Decision No. 18/1998/QD-NHNN7 of January 10th, 1998, on the issuance of the rule on foreign currency position for credit institutions authorised to engage in foreign exchange business. đã được thay thế bởi Decision No. 1081/2002/QD-NHNN of October 07, 2002, on foreign currency position of credit institutions permitted to engage in foreign exchange business và được áp dụng kể từ ngày 22/10/2002.
Nội dung toàn văn Decision No. 18/1998/QD-NHNN7 of January 10th, 1998, on the issuance of the rule on foreign currency position for credit institutions authorised to engage in foreign exchange business.
STATE BANK OF VIETNAM | SOCIALIST REPUBLIC OF VIETNAM |
No. 18/1998/QD-NHNN7 | Hanoi, January 10th, 1998 |
DECISION
ON THE ISSUANCE OF THE RULE ON FOREIGN CURRENCY POSITION FOR CREDIT INSTITUTIONS AUTHORISED TO ENGAGE IN FOREIGN EXCHANGE BUSINESS
THE GOVERNOR OF THE STATE BANK
Pursuant to the Ordinance on the State Bank of Vietnam promulgated by the Decree No 37/LCT/HDNN8 dated 23 May, 1990 of the Chairman of the State Council of the Socialist Republic of Vietnam.
Pursuant to Decree No. 15/CP dated 02 March, 1989 of the Government stipulating the assignment, authority, responsibility of state management of Ministries and ministerial-level agencies.
Upon the proposal of the Director of the Foreign Exchange Control Department.
DECIDES
Article 1.
To issue in conjunction with this Decision the Rule on foreign currency position for credit institutions authorised to engage in foreign exchange business.
Article 2.
This Decision shall be effective after 15 days from the date of signing and shall replace the Decision No 204/QD-NH7 dated 20 September, 1994 by the Governor of the State Bank on the issuance of the temporary Regulation on foreign exchange position for credit institutions authorised to engage in foreign exchange business.
Article 3.
Head of Governor office, relevant departments of the State Bank, General Managers of State Bank in the provinces and cities, the Director of Foreign Exchange Control Department, the Chief Inspector of the State Bank and Director General (Directors) of the credit institutions authorised to engage in foreign exchange business shall be responsible to enforce this decision.
| FOR THE GOVERNOR OF THE STATE BANK |
RULE
ON FOREIGN EXCHANGE POSITION FOR CREDIT INSTITUTIONS AUTHORISED TO ENGAGE IN FOREIGN EXCHANGE BUSINESS
(issued in conjunction with Decision No. 18/1998/QD-NHNN7 of the Governor of the State Bank of Vietnam dated 10 January 1998)
I. GENERAL PROVISIONS
Article 1. Purpose
The Rule on foreign currency position is to ensure the efficiency the foreign currency business of the credit institutions which engage in foreign currency activities, contributing step by step to make the foreign exchange market complete and to integrate the foreign currency activities of credit institutions into the international financial markets.
Article 2. Entities to apply
The Rule on foreign currency position shall be applied to credit institutions authorised to engage in foreign exchange business including state-owned commercial banks, banks for investment and development, joint stock commercial banks, joint venture banks and finance companies.
Foreign banks branches operating in Vietnam shall not be subject to this Decision.
Article 3. In this Rule, the following terms shall be interpreted as follows:
1. Foreign currency is the currencies used by credit institutions in their business except for the Vietnamese Dong.
2. Foreign currency position of each foreign currency is the difference between the total assets and total liabilities denominated in this currency, including the respective off-balance sheet items.
If the total assets are larger than the total liabilities, there occurs the foreign currency long position.
If the total assets are less than the liabilities, there occurs the foreign currency short position.
If the total assets are equal to the liabilities, there occurs the foreign currency square position.
3. "The total foreign currencies long position "is the sum of the long position of foreign currencies. "The total foreign currency short position" is the sum of short position of foreign currencies which are in a short position.
4. The foreign currency position at the end of the day is the foreign currency position at the close of a business day.
5. "The total foreign currencies positions at the end of the day is the total foreign currencies positions at the close of a business day.
6. "Limits of foreign currency position" is the maximum levels of foreign exchange long position and short position the credit institutions are permitted to maintain.
Article 4.
Transactions, which give rise to a foreign currency position, shall include selling or buying spot and forward transactions.
II. DETAILED PROVISIONS
Article 5.
Credit institutions authorised to engage in foreign exchange business (except foreign banks' branches) shall comply with the following regulation on limits of foreign currency positions:
1. The total foreign currencies long position at the close of a business day shall not exceed 30% of the own capital of a credit institution.
2. The total foreign currencies short position at the close of a business day shall not exceed 30% of the own capital of a credit institution.
3. The US Dollar long or short position at the close of a business day of a credit institution shall not exceed 15% of the own capital of a credit institution.
Article 6.
Credit institutions shall buy or sell foreign currency so as to ensure the foreign currency position at a close of a business day to be within the limits provided for in Article 5 of this Rule.
Article 7.
The own capital used in the calculation of the foreign currency position shall be calculated in accordance with the current provision of the State Bank.
Article 8. Principles to calculate the foreign currency position
1. Principle to calculate the position of each foreign currency: to subtract the total liabilities denominated in one foreign currency from its total asset denominated in that currency, including the respective off-balance sheet items and the forward transactions.
2. The principles to calculate the total foreign currencies position: to convert the position of each foreign currency to Vietnamese Dong. Then, add all the foreign currencies long position in order to arrive at the total long position and add all foreign currency short position to arrive at the total short position to calculate the ratio of each total position to the own capital.
3. The conversion exchange rate to calculate the total position shall be the spot rate at the close of the business day.
III. REPORTING REQUIREMENT
Article 9.
Credit institutions authorised to engage in foreign exchange business shall, every day before 10 am, submit a return of total value of buying and selling transaction of the previous day to the State Bank (Department of Foreign Exchange Control) using the pro-forma for the return of value of buying and selling transaction (attached to this Rule).
The General Director (Director) of credit institutions authorised to engage in foreign exchange business (except for foreign bank branches) shall, every month on the 15th and the last day of the month, submit to the State Bank (Department of Foreign Exchange Control), a return on the foreign currency position of the whole system as of the reporting day, in accordance with the pro-forma attached. The return shall be submitted at the latest, 3 days after the reporting.
IV. DEALING WITH VIOLATIONS
Article 10.
Violations of reporting requirement shall be dealt with in accordance with provisions of the laws or in the following manner:
1. Warning in case of late submission of return; and
2. Termination of a part of or the entire foreign currency buying and selling activities in case of continuous late submission of returns or no return is submitted.
Article 11.
Violations of limits of foreign currency positions shall be dealt with in accordance with provisions of the laws or the following manner:
1. Reprimand for the first violation and on the subsequent business day, the credit institution shall either buy or sell foreign currency in order to bring the position back to the permitted limits;
2. Termination of a part of or the entire foreign currency buying and selling activities in case of the second violation until the credit institution returns to the permitted limits; and
3. If the third violation occurs, the licence for foreign currency business shall be revoked.
V. IMPLEMENTING ORGANISATION
Article 12.
The Director of the Department of Foreign Exchange Control shall be responsible to coordinate with the relevant departments; the State Bank branches to disseminate, organise the implementation of this Rule, consolidate and report to the Governor of the State Bank of the performance of foreign exchange transaction in the system of the credit institutions authorised to engage in foreign exchange business and distribute copies of this report to other relevant departments and State Bank branches for cooperation in providing the guidance and supervision.
Article 13.
The Chief Inspector of the State Bank shall be responsible for examining and supervising the status of compliance with the reporting requirement, provision on the limits of foreign currency positions and foreign currency transaction performance of credit institutions authorised to engage in foreign exchange business.
Article 14.
General managers of State Bank branches in cities and provinces shall be responsible for the examination and supervision of the status of compliance with the reporting requirement and the limits of foreign currency positions and foreign currency transaction performance of the credit institutions authorised to engage in foreign exchange business in the localities.
Article 15.
General Directors (Directors) of the credit institutions authorised to engage in foreign exchange business mentioned in Article 2 shall be responsible for implementation of the provisions of this Rule.
Article 16:
Any change or supplement to the provisions of this Rule shall be decided upon by the Governor of the State Bank.
| FOR THE GOVERNOR OF THE STATE BANK |
