Thông tư 01/2012/TT-NHNN

CIRCULAR

REGULATION ON THE DISCOUNT OF VALUABLE PAPERS OF THE STATE BANK OF VIETNAM FOR FOREIGN CREDIT ORGANIZATIONS AND BANK BRANCHES

Pursuant to the Law on State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Organizations No. 47/2010/QH12 dated June 16, 2010;

Pursuant to Decree No. 96/2008/ND-CP dated August 26, 2008 of the Government stipulating the functions, duties, powers and organizational structures of the state bank of Vietnam

The State Bank of Vietnam (hereafter referred to as State Bank for short) stipulates the discount of valuable papers of the State Bank for foreign credit organizations and bank branches as follows:

Chapter 1.

GENERAL REGULATIONS

Article 1. Scope of adjustment and subjects of application

1. Scope of adjustment

This Circular stipulates the implementation of discount technique of valuable papers of the State Bank for foreign credit organizations and bank branches.

2. Subject of application

a) Foreign banks, non-banking credit organizations and bank branches;

b) Central People’s Credit Funds pending the conversion into cooperative bank in accordance with the provisions of the Law on Credit Organizations.

Article 2. Explanation of terms

In this Circular, the following terms are construed as follows:

1. Valuable papers are an evidence of the confirmation of debt payment obligations between the issuer of valuable papers with the owner of valuable papers in a certain time, interest conditions and other conditions.

2. Long-term valuable papers are valuable papers for a period of one year or more from the issuance until the time for payment.

3. Short-term valuable papers are valuable papers for a period of less than one year from the issuance until the time for payment.

4. Discount of valuable papers is the technique the State Bank makes a shot-term purchase of valuable papers under payment period of the foreign credit organizations and bank branches before the time for payment (hereafter referred to as discount for short)

5. Making a long-term purchase of valuable papers is the purchase of valuable papers with the term of less than one year.

6. Discount of entire remaining term of valuable papers is the form the State Bank makes a purchase of valuable papers of foreign credit organizations, bank branches at the discount price.

7. Term discount is a form the State Bank makes a discount together with the request for foreign credit institutions, bank branches to commit to buy back all those valuable papers after a certain time before the time for payment of valuable papers. The maximum discount term is 91 days.

8. Total discount limit is the total money supply approved for the discount technique of the State Bank.

9. Discount limit is determined quarterly and is the maximum balance that the State Bank makes a discount for valuable papers for a foreign credit institution, bank branch at all points of time in a quarter.

10. Discount term is the duration from the date when the State Bank receives the discount of valuable papers to the date when the foreign credit institutions and bank branches have their obligations to buy back the valuable papers for the State Bank and get back the valuable papers under commitment of repurchase of those valuable papers (in case of term discount) or on the due date for payment of those valuable papers (in case of discount of entire remaining term)

11. Remaining term of valuable papers is the duration from the date when the State Bank receives the discount to the due date for payment.

12. Discount interest is the interest applied by the State Bank in order to calculate the payment amount upon making a discount of valuable papers. The discount interest will be determined and promulageted by the State Bank in accordance with the objectives of monetary policies of each period.

Article 3. Objectives and principles for implementation of discount techniques

1. The State Bank implements the discount techniques with the foreign credit institutions and bank branches in order to carry out the national monetary policies contributing to boost the social and economic development.

2. Based on the orientation of social and economic development of the Government and objectives of national monetary policy in each period, the State Bank Governor will make a decision on the banking sector the State Bank will prioritize the discount for the foreign credit institutions and bank branches

3. Based on the total discount limit and priority objectives for credit investment in each period, the State Bank will allocate the discount limit for each foreign credit institution and bank branch.

4. The foreign credit institutions and bank branches discounted must use their capital for the right purpose; upon termination of discount expiration for the case of term discount, the foreign credit institutions and bank branches must take back valuable papers under commitment and make full payment for the repurchase of valuable papers to the State Bank.

Article 4. Method of implementation of the discount techniques

1. Method of direct transanction: The foreign credit institutions and bank branches will make direct transaction to the State Bank.

2. Method of indirect transanction: The foreign credit institutions and bank branches will make transaction through the transaction network system of monetary market technique under the guidance of the State Bank.

Article 5. Issuing digital code, password and code of electronic signature.

The foreign credit institutions and bank branches are issued digital code, password, code of electronic signature to the transaction officers, control officer and officer with competence to approve and sign the document (hereafter referred to as personnel participating in the discount technique) to make transaction through the transaction network system of monetary market technique of the State Bank in order to carry out the security mode.

Article 6. Discounted valuable papers

1. The standard of discounted valuable papers at the State Bank:

a) Issued in Vietnam dong (VND)

b) Transfer permitted

c) Legally owned by the foreign credit institutions and bank branches offering discount;

d) Not being the valuable papers issued by the foreign credit institutions and bank branches offering discounts;

dd) The maximum remaining term of valuable papers is 91 days for the case of discounting the entire remaining term of valuable papers.

e) The remaining term of valuable papers must be longer the term the State Bank makes a discount for the case of term discount.

2. The list of valuable papers is prescribed by the State Bank Governor in each period.

Article 7. Transaction day

1. The transaction day in the discount techinique is the working day

2. In case the due date of discount falls on the holidays and days-off, the due date of discount shall be switched to the next working day.

Chapter 2.

SPECIFIC REGULATION

Article 8. Conditions for implementation of discount technique.

The foreign credit institutions and bank branches participating in discount technique must fully meet the following conditions:

1. Being the financial organizations that are not placed under spcial control.

2. Not having overdue debts at the State Bank at the point of time of discount proposal.

3. Having deposit account opened at the State Bank (Transaction Service or State Bank of branches in central-affiliated provinces and cities (hereinafter referred to as State Bank of authorized branches) implementing the discount.

4. Having request dossier for the notification of discount limits of valuable papers deposited at the State Bank on time as stipulated in clause 3, Article 9 of this Circular.

5. Having qualified and valuable papers and in the list of valuable papers discounted at the State Bank.

6. In case making transaction under the indirect method, the foreign credit organizations and bank branches must be fully equipped with machinery, informatic equipment, transmission line and connected to the server system at the State Bank (Transaction Service and Department of Information Technology)

Article 9. Notification of discount limit

1. Based on the objectives of national monetary policies and direction of social and economic development of the Government in each period, the State Bank Governor will decide the total discount limit for the banking sector that the State Bank will prioritize the discount for foreign credit organizations and bank branches.

2. On the 15th date of the first month of each quarter at the latest, the foreign credit organizations and bank branches will send 1set of request dossier for the notification of discount limits of valuable papers via post, fax or submit directly to the State Bank (Credit Department) for the basis of determination and notification of discount limit for the foreign credit organizations and bank branches in a quarter.

3. The request dossier for the notification of discount limits includes:

a) The written request for the State Bank to notify the discount limits under the form No. 01/NHNN-CK;

b) The balance sheet of the latest month of the foreign credit organizations and bank branches;

c) The list of valuable paper eligible for discount at the State Bank under the form No.02/NHNN-CK;

4. Based on the request dossier for the notification of the discount limits of the foreign credit organizations and bank branches, on the 20th date of the first month of each quarter at the latest, the State Bank will carry out the allocation and notification of the discount limits to the foreign credit organizations and bank branches having their requests under the form No. 03/NHNN-CK.

5. The State Bank only makes allocation and notifies the discount limits to the foreign credit organizations and bank branches having their requests for the discount limits sent to the State Bank within the time as specified.

Article 10. The competence of document signing for participating in the discount techniques.

1. The competent person on behalf of the foreign credit organizations and bank branches to sign for approval of participation documents in the discount techniques at the State Bank is one of the following persons:

a) Chairman of the Board or Chairman of Member Board of the credit organizations;

b) The General Director (Director) of the foreign credit organizations and bank branches;

2. The competent person as prescribed in clause 1 of this Article can authorize the Deputy General Director ( Deputy Director) to sign the documents participation documents in the discount techniques at the State Bank in accordance with regulations of law and is responsible for this authorization. The delegate isnot entitled to authorize a third person.

Article 11.The unit implementing the discount technique at the State Bank

The State Bank will implement the discount of valuable papers for the foreign credit organizations and bank branches at the Transaction Service. In necessary cases, the State Bank Governor can authorize the Director of State Bank of authorized branche to implement the discount techniques for the foreign credit organizations and bank branches;

Article 12. Transaction representative of the foreign credit organizations and bank branches;

The foreign credit organizations and bank branches make transaction with the State Bank through the Head Office (hereafter referred to as the transaction representative) based on the general demand of the foreign credit organizations and bank branches;

In case a foreign bank has two or more branches operating in Vietnam, the State Bank only makes transaction with a presentative branch for the representatives of that bank in Vietnam based on the general demand of the branches.

Article 13. Order for implementation of discount techniques

1. The order for implementation of discount techniques by the direct method

The foreign credit organizations and bank branches having their demand for discount of valuable papers through the transaction representative send a written request for discount (under the form No. 05/NHNN-CK) via post, fax or submit directly to the State Bank (Transaction Service or the State Bank of authorized branches).

Based on the written request for discount and unused discount limits of the foreign credit organizations and bank branches, the State Bank Bank (Transaction Service or the State Bank of authorized branches) will consider the decision and notify of the approval (Under the form No. 07B/NHNN-CK) within 01 working day from the receipt of the written request for discount of the foreign credit organizations and bank branches.

2. Order for implementation of discount techniques by the indirect method.

a) The foreign credit organizations and bank branches via the transaction representative will send the Registration for participation in the discount techniques (under the form No. 04A-NHNN-CK) via post, fax or submit directly to the State Bank (Transaction Service or the State Bank of authorized branches and Department of Information Technology, one unit/registration) in order to be issued password, code of electronic signature and right permission in the discount transaction.

In case there is a change on personnel participating in the discount with the State Bank, as soon as the decision of staff replacement of the foreign credit organizations and bank branches takes effect, the foreign credit organizations and bank branches must send the written request for new issuance and revoke the password, code of electronic signature for participation in the discount techniques ( Under the form No. 04B/NHNN-CK) via post, fax or submit directly to the State Bank (Transaction Service or the State Bank of authorized branches and Department of Information Technology, one unit/registration) in order to be issued password, code of electronic signature and the right permission in the discount transaction.

Within 02 succeeding working days from the date of full receipt of dossier as prescribed, the State Bank (Transaction Service or the State Bank of authorized branches and Department of Information Technology) will carry out the new issuance and revoke the password, code of electronic signature for the personnel participating in the discount techniques of the foreign credit organizations and bank branches;

b) The foreign credit organizations and bank branches having their demand for discount of valuable papers through the transaction representative send a written request for discount (under the form No. 05/NHNN-CK) via the information network system to the State Bank (Transaction Service or the State Bank of authorized branches).

c) Based on the written request for discount and unused discount limits of the foreign credit organizations and bank branches, the State Bank will consider the decision and notify of the approval (Under the form No. 07A/NHNN-CK) or notify of the disapproval (Under the form No. 07B/NHNN-CK) within 01 working day from the receipt of the written request for discount of the foreign credit organizations and bank branches.

3. In case at the time of notification of the discount limits, the discount balance of the foreign credit organizations and bank branches at the State Bank is greater than the discount limits notified, the term discounts previously implemented are still implemented as committed. The State Bank only continue the discount for the foreign credit organizations and bank branches when the discount balance is smaller than the discount limits notified of the foreign credit organizations and bank branches.

Article 14. Delivering and returning the discounted valuable papers

1. Within a maximum period of 15 working days, from the day the State Bank has a notification on the approval of the discount, the foreign credit organizations and bank branches requesting the discount shall conduct the procedures for the transfer of ownership and delivery of valuable papers to the State Bank.

2. Within 01 working day, after the foreign credit organizations and bank branches complete the procedures for the transfer of ownership and delivery of valuable papers to the State Bank, the State Bank will transfer money to the foreign credit organizations and bank branches.

In case of discount of term valuable papers, within the next 02 working days at the latest from the date the State Bank has a notification of approval on the discount, the foreign credit organizations and bank branches will send a written commitment of repurchase of valuable papers (Under the form No.06/NHNN-CK) to the State Bank (Transaction Service or the State Bank of authorized branches). Within 01 working day, after the foreign credit organizations and bank branches complete the procedures for the transfer of ownership and delivery of valuable papers to the State Bank, the State Bank will transfer money to the foreign credit organizations and bank branches.

3. When the time limit of discount is over (in case of term discount), the foreign credit organizations and bank branches will make payment of the repurchase of valuable papers to the State Bank and get back the valuable papers as committed.

Article 15. Cases of discount disapproval

1. The foreign credit organizations and bank branches have used all discount limits.

2. The request dossier for discount does not meet the conditions as prescribed in this Circular.

Article 16. Formula for determination of the payment amount upon discount of valuable papers of the foreign credit organizations and bank branches

1. In case of discount of the entire remaining term:

1.1. For valuable papers with the interest paid upon issuance:

1.1.1. For short-term valuable papers with the interest paid upon issuance:

Of which:

G: The amount the State Bank will pay upon discount of the valuable papers;

MG: The par value of the valuable papers;

T: The remaining term of the valuable papers (number of days);

L: Lãi suất chiết khấu tại thời điểm Ngân hàng Nhà nước chiết khấu giấy tờ có giá (%/năm);

L: The discount interest at the point of time the State Bank make a discount of valuable papers (%/year).

365: The conventional number of days for a year.

1.1.2. For long-term valuable papers with the interest paid upon issuance:

Of which:

G: The amount the State Bank will pay upon discount of the valuable papers;

MG: The par value of the valuable papers;

T: The remaining term of the valuable papers (number of days);

L: The discount interest at the point of time the State Bank make a discount of valuable papers (%/year).

365: The conventional number of days for a year.

1.2. For valuable papers with the principal and interest paid once upon maturity:

1.2.1. For the short-term valuable papers with the principal and interest paid upon maturity:

Of which:

GT = MG x (1 + )

G: The amount the State Bank will pay upon discount of the valuable papers;

GT: The value of the valuable papers upon maturity, including the par value and interest;

MG: The par value;

T: The remaining term of the valuable papers (number of days);

L: The discount interest at the point of time the State Bank make a discount of valuable papers (%/year).

365: The conventional number of days for a year.

Ls: The interest rate for the issuance of the valuable paper (% / year);

n: Term of the valuable papers (number of days).

1.2.2. For the long-term valuable papers with the principal and interest paid upon maturity (the interest not added to the principal):

Of which: GT = MG x [1 + (Ls x n)]

G: The amount the State Bank will pay upon discount of the valuable papers;

GT: The value of the valuable papers upon maturity, including the par value and interest;

MG: The par value;

T: The remaining term of the valuable papers (number of days);

L: The discount interest at the point of time the State Bank make a discount of valuable papers (%/year).

365: The conventional number of days for a year.

Ls: The interest rate for the issuance of the valuable paper (% / year);

n: Term of the valuable papers (number of days).

1.2.3. For the long-term valuable papers with the principal and interest paid upon maturity (the interest added to the principal):

Of which: GT = MG x (1 + Ls)n

G: The amount the State Bank will pay upon discount of the valuable papers;

GT: The value of the valuable papers upon maturity, including the par value and interest;

MG: The par value;

T: The remaining term of the valuable papers (number of days);

L: The discount interest at the point of time the State Bank make a discount of valuable papers (%/year).

365: The conventional number of days for a year.

Ls: The interest rate for the issuance of the valuable paper (% / year);

n: Kỳ hạn giấy tờ có giá (năm).

1.3. For the long-term valuable papers with the principal and interest paid periodically:

Of which:

G: The amount the State Bank will pay upon discount of the valuable papers;

Ci: The amount of interest and principal payment of ith;

i: The ith time of interest and principal payment;

L: The discount interest at the point of time the State Bank makes a discount of valuable papers (%/year).

365: The conventional number of days for a year.

k: The number of time of interest payment in a year;

Ti: The period from the discount date to the date for interest and principal payment of ith time (numbe of days);

2. In case of term discount:

2.1. The formula to determine the amount the State Bank will pay to the foreign credit organizations and bank branches upon discount of valuable papers (out-going price) is calculated by the formula specified in clause 1 of this Article.

2.2. The formula to determine the amount the foreign credit organizations and bank branches will pay to the State Bank upon the end of the discount term (return price):

Of which:

Gv: The amount the foreign credit organizations and bank branches will pay to the State Bank upon the end of the discount term;

G: The amount the State Bank will pay upon discount of the valuable papers;

L: The discount interest at the point of time the State Bank makes a discount of valuable papers (%/year).

Tb: The discount term (calculation by day)

365: The conventional number of days for a year.

Article 17. Handling violation

1. After 01 working days from the date of expiry of discount (in case of term discount) the foreign credit organizations and bank branches discounted donot make payment or insufficient payment to the State Bank to get back the valuable papers as committed, the State Bank will deduct the deposit accounts of the foreign credit organizations and bank branches at the State Bank for debt collection.

In case the deposit accounts of the foreign credit organizations and bank branches discounted do not have or insufficient money, the State Bank will apply the following measures:

a) Collecting debts from other resources (if any) of the foreign credit organizations and bank branches;

b) Transferring the outstanding amount due to the overdue debts and the foreign credit organizations and bank branches shall be subject to overdue interest rate equal to 150% of the discount rate;

c) Making notification of the violation handling result and sending to the foreign credit organizations and bank branches.

2. After 03 working days, from the date the State Bank has a notification of violation handling, the foreign credit organizations and bank branches discounted donot make payment to the State Bank, the State Bank will consider selling the valuable papers of the foreign credit organizations and bank branches that the State Bank is holding on the currency market in order to recover the outstanding amount as prescribed. The foreign credit organizations and bank branches will not be entitled to participate in the discount techniques with the State Bank within a period of 06 months from the date of receiving the notification of violation handling.

3. In case the foreign credit organizations and bank branches requesting the discount do not implement properly the regulations as prescribed in clause 1, Article 14 of this Circular, the foreign credit organizations and bank branches are regarded as canceling the discount request for 02 times, then they are not entitled to participate in the discount techniques with the State Bank within a period of 06 months from the date the State Bank has a notification of approving the discount for the 2nd discount request

Chapter 3

IMPLEMENTATION ORGANIZATION

Article 18. Responsibilities of the foreign credit organizations and bank branches

1. Providing complete and timely dossier and documents as prescribed in this Circular and taking responsibilities before law for the accuracy and legality of the data and documents provided to the State Bank.

2. Sending the request dossier for the notification of discount limits, the written request for discount and the written commitment of repurchase of valuable papers in accordance with the regulations of the State Bank.

3. Properly implementing the commitment and making full and timely payment to the State Bank upon implementation of the discount techniques.

4. Implementing the procedures for the transfer of ownership, delivery of valuable papers between the foreign credit organizations and bank branches with the State Bank upon implementation of the discount techniques with the State Bank.

5. Strictly implementing the requirements in the State Bank’s notification on debt settlement.

Article 19. Responsibilities of the agencies concerned under the State Bank.

1. The Department of monetary Policy

a) Presiding over and coordinating with the units concerned to determine the rate of fund supply for the quarterly discount techniques and presenting to the State Bank Governor for approval.

b) Advising the State Bank Governor on determining and publicizing the discount interest.

c) Coordinating with the units concerned for settling the difficulties arising in the course of implementation of discount techniques.

2. The Credit Department

a) Presiding over and coordinating with the units to present to the State Bank Governor for deciding on the banking sector that the State Bank will prioritize the discount in each period.

b) Publicly implementing the allocation of discount limits for the foreign credit organizations and bank branches on the basis of the total discount limits approved for the discount priority sector.

c) Notifying the discount limits for the foreign credit organizations and bank branches and the Transaction Service.

d) Presiding over and coordinating with the units concerned to present to State Bank Governor for supplement or adjustment of the list of valuable papers to be discounted by the State Bank when necessary.

dd) Quarterly summarizing the situation of allocation and implementation of the discount techniques from the Transaction Service and the State Bank of authorized branches in order to make report to the State Bank Governor.

3. The Transaction Service

a) Guiding the process of implementing the discount techniques for valuable papers at the Transaction Service and the State Bank of authorized branches;

b) Implementating the discount techniques for the foreign credit organizations and bank branches under the discount limits notified, recovering original debts and interest as prescribed in this Circular;

c) Organizing the delivery, starage and preservation of valuable papers discounted, dossier and documents, returning valuable papers and accounting valuable papers as prescribed.

d) Focusing and coordinating with the units concerned to deal with the problems on the transfer of ownership of valuable papers and difficulties arising in the course of implementation of the discount techniques;

dd) Implementing the depository of valuable papers used for discount at the State Bank as prescribed, certifying the depository of valuable papers of the foreign credit organizations and bank branches requesting the discount for the case the foreign credit organizations and bank branches requesting the discount depositing the valuable papers at the State Bank.

e) Implementing the procedures for transfer of the ownership of valuable papers between the State Bank with the foreign credit organizations and bank branches upon implementation of the discount techniques with the State Bank;

g) Making and handling violations for the foreign credit organizations and bank branches that violate the commitment of repurchasing the valuable papers as prescribed in Article 17 of this Circular;

h) Quarterly summarizing the result of discount techniques implementation of the entire system to make report to the State Bank Governor, simultaneously to the Credit Department and Department of monetary Policy (under the Form No. 08/NHNN-CK);

i) Advising the State Bank Governor in the authorization for the State Bank of branches of central-affiliated provinces and cities to implement the whole or a part of discount techniques for the foreign credit organizations and bank branches;

4. Department of Accounting and Finance

Guiding the implementation of accounting concerning the discount techniques.

5. The Department of Information Technology

a) Coordinating with the Transaction Service in the new issuance and cancellation of password, code of electronic signature.

b) Being responsible for building the program of software of techniques, engineering, transmission line and coordinating with the Transaction Service in technical settlement in order to ensure the smoothness of the transmission line and the timeliness, security and accuracy of the transactions of discount techniques

6. The State Bank of authorized branches

a) Implementing the discount techniques for the foreign credit organizations and bank branches under the scope of authorization;

b) Quarterly making report of the result of discount techniques implementation in the area to the Credit Department and the Transaction Service (under the form No. 08/NHNN-CK).

7. The agency of bank inspection and supervision

Co-ordinating and notififying of the operation situation of the foreign credit organizations and bank branches to the Credit Department as required.

Article 20. Effect

1. This Circular will take effect on March 31, 2012 and supersede the Decision No. 898/2003/QD-NHNN dated August 12, 2003 of the State Bank on promulgating the Regulations on the discount, rediscount of the State Bank for the banks, the Decision No. 12/2008/QD-NHNN dated April 29, 2008 of the State Bank on amendment of some articles of the Regulations on the discount, rediscount of valuable papers of the State Bank for the banks promulgated together with the Decision No. 898/2003/QD-NHNN dated August 12, 2003, Article 1 of the Circular No. 26/2011/TT-NHNN dated August 31, 2011 of the State Bank on the implementation of the plan for simplification of administrative procedures in the area of currency operation under the Government’s Resolutions.

2. The Chief of office, Director of Credit Department and Heads of the units under the State Bank, Director of State Bank of branches of central-affiliated provinces and cities; Chairman of the Board, Chairman of the Member Board, General Director (Director) of credit organizations, the Central People’s Credit Fund, Branches of foreign banks are liable to execute this Circular.