Công văn 397/CV-BHTG8

To: Insured deposit institutions

Pursuant to Decree No. 89/1999/NĐ-CP dated September 1, 1999 of the Government on deposit insurance, Decree No. 109/2005/NĐ-CP dated August 24, 2005 of the Government on amendments to Decree No. 89/1999/NĐ-CP and Circular No. 03/2006/TT-NHNN dated April 25, 2006 of the Governor of the State bank on guidance of above Decrees. Deposit insurance of Vietnam provides instructions in determination and payment of deposit insurance premiums (hereinafter referred to as premiums) for insured deposit institutions (hereinafter referred to as insured institutions) as follows:

I. Premiums and method for determining premiums

1. Premiums

Premium means an amount of money that an insured institution obligated to pay for Deposit insurance of Vietnam to provide deposit insurance for depositors. The premium shall be recorded to operating expenses of the insured institution;

1.2. Premium rates: Each insured institution shall pay premium rate at 0.15% per annum out of the average deposit balance of deposits insured at such insured institution as prescribed Clause 2 Section I of this document;

1.3. The premium rate shall be determined and paid for Deposit insurance of Vietnam quarterly according to the average deposit balance of the quarter preceding quarter in which the premium is collected (hereinafter referred to as the collecting quarter) as prescribed Clause 3 Section I of this document.

2. Insured deposits

Insured deposits mean those in Vietnam dong deposited at insured organizations by individuals, households, cooperative teams, private enterprises and partnerships (including residents and non-residents), including the deposits prescribed in Point 2.1 Clause 2 Section I of this document, excluding cases prescribed in Point 2.2 below.

2.1. Insured deposits include:

a. Deposits in Vietnam dong on the accounts of depositors prescribed in regulations on opening and using deposit accounts at credit institutions by the State bank shall consist of: demand deposits; term deposits; specialized capital deposits;

b. Saving deposits in Vietnam dong prescribed by the State bank shall consist of: demand saving deposits; term saving deposits; other saving deposits;

c. Money used to buy valuable papers (certificates of deposit, bonds, promissory notes, etc.) in Vietnam dong which competent agencies permit insured institutions to issue.

2.2. Deposits in Vietnam dong of following depositors shall not be insured:

a. Deposits of depositors holding more than 10% of charter capital or more than 10% of voting share capital of insured institutions;

b. Deposits of depositors of members of the Executive Board, the Control Board, General Directors (Directors), Deputy General Directors (Deputy Directors) of such insured institutions;

c. Deposits used as security for the performance of depositors’ obligations as reflected on the deposit accounts in Vietnam dong, including: Deposits used as security for cheque payment; deposits used as security for Letter of credit; deposits used as security for card payment; guarantee deposits; deposits used as security for financial lease; deposits used as security for other payments;

d. Money used to buy unknown valuable papers issued by insured institutions.

3. Method for determining premiums

3.1. Quarterly premium payable (every period) shall be determined by formula below:

Where:

- P means amount of premium payable in the collecting quarter (current quarter);

- S₀  means insured deposit balance of the early first month of the quarter preceding the collecting quarter;

- S₁ , S₂ , S₃ means insured deposit balance of the late first, second and third month of the quarter preceding the collecting quarter;

-  means premium rate payable per quarter in the year;

3.2. Methods for collecting figures, unit and rounding

a. Methods for collecting figures:

Figures shall be collected from statistical reports or balance sheet (when the insured deposit account are divided into entities as prescribed in Clause 2 of above Section I). Deposit insurance of Vietnam shall request and encourage insured institutions qualified in information technology to apply software to collect figures, and calculate deposit premiums using in the direct transaction system with clients.

b. Unit and rounding

- The insured deposit balance  (S₀, S₁ , S₂ , S₃ ) of the quarter preceding the collecting quarter shall apply the unit “VND” and be rounded to the nearest thousand to make the Table of premiums (if the last 3 digits of S ≥ 500, it shall be rounded up to 1000, if the last 3 digits of S < vnd="" 500,="" it="" shall="" be="" rounded="" down="" to="">

- The amount of premium or fine for late payment of premium (if any) payable to Deposit insurance of Vietnam shall be rounded to the nearest thousand (if the last 3 digits of amount ≥ VND 500, it shall be rounded up to 1000, if the last 3 digits of amount < 500,="" it="" shall="" be="" rounded="" down="" to="">

4. Table of premiums

4.1. Table of premiums:

Quarterly, the insured institution shall make a Table of premiums using the Form No. 01/P-BHTG and Form No. 02/P-BHTG (if the insured institution has affiliated branch(es) issued together with this document for determination, deduction and payment of premiums. One copy of the Table of premiums shall be sent Deposit insurance of Vietnam and another one copy shall be archived at the institution.

4.2. Deadline for submitting the Table of premiums:

The insured institution is required to submit the Table of premiums before the 15^th of the first month of the collecting quarter.

4.3. Address of submitting the Table of premiums:

- Every commercial bank, financial company, leasing company, central people's credit fund shall submit the Table of premiums to the head office of Deposit insurance of Vietnam at the following address: Deposit insurance of Vietnam, floor 19, Tower B – Vincom, 191 Ba Trieu Street -  Hai Ba Trung district – Hanoi.

- Every local people's credit fund in administrative division of a local branch of Deposit insurance of Vietnam shall submit the Table of premiums to the address notified by such local branch.

II. Payment of premiums

1. Method for paying premiums

1.1. If the insured institution is a commercial bank, financial company, leasing company, or central people's credit fund, it shall pay premium directly to the head office of Deposit insurance of Vietnam using wire transfer at the following account:

Account No. 12010000209157 Bank for Investment and Development of Vietnam Exchange

Address: Tower A – Vincom, 191 Ba Trieu Street -  Hai Ba Trung district – Hanoi.

1.2. If the insured institution is a local people's credit fund, Deposit insurance of Vietnam shall encourage them to use wire transfer for payment of premiums. If not, the local people's credit fund may use mail transfers or pay in cash into the account of the branch of Deposit insurance of Vietnam that directly manage the fund as prescribed in Appendix IV issued herewith.

2. Address of sending relevant documents on premiums

The insured institution shall send relevant documents on premiums at the address as prescribed in Point 4.3 Clause 4 Section I of this document.

3. Deadline for payment

The insured institutions are required to pay premiums into the account of Deposit insurance of Vietnam before the 20th of the first month of the collecting quarter. If the premiums are paid using wire transfer or mail transfers, the payment date is the date specified in the credit note of the bank or credit institution where the Deposit insurance of Vietnam opens its account or the date specified in the receiving notice of the post office sent to Deposit insurance of Vietnam. After the above deadline, Deposit insurance of Vietnam shall impose fines for late payment of premiums as prescribed in law on deposit insurance.

III. Penalties for violations against regulations on payment of insurance premiums

1. Overpaid and underpaid premiums

1.1. Overpaid premiums

When Deposit insurance of Vietnam (its head office or branch) detects any overpaid premium made by an insured institution, it shall immediately send notification of the overpaid premium to the insured institution and permit the insured institution to deduct the overpaid premium from the premium amount payable of the next payment or recover the overpaid premium at the request of the insured institution.

1.2. Underpaid premiums

When Deposit insurance of Vietnam (its head office or branch) detects any underpaid premium made by any insured institution, it shall immediately send notification of the underpaid premiums to the insured institution and request the insured institution to pay the outstanding premium within 15 working days from the date on which the Deposit insurance of Vietnam detects the violation. Apart from payment of the outstanding premium, the insured institution shall be liable for fine at 0.1% per diem out of the outstanding premium from the deadline for payment of premium as prescribed. If the insured fails to conform to the notification, Deposit insurance of Vietnam shall take actions as prescribed in law on deposit insurance similarly to cases prescribed in Clause 2 below.

2. Late payment of premiums

2.1. If an insured institution violates deadline for premium payment (paying premium after 20^th of the first month of the collecting quarter), it shall be liable for fine at 0.1% (one thousandth) per diem out of the premium, then Deposit insurance of Vietnam shall send notification of number of dates for late payment, premium amount of late payment and fine amount for late payment, and request the insured institution to pay the above amount within 15 days from the date on which the notification is received;

2.2. If the insured institution has not paid the full premium and the fine after 30 days from the deadline for premium payment. Deposit insurance of Vietnam is entitled to request the State bank (applicable to credit institutions) or State Treasury or credit institutions (applicable to other organizations conducting a number of banking activities) where the insured institution opens its account to withdraw the insured institution’s account to pay the outstanding premium and fine; if the account’s balance is lower than the required amount, Deposit insurance of Vietnam shall send a report to the State bank of Vietnam.

2.3. If the insured institution has not paid the outstanding premium within 03 months after the deadline for premium payment as mentioned in the notification, Deposit insurance of Vietnam shall issue a decision to revoke the deposit insurance certificate and terminate the deposit insurance status and publicize the decision in the mass-media to protect depositors. And it shall request the State bank to issue a decision to stop the mobilization of deposits from individuals by such insured institution.

IV. Actions against particular cases

1. Determination and premium payment applicable to startup insured institutions

Every startup insured institution that completed the registration of deposit insurance and received a deposit insurance certificate is required to determine and pay premium in the first period succeeding the quarter in which it receives insured deposits as prescribed in this document (from the valid date of the deposit insurance certificate). The figures used for determination and payment of premiums shall be determined from the valid date of the deposit insurance certificate until the end of the quarter. The premium of the first period shall be determined as prescribed in Appendix III and the Form No. 03/P-BHTG of this document. The premiums of following periods shall be determined by formula prescribed in Clause 3 of Section I and other regulations of this document;

2. Insured institutions paying premiums once or twice a year.

Every insured institution that pays premiums once or twice a year is required to pay premiums quarterly in the next period as prescribed in Appendix I and Appendix II issued herewith.

V. Guidance, inspection and control of determination and payment of premiums

1. Guidance on determination and payment of premiums

Pursuant to Circular No. 03/2006/TT-NHNN dated April 25, 2006 of the Governor of the State bank and this document, insured institutions, especially insured institutions having large branch network and insured deposit balance, shall stipulate internal regulations and guidance on unanimous determination and payment of premiums in their system depending on their operation scope. Insured institutions qualified in technology shall design unanimous and automatic software of determination and payment of premiums. Every internal regulations and guidance of insured institutions shall be sent to Deposit insurance of Vietnam to facilitate the supervision and cooperation of Deposit insurance of Vietnam.

2. Inspection and control carried out by insured institutions

Insured institutions shall regularly or periodically self-inspect and self-control deposits made by clients eligible for deposit insurance; inspect and control their determination and payment of premiums.

3. Inspection and control carried out by Deposit insurance of Vietnam

- Quarterly, Deposit insurance of Vietnam shall carry out remote supervision of determination and payment of premiums applicable to insured institutions through system of supervision standards, statistical reports, Balance sheets and Table of premiums sent to Deposit insurance of Vietnam by insured institutions. Deposit insurance of Vietnam shall design appropriate software to supervise the determination and payment of premiums of insured institutions. According to the supervision results, Deposit insurance of Vietnam shall send notification of overpaid or underpaid premiums to insured institutions for resolution as prescribed in Section III of this document;

- Annually or irregularly, when Deposit insurance of Vietnam detects any large overpaid or underpaid premiums (via remote supervision), it shall inspect at the premises of the insured institution in terms of premiums payable, overpaid or underpaid premiums, reasons and actions taken as prescribed in law on deposit insurance.

VI. Effect of guiding documents

This document comes into effect from the date on which it is signed and replaces following documents:

1. Official Dispatch No. 220/CV-BHTG dated September 6, 2001 of Deposit insurance of Vietnam on guidelines for determination and payment of premiums from quarter IV in 2001; Official Dispatch No. 22/CV-BHTG dated February 5, 2002 of Deposit insurance of Vietnam on amendments to Official Dispatch No. 220/CV-BHTG dated September 6, 2001 of Deposit insurance of Vietnam; and Official Dispatch No. 652/CV-BHTG8 dated December 12, 2003 of Deposit insurance of Vietnam on guidelines for determination and payment of premiums in the first period applicable to startup insured deposit institutions.

2. Because the insured deposits that are extended or eliminated as prescribed in Clause 2 Article 1 of Decree No. 109/2005/NĐ-CP dated August 24, 2005 of the Government (amendments to Decree No. 89/1999/NĐ-CP dated September 1, 1999 of the Government on deposit insurance) come into effect from September 19, 2005, so that the insured deposit balance and additional premiums payable shall be determined as follows:  

- Premiums payable applicable to new insured deposits shall apply for the collecting quarter I in 2006 and later; bases for determining the deposit balance of quarter I in 2006: deposit balance according to new insured deposits (S₀, S₁, S₂, S₃) of quarter IV in 2005 (early October, late October, late November, late December in 2005);

- Premiums shall be determined according to formula prescribed in Section I of this document;

- Pursuant to guiding Circulars of the State bank and this document, insured institutions shall check their determination and payment of premiums from quarter I in 2006 up to now and self-determine and pay premiums as prescribed.

3. Difficulties that arise during the implementation of this Circular should be reported to Deposit insurance of Vietnam at the address: Floor 19 – Tower B – Vincom – 191 Ba Trieu Street – Hai Ba Trung district – Hanoi. or local branch(es) of Deposit insurance of Vietnam for consideration.