b) The items reducing owned capital that need to be moved out from owned capital including:

- Reduced value of assets determined by re-evaluating fixed assets (if any)

- Bad loans, which are neither secured by a stand-by fund, nor are guaranteed.

- Expenditures exceed income.

III. PROVISIONS FOR IMPLEMENTATION

Article 6.

Limit of foreign exchange positions at the end of a day for each currency shall not exceed 10% of net owned capital of the credit institution, and total foreign exchange position shall not exceed 30% of net owned capital of the credit institution.

Under this statute, gold and gems, if used as foreign currencies in transactions, shall be included in total foreign exchange position.

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Total foreign exchange positions and foreign exchange positions of each foreign currencies of credit institutions shall be in terms of Vietnamese dong based on the foreign exchange rates quoted by the state Bank of Vietnam at the time of reporting.

Article 7.

Credit institutions authorized to do foreign exchange trading shall at all times maintain total foreign exchange positions and foreign exchange positions of each currency within the frame as stipulated in this statute.

Accounting and internal information systems of the credit institutions shall have to meet the following requirements:

- Ability to show at any time the positions of each foreign currency, total long positions and total short positions of each currency.

- Ability of the cashiers of credit institutions to receive information on foreign exchange positions on a permanent basis.

Article 8.

Depending on situation and business performance of each branch, general directors of credit institutions shall stipulate concrete limits of risk levels for each branch, foreign exchange trading unit and foreign exchange staff in accordance with this statute, as follows:

- End-of the day total foreign exchange positions and positions and positions of each currency.

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Head offices of credit institutions shall be responsible for strictly monitoring and supervising these regulations. General directors (directors) of credit institutions shall be responsible to the governor of the State Bank of Vietnam to duly observe the above-mentioned stipulations.

IV. MAKING REPORTS

Article 9.

Each day, prior to 10:00 am, general directors or directors of credit institutions shall report to the State Bank of Vietnam, by fax or telex, about their end-of-day foreign exchange positions of the previous day for the whole system; total amount of foreign currencies in transactions at the and of previous day, clarifying total amount of foreign currencies bought and sold in foreign exchange interbank markets, and the highest and lowest foreign exchange rate of the previous day.

Addition to daily reports in foreign exchange positions, general directors, directors of credit institutions authorized to do foreign exchange trading, at the end of each week, each month, shall have to make weekly and monthly report to the State Bank of Vietnam on integrated and detailed foreign exchange positions for the whole system which shall be calculated at the last working day of each week and month as per the form determined by the State Bank of Vietnam.

These reports shall be forwarded to the State Bank of Vietnam (Foreign exchange control department).

Weekly and monthly reports shall be submitted to the State Bank of Vietnam not later than the 3rd day from the date of their compilation. In addition to these reports, credit institutions authorized to do foreign exchange trading shall have to provide all necessary information as required by the State Bank of Vietnam.

The foreign exchange control department shall be in charge of receiving information on foreign exchange positions and supplying relevant departments and centers of the State Bank with the said information.

V. FINAL PROVISIONS

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Credit institution authorized to do foreign exchange trading shall have to duly observe all provisions stipulated in this statute. In case of violation depending on extent of seriousness, penalties shall be applied in compliance with the provisions on penalties and punitive measures stipulated in the Decree-Laws of the State Bank of Vietnam issued according to the State Bank Governors Decision No 168/QD-NH3 dated 27 August 1992.

Article 11

Any amendment, supplement or replacement to the provisions of this statute shall be decided by the Governor of the State Bank of Vietnam.