CIRCULAR

PROVIDING AMENDMENTS TO CIRCULAR NO. 07/2019/TT-NHNN DATED JULY 03, 2019 OF GOVERNOR OF STATE BANK OF VIETNAM PRESCRIBING PRUDENTIAL RATIOS AND LIMITS FOR OPERATIONS OF VIETNAM DEVELOPMENT BANK

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 providing amendments to the Law on Credit Institutions dated November 20, 2017;

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;

Pursuant to the Government’s Decree No. 32/2017/ND-CP dated March 31, 2017 prescribing state investment credit;

Pursuant to the Government’s Decree No. 46/2021/ND-CP dated March 31, 2021 on financial management and performance assessment of Vietnam Development Bank;

Pursuant to the Decision No.108/2006/QD-TTg dated May 19, 2006 of the Prime Minister on the establishment of Vietnam Development Bank;

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The Governor of the State Bank of Vietnam promulgates a Circular providing amendments to Circular No. 07/2019/TT-NHNN dated July 03, 2019 of the Governor of State Bank of Vietnam prescribing prudential ratios and limits for operations of Vietnam Development Bank (VDB).

Article 1. Amendments to Circular No. 07/2019/TT-NHNN

1. Point c Clause 1 Article 1 is amended as follows:

 “c) Loan-to-deposit ratio.”

2. Clause 3 Article 7 is amended as follows:

 “3. VDB shall maintain a minimum liquidity ratio of 0,6%.”

3. Article 8 is amended as follows:

 “Article 8. Loan-to-deposit ratio

1. VDB shall apply the following formula to calculate the loan-to-deposit ratio in VND and other freely convertible currencies that can be exchanged into VND at the central rate of VND versus USD quoted by the State Bank of Vietnam (“SBV”) or the cross rates of VND versus other foreign currencies in accordance with SBV’s regulations at the last day of the month:

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L

x 100%

D

Where:

- LDR: Loan-to-deposit ratio;

- L: Total loans specified in Clause 2 of this Article;

- D: Total deposits, including mobilized funds specified in Clause 3 of this Article and the equity specified in Clause 4 of this Article.

2. Total loans include:

a) Short-term export loans;

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c) Medium-term loans granted under investment credit program;

d) Medium-term loans granted under the Government’s special program;

dd) Long-term loans granted under investment credit program;

e) Long-term loans granted under the Government’s special program;

g) Compulsory post-guarantee loans;

h) Other loans (excluding loans granted using entrusted funds of domestic and foreign entities without incurring risks);

i) Loans pending settlement.

3. Mobilized funds used for granting loans include funds mobilized according to the Government’s regulations on financial management and business performance assessment of Vietnam Development Bank.

4. The equity used for granting loans is VDB’s equity according to the Government’s regulations on financial management and business performance assessment of Vietnam Development Bank, and does not include the followings:

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b) The actual amount of charter capital contributed as charter capital of Vietnam Infrastructure Development and Finance Investment Joint Stock Company (VIDIFI);

c) Financial reserve fund.

5. VDB shall maintain a maximum loan-to-deposit ratio of 95%.”

 Article 2. Implementation organization

The Chief of Office, Head of SBV Banking Supervision Agency, heads of units affiliated to SBV, and VDB shall organize the implementation of this Circular.

Article 3. Implementation

This Circular comes into force from August 15, 2022./.

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