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THE STATE BANK
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No: 03/2007/QD-NHNN
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Hanoi, January 19, 2007
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DECISION
AMENDING AND SUPPLEMENTING A
NUMBER OF ARTICLES OF THE REGULATION ON SAFETY ASSURANCE RATIOS IN ACTIVITIES
OF CREDIT INSTITUTIONS PROMULGATED TOGETHER WITH THE STATE BANK GOVERNOR'S
DECISION NO. 457/2005/QD-NHNN OF APRIL 19, 2005
THE SATE BANK
GOVERNOR
Pursuant to
December 12, 1997 Law No. 01/1997/QH10 on the State Bank of Vietnam; and June
17, 2003 Law No. 10/2003/QH11 Amending and Supplementing a Number of Articles
of the Law on the State Bank of Vietnam;
Pursuant to December 12, 1997 Law No. 02/1997/QH10 on Credit Institutions; and
June 15, 2004 Law No. 20/2004/QH11 Amending and Supplementing a Number of
Articles of the Law on Credit Institutions;
Pursuant to the Government's Decree No. 86/2002/ND-CP of November 5, 2002,
defining the functions, tasks, powers and organizational structures of
ministries and ministerial-level agencies;
Pursuant to the Government's Decree No. 52/2003/ND-CP of May 19, 2003, defining
the functions, tasks, powers and organizational structure of the State Bank of
Vietnam;
At the proposal of the director of the Department of Banks and Non-Bank Credit
Institutions,
DECIDES:
Article 1.- To amend and supplement a number of
articles of the Regulation on safety assurance ratios in activities of credit
institutions promulgated together with the State Bank Governor's Decision No.
457/2005/QD-NHNN of April 19, 2005, as follows:
1. To amend Clause
9 of Article 2 as follows:
"9. Foreign
currency transaction contracts include foreign currency swapping contracts,
foreign currency term contracts, future contracts, contracts on the option to
select foreign currencies, and other foreign currency transaction contracts
according to regulations of the State Bank of Vietnam."
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"20. Capital
contribution and share purchase mean that credit institutions use their charter
capital and reserves to contribute to the charter capital of, or purchase
shares from, other enterprises or credit institutions; to contribute to
investment funds or the execution of investment projects, including entrustment
of capital to other legal entities, organizations or enterprises for making
investment in the above-mentioned forms.
21. Investments in the
form of capital contribution or share purchase in order to hold the right to
control enterprises include:
a/ Investments
representing 25% or more of the charter capital of a joint stock company;
b/ Investments
representing 51% or more of the charter capital of a limited liability
company."
3. To amend Points
3 and 4, Clause 3 of Article 3 as follows:
"3.3. Total
capital invested by credit institutions in other credit institutions in the
form of capital contribution or share purchase and total investments in the
form of capital contribution or share purchase for holding the right to control
enterprises operating in the domain of insurance or security.
3.4. An excess of 15%
of the own capital of a credit institution for the amount of capital it
contributes to or uses to purchase shares from, an enterprise, investment fund
or project.
An excess of 40% of
the own capital of a credit institution for the total amount of capital it contributes
to, or uses to purchase shares from, enterprises, investment funds or projects,
excluding the above-mentioned excessive 15% already subtracted from the own
capital."
4. To amend Item b,
Point 1.1.4, Clause 1 of Article 5 as follows:
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5. To annul Point
b, Clause 4 of Article 6.
6. To amend Point
c, Clause 4 of Article 6 as follows:
"c. Receivables
from banks established in states other than OECD member states, with a residual
maturity of one year or more, and receivables with a residual maturity of one
year or more guaranteed by these banks."
7. To add Clause 5
to Article 6 as follows:
"5. The group of
credit assets with a risk coefficient of 150% comprises:
a/ Loans for
securities investment;
b/ Loans provided to
securities enterprises for securities trading purposes.
c/ Loans provided to
securities enterprises controlled by credit institutions.
d/ Amounts of capital
contributed to, or used to purchase shares from, enterprises, investment funds
or projects, except for the portion already subtracted from the own capital (if
any) of credit institutions under the provisions of Point 4, Clause 3, Article
3 of this Regulation."
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"1.4. Credit
institutions may neither grant unguaranteed credits nor grant credits with
preferential conditions to enterprises which they hold the right to control,
and shall comply with the following restrictions:
- The total loans and
guarantees provide by a credit institution for an enterprise which the credit
institution holds the right to control must not exceed 10% of the own capital
of that credit institution.
- The total loans and
guarantees provide by a credit institution for enterprises which it holds the
right to control must not exceed 20% of its own capital.
1.5. Credit
institutions may not grant credits for securities trading enterprises which
they hold the right to control; and may not provide unguaranteed loans for
securities investment and trading."
9. To amend Clause
1 of Article 9 as follows:
"1. Loans coming
from trust investment capital sources of the Government, organizations and
individuals. Financial leasing amounts coming from trust capital sources of the
Government, organizations, individuals or lessees being other credit
institutions."
10. To amend Clause
3 of Article 9 as follows:
"3. Loans and
guarantees with a maturity of less than one year granted to other credit
institutions operating in Vietnam."
11. To amend Clause
5 of Article 9 as follows:
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12. To amend Clause
6 of Article 9 as follows:
"6. Loans and
guarantees fully secured with valuable papers issued by credit institutions
themselves."
13. To amend Clause
2 of Article 12 as follows:
"2. The minimum
ratio of 1 between total credit assets receivable within subsequent 7 days and
total debit assets payable within subsequent 7 days."
14. To amend
Article 16 as follows:
"1. Credit institutions
may only use its charter capital and reserves for contribution of
capital to, or purchase of shares from, enterprises, investment funds, projects
or other credit institutions in accordance with the provisions of this
Regulation and relevant provisions of law.
2. Capital
contribution and share purchase decisions of credit institutions shall be
carefully evaluated and assessed by their Executive Committees and approved by
the Managing Boards."
15. To amend
Article 17 as follows:
"1. The level of
capital a credit institution contributes to, or uses to purchase shares from,
an enterprise, investment fund, project or another credit institution must not
exceed 11% of the charter capital of that enterprise, investment fund, project
or credit institution.
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3. Credit institutions
that contribute capital or purchase shares in excess of the limits set in
Clauses 1 and 2 of this Article must obtain prior written approval of the State
Bank, provided that such capital contribution or share purchase is reasonable
and the credit institutions have observed other safety assurance ratios in
banking activities, have the ratio of non-performing loans (NPL) of 3% or
less."
16. To amend
Article 18 as follows:
"Article 18.-
1. Credit institutions
that have contributed capital to, or purchased shares from, enterprises,
investment funds or projects in excess of the ratios set in Article 17 of this
Regulation may not further contribute capital or purchase shares during the
time they have those excessive ratios; and shall, at the same time, adjust by
themselves such ratios in accordance with regulations within (2) two years from
the effective date of this Regulation, except for cases approved by the State
Bank.
2. Credit institutions
that have provided credit for securities trading enterprises which they hold
the right to control shall take measures to comply with regulations within (1)
one year from the effective date of this Regulation."
17. To replace Appendices A and B to the Regulation on safety
assurance ratios in activities of credit institutions promulgated together with
Decision No. 457/2005/QD-NHNN with Appendices A and B to this Regulation.
Article 2.-
This Decision takes effect 15 days after its publication in "CONG
BAO."
Article 3.- The director of the Office, the director of the Department
of Banks and Non-Bank Credit Institutions, heads of units under the State Bank,
directors of Vietnam State Bank's provincial/municipal branches, chairmen of
Managing Boards and general directors (directors) of credit institutions shall
implement this Decision .
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GOVERNOR OF THE
STATE BANK
Le Duc THuy