CIRCULAR

PRESCRIBING MINIMUM BALANCES FOR DEPOSIT ACCOUNTS OF CREDIT INSTITUTIONS AT VIETNAM BANK FOR SOCIAL POLICIES

Pursuant to the Law on the State bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law on amendments to the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Government’s Decree No. 78/2002/ND-CP dated October 04, 2002 on extension of credit to the poor and other policy beneficiaries;

Pursuant to the Government's Decree No. 16/2017/ND-CP dated February 17, 2017 prescribing functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the request of the Director of the Monetary Policy Department; 

The Governor of the State Bank of Vietnam promulgate a Circular prescribing minimum balances for deposit accounts of credit institutions at Vietnam Bank for Social Policies.

Article 1. Scope

This Circular provides regulations on minimum balances maintained by wholly state-owned commercial banks and commercial joint stock banks over 50% of charter capital of which is held by the State (hereinafter referred to as “state-owned credit institutions”) for their deposit accounts opened at Vietnam Bank for Social Policies.

Article 2. Regulated entities

1. State-owned credit institutions. State-owned credit institutions are not required to comply with regulations on minimum balances for their deposit accounts at Vietnam Bank for Social Policies during the period when they are placed by the State Bank of Vietnam (hereinafter referred to as “SBV”) under special control.

2. Vietnam Bank for Social Policies (VBSP).

Article 3. Minimum balances maintained by state-owned credit institutions for their deposit accounts opened at VBSP

1. Every state-owned credit institution is required to maintain a minimum balance for its deposit account which is equal to 2% of the sum of its funds mobilized in VND (hereinafter referred to as “deposit balance”) as at December 31 of the previous year at VBSP.

2. The sum of funds mobilized in VND of a state-owned credit institution includes:

a) Deposits made by organizations (excluding credit institutions and foreign bank branches established and operating in Vietnam) and individuals at the state-owned credit institution in the forms of: demand deposits, term deposits, saving deposits, and deposits for special purposes;

b) Proceeds from issuance of certificates of deposit, exchange bills, treasury bills, and bonds;

c) Other deposits at the state-owned credit institution in the principle of fully paying principals and interests to depositors as agreed (except margins and other deposits of credit institutions and foreign bank branches established and operating in Vietnam).

Article 4. Interest rate on balances maintained by state-owned credit institutions for their deposit accounts opened at VBSP

1. The interest rate on deposit balance is calculated adopting the following formula:

Where:

(b) The average deposit interest rate as at December 31 of the previous year applied by state-owned credit institutions, which is calculated according to the weighted average interest rate on mobilized funds prescribed in Clause 2 Article 3 of this Circular.

(c) The average capital mobilization fee agreed upon by VBSP and state-owned credit institutions but not exceeding 1,3%/year.

2. Based on reports on funds mobilized in VND and deposit interest rates sorted by deposit terms submitted by state-owned credit institutions according to Appendix 01 enclosed herewith, SBV (the Financial Policy Department) shall calculate the average deposit interest rates of state-owned credit institutions as at December 31 of the previous year, and notify them and VBSP by January 31 of every year for use as the basis for determining the interest rate on their deposit balances in the year.

3. In case SBV (the Financial Policy Department) receives a request from a state-owned credit institution or VBSP for adjustment of the average deposit interest rate due to considerable changes in deposit interest rates of state-owned credit institutions compared to the interest rates applied at the date of notification, SBV shall request the state-owned credit institution to submit an ad-hoc report made according to Appendix 01 enclosed herewith and consider deciding to adjust the average deposit interest rate, and notify such adjustment to state-owned credit institutions and VBSP for use as the basis for determining the interest rate on deposit balance applied during the remaining period of the year. Within 45 days from the receipt of the request for adjustment of the average deposit interest rate from a state-owned credit institution or VBSP, SBV shall give response indicating whether the interest rate is adjusted or kept unchanged to state-owned credit institutions and VBSP.

4. The interest period shall be agreed upon between VBSP and state-owned credit institutions in conformity with SBV’s regulations on interest calculation methods in depositing and credit extension transactions between credit institutions and their clients.

Article 5. Making deposits and changing (making additional deposit or withdrawing) deposit balances at VBSP

1. State-owned credit institutions shall maintain their deposit balances at VBSP under deposit contracts and their appendixes signed by and between such state-owned credit institutions and VBSP.

2. By March 01 of each year, state-owned credit institutions and VBSP shall complete the conclusion of deposit contracts, additional payment or withdrawal of money from deposit accounts at VBSP.

a) In case the deposit balance required to be maintained in the current year is greater than the deposit balance in the previous year, the state-owned credit institution is required to make additional payment which is equal to such difference to its deposit account at VBSP;

b) In case the deposit balance required to be maintained in the current year is smaller than the deposit balance in the previous year, the state-owned credit institution is entitled to withdraw an amount of money which is equal to such difference from its deposit account at VBSP or maintain the current deposit balance.

3. Within 15 working days from the day on which a state-owned credit institution’s annual financial statements are audited, state-owned credit institutions and VBSP shall review, enter into appendixes to deposit contracts, and complete procedures for additional payment or withdrawal of money from deposit accounts at VBSP if any difference occurs. To be specific:

a) In case the deposit balance under the audited annual financial statements of a state-owned credit institution is greater than the balance deposit to be maintained in the current year, the state-owned credit institution is required to make additional payment which is equal to such difference to its deposit account at VBSP;

b) In case the deposit balance under the audited annual financial statements of a state-owned credit institution is smaller than the balance deposit to be maintained in the current year, the state-owned credit institution is entitled to withdraw an amount of money which is equal to such difference from its deposit account at VBSP or maintain the current deposit balance.

4. Additional payment or withdrawal of money from deposit accounts at VBSP by state-owned credit institutions which are placed under special control or lifted from special control:

a) In case SBV issues a decision to terminate special control over a state-owned credit institution according to Clause 1 Article 145b of the Law on Credit Institutions (as amended in 2017), that state-owned credit institution is required to maintain the minimum balance on its deposit account opened at VBSP in accordance with regulations herein from the year following the year in which it is lifted from special control under SBV’s decision;

b) In case a state-owned credit institution which is maintaining its deposit balance at VBSP as prescribed is placed under special control, it is entitled to withdraw all money from its deposit account at VBSP within 03 months from the day on which it is placed under special control.

Article 6. Responsibilities of state-owned credit institutions and VBSP

1. Each state-owned credit institution shall:

a) Maintain or adjust its deposit balance in accordance with regulations herein.

b) By January 15 of each year, prepare report on the sum of funds mobilized in VND and deposit interest rates sorted by deposit terms as at December 31 of the previous year or ad hoc reports on request of SBV according to Appendix 01 enclosed herewith, and submit them to SBV (the Financial Policy Department);

c) By January 15 of each year, notify VBSP of the balance on its deposit account at VBSP according to Appendix 02 enclosed herewith;

d) Assume responsibility for the accuracy of figures provided for SBV and VBSP.

2. VBSP shall:

a) Cooperate in making deposits or adjust deposit balances in accordance with regulations herein;

b) Submit report on deposit balances maintained by state-owned credit institutions which is prepared according to Appendix 03 enclosed herewith to SBV (Banking Supervision Authority, Financial Policy Department, or Credit Department) by March 05 of each year;

c) Submit report on maintained deposit balances which is prepared according to Appendix 04 enclosed herewith to SBV (Banking Supervision Authority, Financial Policy Department, or Credit Department) within 05 days from the day on which state-owned credit institutions and VBSP complete review and adjustment of deposit balances according to audited annual financial statements of state-owned credit institutions.

Article 7. Responsibilities of SBV’s affiliated units

1. The Financial Policy Department shall:

a) Calculate and notify the average deposit interest rate which shall be used as the basis for determining the interest rate on deposit balances by January 31 of each year, and consider deciding to adjust this average deposit interest rate according to Clause 3 Article 4 of this Circular;

b) Act as a contact point in charge of settling issues concerning maintenance of deposit balances by state-owned credit institutions at VBSP during the implementation of this Circular.

2. The Credit Department shall cooperate in monitoring deposit balances maintained by state-owned credit institutions at VBSP so as to manage, monitor and cooperate with VBSP in implementing credit programs and state policies.

3. The Banking Supervision Authority shall:

a) Monitor, inspect and supervise the implementation of this Circular, and take actions against violations in accordance with regulations of law;

b) Based on inspection reports, notify violations against regulations herein and actions taken (if any) to SBV’s relevant units for cooperation within the ambit of their assigned functions and tasks.

Article 8. Implementation 

1. This Circular comes into force from February 11, 2022.

2. This Circular shall nullify:

a) The Circular No. 23/2013/TT-NHNN dated November 19, 2013 of the Governor of the State Bank of Vietnam prescribing minimum balances for deposit accounts of state-owned credit institutions at Vietnam Bank for Social Policies;

b) The Circular No. 41/2015/TT-NHNN dated December 31, 2015 of the Governor of the State Bank of Vietnam providing amendments to the Circular No. 23/2013/TT-NHNN dated November 19, 2013.

3. Deposit contracts and their appendixes concluded before the date of entry into force of this Circular shall continue to be fully effective or may be modified under agreements made between state-owned credit institutions and VBSP in accordance with regulations herein.

Article 9. Implementation organization

Chief of Office, the Director of the Monetary Policy Department, heads of SBV’s affiliated units, state-owned credit institutions and VBSP shall organize the implementation of this Circular./.