CIRCULAR

REGULATIONS ON APPLICATION OF INTEREST RATES ON PREMATURE WITHDRAWAL OF DEPOSITS FROM CREDIT INSTITUTIONS AND FOREIGN BANK BRANCHES

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

Pursuant to the Law on Credit Institutions of Vietnam dated June 16, 2010; 

Pursuant to the Law on Amendments to the Law on Credit Institutions of Vietnam dated November 20, 2017;  

Pursuant to Decree No. 16/2017/ND-CP dated February 17, 2017 of the Government on functions, duties, entitlements and organizational structure of the State Bank of Vietnam;

At the request of the Director of the Monetary Policy Department of Vietnam; 

Governor of the State Bank of Vietnam promulgates the Circular on the application of interest rates on premature withdrawal of deposits from credit institutions and foreign bank branches.

...

...

...

1. This Circular provides for the application of interest rates on premature withdrawal and payment of deposits under agreements (hereinafter referred to as "premature withdrawal of deposits") of organizations (excluding credit institutions and foreign bank branches) and individuals' deposits at credit institutions and foreign bank branches.

2. Regarding time deposits at credit institutions and foreign bank branches, in order to ensure legal obligations, the application of interest rates on premature withdrawal of deposits is carried out according to separate documents of the Government of Vietnam and the State Bank of Vietnam. In case the separate documents of the Government of Vietnam and State Bank of Vietnam do not prescribe the interest rates on premature withdrawal of deposits, the agreement between parties shall apply in accordance with this Circular.

Article 2. Regulated entities

1. Credit institutions and foreign bank branches (hereinafter referred to as “credit institutions”) operating in Vietnam according to the Law on Credit Institutions of Vietnam, excluding policy banks.

2. Organizations (excluding credit institutions) and individuals depositing money in credit institutions (hereinafter referred to as "clients").

Article 3. Forms of deposits eligible for premature withdrawal

1. Time savings deposits

2. Time deposits.

3. Deposit certificates, bills, treasury bills, and bonds issued by credit institutions.

...

...

...

Article 4. Premature withdrawal of deposits

1. Premature withdrawal of deposits is when a client withdraws a part or all of the deposit before the due date or maturity date of such deposit.

2. Credit institutions and clients shall make agreements on the premature withdrawal of deposits in compliance with regulations of the State Bank of Vietnam regarding each specific form of deposit. Interest rates on premature withdrawal of deposits are agreed upon in accordance with regulations prescribed in Article 5 of this Circular. If no agreements on premature withdrawal of deposits are made, credit institutions shall apply the interest rates on premature withdrawal of deposits following the regulations of this Circular.

Article 5. Interest rates on premature withdrawal of deposits

1. When a client withdraws all of the deposit: credit institutions shall apply a maximum interest rate equal to its lowest interest rate of demand deposits based on the type of client and/or the currency of the deposit when such client withdraws it.

2. When a client withdraws a part of the deposit:

a) Regarding the part of withdrawn deposit before maturity, credit institutions shall apply a maximum interest rate equal to its lowest interest rate of demand deposits based on the type of client and/or currency of the deposit when such client withdraws it;

b) Regarding the remaining deposit, credit institutions shall apply the interest rate equal to the interest rate applied to the deposit that the client has withdrawn a part.

Article 6. Implementation provisions

...

...

...

2. Regarding agreements on interest rates on premature withdrawal of deposits made before this Circular comes into force, credit institutions and clients shall continue to follow such agreements until the due date or payment date of the deposit or the agreements made according to this Circular.

Article 7. Implementation

The Chief of Office, Director of the Monetary Policy Department, heads of the State Bank of Vietnam’s affiliated units, credit institutions, and foreign bank branches shall implement this Circular./.

PP. GOVERNOR
VICE GOVERNOR




Pham Thanh Ha