Quyết định 07/2013/QD-TTg

DECISION

ON FINANCIAL REGULATION OF THE STATE BANK OF VIETNAM

Pursuant to the Law on organization of the government dated December 25, 2001;

Pursuant to the Law on State bank of Vietnam dated June 16, 2010;

Pursuant to the Law on state budget dated December 16, 2002;  

At the requests of the Governor of the State Bank of Vietnam and Minister of Finance; 

Prime Minister promulgates a Decision to provide for financial regulation of the State Bank of Vietnam,

Article 1. This Decision is enclosed with the financial regulation of the State Bank of Vietnam.

Article 2. This Decision takes effect as of March 15, 2013. Financial regulations prescribed in this Decision shall be enforced as of January 01, 2013.

Article 3. The Governor of the State Bank, Minister of Finance, Ministers, Heads of Ministerial-level Agencies, Heads of the Government's Affiliates, Chairpersons of People’s Committees of Central-affiliated Cities or Provinces shall be responsible for implementing this Decision./.

FINANCIAL REGULATION

OF THE STATE BANK OF VIETNAM
(Enclosed with Decision No. 07/2013/QD-TTg dated January 24, 2013 by Prime Minister)

Chapter 1.

GENERAL PROVISIONS

Article 1. This Regulation provides for financial regulations applicable to the State Bank of Vietnam (hereinafter referred to as “SBV”).

This Regulation shall not apply to public service providers that gain the autonomy in their performance of tasks, organizational structure, payroll personnel and finance in accordance with the Government’s regulations, and SBV's affiliates with independent accounting.

Article 2. In principle revenues and expenditures of SBV shall be governed by the Law on state budget and the Law on State Bank of Vietnam.

Article 3. SBV may use revenues to cover its operating expenses. The difference between revenues and expenditures shall be paid to state budget after setting aside for establishment of funds as referred to by the Law on State Bank of Vietnam and this Regulation.

Article 4. SBV must not pay taxes on its professional activities and services.

Article 5. The SBV’s Governor shall assume responsibility before the Prime Minister for formulation of plans for revenues and expenditures, management and use of capital sources and assets allocated by the Government.

Article 6. Ministry of Finance that exercises the governmental authority for finance shall be responsible for instructing and inspecting activities relating to revenues and expenditures of SBV.

Chapter 2.

CAPITAL AND FUNDS

Article 7. SBV shall manage and use the following types of capital:

1. Legal capital.

2. Issued money in circulation to enforce national monetary policy.

3. Deposits by credit institutions and State Treasuries.

4. Loans.

5. Other capital.

Article 8. The legal capital of SBV shall be VND 10,000 (ten thousand) billion.

This level of legal capital may be changed upon the Prime Minister’s decision made at the requests of the Governor of SBV and Minister of Finance.

SBV’s legal capital is generated from the following sources:

1. Current sources of capital: Funding derived from state budget and funding for infrastructural development and purchase of fixed assets.

2. Additional sources of capital:

a) Funding derived from state budget (if any).

b) Appropriation of expenditure as 12% of annual average value of fixed assets as referred to in Clause 7 Article 13 of this Regulation.

c) Revaluation surplus of fixed assets as regulated by laws.

d) Other sources of capital (if any).

Article 9. SBV may appropriate 10% of difference between revenues and expenditures to set aside the risk provision and account it as its expenditure other than expenditure for risk provisions.  The balance of risk provision shall not exceed the amount which must be used to set aside risk provisions in accordance with regulations applicable to SBV.  Risk provision shall be used to make up or considered as losses on operation of SBV, including:

1. Credit losses:

- Debts cleared upon decision by Prime Minister but the Government does not provide funding to make up such cleared debts for SBV.

- Outstanding loans and debts paid on credit institutions’ behalf provided that evidence that SBV may not recover such debts because credit institutions are dissolved or declared bankrupt as referred to by laws must be presented.

2. Losses on payment and budgetary activities:

- Losses incurred when carrying out payment operations such as payment network errors, technologies, etc.

- Losses in money, gold, precious assets and financial instruments incurred from budgetary activities.

3. Losses incurred from the management of foreign exchange reserves and the intervention and stabilization of domestic gold market.

- Losses in money, gold and financial instruments deposited at foreign banks because of the force majeure, e.g. war, terror or natural disaster occurs in the country where the bank receiving SBV’s deposits is situated resulting in that foreign bank is unable to make payment to SBV, or that foreign bank is declared bankrupt.    

- Risks of reduction in price of securities invested in international financial markets; risks of gold purity testing and reduction in gold price.  

4. Other losses incurred during SBV’s operation with persuasive evidence that there is not debtor or debtors are unable to make payment.

5. Settlement of payments made to the Government and state budget upon the approval by Prime Minister.

6. Other cases as decided by SBV's Governor.

The balance of risk provision set aside from the effective date of the Government’s Decree No. 100/1998/ND-CP dated December 10, 1998 shall be carried forwards to become the beginning balance of risk provision set aside as referred to by this Regulation to use as regulated by laws.

SBV shall lead and coordinate with Minister of Finance to promulgate regulation on management and use of risk provisions.

Article 10. SBV shall appropriate money from annual difference between revenues and expenditures as referred to in Article 16 of this Regulation for making additional payment to the fund for implementing national monetary policy and the financial reserve fund:

1. Fund for implementing national monetary policy:

The Fund’s actual balance shall not exceed SBV's legal capital.  The Governor of SBV decides to use balance of the fund for implementing national monetary policy to serve the following purposes:

- Provide loans to support credit institutions that encounter difficulties which cause influence on the security of banking system;

- Provide loans to participants in payment system to support the payment system when it has trouble and pose threat to the security of payment activities and banking system;

- Provide loans to Deposit Insurance of Vietnam (DIV) to implement measures for maintaining the stabilization of credit institutions and facilitating the healthy development of banking activities in case all sources of capital of DIV have been used but it is still not enough;

- Make capital contributions and/or purchase shares of credit institutions under special control as referred to in Clauses 2,3 Article 149 of the Law on credit institutions in 2010;

- Other payments made for implementing the monetary policy upon the approval by Prime Minister.

If the balance of the Fund for implementing national monetary policy is not enough for spending, SBV shall coordinate with Ministry of Finance to propose measures for making up the deficit to the Prime Minister.

SBV shall lead and coordinate with Ministry of Finance to promulgate regulation for management and use of balance of the fund for implementing national monetary policy.

2. Financial reserve fund: The fund’s maximum balance shall not exceed 25% of SBV's legal capital.  The balance of the financial reserve fund shall be used to serve the following purposes:

- Make up for the remaining of losses in assets incurred during the operation after they have been made up for by using compensations paid by entities causing such losses, paid by insurers and risk provisions set aside in expenditures.

- Make up for annual deficit when expenditures exceed revenues (if any) due to the national monetary policy.

The balance of this fund shall be managed and used as regulated by Ministry of Finance. If the balance of the financial reserve fund is not enough for offsetting losses and annual deficit when expenditures exceed revenues (if any), SBV shall coordinate with Ministry of Finance to propose measures for making up the deficit to the Prime Minister.

Article 11. SBV shall make depreciation of fixed assets as regulated by Ministry of Finance.

SBV makes investments in infrastructural development and purchases fixed assets from the following sources of capital: Funding derived from state budget; depreciation of fixed assets left as regulated; appropriation from expenditure as 12% of annual average value of fixed assets and other legitimate sources of capital.

The management and use of capital for investment, purchase of fixed assets, transfer, liquidation, inventory and revaluation of assets of SBV shall be governed by prevailing laws.

Chapter 3.

REVENUES AND EXPENDITURES

Article 12. SBV has the following revenues:

1. Revenues from deposit operations, credit extension and investment, including: Interests of loans and deposits, revenues from securities investment and other revenues from credit activities.

2. Revenues from open market operation.

3. Revenues from forex buying, selling and transactions (foreign currencies and gold).

4. Revenues from settlement, information and budgetary services.

5. Collection of fees and charges as referred to by laws.

6. Income from investments in specific enterprises.

7. Other revenues.

Article 13. SBV has the following expenditures:

1. Expenditures for SBV’s professional activities and services:

a) Expenditures for making payment of interests of deposits and loans; expenditures for forex buying, selling and transactions; expenditures for open market operation;

b) Expenditures for printing, coining, maintaining, protecting, transporting, delivering, issuing, recalling, replacing and destroying money; expenditures for settlement and information services; other expenditures for professional activities.

c) Expenditures for anti-money laundering.

2. Expenditures for officials and contractual employees of SBV. To be specific:

a) Expenditures for salaries and allowances according to salary policies applicable to officials and public employees adopted by SBV; expenditures for additional earnings as allocated;

b) Expenditures for monthly meal charges, which shall not exceed the minimum salary rate of officials and public employees;

c) Expenditures for uniforms and personal protective equipment;

d) Expenditures for regular and irregular bonuses and welfares for SBV’s employees and officials; The annual level of expenditure for these two items shall be equal to total balance of fund for paying salaries during the year.

3. Salary-based contributions (union dues, social insurance and health insurance premiums, and other contributions as regulated), expenditures for unions’ activities.

4. Hardship allowance and severance pay as referred to by laws.

5. Expenditures for administrative management and missions: office stationeries, postage and message sending charges, expenditures for electricity, water, hygiene and medical services; petroleum charges; expenses for business trips; expenditure for protocol, festivals and meetings; expenditure for inspection and auditing of SBV’s operations; expenditure for training in professional skills, scientific and technological research, initiatives and innovations; expenditure for documents, books, magazines, library fees, propagation and promotion, and other expenditures for administrative management and missions.

6. Asset-related expenditures:

a) Depreciation of fixed assets;

b) Expenditures for maintaining and repairing assets; purchasing working tools; and leasing assets;

c) Expenditure for liquidation of assets.

7. 12% of annual average value of fixed assets shall be appropriated to invest in professional operations and technologies of the bank. This expenditure shall be made until SBV has enough the legal capital as regulated in Article 8 herein.

8. Expenditures for rewarding entities of different sectors that have make significant contribution to SBV’s operation; this expenditure shall not exceed the average amount of salaries paid for one month during the year.

9. Expenditures with funding derived from state budget as regulated.

10. Expenditures for setting aside risk provisions as referred to in Article 9 herein.

11. Expenditures for making contributions to specific enterprises (excluding the contributed capital).

12. Other expenditures as referred to by laws.

Article 14. Allocation of predetermined operational expenditure for SBV

1. Principle for allocation of predetermined operational expenditure:

a) Determine levels of expenditures allocated to the SBV, except for expenditures mentioned in Clause 1, Clause 6 Point a, Clause 7, Clause 8, Clause 9, Clause 10 and Clause 11 Article 13 of this Regulation, on the basis of the number of payroll employees of SBV, current expenditure levels regulated by the Government, expenditures allocated in previous year, annual increase of consumer price index (CIP) and unexpected expenditures (if any).

b) An amount of the difference between revenues and expenditures of SBV shall be appropriated to allocate predetermined expenditures.

c) The amount saved from the predetermination of allocated expenditures and appropriation of difference between revenues and expenditures of SBV shall be used to increase income of SBV’s officials provided that it shall not exceed 0.8 times of salaries and allowances paid during the year, and used to serve other purposes as regulated by Ministry of Finance.  

SBV’s Governor shall decide that increase of income according to working results and achievements of officials and employees on an impartial and appropriate manner in association with working performance.

d) Ministry of Finance shall instruct the policy for allocation of predetermined administrative expenditure, the level of expenditure allocated for each period which including at least 03 (three) years or more, and that for each year.

2. Adjustment of operational expenditure:

a) During the period when the plan for allocation of predetermined expenditure, as of the second year, SBV may adjust the level of expenditure allocated for each according to the following principle:

- Expenditures for officials (including salaries, allowances, meal charges, rewards, benefits and salary-based contributions, etc.) may be re-determined according to the minimum salary rate in current year and the number of payroll employees approved by competent authorities;- Other expenditures shall be adjusted and may equal to the increase rate of the consumer price index (CPI) announced by the General Statistics Office of Vietnam;

- SBV shall be responsible for adjusting the allocation of predetermined expenditures and report it to Ministry of Finance for monitoring.

- SBV must report and request Ministry of Finance to adjust the plan for allocation of predetermined expenditures in the following cases:

- Functions and tasks are additionally assigned upon decisions by competent authorities; or

- Having natural disasters or other objective reasons; or

- Difference between revenues and expenditures reduces about 20% or more in comparison with the plan due to the implementation of national monetary policy.  

Article 15. SBV is responsible for aggregating revenues and expenditures into accounts in a sufficient, accurate and timely manner as referred to in the laws on accounting and statistics.  SBV’s revenues and expenditures shall be entered into accounts on the principle of accrual-basis accounting. Revenues and expenditures in foreign currencies or in gold must be exchanged into VND according to the exchange rate announced by SBV at the time they occur.

Article 16. SBV’s annual surplus between revenues and expenditures, after deducting the appropriation of surplus for allocation of predetermined expenditures as regulated, shall be handled as follows:

1. 20% of the annual surplus between revenues and expenditures shall be appropriated for setting aside the Fund for implementing national monetary policy.

2. 10% of the annual surplus between revenues and expenditures shall be appropriated for setting aside the financial reserve fund.

3. SBV shall make contributions to international organizations on behalf of Vietnam's Government (if any contribution must be made during the financial year).

4. The remaining amount of the annual surplus between revenues and expenditures shall be paid to state budget.

Payment shall be made to state budget on a quarterly basis according to the form of temporary payment. 60% of quarterly surplus between revenues and expenditures shall be temporarily paid to state budget. The remaining shall be paid to state budget after the annual financial statement is approved by SBV’s Governor.  If necessary, Ministry of Finance may request SBV to make a temporary payment of more than 60% of quarterly surplus between revenues and expenditures to state budget provided that the amount temporarily paid to state budget during the year shall not exceed the surplus payable of the whole year.

Chapter 4.

FINANCIAL PLAN AND FINANCIAL STATEMENT

Article 17. SBV's financial year begins on January 01st and ends on December 31st of calendar year.

Article 18. SBV’s financial plan shall be prepared on an annual basis and sent to Ministry of Finance for appraisal and aggregation in state budget estimates as referred to by the Law on state budget.

SBV shall comply with regulations on accounting and accounting documents as referred to in the laws on accounting and statistics.

Article 19. Financial statement shall be made on an annual basis as regulated by Ministry of Finance, approved by the Governor of SBV and submitted to Ministry of Finance by February 15 annually.

The auditing and authentication of annual financial statements of SBV shall be undertaken by the State Audit Office of Vietnam. Auditing results shall be reported to the National Assembly and/or the Prime Minister and informed to Ministry of Finance.

Chapter 5.

IMPLEMENTATION

Article 20. Ministry of Finance shall coordinate with SBV to instruct the implementation of this Regulation./.