Decision No. 11/QD-NHNN of January 06, 2010, on the list of valuable papers to be used in transactions of the State Bank

DECISION

ON THE LIST OF VALUABLE PAPERS TO BE USED IN TRANSACTIONS OF THE STATE BANK

GOVERNOR OF THE STATE BANK

- Pursuant to the Law on the State Bank of Vietnam issued in 1997; the Law on the amendment, supplement of several articles of the Law on the State Bank of Vietnam issued 2003;
- Pursuant to the Law on Credit Institutions issued in 1997; the Law on the amendment, supplement of several articles of the Law on Credit Institutions issued in 2004;
- Pursuant to the Decree No.96/2008/ND-CP dated 26/8/2008 of the Government providing for the functions, duties, authority and organizational structure of the State Bank of Vietnam;
- Pursuant to the Decision No.01/2007/QD-NHNN dated 5/1/2007 of the Governor of the State Bank on the issuance of the Regulation on open market operations; Decision No.27/2008/QD-NHNN dated 30/9/2008 of the Governor of the State Bank on the amendment, supplement of several articles of the Regulation on open market operations issued in conjunction with the Decision No.01/2007/QD-NHNN;
- Pursuant to the Circular No.03/2009/TT-NHNN dated 02/3/2009 of the State Bank providing for the lending secured by the mortgage of valuable paper of the Governor of the State Bank to banks; Circular No.11/2009/TT-NHNN dated 27/5/2009 of the Governor of the State Bank on the amendment of Paragraph 1 Article 7 of the Circular No.03/2009/TT-NHNN;
- Pursuant to the Decision No. 898/2003/QD-NHNN dated 12/8/2003 of the Governor of the State Bank on the issuance of the Regulation on the discount, rediscount by the State Bank to banks; Decision No.12/2008/QD-NHNN dated 29/4/2008 of the Governor of the State Bank on the amendment, supplement of several articles of the Regulation on discount, rediscount by the State Bank to banks issued in conjunction with the Decision No.898/2003/QD-NHNN;
- Pursuant to the Decision No.04/2007/QD-NHNN dated 22/1/2007 of the Governor of the State Bank on the overdraft and overnight lending applicable in inter-bank electronic payment.
- Upon the proposal of the Credit Department’s Director,

DECIDES:

Article 1. The State Bank hereby provides for the types of valuable papers to be used in transactions of open market operation, lending secured by the mortgage of valuable papers, discount, rediscount of valuable papers, overdraft and overnight lending applicable in inter-bank electronic payment (hereinafter referred to as transactions with the State Bank) at the State Bank as follows:

1. Valuable papers to be used in transactions with the State Bank:

1.1. State Bank’s bills.

1.2. Government’s bonds, including:

a. Treasury bills;

b. Treasury bonds;

c. Central work bonds;

d. Government’s bonds for construction of Motherland.

dd. Government’s bonds issued by Vietnam Development Bank (formerly called Fund for Development Assistance) under the designation by the Prime Minister.

1.3. Bonds guaranteed by the Government, including:

a. Bonds issued by Vietnam Development Bank, of which the payment of 100% of the principal, interest amount is guaranteed by the Government at the maturity;

b. Bonds issued by Bank for Social Policy issued, of which the payment of 100% of the principal, interest amount is guaranteed by the Government at the maturity.

1.4. Local Government’s Bonds issued by Hanoi People’s Committee and Hochiminh People’s Committee.

2. Valuable papers stipulated in Paragraph 1 above must fully satisfy following conditions:

2.1. To be deposited at the State Bank;

2.2. To be subject to the legal ownership of the credit institution;

2.3. The issuing organization shall not be entitled to use valuable papers issued by the very organization to take part in transactions with the State Bank.

Article 2. Provisions on valuable papers being used in transactions of the open market operations of the State Bank

1. Apart from provisions in Paragraph 2 Article 1 of this Decision, valuable papers stated in item d, point 1.2, point 1.3, point 1.4 in Paragraph 1 Article 1 of this Decision shall only be used in forward purchase transaction of the State Bank through the open market operations.

2. Valuable papers stipulated in Paragraph 1 Article 1 of this Decision must be valuable papers which are issued in book entry form.

3. The difference rate between the value of valuable papers at the valuating time and payment price in the forward purchase, sale transaction between the State Bank and credit institutions shall be stipulated as follows:

3.1. For types of valuable papers stated in point 1.1, point 1.2, point 1.3 in Paragraph 1 Article 1 of this Decision, of which remaining period is:

a. Less than 1 year: 0%;

b. From 1 year to 5 years: 5%;

c. Over 5 years: 10%.

3.2. For types of valuable papers stated in point 1.4 Paragraph 1 Article 1 of this Decision, such rate shall be 20%.

Article 3. Order of priority and rate between value of valuable papers and amount of the loan mortgaged by valuable papers at the State Bank

1. Valuable papers as stipulated in point 1.1, point 1.2, point 1.3 Paragraph 1 Article 1 of this Decision are valuable papers of tier 1 and their minimum value must be 105% of the amount of mortgaged loan at the State Bank.

2. Valuable papers as stipulated in point 1.4 Paragraph 1 Article 1 of this Decision are valuable papers of tier 2 and their minimum value must be 120% of the amount of mortgaged loan at the State Bank.

Article 4. Provisions on valuable papers being used in the discount, rediscount operations of valuable papers by the State Bank

Types of valuable papers stated in item dd point 1.2, point 1.3, point 1.4 in Paragraph 1 Article 1 of this Decision shall only be used in the forward discount transaction of valuable papers by the State Bank.

Article 5. Provisions on valuable papers being used in the overdraft and overnight lending operations in inter-bank electronic payment

1. The maximum level of overdraft and overnight lending secured by valuable papers as stated in point 1.1, point 1.2, point 1.3 Paragraph 1 Article 1 of this Decision shall be 95% of the valuable papers’ value at the valuating time.

2. The maximum level of overdraft and overnight lending secured by valuable papers as stated in point 1.4 Paragraph 1 Article 1 of this Decision shall be 80% of the valuable papers’ value at the valuating time.

Article 6. This Decision shall be effective from its date of signing and replace the Decision No.1909/QD-NHNN dated 30/12/2005 of the State Bank on the use of several types of bonds by the credit institutions in refinancing transactions of the State Bank, Decision No.86/QD-NHNN dated 08/01/2007 of the State Bank on the list of valuable papers, difference rate between the value of the valuable paper at the valuation time and the payment price, transaction ratio of valuable papers through the open market operation, Decision No.441/QD-NHNN dated 2/3/2009 of the State Bank on list, order of priority, proportion between value of valuable papers and loan secured by mortgage of valuable papers at the State Bank of Vietnam.

Article 7. Director of Administrative Department, Director of the Credit Department, Heads of units of the State Bank, Manager of State Bank Branches in provinces, cities under the central Government’s management, Chairperson of the Board of Directors and General Director (Director) of credit institutions shall be responsible for the implementation of this Decision.