Circular 04/2022/TT-NHNN providing for the application of interest rates upon premature withdrawal of deposits from credit institutions and foreign bank branches

CIRCULAR

Providing the application of interest rates for early withdrawal of deposits from credit institutions or foreign bank branches^[1]

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

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

Pursuant to the November 20, 2017 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the Government’s Decree No. 16/2017/ND-CP of February 17, 2017, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Monetary Policy Department;

The Governor of the State Bank of Vietnam promulgates the Circular providing the application of interest rates for early withdrawal of deposits from credit institutions or foreign bank branches.

Article 1. Scope of regulation

1. This Circular provides the application of interest rates for early withdrawal, early payment or advance payment of deposits as agreed (below referred to as early withdrawal of deposits) by organizations (excluding credit institutions and foreign bank branches) and individuals depositing money at credit institutions or foreign bank branches.

2. For term deposits at credit institutions or foreign bank branches, in order to secure the performance of the law-prescribed obligations, the application of interest rates for early withdrawal of deposits must comply with documents of the Government and the State Bank of Vietnam. If documents of the Government or the State Bank of Vietnam do not provide interest rates for early withdrawal of deposits, the agreement between the parties shall prevail in accordance with this Circular.

Article 2. Subjects of application

1. Credit institutions and foreign bank branches (below referred to as credit institutions) operating in Vietnam under the Law on Credit Institutions, excluding policy banks.

2. Organizations (excluding credit institutions) and individuals making deposits at credit institutions (below referred to as clients).

Article 3. Forms of deposits eligible for early withdrawal

1. Term savings deposits.

2. Term deposits.

3. Certificates of deposits, promissory notes, treasury bills, bonds issued by credit institutions.

4. Other forms of term deposits prescribed in the Law on Credit Institutions.

Article 4. Early withdrawal of deposits

1. Early withdrawal of deposits is the case in which clients withdraw part or the whole of deposits before the maturity date or payment date.

2. Credit institutions and clients shall agree on early withdrawal of deposits in accordance with regulations of the State Bank of Vietnam for each specific form of deposit. Interest rates for early withdrawal of deposits shall be agreed upon under Article 5 of this Circular. If there is no agreement on early withdrawal of deposits, credit institutions shall apply interest rates for early withdrawal specified in this Circular.

Article 5. Interest rates for early withdrawal of deposits

1. In case a client early withdraws the whole of its/his/her deposits: a credit institution shall apply a maximum interest rate equal to its lowest interest rate applicable to demand deposits according to the category of client and/or in the deposited currency at the time of early withdrawal.

2. In case a client early withdraws part of its/his/her deposits:

a/ For an early withdrawn amount of a deposit, a credit institution shall apply the maximum interest rate equal to its lowest interest rate applicable to demand deposits according to the category of client and/or in the deposited currency at the time of early withdrawal.

b/ For the remaining amount of the deposit, a credit institution shall apply the current interest rate to the deposit part of which is early withdrawn by the client.

Article 6. Implementation provisions

1. This Circular takes effect on August 1, 2022, and replaces the State Bank Governor’s Circular No. 04/2011/TT-NHNN of March 10, 2011, provides for the application of interest rates upon organizations’ or individuals’ early withdrawal of deposits from credit institutions.

2. For agreements on interest rates for early withdrawal of deposits entered into before the effective date of this Circular, credit institutions and clients shall continue to comply with such agreements until the maturity date or payment date of deposits or agree to comply with this Circular.

Article 7. Organization of implementation

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

For the State Bank Governor
Deputy Governor
PHAM THANH HA