Article 1.- To issue together with this Decision the Regulation on the organization of bidding for treasury bonds.

Article 2.- This Decision takes effect from the date of its signing.

Article 3.- The Director of the Office of the Governor, the Head of the Credit Department, the Head of the Issue and Storage Department, the Head of the Accountancy and Finance Department, the Director of the Transaction Service of the State Bank, the Head of the Commission for Research and Building of the Capital Market, the Heads of other related departments of the Central State Bank, the Directors of the State Bank branches in the provinces and cities directly under the Central Government, the General Director (Director) of the State owned and stock Commercial Banks, the Investment and Development Banks, the Joint Venture Banks, and the branches of foreign banks, the financial companies, insurance companies, insurance funds, and the investment funds shall have to implement this Decision.

For the Governor of the State Bank

Deputy Governor

Article 1.- Bidding for treasury bonds is a form of issuing treasury bonds in the wholesale trade, through the bidding among the members, on the primary market for the issue of treasury bonds.

Article 2.- Characteristics of the bond:

2.1. The treasury bond is payable, accounted and used for payment in the Vietnam Dong.

2.2. The minimum denomination is one million Vietnam Dong. The other denominations shall be decided and announced by the Ministry of Finance and the State Bank in the issue notice.

2.3. The treasury bond has the following terms: one month, 3 months, 6 months and 9 months.

2.4. The treasury bond is a form of discount: it is sold at a price lower than its denomination, and paid for according to its denomination when it is due.

2.5. Treasury bonds are issued in the form of registers, and named or unamed certificates;

The buyer of treasury bonds in the form of certificate may make his deposits at the State Bank (the Exchange Service or appointed branch), or an affiliate bank.

2.6. Treasury bond bidding is a bidding for interest rates.

Article 3.- Periodical terms for the issue of treasury bonds are one week, two weeks or one month. Specific terms shall be set by interministerial decision.

Article 4.- Eligible for treasury bond bidding are:

4.1. Credit organizations operating in Vietnam: the State-owned Commercial Banks, the Stock Commercial Banks, the Investment and Development Banks, the Joint-Venture Banks, the branches of foreign banks and the Financial Company;

4.2. The insurance companies, insurance funds, and investment funds.

Article 5.- Conditions for joining the market:

The subjects mentioned in Article 4, who want to become members of the market must meet the following conditions:

5.1. To have the legal person status, and is founded under the current law of Vietnam.

5.2. For the banks and financial companies, they must have accounts in Vietnam Dong and treasury bond accounts opened at the Exchange Service of the State Bank, or an appointed branch of the State Bank.

The other subjects stipulated in Point 4.2. must have deposits in Vietnam Dong opened at a bank which is a member of the market, and treasury bond accounts opened at the State Bank (Exchange Service or an appointed branch of the State Bank).

5.3. They must have a minimum legal capital of 20 billion Vietnam

Dong.

5.4. They must abide by the provisions of this Regulation.

5.5. They must send an application to the State Bank.

The credit organizations, which do not possess the minimum legal capital stipulated in Point 5.3., can indirectly take part in the bidding through the members of the market, as mutually agreed upon by the concerned parties.

Article 6.- The subjects stipulated in Article 4, who want to join the market, must file an application to the Credit Department of the State Bank.

Basing itself on the conditions stipulated in Article 3, the State Bank shall issue certificates of market membership to the qualified subjects.

The time-limit for the reply concerning the issue of certificate is 15 days after receipt of the application.

After being granted the permits certifying that they are members of the market for bidding for treasury bonds, the members of the market have to constantly abide by the conditions mentioned above. In case of violation which has either been admonished by the State Bank or which is repeated many times, the State Bank shall withdraw the certificate of membership.

Annually, the State Bank shall review the qualifications of the members, on the basis of the above conditions and their regular participation in the market.

Each member can send a representative organization to the bidding. When necessary, the main office may delegate this representative power to a branch.

Article 7.- Notice of bidding:

Five days before the bidding, basing itself on the proposal of the Ministry of Finance to issue bonds, the Treasury Bond Bidding Board shall meet and draft the notice on the issue of treasury bonds.

Article 8.- Procedures for putting out a notice:

Two days before the bidding, the State Bank shall put out the notice on the issue of treasury bonds through the following information channels :

8.1. The Credit Department of the State Bank shall send a bidding notice by facsimile to the members and the appointed branches of the State Bank.

8.2. The notice shall be sent by computer if the members are connected to the Central State Bank by a computer network.

8.3. The notice shall be posted up at the Credit Department of the Central State Bank in Hanoi and the appointed branches of the State Bank.

At the same time, the notice shall be briefly published on the mass media. This summary must contain the following information:

- Projected volume of bonds to be issued,

- The date of issue,

- The time-limit of the bonds,

- The time-limit for registration.

Article 9.- Registering for bidding:

9.1. The registration for bidding shall be made according to guide-form.

In case treasury bonds of different terms are issued on the same occasion, each term must be registered in a separate card.

9.2. The interest rate of each bidding registration is recorded in percentages, and is rounded up to two figures after the decimal point.

Each bidding registration card can register at most five different interest rates. The volume of registrations corresponding to each interest rate must be a multiple of 100 million Vietnamese Dong.

For each interest rate, the volume of registrations must be written in letters and numbers. In case the figure in letters does not match that in numbers, the registration volume is invalid, and shall be taken out of the registration card.

9.3. The registration card (original copy) must be signed by an official Grade A, or two officials Grade B who have signed to the application for joining the market, and must be put into an envelop and sealed.

9.4. The registration cards of the members stipulated in Point 4.2. must be certified for warranted payment by the servicing member bank.

Article 10.- Making a deposit:

Thirty minutes before the closing of the registration time, the participants in the bidding must assure a minimum deposit of 5% of the value of the bidding registrations.

The State Bank shall open a separate deposit account to record the deposits of each member.

During the period of deposit making (from the date of making the deposits to the date of issue), the deposits shall carry no interest.

The State Bank shall return the deposits to the non-winning bidders right after the results of the bidding are known.

With regard to the winning members, the deposits shall be subtracted from the payment of the bonds.

Article 11.- Procedures for sending bidding registration cards:

11.1. The participants in the bidding must send their bidding registration cards at 12.00 hrs of the bidding day at the latest. Each member can send only one card for each term of the bond and each bidding. After the registration card has been sent, the registering unit must not make any more change.

11.2. The registration card shall be sent directly to the Central State Bank in Hanoi, or the appointed branch of the State Bank.

11.3. The State Bank shall place the registration card box at the Credit Department of the Central State Bank and the appointed branches of the State Bank. The box is provided with two padlocks, the keys of which are kept by two authorized officials.

Article 12.- Processing of bidding registration cards :

12.1. At 12.00 hrs sharp on the bidding day, the bidding card box shall be opened at the same time at the places stipulated in Point 11.3., and no more cards shall be received after the boxes have been opened. The boxes shall be emptied, and all the registration cards shall be handed over to the processing body.

12.2. All the registration cards shall be checked twice, and in each time the control personnel shall initial separately on the cards.

The cards which do not conform with the prescribed form, which are not filled as prescribed, such as without the serial number, or the registered sum not a multiple of 100 million Vietnam Dong, or which do not ensure the minimum registration volume or the prescribed level of deposits, shall be considered non valid. The processing body at the Credit Department of the State Bank in Hanoi and the appointed branches of the State Bank, shall return the cards to their owners by fax or through the computer network, in which the reason for invalidation shall be stated.

12.3. After all the cards have been processed, all the valid cards (attached to a full account) shall be sent by the appointed branches of the State Bank by fax (coded), or through the computer network to the Credit Department in Hanoi for an overall consideration.

Even in case no member applies, the appointed branches of the State Bank still have to notify it by fax to the Credit Department.

Article 13.- Procedures for bidding consideration:

13.1. The consideration of bidding is effected in the professional order of treasury bond bidding, issued by the Head of the Credit Department on order from the Governor of the State Bank.

13.2. The determination of the volume and interest rates of the winning treasury bond is based on :

- The volume and interest rates tendered by the members;

- The volume of treasury bonds to be mobilized and the administered interest rates.

13.3. The volume of winning treasury bonds is calculated in the ascending order of the interest rate of the biddings, within the administered interest rate.

In case the volume of biddings exceeds the projected level of issue, at the highest level of winning interest rate within the limit of the administered interest rate, the volume of winning biddings shall be distributed to each bidding card, proportionally to the volume of bidding of each card at that interest rate. This can be rounded up to 100 million Vietnamese Dong.

13.4. The interest rate of treasury bonds applies in a uniform manner to the winners, according to the highest interest rate among the winners.

The results of the bidding shall be signed and certified, at the place of the bidding consideration, by an authorized representative of the Ministry of Finance and the State Bank in the Treasury Bond Bidding Commission.

Article 14.- The selling prices of treasury bonds generally applied to the winning units shall be set according to the following formula :

MG

G = ---------------

Ls x T

1 + ---------

365 x 100

G = Selling price of the treasury bond

MG = Denomination of the bond

Ls = Interest rate of the winning bond

T = Number of days in the term of the bond

365 = Conventional number of days in a year.

The amount of money the winning unit has to pay can be rounded up to hundreds of Vietnam Dong.

Article 15.- Announcement of the result of the bidding:

Right after the results of the bidding are known Treasury Bond the Bidding Commission shall send a written report to the leaderships of the Ministry of Finance and the State Bank.

On the same day, the State Bank shall send the results of the bidding to the winning units, either directly or by fax, or through the computer network (if any), and post them up at the Office of the Credit Department of the Central State Bank in Hanoi and the appointed branches of the State Bank.

At the same time, the State Bank shall announce on the mass media the following information:

- The amount of winning treasury bonds.

- The prices of the bonds and the interest rates applied to the winning bidders.

- The amount of non-winning bonds.

Article 16.- Payment and delivery of treasury bonds:

16.1. The winning bidders must pay fully for the treasury bonds they have bought from the State Bank (the Exchange Service or the appointed branch of the State Bank) within two working days after the bidding day.

16.2. The day after the bidding, the winning units must send their payment notices to the Exchange Service of the State Bank or the appointed branch of the State Bank where the members registered for bidding, on the amount to be paid and also the composition of the amount of treasury bonds registered for purchase (in the form of book recording or certificate).

In case no payment notice is received, by the date when payment is due, the State Bank shall make deduction from the deposit account of the winning unit at the State Bank (if any) to have the amount corresponding with the amount of winning treasury bonds. If the winning unit has no accounts at the State Bank, the latter shall deduct from the accounts of the member banks to meet the need of the unit.

16.3. The State Bank shall make an entry to the credit side of the deposit account of the State Treasury Department opened at the Exchange Service of the State Bank, for the whole amount of money for the purchase of the treasury bonds of the winning units, at the selling price on the third day after the bidding.

16.4. After receiving the full money of the purchase, the State Bank shall make an entry to the credit side of the recorded accounts, or hand the treasury bond certificates to the winning unit. The entry on the credit side of the recorded accounts must be completed within two days after the bidding day, and the delivery of the certificates must be done within three days after the bidding day.

16.5. One day before the treasury bond is due, the Ministry of Finance (the State Treasury Department) must transfer the payment capital (according to the denominations of the volume of the winning bonds) to the Central State Bank, through the deposit accounts of the State Treasury at the Exchange Service of the State Bank, in order to pay the members of the market. On the date of payment, if the State Bank (the Exchange Service) has not received the money transfer certificates of the State Treasury Department, it shall make a deduction of the deposits of the State Treasury Department at the State Bank Exchange Service, to pay the owner of the bond, and send the notice of debt to the State Treasury Department.

16.6. The payment of treasury bonds to the members shall be done on the date when the bonds are due, through the accounts of the members opened at the State Bank, or the servicing member banks (for the members without accounts at the State Bank).

With regard to the treasury bond certificates, the members shall pay their customers and repay the State Bank. The State Bank shall pay the members according to the denominations of the actual number of bonds delivered to the State Bank (the Exchange Service or the appointed branch of the State Bank).

In case the owner of the treasury bond does not come to pay on the due date, he shall not be paid the interest for the overdue period.

16.7. All violations of the terms of payment shall be subject to penalties as stipulated hereunder:

16.7.1. With regard to the State Bank and the State Treasury: They will have to bear an interest fine representing 150% of the bidding interest rate of the corresponding terms, counted on the number of days and the arrears.

16.7.2. With regard to the winning unit: If the deduction made from the registered fund and deposits of the winning units still cannot cover the amount of the money which the unit must pay to the State Bank, the State Bank shall cancel the result of the winning bid which has not been paid, and confiscate the whole amount of the registered fund submitted to the State Bank.

Article 17.- Responsibility of the departments and other units in the State Bank:

17.1. The responsibility of the Department Credit Department

17.1.1. To receive the application, and issue the certificate of membership of the market to the qualified subjects as stipulated in Article 5; to supervise the regular observance of these terms, and to withdraw the membership certificate when necessary.

17.1.2. To send the notice of issue of treasury bonds to the members of the market, the Exchange Service and the appointed branches of the State Bank.

17.1.3. To receive the registrations for bidding, and organize the consideration of the biddings in accordance with the prescribed professional order.

17.1.4. To announce the bidding results to the Exchange Service of the State Bank and the appointed branches of the State Bank as well as to the winning members, so that the buying and selling of bonds can start.

17.1.5. To draft a report analyzing the result of the bidding, and send it to the Governor of the State Bank, and also to the Economic Research Department and the Accountancy-Finance Department. The report shall include the following information:

- The number, interest rate and prices of the bonds registered for purchase;

- The number, the determined interest rate and the prices of the bonds sold to each winning bidder with comparison to the previous biddings;

- The number and value of the unsold bonds, or bonds of which the demanding price is not accepted.

17.1.6. To coordinate with the Information and Press Department in announcing the results of the bidding on the mass media, and post them up at the Credit Department of the State Bank in Hanoi and the appointed branches of the State Bank.

17.2. The Accountancy and Finance Department has the responsibility:

- To guide the observance of the order in accounting and paying the treasury bonds.

17.3. The Exchange Service of the State Bank has the responsibility:

17.3.1. To send before the opening of the bidding a notice to the Credit Department on the amount of the registered fund of the participants in the bidding.

17.3.2. To collect the money of the buying units according to the announcement of the bidding results from the Credit Department, and make an entry to the credit side of the accounts of the State Treasury in conformity with the stipulations in Article 16 of this Regulation.

17.3.3. To enter record accounts in treasury bills or to deliver the certificate of treasury bills to the buying unit according to the registration form and the stipulations in Article 16 of this Regulation.

17.3.4. When the bond is due, it shall deduct from the accounts of the State Treasury to pay the members having bought bonds, as stipulated in Article 15 of the Interministerial Circular and Point 16.6 of this Regulation. The non-member units shall be paid through the affiliate bank where they have their accounts.

17.3.5. To draft the general account on the payment of treasury bonds. All the treasury bond certificates must be kept in the journal of payment vouchers at the State Bank.

17.4. The appointed branches of the State Bank have the responsibility:

17.4.1. To receive the bidding registrations of the members of the market who have their accounts at the branches, and to carry out their tasks according to the professional order for treasury bond bidding.

17.4.2. On the basis of the announcement of the bidding results from the Credit Department, to deduct from the deposit accounts of the unit mentioned at the above point in conformity with the stipulations in Point 16.1, and transfer money to the accounts of the State Treasury Department at the Exchange Service of the State Bank.

17.4.3. To integrate the off-balance sheet accounts of the recorded treasury bonds, or to hand over the treasury bond certificate to the purchasing unit, according to the registration application and in conformity with the stipulations in Point 16.4 of this Regulation.

17.4.4. To draw up the final accounts of payment of the bonds and send it to the Exchange Service of the State Bank, and to safeguard the journal of payment vouchers.

17.5. The Issue and Storage Department has the responsibility:

17.5.1. To organize the printing and maintenance of the certificates of treasury bonds according to the system of valued vouchers.

17.5.2. To organize the transportation, maintenance and delivery of the treasury certificates to the Exchange Service of the State Bank and the appointed branches of the State Bank, on order from the Governor of the State Bank.

17.5.3. To open a book to monitor and settle the accounts of the treasury bonds with the Accountancy and Finance Department.

Article 18.- Any amendment or supplement to this Regulation shall be decided by the Governor of the State Bank.

For the Governor of the State Bank

Deputy Governor