DECISION

ON CREDIT INSTITUTIONS� OPERATION OF MOBILIZING AND USING CAPITAL IN GOLD AND VIETNAM DONG WITH VALUE SECURED BY GOLD PRICES

THE STATE BANK GOVERNOR

Pursuant to Vietnam State Bank Law No.01/1997/QH10 and Credit Institutions Law No.02/1997/QH10 of December 12, 1997;
Pursuant to the Government’s Decree No.15/CP of March 2, 1993 on the tasks, powers and State management responsibilities of the ministries and ministerial-level agencies;
At the proposal of the director of the Department for Monetary Policy,

DECIDES:

Article 1.- To allow credit institutions with foreign exchange transaction licenses to mobilize from population time capital in gold and Vietnam dong with value secured by gold prices under the provisions of this Decision, with a view to further attracting sources of capital in gold and cash to meet the demand of capital for production, business, services and daily-life activities.

Article 2.- The mobilized gold shall be in form of bars or jewelry gold converted into gold bars, based on the standards of gold businesses already licensed to produce gold bars by the State Bank.

Article 3.-

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2. Credit institutions shall decide the selection of types of gold bar to be mobilized and to serve as basis for conversion of jewelry gold when mobilizing and using capital in gold and in Vietnam dong with value secured by gold prices.

3. When mobilizing and lending capital in gold and in Vietnam dong with value secured by gold prices, credit institutions and customers shall agree upon the conversion gold prices, based on the market buying and selling prices of the selected gold bars at the time of conversion.

Article 4.-

1. Credit institutions shall prescribe interest rates for mobilizing capital in gold and Vietnam dong with value secured by gold prices; interest rates for loans in gold and Vietnam dong with value secured by gold prices, suited to their own business characteristics and conditions in order to ensure the full coverage of expenses and risks, and the profit earning.

2. Credit institutions shall have to publicize and post up at capital mobilizing and lending places the mobilizing and lending interest rates as well as the gold buying and selling prices so that customers may be aware thereof.

Article 5.-

1. Credit institutions shall mobilize capital in gold in form of issuing time gold mobilization certificates; the mobilization of capital in Vietnam dong with value secured by gold prices shall be effected in form of time savings or issuing certificates of mobilizing Vietnam dong with value secured by gold prices. The minimum mobilization term for these forms shall be 30 days.

2. The gold mobilization certificates as well as the gold price-secured Vietnam dong mobilization certificates are the credit institutions’ commitments towards the gold depositors and money depositors, which clearly specify conditions on gold quantity, gold quality, Vietnam dong amount with value secured by converted gold prices, term, interest rate, date of maturity and mode of principal and interest payment; conditions on the assignment, purchase, sale, donation, presentation, inheritance or pledge to borrow capital, and other conditions.

Article 6.-

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2. The capital sources mobilized in gold serving as basis for calculation of compulsory reserve shall be converted into Vietnam dong according to the gold buying prices of credit institutions for gold bars selected on the last working day of the compulsory reserve determination period.

Article 7.-

1. Credit institutions shall use capital sources mobilized in gold to provide gold loans to customers in order to meet the demand of capital for production, business, services and daily-life activities or convert them into capital sources in cash for the provision of loans in Vietnam dong with value secured by gold prices, and to meet their own business requirements.

2. Where credit institutions convert capital sources mobilized in gold into capital sources in cash, the capital sources converted into cash must not exceed 30% of the mobilized capital sources in gold.

Article 8.- The lending of capital in gold and Vietnam dong with value secured by gold prices shall comply with the Regulation on loan provision to customers by credit institutions, issued together with the State Bank Governor’s Decision No.284/2000/QD-NHNN1 of August 25, 2000.

Article 9.- Credit institutions shall have the responsibility:

1. To issue written professional guidance for implementation of the provisions of this Decision and relevant legal documents, in conformity with their business conditions and characteristics as well as charters.

2. To send notices to the State Bank’s branches in the provinces and cities (where credit institutions are headquartered), which shall be enclosed with written professional guidance for mobilization and use of capital in gold and Vietnam dong with value secured by gold prices. The time limit for sending notices shall be 15 days before the actual mobilization and use of capital in gold and Vietnam dong with value secured by gold prices.

3. To comply with suggestions of the State Bank’s provincial/municipal branches related to the credit institutions’ operation of mobilizing and using capital in gold and Vietnam dong with value secured by gold prices.

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- For monthly reports: By the 10th of the following month at the latest.

- For quarterly reports: By the 10th of the first month of the following quarter at the latest.

- For yearly reports: By January 15th of the following year at the latest.

Article 10.- The State Bank’s provincial/municipal branches shall have the responsibility:

1. To receive and examine written guidance for local credit institutions’ operation of mobilizing and using capital in gold and Vietnam dong with value secured by gold prices; if detecting any contents incompatible with the provisions of this Decision, the State Bank’s provincial/municipal branches shall request in writing concerned credit institutions to make appropriate amendments and/or supplements before the implementation thereof.

2. To periodically or extraordinarily examine, inspect the local credit institutions’ operation of mobilizing and using capital in gold and Vietnam dong with value secured by gold prices in strict compliance with the provisions of this Decision as well as the relevant legal documents in order to ensure safety for depositors’ capital as well as the safe, healthy and effective operations of credit institutions, promptly detect and handle violations according to law provisions.

3. To monthly, quarterly and annually report to the State Bank (Department for Monetary Policy, Banking Inspectorate and Department for Banks and Non-Bank Credit Institutions) on the local credit institutions’ situation of mobilizing and using capital sources in gold and Vietnam dong with value secured by gold prices. The reporting deadlines are prescribed as follows:

- For monthly reports: By the 15th of the following month at the latest.

- For quarterly reports: By the 15th of the first month of the following quarter at the latest.

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Article 11.- The units attached to the State Bank shall have the responsibility:

1. The Finance- Accountancy Department: To guide the accounting of the operation of mobilizing and using capital in gold and Vietnam dong with value secured by gold prices.

2. The Department for Banks and Non-Bank Credit Institutions: To guide credit institutions to effect the risk reserve during the mobilization and use of capital in gold and Vietnam dong with value secured by gold prices.

3. The Department for Monetary Policy: To study the credit institutions’ situation of mobilizing and using capital in gold and Vietnam dong with value secured by gold prices in order to propose to the State Bank Governor amendments and/or supplements to the regulations on operation of mobilizing and using capital in gold and Vietnam dong with value secured by gold prices.

4. The Banking Inspectorate: To supervise and inspect credit institutions’ operation of mobilizing and using capital in gold and Vietnam dong with value secured by gold prices; to handle according to its competence or propose the State Bank Governor to handle violations of the provisions of this Decision.

Article 12.- This Decision takes effect 15 days after its signing and replaces Decision No.42/QD-NH1 of February 21, 1992 on the mobilization of capital and provision of loans with value secured according to the gold prices; legal documents guiding the implementation of Decision No.42/QD-NH1 of February 21, 1992, Decision No.57/QD-NH1 of March 31, 1992 on interest rates of mobilizing and lending capital with value secured according to the gold prices, and Clause 5, Article 1 of the State Bank Governor’s Decision No.191/1999/QD-NHNN1 of May 31, 1999 on the compulsory reserve ratio for credit institutions.

Article 13.- The heads of the units attached to the State Bank; the directors of the State Bank’s branches in the provinces and centrally-run cities; the chairmen of the Managing Boards and the general directors (directors) of credit institutions licensed for foreign exchange activities shall have to implement this Decision.

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