CIRCULAR

PRESCRIBING MANAGEMENT AND USE OF FUND FOR IMPLEMENTATION OF NATIONAL MONETARY POLICY

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

Pursuant to the 2010 Law on Credit Institutions; the 2017 Law on amendments to the Law on Credit Institutions;

Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017 defining the Functions, Tasks, Powers and Organizational Structure of the State Bank of Vietnam;

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

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

The Governor of the State bank of Vietnam promulgates a Circular prescribing the management and use of the Fund for implementation of national monetary policy.

Article 1. Scope

This Circular provides regulations on the management and use of the Fund for implementation of national monetary policy (hereinafter referred to as the “Fund”).

Article 2. Regulated entities

1. The State Bank of Vietnam (hereinafter referred to as “SBV”).

2. Credit institutions and other organizations involved in the use of the Fund.

Article 3. Rules for management and use of Fund for implementation of national monetary policy

1. The Fund must be strictly, safely and transparently managed and used for defined purposes.

2. The Fund shall be used for achieving objectives of the national monetary policy and ensuring the safe operation of banks and credit institutions.

3. Debts and amounts for offsetting loans (if any) recovered from credit institutions shall be used to repay loans granted by the Fund. If loans granted by the Fund are not yet fully paid, the deficit shall be handled according to SBV’s financial policies.

Article 4. Setting aside, statement and management of Fund for implementation of national monetary policy

1. SBV (the Finance and Accounting Department) shall set aside the Fund in accordance with the Decision No. 07/2013/QD-TTg dated January 24, 2013 of the Prime Minister.

2. If the balance of the Fund is not enough to meet using demands, SBV shall cooperate with the Ministry of Finance in requesting the Prime Minister to take actions against the deficit.

3. The unused balance of the Fund in a year shall be carried forwards to the following years.

4. The statement and management of the Fund shall be made by the Finance and Accounting Department.

Article 5. Use of Fund for implementation of national monetary policy

The Fund shall be used for:

1. Providing loans to credit institutions facing problems which may adversely affect the safety of the banking system.

2. Providing loans to credit institutions that participate in the payment system for the purpose of supporting the payment system when it has incidents which influence the safety of payment operations and of banking system.

3. Making other payments during the implementation of the monetary policy under the approval of the Prime Minister.

Article 6. Power to decide the use of Fund for implementation of national monetary policy

1. The SBV’s Governor shall decide to use the Fund for the purposes defined in Article 5 hereof.

With regard to any payments requiring the approval from the Prime Minister, SBV must obtain the approval from the Prime Minister before using the Fund to make such payments.

2. The SBV’s Governor shall decide to use the Fund for specific cases.

Article 7. Procedures for using Fund for implementation of national monetary policy

1. Decision to use the Fund

a) Providing loans to credit institutions facing problems which may adversely affect the safety of the banking system:

The Banking Supervision Agency shall play the leading role and cooperate with the Monetary Policy Department, Finance and Accounting Department and relevant units to request the SBV’s Governor to issue the decision to use the Fund for providing loans to credit institutions facing problems which may adversely affect the safety of the banking system.

The written request submitted to the SBV’s Governor must include the following contents: purpose of using the Fund (including the assessment of impacts on safety of the banking system), eligible borrower, loan amount, lending form and expected results.

A decision to use the Fund must specify the borrower, loan amount, lending form, purposes of the loan and other relevant contents.

b) Providing loans to credit institutions that participate in the payment system for the purpose of supporting the payment system when it has incidents which influence the safety of payment operations and of banking system:

The Banking Supervision Agency shall play the leading role and cooperate with the Payment Department, Operations Center, Monetary Policy Department, Finance and Accounting Department and relevant units to request the SBV’s Governor to issue the decision to use the Fund for providing loans to credit institutions that participate in the payment system for the purpose of supporting the payment system when it has incidents which influence the safety of payment operations and of banking system.

The written request submitted to the SBV’s Governor must include the following contents: purpose of using the Fund (including the assessment of the incident of the payment system and its impacts on safety of payment operations and of banking system), eligible borrower, loan amount, lending form and expected results.

A decision to use the Fund must specify the borrower, loan amount, lending form, purposes of the loan and other relevant contents.

c) Other payment made during the implementation of the monetary policy:

The unit that is affiliated to SBV and proposes the use of the Fund for making payments other than those specified in Point a and Point b of this Clause shall play the leading role and cooperate with Finance and Accounting Department, Monetary Policy Department and relevant units to request the SBV’s Governor to get written opinions about the payments from the Ministry of Finance for obtaining an approval from the Prime Minister. The written request for approval of the Prime Minister must indicate the purpose of using the Fund, specific amounts and reporting methods.

After obtaining an approval from the Prime Minister, the in-charge unit shall request the SBV’s Governor to issue a decision to use the Fund for making specific payments.

A decision to use the Fund must specify the purpose of using the Fund, specific amounts and other relevant contents.

2. Pursuant to the decision issued by the SBV’s Governor, the Finance and Accounting Department shall instruct the statement of the use of the Fund and record repayments to the Fund (if any).

3. Pursuant to the decision issued by the SBV’s Governor and instructions for statement of the Fund, the Finance and Accounting Department shall cooperate with the Operations Center and relevant units affiliated to SBV to make statement and monitor the use of the Fund according to the Law on accounting and relevant laws.

Article 8. Responsibility of units affiliated to SBV

1. Finance and Accounting Department shall:

a) set aside and instruct the statement of Fund;

b) play the leading role and cooperate with the Operations Center and relevant units to make statement, manage and monitor the use of the Fund according to decisions issued by the SBV’s Governor;

c) submit reports to the SBV’s Governor on any changes in the Fund and send such reports to the Ministry of Finance according to SBV’s financial policies.

2. The Operations Center shall:

make statement, manage and monitor the use of the Fund for providing loans to credit institutions according to decisions issued by the SBV’s Governor.

3. The Banking Supervision Agency shall:

Play the leading role and cooperate with relevant units to request the SBV’s Governor to decide the use of the Fund as prescribed in Point a, Point b Clause 1 Article 7 hereof.

Article 9. Effect

This Circular comes into force from February 20, 2020.

Article 10. Implementation organization

Chief of the Ministry’s Office, the head of Finance and Accounting Department and heads of units affiliated to SBV shall organize the implementation of this Circular./.

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