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THE
MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
51/2001/TT-BTC
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Hanoi,
June 28, 2001
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CIRCULAR
GUIDING
THE IMPLEMENTATION OF THE PRIME MINISTER’S
DECISION No. 58/2001/QD-TTg OF APRIL 24, 2001 ON POST-INVESTMENT INTEREST RATE
SUPPORT
In furtherance of the Prime
Minister’s Decision No.
58/2001/QD-TTg of April 24, 2001 on post-investment interest rate support;
after reaching an agreement with the Development Assistance Fund, the Finance
Ministry gives the following guidance for the implementation thereof:
The subjects, conditions, order
and procedures for post-investment interest rate support shall continue
complying with the provisions of the Government’s
Decree No. 43/1999/ND-CP of June 29, 1999 on the State’s
development investment credit.
In this Circular, the Finance
Ministry guides the scope and methods of determining post-investment interest
rate support levels.
1. Scope of post-investment
interest rate support:
The scope of post-investment
interest rate support covers projects eligible for the investment preferences
under the Government’s
current regulations guiding the implementation of the Law on Domestic
Investment Promotion (amended), which had been invested with loan capital in
the Vietnamese currency and foreign currency(ies) borrowed by their investors
from credit institutions lawfully operating in Vietnam, have been completed and
put into operation, provided that such loan capital has been repaid.
Projects which enjoy interest
rate support provided by investment funds or the State budget shall not be
eligible for post-investment interest rate support from the Development
Assistance Fund.
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2. Determination of
post-investment interest rate support levels:
2.1. Principles for determining
and providing post-investment interest rate support:
- Post-investment interest rate
support shall be calculated for each project and provided to its investor after
loans (principal and interest) are repaid to credit institutions. Depending on
size of a project, the provision of post-investment interest rate support shall
be effected once or twice a year.
- Investors cannot enjoy
post-investment interest rate support for their overdue debts and/or debts
repaid in the debt reschedule duration. For loans repaid ahead of time, the
post-investment interest rate support levels shall be calculated according to
the actual borrowing duration of such capital amount.
- For projects with frozen
debts, the debt freezing duration shall not be counted into the actual
borrowing term for calculating post-investment interest rate support, and the
maximum support duration shall be equal to the duration inscribed in credit
contracts.
2.2. Methods of determining
post-investment interest rate support levels:
a) For projects with borrowed
capital in Vietnam dong:
Post-
investment interest rate support level for projects
=
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x
50%
of the annual interest rate of the State’s
development investment credit
x
Actual
borrowing duration (converted into years) of loan principal entitled to the
post-investment interest rate support
b) For projects with borrowed
capital in foreign currencies:
Post-
investment interest rate support level for projects
=
Immature
loan principal actually repaid (in original currencies)
x
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x
Actual
borrowing duration (converted into years) of the loan principal entitled to
post- investment interest rate support
- The State’s development investment credit
interest rates used for calculating post-investment interest rate support
levels are those at the time of drawing loan principals eligible for
post-investment interest rate support.
- For foreign-currency loan
capital amounts: interest rates for considering post-investment interest rate
support are actual lending interest rates of credit institutions.
- The post-investment interest
rate support levels for projects with borrowed capital in foreign currencies
shall be determined in original foreign currencies. On that basis, according to
the USD/VND exchange rate on the inter-bank foreign currency market or foreign
currency/VND cross rates announced by the State Bank of Vietnam at the time of
providing support amounts, the post-investment interest rate support levels in
Vietnam dong shall be determined for projects.
2.3. The actual borrowing
duration for calculating post-investment interest rate support is a period of
time (number of months shall be converted into years) from the date of debt
acknowledgment to the date the immature debt principal is repaid to the credit
institution.
a) Determining principles:
- The determination of actual
borrowing duration for post-investment interest rate support shall be based on
the time of receiving loan capital inscribed in the contracts and the time of
repaying loan principal inscribed in debt repayment vouchers (with number of
months converted into years) by investors to credit institutions.
- The period from the time of
first repayment of immature loan principal to the time of first disbursement of
loan capital shall serve as basis for calculating the number of actual
borrowing months for the loan principal amount involved in the first repayment,
and then such number shall serve as basis for counting back and determining the
number of actual borrowing months for the loan principal amounts involved in
the subsequent repayments.
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The methods of calculating
post-investment interest rate support duration for the following cases:
- Capital amount disbursed and
repaid in lump-sum;
- Capital amount disbursed in
lump-sum and repaid in installments;
- Capital amount disbursed in
installments and repaid in lump-sum,
are defined in Appendices 1 and
2 enclosed herewith.
3. Cost-accounting and
accountancy:
3.1. For the Development
Assistance Fund:
The cost-accounting and
monitoring of post-investment interest rate support amounts for projects of the
Development Assistance Fund shall be effected in strict compliance with the
provisions of the Finance Minister’s
Decision No. 162/1999/QD-BTC of December 24, 1999 on the accounting regime
applicable to the Development Assistance Fund.
3.2. For investors:
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4. Organization of
implementation:
This Circular takes effect after
its signing. The calculation of post-investment interest rate support levels as
from January 1, 2001 shall comply with the provisions of Decision No.
58/2001/QD-TTg and guidance in this Circular.
Any problems arising in the
course of implementation should be reported to the Finance Ministry for study
and solution.
FOR
THE MINISTER OF FINANCE
VICE MINISTER
Le Thi Bang Tam
APPENDIX 1
(Issued together with the Finance Ministry’s
Circular No. 51/2001/TT-BTC of June 28, 2001)
Calculation of post-investment interest
rate support duration for the following cases
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Example 1: Project A borrows VND
200 million and is allowed to draw such capital amount on November 1, 1999 and
repay it on March 1, 2000, then the actual borrowing duration shall be 4
months.
2. For capital amounts disbursed
in lump-sum and repaid in installments:
Example 2: Project B borrows VND
200 million and is allowed to draw such capital amount on November 1, 1999 and
repaid in two installments: VND 100 million on March 1, 2000 and another 100
million on June 16, 2000, then the actual borrowing duration shall be:
+ For the first installment: 4
months
+ For the second installment:
7.5 months (7 months plus 15 days/30).
Example 3: Project C: - The
first capital drawing: VND 250 million on November 1, 1999, and the second
drawing: VND 250 million on February 1, 2000.
- The first repayment: VND 200
million on June 1, 2000 and the second repayment: VND 100 million on September
10, 2000.
The actual borrowing duration:
+ For the first repayment (VND
200 million): 7 months;
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+ For the second repayment for
the second capital drawing: 7.33 months (7 months plus 10 days/30).
3. For capital amounts disbursed
in installments and repaid in lump-sum:
Example 4: Project D: The first
capital drawing: VND 100 million on November 1, 1999; the second drawing: VND
100 million on March 20, 2000, and the lump-sum debt repayment: VND 200 million
on September 1, 2000.
The actual borrowing duration:
+ For the first capital drawing:
10 months;
+ For the second capital
drawing: 5.33 months (5 months plus 10 days/30).
Example 5: Project E: The first
capital drawing: VND 100 million on November 1, 1999; the second drawing: VND
100 million on March 15, 2000; and the third drawing: VND 100 million on June
1, 2000.
Repayment: The first installment
of VND 250 million on September 1, 2000.
The actual borrowing duration:
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+ For the second capital
drawing: 5.5 months (5 months plus 15 days/30);
+ For the third capital drawing:
3 months.
APPENDIX 2
(Issued
together with the Finance Ministry’s
Circular No. 51/2001/TT-BTC of June 28, 2001)
Determination of post-investment
interest rate support levels for the following cases
Presumably: An enterprise
borrows a capital amount of VND 1,200 million from a credit institution with an
interest rate of 0.9%/month in 1999 and 0.81%/month in 2000. Such loan shall be
repaid on the quarterly basis, with VND 100 million for each quarter. The
repayment shall start in the first quarter (March 2000). The borrowing term: 37
months; the grace period: 4 months; the development investment credit interest
rate: 9.72% for 1999 and 7% for 2000. And to simplify the calculation, we
presume that all capital drawings or debt repayments are made on the first days
of the months.
Disbursement: The first installment
(November 1, 1999): VND 350 million; the second installment (February 1, 2000):
VND 450 million; the third installment (August 1, 2000): VND 60 million; the
fourth installment (October 1, 2000): VND 340 million.
In 2000: VND 11.1375 million:
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The second quarter (June 1,
2000), provided for the first disbursement: VND 100 million x 4.86% x 7/12 =
VND 2.835 million
The third quarter (September 1,
2000), provided for the first disbursement: VND 100 million x 4.86% x 10/12 =
VND 4.05 million
The fourth quarter (December 1,
2000):
+ provided for the first
disbursement: VND 50 million x 4.86% x 13/12 = VND 2.6325 million
+ Provided for the second
disbursement: VND 50 million x 3.5% x 10/12 = VND 1.45 million
In 2001: VND 20.38 million:
The first quarter (March 1,
2001), provided for the second disbursement: VND 100 million x 3.5% x 13/12 =
VND 3.78 million
The second quarter (June 1,
2001), provided for the second disbursement: VND 100 million x 3.5% x 16/12 =
VND 4.66 million
The third quarter (September 1,
2001), provided for the second disbursement: VND 100 million x 3.5% x 19/12 =
VND 5.53 million
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In 2002: VND 25.48 million:
The first quarter (March 1,
2002), + provided for the third disbursement: VND 60 million x 3.5% x 19/12 =
VND 3.32 million
+ Provided for the fourth
disbursement: VND 40 million x 3.5% x 17/12 = 1.99 million
The second quarter (June 1,
2002), provided for the fourth disbursement: VND 100 million x 3.5% x 20/12 =
VND 5.85 million
The third quarter (September 1,
2002), provided for the fourth disbursement: VND 100 million x 3.5% x 23/12 =
VND 6.72 million
The fourth quarter (December 1,
2002), provided for the fourth disbursement: VND 100 million x 3.5% x 26/12 =
VND 7.6 million
The post-investment interest
rate support level for the whole project:
Level for the whole project =
Level for 2000 + level for 2001 + level for 2002
Level for the whole project =
11.1375 + 20.38 + 25.48 = VND 56.9975 million.-