STATE BANK OF VIETNAM
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No: 20/2010/TT-NHNN

Hanoi, September 29, 2010

 

CIRCULAR

ON GUIDING THE IMPLEMENTATION OF MEASURES FOR MANAGING MONETARY POLICY INSTRUMENT TO SUPPORT CREDIT INSTITUTIONS LENDING FOR AGRICULTURAL AND RURAL DEVELOPMENT

- Pursuant to the Law on State Bank of Vietnam issued in 1997 and the Law on the amendment, supplement of several articles of the Law on State Bank of Vietnam issued in 2003; the Law on Credit institutions issued in 1997 and the Law on the amendment, supplement of several articles of the Law on Credit Institutions issued in 2004;
- Pursuant to the Decree No.96/2008/ND-CP dated 26 August 2008 of the Government providing for the function, duty, authority and organizational structure of the State Bank of Vietnam;
- Pursuant to the Decree No.41/2010/ND-CP dated 12 April 2010 of the Government on credit policy for serving the agricultural, rural development;
The State Bank of Vietnam hereby provides guidance to the implementation of measures for managing monetary policy instrument to support credit institution lending for agricultural, rural development as follows:

Article 1. The State Bank shall provide capital support to the lending for agricultural, rural development by credit institutions (excluding local People’s credit funds) through the following monetary policy management instruments:

1. The required reserve rate applicable to VND deposit shall be lower than the normal required reserve rate (that is the required reserve rate applicable to State-owned commercial banks, excluding Vietnam Bank for Agricultural and Rural Development, joint stock commercial banks, joint venture banks, foreign bank’s branches, 100% foreign owned banks, finance companies), which shall be applied from the required reserve maintaining period in October 2010, specifically as follows:

a. For the credit institution whose ratio of loan outstanding for agricultural, rural development over the average total loan outstanding at the end of quarters in the consecutive fiscal year is 70% and higher: The required reserve rate for VND deposits shall be 1/20 (one twentieth) against the normal required reserve rate in proportion with the term of the deposit.

b. For the credit institution whose ratio of loan outstanding for agricultural, rural development over the average total loan outstanding at the end of quarters in the consecutive fiscal year is from 40% to 70%: The required reserve rate for VND deposits shall be 1/5 (one fifth) against the normal required reserve rate in proportion with the term of the deposit.

2. To set aside an amount from the money for annual supply to refinance the credit institutions lending for agricultural, rural development in conformity with the objectives, measures of monetary policy management. Refinance loans to the agricultural, rural sectors shall be entitled to priority of the State Bank in terms of the period and capital source of loan in comparison with other sectors.

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Article 2. Responsibilities of the credit institutions and units of the State Bank

1. Responsibilities of the credit institutions:

a. To observe provisions of applicable laws and guidance of the State Bank of Vietnam on credit policy for agricultural, rural development.

b. To make timely and full report on the lending to agricultural, rural sector in accordance with provisions of the State Bank. To take responsibility for the accuracy and legality of the reported data on credit of service to agricultural, rural development as a basis for the implementation of provisions in Article 1 of this Circular.

c. To use the supported capital for the right purpose of lending for agricultural, rural development.

2. Responsibilities of units of the State Bank:

a. The Credit Department shall submit the Governor of the State Bank for approval and notify the List of credit institutions subject to provisions in Paragraph 1 Article 1 of this Circular to the Banking Operation Department and concerned units of the State Bank, the State Bank’s branches in provinces, cities under the central Government’s management, credit institutions for implementation.

b. Other units of the State Bank shall, upon their assigned function, duty, perform tasks concerning the monetary policy management as provided for in Article 1 of this Circular.

Article 3. Implementation organization

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2. Any provisions contrary to this Circular shall become expired.

3. Director of Administrative Department, Director of the Monetary Policy Department and Head of units of the State Bank, Manager of State Bank’s branches in provinces, cities under the central Government’s management; Chairman of the Board of Directors and General Director (Director) of credit institutions shall be responsible for the implementation of this Circular.

 

 

FOR THE GOVERNOR OF THE STATE BANK OF VIETNAM
DEPUTY GOVERNOR




Nguyen Dong Tien

 

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