CIRCULAR

PROVIDING SOME PECULIARITIES OF STATE FINANCIAL MANAGEMENT OF POSTAL DEPOSIT SERVICES OF THE VIETNAM POST AND TELECOMMUNICATIONS CORPORATION

In observation of Article 5 of Governmental Decision No.215/1998/QD-TTg of November 4, 1998, on mobilising, managing and utilising postal deposit sources, the Ministry of Finance (MoF) provides some peculiarities of State financial management of postal deposit services of the Vietnam Post and Telecommunications Corporation (VNPT) as follows:

I. GENERAL RULES

- Postal deposit services must pursue the financial regime ruled in VNPT’s Financial Regulation which conforms to the existing State regulations on financial management of State-owned businesses. In particular, some peculiarities of postal deposit services referred to in Governmental Decision No.215/1998/QD-TTg dated November 4, 1998, are implemented as guided in this Circular.

- MoF fulfils its function as State financial manager of postal deposit services.

II. SPECIFIC REGULATIONS

1. Mobilisation and utilisation of postal deposit sources:

1.1- VNPT is allowed to mobilise all possible sources of the population’s idle money by receiving term and call deposits and the like. The interest rates of mobilised deposits are determined by VNPT under the rule of covering costs by itself and ensuring the development of capital sources in accordance with the State Bank interest rate policy.

1.2- Mobilised postal deposit sources are used as follows:

- VNPT is allowed to set aside a maximum of 20 percent of the total outstanding deposit balance mobilised from the population at any time, in order to guarantee the regular payment of depositors, either according to the duedate or on customer’s unexpected demand.

- Transferring deposit sources to the National Investment Assistance Fund which are in use as loans for Government projects, under the Domestic Investment Encouragement Law, with term and quantity of loans exactly the same as identified in the agreement signed between the National Investment Assistance Fund and VNPT.

- In cases where there is a surplus of deposits left after a sufficient amount of capital has been transferred to the National Investment Assistance Fund as planned, and after regular payments have been ensured, such a source will be either added to the National Investment Assistance Fund (if needed) or be used to buy State Treasury bonds and project bonds.

2. Management of earnings and spending of postal deposit services:

2.1- VNPT is responsible for prompt, complete cost accounting of earnings coming up from postal deposit services. These include:

- Earning interest derived from loans provided for the National Investment Assistance Fund;

- Earning deposit interest;

- Earning interest made by investments in State Treasury bonds and project bonds.

2.2- Spending on postal deposit services is as follows:

- Spending on the population’s deposit interest which meets the duedate;

- Spending on money transfer services;

- Spending that makes up for professional risks in relation to payments and cash, the reasons for which are totally objective confirmed and approved by VNPT Board of Directors;

- Spending on managing postal deposit services such as salaries, expenditures for professional training, reception and printing as per the State regulations.

3. Value added tax:

VNPT is not required to pay the value added tax on earnings from lending the National Investment Assistance Fund as well as from investments in State Treasury bonds and project bonds and deposit interest for postal deposit services.

4. Regime on cost accounting and financial reports on postal deposit services:

VNPT is responsible for monitoring accounting and formulating financial reports on postal deposit services in accordance with MoF regulation on the accounting regime on postal deposit services. Financial reports are dispatched to related bodies as decreed in the existing stipulations, and to MoF (the Financial Department for Banks and Financial Organisations).

5. Formulating plans:

Annually, VNPT is responsible for forming financial plans for postal deposit services for submission to related bodies in conformity with the existing regulations, as well as to MoF (the Financial Department for Banks and Financial Organisations), in the fourth quarter of the previous year. These include:

+ Plan for capital sources and capital utilisation;

+ Plan of value and term of postal deposit capital transferred to the National Investment Assistance Fund;

+ Plan for earnings from, and spending on deposit interest, management expenditures and compensation of professional risks.

III. IMPLEMENTATION

1- VNPT takes the responsibility of the laws for utilisation of capital sources and payments to the population under the control of State financial bodies as stipulated in the laws and in this Circular.

2- The Circular comes into effect 15 days after the date of issuance.

VNPT Board of Directors Chairman, VNPT General Director and related units are responsible for implementing this Circular. During the implementation, entanglements, if any, must be proposed to MoF for prompt consideration, addition and adjustments.

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