DECISION No. 197-QD/NH1 OF JUNE 28, 1997 ADJUSTING THE INTEREST RATES IN VIETNAM DONG AND US DOLLAR FOR THE LOANS FROM CREDIT ORGANIZATIONS TO ECONOMIC ORGANIZATIONS AND PEOPLE

- Pursuant to the Ordinance on the State Bank and the Ordinance on Banks, Credit Cooperatives and Financial Companies promulgated together with Order No. 37/LCT-HDNN8 and Order No. 38/LCT-HDNN8 of May 24, 1990 of the Chairman of the State Council;

Pursuant to Decree No. 15-CP of March 02, 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 of Economic Research;

DECIDES:

Article 1.- To announce the following ceiling interest rates of the loans from credit organizations to economic organizations and people:

1. Ceiling lending interest rate in Vietnam Dong:

1.1. A maximum of 1.00%/month for short-term loans.

1.2. A maximum of 1.10%/month for medium-term and long-term loans.

1.3. A maximum of 1.20%/month for loans made by credit organizations to rural areas, and a maximum of 1.50%/month for loans made by credit cooperatives and grassroots People�s Credit Funds to their members.

1.4. 0.80%/month for loans made by the Bank for the Poor to poor households.

1.5. The interest rate for overdue debts is 150% of the ceiling interest rate of loans of the same type.

2. Ceiling lending interest rate in US dollar:

2.1. A maximum of 8.50%/year (including fees) for short-term, medium-term and long-term loans.

2.2. The interest rate for overdue debts is 150% of the ceiling lending interest rate

3. A 15% reduction, compared with the interest rate for loans of the same type shall apply to loans in Vietnam Dong and US dollar for economic organizations located on highlands, offshore islands or areas inhabited by large numbers of Khmer people.

Article 2.- The interest rates for overdue debts of economic organizations and people at a credit organization up to June 30, 1997 shall be as follows:

1. The interest rate of overdue debts in Vietnam Dong shall be 150% of the ceiling interest rate for loans of the same type stipulated in Decision No. 266/QD-NH1 of September 27, 1996 of the Governor of the State Bank of Vietnam "on adjusting the interest rate of loans in Vietnam Dong made by credit organizations to economic organizations and people" and applicable to the following overdue debts:

1.1. The overdue debts of various types up to the end of June 30, 1997 which are subject to different interest rates for overdue debts effective at previous different lending times.

1.2. The debts of different types up to June 30, 1997, including undue, rescheduled and prolonged debts which all have been converted into overdue debts after June 30, 1997.

2. The interest rate for overdue debts in US dollar which is equal to 150% of the lending interest rate written in the capital lending contract shall be applicable to the following overdue debts:

2.1. The overdue debts up to the end of June 30, 1997.

2.2. The balances of debts of different types which are not overdue by June 30, 1997, including: undue, rescheduled and prolonged debts which all have been converted into overdue debts after June 30, 1997.

3. A 15% reduction of the interest rate for overdue debts in Vietnam Dong and US dollar shall be applicable to economic organizations and people on highlands, islands and in areas inhabited by large number of Khmer people. For preferential loans and State-approved loans, the interest rate for overdue debts shall be equal to 150% of the actual lending interest rate written in the capital lending contract.

Article 3.- The ceiling lending interest rates stipulated in Article 1 and the interest rates for overdue debts stipulated in Article 2 of this Decision shall become effective from July 1, 1997. The ceiling lending interest rates and the interest rates for overdue debts stipulated in Decision No. 266/QD-NH1 of September 27, 1996 of the Governor of the State Bank on "adjusting the ceiling interest rates in Vietnam Dong of loans from credit organizations to economic organizations and people", Decision No. 181/QD-NH1 of June 29, 1995 of the Governor of the State Bank on "the lending interest rates for foreign currencies applied by credit organizations" and the previous Decisions of the Governor of the State Bank which are contrary to this Decision shall cease to be effective.

The overdue debts of economic organizations and people at credit organizations up to June 30, 1997 and afterwards shall continue to be subject to the interest rate written in the capital lending contract.

The loans made by credit organizations to economic organizations and people from July 1, 1997 shall be subject to the ceiling lending interest rates stipulated in this Decision.

Article 4.- The chairmen of the Managing Boards and the General Directors (Directors) of the State commercial banks, investment and development banks, commercial stock banks, joint venture banks, Vietnam-based branches of foreign banks, financial companies, people�s credit funds, bank for the poor and the managers of credit cooperatives shall base themselves on the ceiling lending interest rates stipulated in this Decision and the guiding difference between the lending interest rate and the average interest rate for mobilized capital set in Resolution of the IXth National Assembly at its 10th session (October 1996) in order to stipulate concrete interest rates for deposits and lending interest rates appropriate for the period of each deposit or loan, the production and business characteristics of various economic organizations and people as well as the conditions and business area of each credit organization.

Article 5.- The Director of the Governor�s Office, the heads of the units directly under the Central State Bank, the chairmen of the Managing Boards and the General Directors (Directors) of the State commercial banks, investment and development banks, commercial 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, the directors of the State Bank�s provincial and municipal branches shall have to implement this Decision.

The Governor of the State Bank

CAO SY KIEM