DECISION No. 581/2003/QD-NHNN OF JUNE 9, 2003 PROMULGATING THE REGULATION ON COMPULSORY RESERVES APPLICABLE TO CREDIT INSTITUTIONS
THE STATE BANK GOVERNOR
Pursuant to State Bank Law No. 01/1997/QH10 and Credit Institution Law No. 02/1997/QH10 of December 12, 1997;
Pursuant to the Government's Decree No. 86/2002/ND-CP of November 5, 2002 defining the functions, tasks, powers and organizational structures of the ministries and ministerial-level agencies;
At the proposal of the director of the Monetary Policy Department,
DECIDES:
Article 1.- To promulgate together with this Decision the Regulation on compulsory reserves applicable to credit institutions.
Article 2.- This Decision takes effect as from the period of compulsory reserve maintenance of August 2003.
Article 3.- This Decision replaces Decision No. 51/1999/QD-NHNN1 of February 10, 1999 promulgating the Regulation on compulsory reserves for credit institutions, Decision No. 191/1999/QD-NHNN1 of May 31, 1999 on compulsory reserve rates applicable to credit institutions, Decision No. 303/2000/QD-NHNN1 of September 11, 2000 and Decision No. 700/2002/QD-NHNN of July 4, 2002 of the State Bank Governor on depositing the compulsory reserves in Vietnam dong by credit institutions which participate in the inter-bank electronic payment.
Article 4.- The director of the Office, the chief inspector, the director of the Department of Monetary Policies, the heads of the units under the State Bank, the directors of the State Bank's branches in the provinces and centrally-run cities, the general directors (directors) of credit institutions shall have to implement this Decision.
State Bank Governor
LE DUC THUY
REGULATION ON COMPULSORY RESERVES APPLICABLE TO CREDIT INSTITUTIONS
(Promulgated together with the State Bank Governor's Decision No. 581/QD-NHNN of June 9, 2003)
Chapter I
GENERAL PROVISIONS
Article 1.- Compulsory reserves are money amounts which credit institutions operating in Vietnam must maintain on their payment deposit accounts at the State Bank.
Article 2.- In this Regulation, the following terms are construed as follows:
1. Period of compulsory-reserve determination means the preceding month's period of time from the first day to the last day of the month.
2. Period of compulsory-reserve maintenance means the current month's period of time from the first day to the last day of the month.
Article 3.- Subject to the application of the Compulsory Reserve Regulation are credit institutions established and operating under the Law on Credit Institutions.
Article 4.- Compulsory reserves are calculated on the basis of the average mobilized deposit balance of each type of compulsory reserve-liable deposit at head offices and branches of credit institutions in the period of compulsory-reserve determination and at the corresponding compulsory-reserve rates prescribed by the State Bank Governor in each period.
Article 5.- The compulsory-reserve rate applicable to each type of credit institution and each type of deposit shall be prescribed by the State Bank Governor, depending on the objectives of the monetary policy in each period.
Article 6.- The payment of interests on compulsory reserves of each type of credit institution and each type of deposit in each period shall be made according to the Government's regulations.
Article 7.- Credit institutions shall have to maintain their compulsory reserves as follows:
1. Compulsory reserves in Vietnam dong shall be maintained on payment deposit accounts at the State Bank's Transaction Office and branches in the provinces and centrally-run cities;
2. Compulsory reserves in foreign currencies shall be maintained on payment deposit accounts at the State Bank's Transaction Office.
Article 8.- The notification of compulsory reserves and handling of foreign-currency compulsory-reserve surpluses or deficits shall be carried out by the State Bank's Transaction Office.
The notification of compulsory reserves and handling of Vietnam-dong compulsory-reserve surpluses or deficits shall be carried out by the State Bank's Transaction Office or the State Bank's branches in the provinces and cities where credit institutions are headquartered.
Article 9.- The State Bank shall pay interest on compulsory-reserve surpluses to, or impose fines for compulsory-reserve deficits on, head offices of credit institutions, without separately counting their branches.
Article 10.- In cases where credit institutions are placed under the special control, the State Bank Governor shall consider and decide to reduce the compulsory-reserve rates applicable to such credit institutions to the minimum level of 0%.
Chapter II
SPECIFIC PROVISIONS
Article 11.- Credit institutions shall have to adequately maintain compulsory reserves at the State Bank in the period of compulsory-reserve maintenance on the following principles:
1. The average balance of credit institutions' payment deposit accounts at the State Bank must not be lower than their compulsory reserves in the period.
2. The daily balance of credit institutions' payment deposit accounts at the State Bank in the period of compulsory-reserve maintenance may be lower or higher than the compulsory reserves of such period.
Article 12.- Compulsory reserves shall be calculated on the following bases:
1. Types of deposit subject to compulsory-reserve calculation include:
a/ For deposits in Vietnam dong:
- Deposits of the State Treasury.
- Deposits of customers:
* Deposits of domestic customers:
+ Demand deposits
+ Time deposits subject to compulsory reserve
+ Special-use capital deposits
* Savings:
+ Demand savings
+ Time savings subject to compulsory reserve
+ Savings of other types
* Deposits of foreign customers:
+ Demand deposits
+ Time deposits subject to compulsory reserve
- Proceeds from the issuance of valuable papers with definite terms, which are subject to compulsory reserve.
b/ For deposits in foreign currencies:
- Deposits of the State Treasury.
- Deposits of customers:
* Deposits of domestic customers:
+ Demand deposits
+ Time deposits subject to compulsory reserve
+ Special-use capital deposits
* Savings:
+ Demand savings
+ Time savings subject to compulsory reserve
* Deposits of foreign customers:
+ Demand deposits
+ Time deposits subject to compulsory reserve
- Proceeds from the issuance of valuable papers with definite terms, which are subject to compulsory reserve.
2. Deposits in foreign currencies which serve as basis for calculating compulsory reserves are foreign currencies converted into USD for USD compulsory reserve. The exchange rates for converting foreign currencies for calculating compulsory reserves are those serving the accounting of foreign currency amounts in the period of compulsory-reserve determination, which are monthly announced by the Finance Ministry.
3. In cases where credit institutions have mobilized deposit balances in EURO, JPY, GBP or CHF accounting for over 50% of the total mobilized sources in foreign currencies, they may deposit their compulsory reserves in such foreign currencies.
Article 13.- Method of calculating compulsory reserves for the period of compulsory-reserve maintenance
1. Compulsory reserves for the period of compulsory-reserve maintenance shall be calculated by multiplying the average balance of the credit institutions' assorted mobilized deposits subject to compulsory reserve (specified in Article 12 of this Regulation) in the period of compulsory-reserve determination by the compulsory-reserve rate prescribed for each type of credit institution and each corresponding type of deposit.
2. The average balance of assorted mobilized deposits subject to the calculation of compulsory-reserve in the period of compulsory-reserve determination shall be calculated by aggregating the balances of mobilized deposits subject to compulsory-reserve at the end of every day in the period then dividing the result by the total number of days in such period.
Article 14.- Process of determining actual reserve
1. An actual reserve is the average deposit balance of a credit institution at the State Bank in the period of compulsory-reserve maintenance.
2. Actual reserves are determined on the basis of electronic databases on credit institutions' daily deposit balance at the State Bank, which are formulated, inspected, transmitted and processed by the units under the State Bank.
3. Assurance of legality of electronic data
a/ For units under the State Bank which transmit data: After formulating data, the data-transmitting units must print such data in form of listing tables and keep them according to the regulations on archival of accounting documents; and at the same time, the unit heads or authorized persons shall use granted passwords to give their electronic signatures on to be-transmitted data.
b/ For units under the State Bank, which receive data: The unit heads or persons authorized to use the granted passwords shall have to check the accuracy of received electronic data, then forward such data to professional sections for printing listing tables and further processing. The unit heads and table makers shall sign on the tables and keep them according to the regulations on accounting documents.
Article 15.- Determination of compulsory-reserve surpluses or deficits
1. Compulsory-reserve surplus is the actual reserve larger than the compulsory reserve in the period of compulsory-reserve maintenance.
2. Compulsory-reserve deficit is the actual reserve smaller than the compulsory reserve in the period of compulsory-reserve maintenance.
The method of calculating compulsory reserves and actual reserves is additionally guided in Appendix II to this Regulation (not printed herein).
Article 16.- Handling of compulsory-reserve surplus or deficit
1. The State Bank shall pay interests on excessive compulsory-reserve portions in Vietnam dong and foreign currency(ies) into payment deposit accounts of credit institutions’ head offices at the demand deposit interest rate prescribed by the State Bank Governor for each period.
2. The State Bank shall impose fines for deficient compulsory-reserve portions of credit institutions as follows:
a/ For the first-time compulsory-reserve deficit in a year, credit institutions shall be served with caution.
b/ For the second time of compulsory-reserve deficit onward in a year, the State Bank shall impose fines for deficits on credit institutions' head offices as follows:
- For Vietnam-dong compulsory-reserve deficit, credit institutions shall be fined at an interest rate equal to 150% of the capital re-allocation interest rate on the last working day of the period of compulsory-reserve maintenance, prescribed by the State Bank for credit institutions, calculated on the deficit for the whole period of compulsory-reserve maintenance.
- For foreign-currency compulsory-reserve deficit, credit institutions shall be fined at an interest rate equal to 150% of the 3-month USD interest rate on Singapore's interbank currency market (Singapore interbank offered rate -SIBOR), announced on the last working day of the period of compulsory-reserve maintenance, calculated on the deficit for the whole period of compulsory-reserve maintenance.
Chapter III
IMPLEMENTATION PROVISIONS
Article 17.- Credit institutions have the following responsibility
Within the first 3 working days of every month, the head-offices of credit institutions shall have to report to the State Bank's Transaction Office or branches in the provinces and centrally-run cities where the credit institutions are headquartered on the credit institutions' average balance of mobilized deposits subject to compulsory reserve in the period of compulsory-reserve determination, which shall serve as basis for calculating compulsory reserves of the period of compulsory-reserve maintenance.
Article 18.- The State Bank's branches in the provinces and cities have the following responsibility:
Before 11:00 hrs of every working day, to transmit the balances of Vietnam-dong payment deposit accounts of credit institutions, opened at their units at the end of the preceding working day to the State Bank's Transaction Office.
The State Bank's branches in the provinces and cities shall not pay interests on the balances of Vietnam-dong payment deposit accounts of credit institutions' branches opened at their units.
Article 19.- The State Bank's Transaction Office has the following responsibility
1. Within the first 3 working days of every month, on the basis of the day-end balances of credit institutions' payment deposit accounts, transmitted from the State Bank's branches in the provinces and cities, to synthesize and calculate the average balances of Vietnam-dong payment deposit accounts of credit institutions at the State Bank in the period of compulsory-reserve maintenance. To transmit the average balances of Vietnam-dong payment deposit accounts of credit institutions at the State Bank in the period of compulsory-reserve maintenance to the State Bank's branches in the provinces or cities where such credit institutions are headquartered.
2. Within the first 5 working days of every month, on the basis of the preceding month's average balances of payment deposit accounts of credit institutions at the State Bank in the period of compulsory-reserve maintenance, to check and handle compulsory-reserve surplus or deficit for credit institutions under its management according to Article 16 of this Regulation.
3. Within the first 5 working days of every month, on the basis of the average balances of mobilized deposit accounts subject to the compulsory reserves in the period of compulsory-reserve determination reported by credit institutions, to check, calculate and notify the compulsory reserves of the period of compulsory-reserve maintenance and the result of the handling of compulsory-reserve surplus or deficit of the preceding month's period of compulsory-reserve maintenance to credit institutions under its management.
4. Within the first 7 working days of every month, to sum up and report on the situation of compulsory reserves of credit institutions under its management to the State Bank of Vietnam (the Department for Banks and Non-Bank Credit Institutions).
Article 20.- The State Bank's branches in the provinces and cities where credit institutions are headquartered have the following responsibilities
1. Within the first 5 working days of every month, on the basis of the preceding month's average balances of Vietnam-dong payment deposit accounts of credit institutions at the State Bank in the period of compulsory-reserve maintenance, transmitted by the State Bank's Transaction Office, to check and handle Vietnam-dong compulsory-reserve surplus or deficit of credit institutions under their respective management according to Article 16 of this Regulation.
2. Within the first 5 working days of every month, on the basis of the average balances of mobilized deposit accounts subject to the compulsory reserves in the period of compulsory-reserve determination, reported by credit institutions, to check, calculate and notify the Vietnam-dong compulsory reserves of the period of compulsory-reserve maintenance and the result of the handling of compulsory-reserve surplus or deficit of the preceding period of compulsory-reserve maintenance to credit institutions under their respective management.
3. Within the first 7 working days of every month, to sum up and report on the situation of compulsory reserves of credit institutions under their respective management to the State Bank of Vietnam (the Department for Banks and Non-Bank Credit Institutions).
Article 21.- The Department for Banks and Non-Bank Credit Institutions has the following responsibility
Within the first 10 working days of every month, to sum up the situation of credit institutions' observance of compulsory reserves transmitted by the State Bank's Transaction Office and branches in the provinces and cities, then report it to the State Bank Governor and concurrently to the Monetary Policy Department and the State Bank Inspectorate.
Article 22.- The Monetary Policy Department has the following responsibility
Basing itself on the economic development situation and monetary policy objectives to submit to the State Bank Governor the following matters:
1. Adjustment of compulsory-reserve rate applicable to each type of credit institution and each type of deposit;
2. Interest rate applicable to fines for compulsory-reserve deficits, interest rate applicable to payments for compulsory-reserve surpluses;
3. Submission of proposals on the payment of interests on compulsory-reserve of each type of credit institution or for each type of deposit to suit each period.
Article 23.- The Accountancy and Finance Department has the following responsibility:
To guide the accounting of book-keeping accounts of mobilized deposits subject to compulsory reserves as well as accounting of interest payments for compulsory-reserve surpluses or fines for compulsory-reserve deficits in compliance with this Regulation.
Article 24.- The State Bank Inspectorate has the following responsibility:
To inspect and examine the implementation of regulations on compulsory reserves by credit institutions. To report to the State Bank Governor on the results of inspection and examination, and propose remedies or handling measures according to its competence in cases where credit institutions violate regulations on compulsory reserves.
Article 25.- The Banking Information Technology Department has the following responsibility:
1. To formulate, set up and guide the operation of computer programs for the State Bank's units and the State Bank's branches in the provinces and cities for transmitting, summing up, reporting, calculating and handling compulsory-reserve surpluses or deficits of credit institutions.
2. To grant passwords to the State Bank's Transaction Office and branches in the provinces and cities, and to promulgate regulations on management and use thereof in service of the formulation, control, transmission, processing, storing and preservation of electronic data.
Article 26.- Handling of violations
1. Violations of the information and reporting regime shall be handled according to the regulations on sanctioning administrative violations in the monetary and banking activities.
2. Fines for compulsory-reserve deficits shall be imposed according to Clause 2, Article 16 of this Regulation.
Article 27.- The amendment and supplementation of this Regulation shall be decided by the State Bank Governor.
State Bank Governor
LE DUC THUY