Quyết định 251/2001/QD-NHNN

DECISION

ON THE ISSUANCE OF THE REGULATION ON LENDING SECURED BY MORTGAGE OF SHORT-TERM VALUABLE PAPER BY THE STATE BANK TO BANKS

THE GOVERNOR OF THE STATE BANK

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 and the Law on Credit Institutions No. 02/1997/QH10 dated 12 December, 1997;
Pursuant to the Decree No. 15/CP dated 02 March, 1993 of the Government on the assignment, authority and responsibility for the State management of the ministries and ministry-level agencies;
Upon the proposal of the Director of the Credit Institution Department,

DECIDES

Article 1. To issue in conjunction with this Decision the Regulation on lending secured by mortgage of short-term valuable paper by the State Bank to banks.

Article 2. This Decisions shall be effective after 15 days from the date of signing and shall replace the provision on refinancing in form of pledge of Treasury bills stated in the Regulation on the refinancing of the State Bank for credit institutions issued by the Decision No. 285/QD-NH14 dated 10 November, 1994 of the Governor of the State Bank, the Decision No. 431/1997/QD-NHNN14 dated 24 December, 1997 supplementing the Regulation on the refinancing of the State Bank for credit institutions issued in conjunction with the Decision No. 285 QD-NH14 dated 10 November, 1994 of the Governor of the State Bank and the official dispatch No. 97/CV-NH14 dated 4 February, 1997 of the State Bank on the delegation of authority to General Managers of State Bank branches to perform refinancing lending to non state-owned credit institutions in respective localities.

Article 3. In respect of balance of refinancing made by the State Bank to banks that exists at the end of the date prior to the effective date of this Decision, the State Bank and banks shall continue complying with agreements in respective contracts and debt recognition documents until the full collection of debt by the State Bank.

Article 4. The Director of the Administrative Department, the Director of the Finance and Accounting Department, the Director of the Credit Institution Department, the Director of Banking Operation Department of the State Bank, the Chief Inspector, Heads of the relevant units of the State Bank of Vietnam, General Managers of the State Bank branches in the provinces, cities under the central Government's management and General Director (Directors) of banks shall be responsible for the implementation of this Decision.

REGULATION

ON THE LENDING SECURED BY MORTGAGE OF SHORT-TERM VALUABLE PAPER BY THE STATE BANK TO BANKS
(issued in conjunction with the Decision No. 251/2001/QD-NHNN dated 30 March, 2001 of the Governor of the State Bank)

Chapter I

GENERAL PROVISIONS

Article 1. Governing scope

This regulation provides for the refinancing in Vietnam Dong by the State Bank to banks in form of lending secured by the mortgage of short-term valuable paper to provide short-term funds and liquidity to banks.

Article 2. Subjects of refinancing

Banks that are entitled to refinancing in accordance of provisions of this Regulation shall be banks which are established and operating in accordance with the Law on credit institutions (abbreviated as banks), including:

1. Commercial banks;

2. Development banks;

3. Investment banks;

4. Policy banks;

5. Cooperative banks;

6. Joint-venture banks;

7. Foreign bank branches;

8. Other type of banks that are established and operating in accordance with the Law on credit institutions.

Article 3. Interpretation

In this Regulation, following terms shall be construed as follows:

1. Short-term valuable paper shall be valuable paper with term of less than one year;

2. Lending secured by mortgage of short-term valuable paper (hereinafter referred to as mortgage lending) shall be a form of refinancing by the State Bank to banks on the basis of the mortgage of short-term valuable paper to secure the repayment obligation.

3. Limit on the mortgage lending shall be the maximum funds the State Bank may lend in a quarter or a year in form of mortgage lending.

4. Interest on mortgage lending (hereinafter abbreviated as mortgage interest) shall be the refinancing interest that is used to calculate and collect interest on the actual principal when the State Bank makes mortgage lending.

Article 4. Principle of mortgage lending

Mortgage lending by the State Bank shall ensure the compliance with following principles:

1. Provision of secured credit;

2. Provision of funds to satisfy demand for short-term funds and liquidity to banks;

3. Repayment of principal and payment of interest on time.

Article 5. Conditions of mortgage lending

1. The State Bank shall consider and decide on mortgage lending upon the satisfaction of following conditions by banks:

1.1. Being banks provided for in Article 2 of this Regulation;

1.2. Not being under the special control regime;

1.3. Being a member of open market and Vietnam Dong inter-bank market;

1.4. There is a demand for borrowing;

1.5. There exists no overdue debt to the State Bank;

1.6. Compliance with provisions on loan security under this Regulation.

2. The State Bank shall not make any mortgage lending to any bank, which does not satisfy any of conditions provided for in paragraph 1 of this Article.

Article 6. Interests on mortgage lending

1. Interests on mortgage lending shall be provided for by the Governor of the State Bank and adjusted in line with the objective of the monetary policy in each period of time.

2. In case a loan becomes overdue, it shall be categorized as overdue debt and be subject to overdue interest in accordance with provisions of the Governor of the State Bank from the time the loan is classified as overdue.

Chapter II

DETAILED PROVISIONS

Article 7. Mortgage assets shall include:

1. State Treasury Bills;

2. State Bank Bills

3. Apart from mortgage assets mentioned in paragraph 1 and paragraph 2 of this Article, the acceptance of other short-term valuable paper as mortgage assets shall be provided for by the Governor of the State Bank from time to time.

Article 8. Conditions for the acceptance of mortgage assets

Short-term valuable paper that shall be accepted by the State Bank as mortgage assets upon satisfaction of following conditions:

1. Applicant banks is the beneficiary (in case of non-bearer valuable paper) or the legal holder (in case of bearer valuable paper).

2. Valuable paper provided for in Article 7 of this Regulation.

3. Eligible for transaction with, payment to the State Bank as the third party in accordance with provisions of applicable laws and commitment of the beneficiary.

4. In case paper are issued in book-entry form, there must be confirmation and assurance by organization which is responsible for the payment of those valuable paper to the extent that it will make payment to the State Bank when and if applicant bank (the beneficiary) fails to pay any due debt.

Article 9. Application file for mortgage lending

Upon a demand for borrowing, applicant bank shall submit to the State Bank an applicant file for mortgage lending, including:

1. Application for mortgage lending which includes following basic contents: Name, address of applicant bank; amount to be borrowed, objective of the borrowing; commitment for security, repayment of principal, payment of interests and other commitments.

2. A list of valuable paper requested to be used as mortgage for borrowing from the State Bank (Form No. 01/CC).

3. Related documents to evidence that mortgage assets satisfy conditions stated in Article 8 of this Regulation.

Article 10. Acceptance of mortgage assets and approval of the mortgage lending

1. In the event the applicant bank satisfies conditions provided for in Article 5 of this Regulation, mortgage assets of applicant bank satisfy conditions for mortgage in accordance with provisions of Article 8 of this Regulation, the State Bank shall base on the value and maturity of valuable paper accepted as mortgage to determine the value of the mortgage assets, the term of the mortgage and the lending amount on the list of short-term valuable paper accepted as mortgage for borrowing from the State Bank (Form No. 02/CC).

2. Within a maximum period of 2 working days from the complete receipt of application file for the mortgage in accordance with provisions in Article 9 of this Regulation, the State Bank shall inform the applicant bank of its approval or its refusal of the mortgage lending (Form No. 03/CC or Form No. 04/CC).

Article 11. Level of mortgage lending

1. The State Bank shall base on the borrowing requirements of banks; the limit on the mortgage lending available to decide on the level of mortgage lending on the List of short-term valuable paper accepted as mortgage at the State Bank.

2. The maximum level of mortgage lending shall not exceed the total value of the mortgaged paper at maturity.

Article 12. Performance of lending

1. After the receipt of the approval by the State Bank of mortgage lending, the applicant bank shall prepare the contract on lending secured by mortgage of short-term valuable paper (4 original copies) under the Form No. 05/CC and submit to the State Bank.

2. The State Bank and applicant bank shall base on the List of short-term valuable paper that are accepted as mortgage assets to borrow from the State Bank, the Notice of approval by the State Bank of mortgage lending to complete procedures to sign the contract on lending secured by short-term valuable paper (4 original copies). Each party shall keep 2 copies as the basis for the accounting and for the transfer of lending funds.

3. The lending funds shall be transferred to the deposit account of the applicant bank at the State Bank.

Article 13. Determination of the lending term, repayment periods

The State Bank and applicant bank shall agree on the lending term and determine repayment periods on the basis of the loan objective and remaining payment maturity of accepted mortgaged paper, but not in excess of their remaining maturity of payment.

Article 14. Payment of principal and interests

1. Applicant bank shall be responsible and take initiative to comply with commitments of borrowing and repayment to the State Bank at periods agreed upon in the contract on lending secured by short-term valuable paper.

2. The State Bank shall not consider any extension of repayment for mortgage loans.

Article 15. Debt collection and disposal of mortgage assets for debt collection

In case applicant bank fails to repay at the due date, the State Bank shall take necessary measures to impose a compulsory debt collection (principal and interests) and penalty payment (if any) as follows:

1. To deduct the deposit account of applicant bank at the State Bank to implement compulsory debt collection for each payment installment;

2. In case the balance on the account of applicant bank at the State Bank is not sufficient for the debt collection, the principal due for repayment shall be subject to overdue interest from the due date until its collection (principal and interests) from the payment of due mortgage paper.

3. Collection from the payment of due mortgage paper in case the State Bank is the issuer or authorized payer for the beneficiary (legal owner).

4. To request organizations that are responsible for the payment of paper mortgaged at the State Bank to make direct payment to the State Bank, in accordance with obligation committed by the beneficiary (legal owner). In the event the issuer fails to perform the obligation, that organization shall fully be responsible before the laws.

Chapter III

ORGANIZATION OF IMPLEMENTATION

Article 16. Delegated authority of mortgage lending

The State Bank shall perform mortgage lending at the Banking Operation Department and State Bank branches in provinces, cities.

1. The Director of the Banking Operation Department shall perform the mortgage lending to banks that have Head-office in Hanoi.

2. General Managers of State Bank branches in provinces, cities shall perform mortgage lending to banks that have Head-office in respective localities (except for Hanoi).

Article 17. Responsibility of applicant banks

1. To provide sufficiently, timely files, documents in accordance with provisions of this Regulation and be responsible before the laws for the accuracy of data and documents they have provided.

2. To comply with their commitment to the State Bank upon their borrowing as stated in contracts on lending secured by short-term valuable paper and make the repayment on time, use the borrowed funds for the right purpose.

3. To hand over adequately short-term valuable paper that are accepted upon borrowing. To receive the complete mortgaged assets upon full repayment of the debt (including principal and interests) to the State Bank.

Article 18. Responsibilities of units in the State Bank

1. The Monetary Policy Department: to determine the limit and interests of mortgage lending for each period of time to submit to the Governor for approval and give notice to related units in the State Bank for implementation.

2. The Credit Department shall have the responsibility:

a. To give notice of limits of mortgage lending applicable to the Banking Operation Department, State Bank branches in provinces, cities after they are approved by the Governor of the State Bank;

b. To report to the Governor of the State Bank of the performance of the limits of mortgage lending used by the Banking Operation Department, State Bank branches in provinces, cities.

3. The Banking Operation Department shall have the responsibility:

a. To set up the operational procedures of mortgage lending for the performance at the Banking Operation Department and State Bank branches to submit to the Governor of the State Bank for approval.

b. To publicly announce interests of mortgage lending at the Banking Operation Department;

c. To receive and appraise application files for mortgage lending and perform the mortgage lending in accordance with the operational procedures of mortgage lending;

d. To receive, keep, maintain and hand over mortgage assets, files, documents relating to the mortgage lending in a safety manner and perform the accounting in accordance with applicable provisions.

dd. To consolidate information, data on mortgage lending monthly, discover timely difficulties, obstacles which may arise during the implementation in order to report to the Governor of the State Bank with copies sent to the Credit Department, the Monetary Policy Department, the Finance and Accounting Department.

4. The Finance and Accounting Department: to give guidance on accounting of mortgage lending.

5. State Bank branches in provinces and cities

a. To announce publicly interests on mortgage lending at branches;

b. To receive and appraise application files for mortgage lending from applicant banks in respective localities; perform mortgage lending within their authority delegated by the Governor of the State Bank;

c. To receive, keep, maintain and hand over mortgage assets, files, documents relating to the mortgage lending and perform the accounting in accordance with applicable provisions.

d. To consolidate information, data on mortgage lending monthly, discover timely difficulties, obstacles which may arise during the implementation in order to report to the Governor of the State Bank with copies sent to the Credit Department, the Monetary Policy Department, the Finance and Accounting Department.

6. The General Control Department shall have the responsibility to examine, supervise the performance of mortgage lending by the Banking Operation Department, State Bank branches in provinces, cities as authorized by the Governor of the State Bank in accordance with its competence, functions and authority.

7. The State Bank Inspection shall have the responsibility to examine, supervise the compliance with the provisions on mortgage lending by banks in accordance with its competence, functions and authority.

Article 19. Implementing provision

Any amendment of, supplement to the content of this Regulation shall be decided upon by the Governor of the State Bank.

Form No. 01/CC

Bank......

No: ...../DNCC

LIST OF SHORT-TERM VALUABLE PAPER PROPOSED FOR USE AS MORTGAGE ASSETSFOR BORROWING FROM THE STATE BANK

Unit: 1 VND

Note: Paper of the same maturity is grouped in column 2

Date:----------------------

Form No. 02/CC

Bank........

No: ...../DNCC

LIST OF SHORT-TERM VALUABLE PAPER ACCEPTED FOR USE AS MORTGAGE ASSETS FOR BORROWING FROM THE STATE BANK

Unit: 1 VND

Note: Paper of the same maturity is grouped in column 2

Date:.................................

Form No.5/CC

CONTRACT ON LENDING SECURED BY MORTGAGE OF SHORT-TERM VALUABLE PAPER

No:..

Name of applicant bank:-----------------Code-------------------------------------------------

Address:-------------------------------------------------------------------------------------------

Number of deposit account:--------------------------------------------------------------------

Number of loan account:------------------------------------------------------------------------

Maintained at:------------------------------------------------------------------------------------

Based on the application for borrowing secured by mortgage of short-term valuable paper stated in the Dispatch Nodated/200 of ..that has been accepted in accordance with the Notice of the State Bank No..dated/200..together with the List of short-term valuable paper accepted for use as mortgage assets, the Bank.recognizes the debt secured by mortgage of short-term valuable assets at the State Bank with following contents:

- Amount of mortgage borrowing:--------------------------------------

- In words:-----------------------------------------------------------------

- Interest of mortgage borrowing:--------------------------------------

- Term of mortgage borrowing:-------------from the date of the debt recognition and broken down into repayment periods stated in the back of this contract.

- Purpose of the mortgage borrowing:---------------------------------

The applicant Bank commits to comply with the Regulation on the lending secured by mortgage of short-term valuable assets of the State Bank for banks that is issued in conjunction with the Decision No..dated/2001 of the Governor of the State Bank.

Acceptance by State Bank of lending secured by mortgage of short-term valuable paper

Amount of mortgage lending:------------------------------------------------------------

In words:------------------------------------------------------------------------------------

Interest on mortgage lending:------------------------------------------------------------

Term of mortgage lending:---------------------------------------------------------------

Types of paper accepted for use as mortgage assets:---------------------------------

Purpose of mortgage lending:------------------------------------------------------------

LENDING BANK

DISBURSEMENT OF FUNDS AND REPAYMENT PERIODS

Repayment performance and overdue debt