DECISION No. 189/1999/QD-NHNN1 OF MAY, 29, 1999 PROMULGATING REGULATIONS ON THE CEILING INTEREST RATES ON LOANS IN VIETNAM DONG TO BE APPLIED BY CREDIT INSTITUTIONS FOR THEIR CLIENTS

THE STATE BANK GOVERNOR

Pursuant to the Law on the State Bank of Vietnam and the Law on Credit Institutions of December 12, 1992;

Pursuant to the Government’s Decree No. 15/CP of February 3, 1993 on the tasks, rights and State management responsibility of the ministries and the ministerial-level agencies;

At the proposal of the head of the Monetary Policies Department of the State Bank,

DECIDES

Article 1.- To stipulate the ceiling interest rates on loans in Vietnam dong to be applied by credit institutions for their clients as follows:

1. The ceiling loan interest rate of 1.15%/month (including fee) shall be applied by all credit institutions for their clients in both rural and urban areas; particularly the ceiling loan interest of the grassroots People’s Credit Funds and Credit Co-operatives for their members shall remain to be 1.5%/month.

2. The interest rates on loans for the Region 3 of mountain areas (the Region 3 of mountain areas as stipulated in Decision No. 42/VB-QD of May 23,1997 of the Committee for Ethnic Minorities and Mountain Region recognizing the list of three areas of mountains and highlands), offshore islands, regions concentrated with Khmer minorities shall be cut by 30% as compared to the interest rate on loans of the same kind.

3. The preferential loan interest rates shall continue to comply with the current regulations of the State Bank Governor.

4. The overdue debt interest rate shall be agreed upon in the credit contract between the lender and the borrower, but must not exceed 150% of the interest rate on undue loans of the same kind.

5. Basing themselves on the ceiling interest rates stipulated at Item 1 this Article, credit institutions shall fix the specific interest rates on deposits and loans suitable to the operating conditions of different regions, to the capital supply and demand situation in each period as well as the nature of risk for each loan, with the interest rates on long-term loans being higher than that on short-term ones.

Article 2.- The ceiling interest rates stipulated in Article 1, this Decision take effect as from June 01, 1999.

For the debt balance and credit contracts with loans having not yet been disbursed by May 31, 1999, the interest rate, agreed upon in the contracts, shall continue to apply.

The interest rates on loans in Vietnam dong stipulated at Item 1 Article 1 Decision No. 38/1998/QD-NHNN1 of January 17, 1998, Directive No. 01/1999/CT-NHNN1 of January 29, 1999 and Official Dispatch No. 422/CV-NHNN1 of May 15, 1998 of the State Bank Governor providing for the ceiling loan interest rates of rural commercial stock banks in the two provinces of Can Tho and An Giang shall be no longer effective.

Article 3.- The heads of units under the Central State Bank, directors of State Bank’s provincial/municipal branches, chairmen of the management boards and general directors (directors) of credit institutions and their clients shall have to implement this Decision.

For the State Bank Governor

Deputy Governor