Decision No. 432/2000/QĐ-NHNN1 of the Governor of the State Bank on the business of mobilizing and using gold capital and VND guaranteed by gold price of credit institutions

DECISION OF THE GOVERNOR OF THE STATE BANK OF VIETNAM

Regarding the business of mobilizing and using gold and VND-denominated funds guaranteed by gold value

of credit institutions

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 and the Law on Credit Organizations No. 02/1997/QH10 dated December 12, 1997;

Pursuant to Decree No. 15/CP dated March 2, 1993 of the Government on the tasks, powers, and responsibilities for state management of ministries and ministerial-level agencies;

Pursuant to the proposal of the Director of the Monetary Policy Department,

DECISION:

Article 1.

Permit organizations with foreign exchange operation licenses to mobilize time deposits denominated in gold and VND guaranteed by gold value according to the price of gold for residents as stipulated in this Decision in order to enhance the attraction of gold and currency funds to meet production, business, service, and living needs.

Article 2.

Mobilized gold is gold bars or jewelry gold converted into gold bars according to the standards of gold trading enterprises that have been granted permission to produce gold bars by the State Bank.

Article 3.

1. Credit institutions shall be responsible for the effectiveness and safety in mobilizing and utilizing gold and VND-denominated funds guaranteed by gold value.

2. Credit institutions shall decide on the type of gold bars to mobilize and serve as the basis for converting various types of jewelry gold when mobilizing and utilizing gold and VND-denominated funds guaranteed by gold value.

3. When mobilizing and lending gold and VND-denominated funds guaranteed by gold value, credit institutions and customers shall agree on the conversion gold price based on the purchase price and sale price of the selected gold bar on the market at the time of conversion.

Article 4.

1. Credit institutions shall determine interest rates for mobilizing gold funds, interest rates for mobilizing VND-denominated funds guaranteed by gold value, interest rates for lending gold, and interest rates for lending VND-denominated funds guaranteed by gold value in accordance with their business characteristics and conditions to ensure cost coverage, risk compensation, and profit.

2. Credit institutions shall publicly announce and display at places where they mobilize and lend funds the interest rates for mobilization, interest rates for lending, purchase prices, and sale prices of gold for customers' knowledge.

Article 5.

1. Credit institutions shall mobilize gold funds through the issuance of gold deposit certificates with terms; in cases of mobilizing VND-denominated funds guaranteed by gold value, it shall be carried out through term savings or the issuance of VND-denominated deposit certificates guaranteed by gold value. The minimum term for mobilization under these forms is 30 days.

2. Gold deposit certificates and VND-denominated deposit certificates guaranteed by gold value are commitments of credit institutions to depositors specifying clearly the conditions regarding the quantity of gold, quality of gold, amount of VND guaranteed by gold value, term, interest rate, maturity date, methods of principal repayment and interest payment; conditions regarding transfer, purchase, sale, gift, inheritance, pledge for loans, and other conditions.

Article 6.

1. Credit institutions shall be responsible for maintaining mandatory reserves in VND against mobilized gold funds and VND-denominated funds guaranteed by gold value in accordance with current regulations on mandatory reserves for VND deposits calculated based on the total amount of mobilized gold funds converted into VND and VND-denominated funds guaranteed by gold value.

2. The mobilized gold funds serving as the basis for calculating mandatory reserves shall be converted into VND based on the purchase price of the selected gold bar by the credit institution on the last working day of the period for determining mandatory reserves.

Article 7.

1. Credit institutions may use mobilized gold funds to lend gold to customers to meet capital needs for production, business, services, and living or convert them into currency funds to lend VND-denominated funds guaranteed by gold value and to meet the business needs of credit institutions.

2. In cases where credit institutions convert mobilized gold funds into currency funds, the converted currency funds shall not exceed 30% of the mobilized gold funds.

 Article 8.

Lending of gold and VND-denominated funds guaranteed by gold value shall be implemented in accordance with the Loan Regulations of credit institutions for customers issued together with Decision No. 284/2000/QĐ-NHNN1 dated August 25, 2000 of the Governor of the State Bank.

Article 9.

Credit institutions shall be responsible for:

1. Issuing specific guidelines to implement the provisions of this Decision and relevant laws and regulations, in line with the business conditions and charter of credit institutions.

2. Sending notifications to the State Bank Branches in provinces and cities (where credit institutions have their main offices) along with the guidelines for the business of mobilizing and utilizing gold and VND-denominated funds guaranteed by gold value. The notification must be sent at least 15 days before implementing the business of mobilizing and utilizing gold and VND-denominated funds guaranteed by gold value.

3. Implementing recommendations from State Bank Branches in provinces and cities related to the business of mobilizing and utilizing gold and VND-denominated funds guaranteed by gold value of credit institutions.

4. Reporting in writing the situation of mobilizing and utilizing gold and VND-denominated funds guaranteed by gold value to State Bank Branches in provinces and cities (where credit institutions have their main offices) on a monthly, quarterly, and annual basis. The reporting deadlines are as follows:

For monthly reports: At the latest by the 10th day of the following month.

For quarterly reports: At the latest by the 10th day of the first month of the next quarter.

For annual reports: At the latest by January 15 of the following year.

Article 10.

State Bank Branches in provinces and cities shall be responsible for:

1. Receiving and reviewing the guidelines for the business of mobilizing and utilizing gold and VND-denominated funds guaranteed by gold value issued by credit institutions within their jurisdiction; in case of discovering contents inconsistent with the provisions of this Decision, State Bank Branches in provinces and cities shall issue recommendations to credit institutions to amend and supplement accordingly before implementation.

2. Regularly and突击检查信贷机构在其管辖范围内开展的黄金和以金价保证的VND资金的募集和使用活动，确保按照本决定及相关法律法规的规定进行，保障存款人的资金安全，确保信贷机构的安全、稳健和有效运营，并及时发现和处理违法行为。

3. Monthly, quarterly, and annually, report to the State Bank of Vietnam (Departmentof Monetary Policy, Banking Supervision Department, Department of Banks andNon-Bank Financial Institutions) on the situation of mobilizing and utilizingcapital in gold and VND guaranteed by gold prices of credit institutions withintheir jurisdiction. The reporting deadlines are as follows:

Formonthly reports: No later than the 15th day of the following month.

Forquarterly reports: No later than the 15th day of the first month of the nextquarter.

Forannual reports: No later than January 20th of the following year.

Article 11.

Unitsunder the State Bank of Vietnam shall be responsible for the following:

1.Department of Accounting and Finance: Guide accounting entries for the mobilizationand utilization of capital in gold and VND guaranteed by gold prices.

2.Department of Banks and Non-Bank Financial Institutions: Guide credit institutionsin implementing risk reserves when mobilizing and utilizing capital in gold andVND guaranteed by gold prices.

3.Department of Monetary Policy: Study the situation of mobilizing and utilizingcapital in gold and VND guaranteed by gold prices by credit institutions toadvise the Governor of the State Bank of Vietnam to amend and supplementregulations on the mobilization and utilization of capital in gold and VNDguaranteed by gold prices.

4.Banking Inspection Department: Monitor and inspect activities related to themobilization and utilization of capital in gold and VND guaranteed by goldprices by credit institutions; handle according to their authority and advise theGovernor of the State Bank of Vietnam to deal with cases violating theprovisions of this Decision.

Article 12.

ThisDecision takes effect 15 days from the date of signature and replaces DecisionNo. 42/QD-NH1 dated February 21, 1992 on the mobilization of capital and gold-guaranteed loans, guiding documents for the implementation of Decision No. 42/QD-NH1dated February 21, 1992, Decision No. 57/QD-NH1 dated March 31, 1992 on interestrates for gold-guaranteed capital mobilization and loans, Clause 5 Article 1 ofDecision No. 191/1999/QD-NHNN1 dated May 31, 1999 of the Governor of the StateBank of Vietnam on the reserve requirement ratio for credit institutions.

Article 13.

Heads ofunits under the State Bank of Vietnam; Branch Directors of the State Bank ofVietnam in provinces and centrally-administered cities; Chairmen of the Board ofDirectors, General Managers (Directors) of credit institutions licensed toconduct foreign exchange operations are responsible for implementing thisDecision./.