Decision No. 52/1999/QD-NHNN1 of February 10, 1999, prescribing the compulsory reserve rates applicable to credit institutions

DECISION

PRESCRIBING THE COMPULSORY RESERVE RATES APPLICABLE TO CREDIT INSTITUTIONS

THE STATE BANK GOVERNOR

Pursuant to State Bank Law No.01/1997/QH10 and Credit Institutions Law No.02/1997/QH10 of December 12, 1997;
Pursuant to Decree No.15-CP of March 2, 1993 of the Government on the tasks, powers and State management responsibilities of the ministries and ministerial-level agencies;
At the proposal of the Director of the Monetary Policy Department,

DECIDES:

Article 1.- The compulsory reserve rates applicable to credit institutions (including Vietnam dong and foreign currencies) are prescribed as follows:

1. For demand deposits and under-12 month time deposits of State-run commercial banks, urban joint stock commercial banks, foreign bank branches, joint venture banks and financial companies: 7% of the total deposit balance.

2. For demand deposits and under-12 month time deposits of rural joint stock commercial banks, cooperation banks, the central people’s credit fund and regional people’s credit funds: 5% of the total deposit balance.

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4. For deposits of credit institutions with deposit balance subject to compulsory reserves, which is less than 500 million dong and deposits of grassroots people’s credit funds, credit cooperatives and banks for the poor, the compulsory reserve rate shall be 0%.

5. In cases where the credit institutions are allowed by the State Bank Governor to mobilize and lend capital in gold, the compulsory reserve rate prescribed for such capital in gold shall be 0%. In cases where a credit institution, which has been allowed by the State Bank Governor to mobilize capital in gold, converts the mobilized capital in gold into cash for lending, such converted capital amount shall be subject to compulsory reserves according to the regulations on compulsory reserves in cash.

Types of deposits are specified in Article 11 of the Regulation on compulsory reserves issued together with Decision No.51/1999/QD-NHNN1 of February 10, 1999 of the State Bank Governor.

Article 2.- The compulsory reserves in Vietnam dong of the credit institutions shall be deposited in demand deposit accounts opened at the State Bank’s Transaction Bureau or the State Bank’s branches in the provinces and cities where such credit institutions’ head offices are located; the foreign-currency compulsory reserves of the credit institutions shall be deposited in demand deposit accounts opened at the State Bank’s Transaction Bureau.

Article 3.- For the compulsory reserves deposited by the credit institutions at the State Bank within the prescribed compulsory reserve amount, the applicable interest rate shall be 0%/month.

Article 4.- The State Bank shall pay interest on the deposit amounts in excess of the compulsory reserves of the credit institutions (including Vietnam dong and foreign currencies) in their demand deposit accounts opened at the State Bank, as follows:

1. For the deposit amounts in excess of the compulsory reserves in Vietnam dong: the State Bank shall pay the interest according to the interest rate for credit institutions’ demand deposits at the State Bank prescribed by the State Bank Governor for each period.

2. For the deposit amounts in excess of the compulsory reserves in foreign currencies: the State Bank shall pay the interest according to the interest rate for credit institutions’ foreign-currency demand deposits at the State Bank prescribed by the State Bank Governor for each period.

Article 5.- The State Bank shall impose fines for deficits in the compulsory reserves of the credit institutions in the period during which such compulsory reserves must be maintained as prescribed in Article 14 of the Regulation on compulsory reserves, more concretely:

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2. Deficits in the compulsory reserves in foreign currencies during the "compulsory reserve maintenance period" shall be subject to a fine equal to 150% of the ceiling interest rate for loans in US dollar provided to economic organizations prescribed by the Governor of the State Bank of Vietnam in each period, calculated on the deficit amount for the whole "compulsory reserve maintenance period".

Article 6.- This Decision takes effect from March 1st, 1999 and shall be applied to the calculation of the compulsory reserve maintenance period of March 1999.

This Decision replaces Decision No.135/QD-NHNN1 of April 11, 1998 of the State Bank Governor. The previous stipulations which are contrary to this Decision shall cease to be effective.

Article 7.- The Director of the Office and the Chief Inspector of the State Bank, the heads of the units attached to the State Bank, the directors of the provincial/municipal State Bank’s branches and the general directors (directors) of credit institutions shall have to implement this Decision.

FOR THE STATE BANK GOVERNOR
DEPUTY GOVERNOR




Duong Thu Huong