THE STATE BANK OF VIETNAM

DECISION No.39/1998/QD-NHNN1 OF JANUARY 17, 1998 STIPULATING THE INTEREST RATES FOR LOANS IN VIETNAM DONG LENT BY CREDIT INSTITUTIONS TO ECONOMIC ORGANIZATIONS AND PEOPLE AND INTEREST RATES FOR DEPOSITS IN US DOLLAR OF ECONOMIC ORGANIZATIONS

Pursuant to the Ordinance on the State Bank of May 24, 1990;

Pursuant to Decree No.15-CP of March 2, 1993 of the Government on the State management tasks, powers and responsibilities of the ministries and ministerial-level agencies;

At the proposal of the Director of the Department for Economic Research,

DECIDES:

Article 1.- To stipulate the interest rates for loans in Vietnam Dong lent by credit institutions to economic organizations and people as follows:

1. The ceiling loan interest rates:

1.1- For short-term loans: 1.20 % /month

1.2- For medium- and long-term loans: 1.25%/month

The above-said ceiling interest rates for loans in Vietnam Dong shall be applicable to loans provided from January 21, 1998 in both urban and rural areas. The debit balance of short-, medium- and long-term loans till the end of January 20th, 1998 shall continue to be accounted according to the loan interest rates written in the credit contracts (money-borrowing agreements).

2. The preferential loan interest rates shall continue to be applied in accordance with current regulations, more concretely:

2.1. Loans lent by the Bank for the Poor to the poor households: 0.8 % /month.

2.2. Loans provided for the production restoration and development under Decision No.985-TTg of November 20, 1997 of the Prime Minister on overcoming the consequences of storm No.5 (Storm Linda) in coastal provinces of South and Central Vietnam:

- Short-term loans: 0.50 % /month.

- Medium- and long-term loans: 0.60 % /month.

2.3. The interest rate for loans lent to economic organizations and people in high mountainous areas (Region No.3 according to Circular No.41/UB-TT of January 8, 1996 on the criteria for classification of mountainous areas and Decision No.42/UB-QD of May 23, 1997 on the recognition of the list of three mountainous and high-land regions of the Commission for Ethnic Minorities and Mountainous Areas), islands and areas densely inhabited by Khmer people shall be 30% lower than those for loans of the same types.

2.4. Loans lent to pupils and students of universities, colleges and intermediate and vocational training schools: 0.70 % /month.

3. Interest rates for loans lent by credit cooperatives and grassroots people's credit funds to their members shall continue to be applied in accordance with the ceiling interest rates stipulated in Point 1.3, Clause 1, Article 1 of Decision No.197/QD-NH1 of June 28, 1997 of the Governor of the State Bank adjusting the interest rates for loans in Vietnam Dong and US dollar lent by credit institutions to economic organizations and people.

4. The over-due debt interest rate shall be equal to 150% of the ceiling interest rate for loans of the same type; particularly, the over-due debt interest rate for preferential loans shall be equal to 150% of the loan interest rate written in the credit contracts (money-borrowing agreements).

Article 2.- To stipulate the interest rates for deposits in US dollar made by economic organizations at credit institutions, as follows:

- Maximum interest rate for demand deposits: 1.50% /year.

- Maximum interest rate for time deposits of up to 6 months: 4.00% /year.

- Maximum interest rate for time deposits of over 6 months: 4.50% /year.

Article 3.- The Chairmen of the Managing Boards and the General Directors (Directors) of State-run commercial banks, The Investment and Development Bank, commercial joint stock banks, joint venture banks, Vietnam-based branches of foreign banks, financial companies, people's credit funds, the Bank for the Poor and the managers of credit cooperatives shall base themselves on the ceiling loan interest rates and the interest rates for deposits in US dollar of economic organizations stipulated in this Decision and currently effective stipulations in Decision No.197/QD-NH1 of June 28, 1997 of the Governor of the State Bank, to specify the interest rates for deposits and loans.

Article 4.- This Decision takes effect from January 21, 1998. The ceiling interest rates for loans in Vietnam Dong stipulated in Points 1.1, 1.2 and 1.3, Clause 1, Article 1 of Decision No. 197/QD-NH1 of June 28, 1997 of the Governor of the State Bank shall be invalidated (except for the ceiling interest rates for loans lent by the credit cooperatives and the grassroots people's credit funds to their members).

Article 5.- The Director of the Governor's Office, the heads of the units attached to the Central State Bank, the Chairmen of the Managing Boards and the General Directors (Directors) of the State-run commercial banks, the Investment and Development Bank, commercial joint stock banks, joint venture banks, Vietnam-based branches of foreign banks, financial companies, people's credit funds, the Bank for the Poor, the managers of credit cooperatives, the Directors of the State Bank's branches in provinces and cities shall have to implement this Decision.

For the Governor of the State Bank

Deputy Governor

LE DUC THUY