) as follows:

Article 1. Amending and supplementing certain provisions of Circular No. 17 as follows:

1. Amending and supplementing Clause 3, Article 11 as follows:

"3. In special cases, the State Bank may consider extending the loan term based on the request of the credit institution and reasons for extension that are consistent with the orientation of monetary policy management of the State Bank.

When there is a need to request an extension of the pledged loan at the State Bank, the credit institution requesting the extension must submit directly or through postal service one set of extension request documents to the State Bank at least three working days before the due date of the pledged loan. The documents include:

- A letter requesting an extension of the pledged loan clearly stating the reasons for the request;

- Documents specified in Clause 3 and 4, Article 15 of Circular No. 17.

Within a maximum period of two working days from the date of receipt of complete extension request documents, the State Bank shall notify the credit institution requesting the extension in writing about the approval or non-approval of the extension of the pledged loan (with clear reasons) and send it to relevant units."

2. Supplementing Clause 5, Article 20 as follows:

"5. Regularly report the activities of the credit institution, sources of funds and fund usage to the State Bank branch in the province/city where the credit institution's headquarters is located (referred to as the State Bank branch in the province/city) during the period of borrowing from the State Bank."

3. Amending and supplementing Clause 1, Article 21 as follows:

"1. Department of Monetary Policy

a) Take the lead and coordinate with relevant units to determine the amount of money supplied for quarterly and annual refinancing purposes, including the form of refinancing by pledge of negotiable instruments, to be submitted to the Governor of the State Bank (referred to as the Governor) for approval and notification to relevant units.

b) Advise the Governor to determine and announce the refinancing interest rate to serve as the basis for applying to the pledge of negotiable instruments business.

c) Receive and review the loan application documents of credit institutions.

d) Submit the loan application of credit institutions for pledge of negotiable instruments to the Governor for approval and authorize the State Bank branch in the province/city to implement (if applicable) and notify the credit institution requesting the loan about the approval or non-approval of the loan.

e) Transfer the approved loan application documents to the State Bank Trading Department for implementation of the loan.

f) Take the lead and coordinate with relevant units to resolve difficulties and obstacles arising during the implementation of the loan.

g) Submit requests from credit institutions to change negotiable instruments currently pledged at the State Bank to the Governor for consideration and decision.

4. Amending Clause 2 of Article 21 as follows:

h) Summarize the implementation of loans by pledge of negotiable instruments from the State Bank Trading Department and State Bank branch in the province/city monthly, quarterly, and annually to report to the Governor and send to the Credit Department.

"2. The Credit DepartmentSubmit the Governor for approval of the list and priority order of negotiable instruments to be used in the pledge of negotiable instruments lending business and the ratio between the value of negotiable instruments and the loan amount in each period."

5. Amending Point d, Clause 3, Article 21 as follows:

"d) Aggregate data on newly issued loans by pledge of negotiable instruments at the State Bank Trading Department periodically monthly, quarterly, and annually, promptly identify difficulties and obstacles during implementation and report to the Monetary Policy Department for consolidation and reporting to the Governor."

6. Supplementing Clause 6, Article 21 as follows:

"c) Coordinate with the Monetary Policy Department to provide opinions on credit institutions' loan applications by pledge of negotiable instruments.

d) Provide the Monetary Policy Department with information on the operations of credit institutions requesting loans, including their ability to meet payment obligations.

đ) Lead and coordinate with relevant units to develop measures to handle credit institutions that cannot repay State Bank loans."

7. Amending and supplementing Clause 7, Article 21 as follows:

"c) Periodically weekly, monthly, quarterly, and annually, aggregate information and data on newly issued loans by pledge of negotiable instruments at branches, promptly identify difficulties and obstacles during implementation and report to the Monetary Policy Department for consolidation and reporting to the Governor."

d) Coordinate with units under the State Bank to conduct inspections, audits, and supervision of the use of pledged loan funds by credit institutions during the loan period, handle according to authority and recommend the Governor to handle violations according to current regulations.

Article 2. đ) Periodically weekly, monthly, and annually report to the Governor and send to the Monetary Policy Department on the operations of credit institutions headquartered in the area with outstanding State Bank loans.

Article 3. Effectiveness

Replace Model 01/NHNN-CC, Model 06a/NHNN-CC, and Model 06b/NHNN-CC issued together with Circular No. 17 with Models 01/NHNN-CC, 06a/NHNN-CC, and 06b/NHNN-CC attached to this Circular.

1. This Circular takes effect from December 12, 2011.