Decision No. 108/2006/QD-TTg dated May 19, 2006 of the Prime Minister establishing the Vietnam Development Bank

DECISION

ESTABLISHING THE VIETNAM DEVELOPMENT BANK

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the December 16, 2002 Law on the State Budget;

Pursuant to the December 12, 1997 Law on Credit Institutions and the June 15, 2004 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;

Pursuant to the Government's Resolution No. 06/2006/NQ-CP of May 4, 2006, on the Government's April 2006 regular meeting;

Considering the proposal of the Minister of Finance,

DECIDES:

Article 1.- To establish the Vietnam Development Bank (hereinafter referred to as the Development Bank) on the basis of reorganizing the Development Assistance Fund (established under the Government's Decree No. 50/1999/ND-CP of July 8, 1999) to implement state policies on development investment credit and export credit.

International transaction name: The Vietnam Development Bank

Acronym name: VDB

The Development Bank has the legal person status, charter capital and a seal. It is allowed to open accounts at the State Bank of Vietnam, the State Treasury, and domestic and foreign commercial banks, and to join the system of payment with banks and provide payment services according to the provisions of law. The Development Bank takes over all the rights and responsibilities of the Development Assistance Fund.

Article 2.- The Development Bank shall operate on a not-for-profit basis. Its compulsory reserve ratio shall be 0% (zero per cent). The Development Bank shall not have to buy deposit insurance.

The Development Bank's payment capacity shall be guaranteed by the Government. It shall be exempted from taxes and state budget contributions according to the provisions of law.

The Development Bank's charter capital shall be VND 5,000 billion (five thousand billion dong) which shall come from the current charter capital of the Development Assistance Fund.

Adjustments to the charter capital of the Development Bank shall depend on its specific requirements and tasks, ensure the capital adequacy ratio, and be considered and decided by the Prime Minister.

The organization and operation of the Development Bank are prescribed in this Decision and in its Charter on organization and operation, which is approved by the Prime Minister.

The operation term of the Development Bank shall be 99 years from the date this Decision takes effect.

Article 3.- Capital sources of the Development Bank:

1. State budget sources:

a/ The charter capital of the Development Bank;

b/ State budget capital allocated to projects according to annual plans;

c/ ODA capital assigned by the Government.

2. Mobilized capital

a/ Issuing bonds and deposit certificates according to the provisions of law;

b/ Taking loans from the Postal Savings, the Social Insurance Fund and domestic and overseas credit and financial institutions.

3. Receiving entrusted deposits of domestic and overseas institutions.

4. Non-refundable capital voluntarily contributed by individuals, economic, financial and credit institutions, socio-political organizations, and domestic and overseas associations, societies and organizations.

5. Receiving entrusted capital from local governments, economic organizations, socio-political organizations, and domestic and overseas associations, societies and organizations for granting and lending.

6. Other capital sources as provided by law.

Article 4.- Functions and tasks of the Development Bank:

1. Mobilizing and receiving capital of domestic and overseas organizations to provide state credits for development investment and export under the regulations of the Government.

2. Implementing policies on development investment credit:

a/ Granting loans for development investment;

b/ Post-investment support;

c/ Investment credit guarantee.

3. Implementing policies on export credit:

a/ Granting loans for export;

b/ Export investment guarantee;

c/ Guarantee for bidding participation and for implementation of export contracts.

4. Accepting entrusted management of ODA capital re-lent by the Government, and entrusted provision of loans for investment and collection of debts for domestic and overseas organizations through entrustment contracts between the Development Bank and entrusting organizations.

5. Entrusting financial and credit institutions to carry out credit transactions of the Development Bank.

6. Providing payment services for clients and joining domestic and international payment systems to serve the Development Bank's operations under the provisions of law.

7. Performing international cooperation tasks concerning development investment credit and export credit.

8. Carrying out other tasks assigned by the Government.

Article 5.- Organizational structure of the Development Bank:

1. The Development Bank shall be composed of:

a/ The Managing Board;

b/ The Control Board;

c/ The executive apparatus including:

- The headquarters based in Hanoi capital;

- Transaction centers, branches, and domestic and overseas representative offices.

The tasks, powers and organizational structure of the Managing Board, the Control Board and the executive apparatus of the Development Bank shall be defined in its the Charter on organization and operation, which is approved by the Prime Minister.

2. The Development Bank shall organize its streamlined and efficient management and executive apparatus in certain provinces and centrally-run cities in accordance with the requirement for and scope of its operation.

Article 6.- Decision on managerial tittles of the Development Bank:

1. The Prime Minister shall decide on the appointment or dismissal of Managing Board members and the general director at the proposal of the Minister of Home Affairs after consulting the Finance Minister and relevant agencies.

2. The Managing Board shall decide on the appointment or dismissal of deputy general directors, the head of the Control Board and the chief accountant.

3. The general director shall appoint or dismiss holders of other managerial tittles of the Development Bank.

Article 7.- The Prime Minister shall decide on the Financial Management Regulation of the Development Bank at the proposal of the Finance Minister.

Article 8.- Responsibilities and powers of state agencies, local governments and relevant organizations with respect to the Development Bank:

1. The Ministry of Finance:

a/ Proposing to competent agencies and authorities for issuance or issuing according to its competence state policies on development investment credit and export credit; guiding the implementation of the Development Bank's Financial Management Regulation;

b/ Proposing to the Prime Minister to decide on amendments and supplements to the Charter on organization and operation and the Financial Management Regulation of the Development Bank;

c/ Monitoring, examining and inspecting activities of the Development Bank. Monitoring the management and use of state capital and assets which the Finance Ministry assigns or authorizes the Development Bank to re-lend and collect debts for return to the state budget;

d/ Guiding the implementation of the Development Bank's accounting regime;

e/ Acting as the key agency to handle general issues and intersectoral issues of the Development Bank before submitting to the Prime Minister for decision.

2. The State Bank of Vietnam:

a/ Guiding the Development Bank to perform operations concerning development investment credit and export credit;

b/ Supervising the Development Bank in its performance of professional operations under the provisions of law.

3. The Ministry of Planning and Investment:

Carrying out tasks according to its functions and competence concerning development investment credit and export credit.

4. The Ministry of Trade:

Carrying out tasks according to its functions and competence concerning state policies on export credit.

5. The Ministry of Home Affairs:

a/ Appraising the titles of the Managing Board chairman, Managing Board members, and the general director of the Development Bank before proposing nominees to the Prime Minister for appointment;

b/ Guiding the Development Bank to properly implement regimes and policies on staff management and training.

6. The Ministry of Labor, War Invalids and Social Affairs:

a/ Guiding the Development Bank to implement regimes and policies on labor, wages and allowances;

b/ Inspecting and supervising the Development Bank in implementing the Prime Minister's decisions on wage and allowance regimes for the Development Bank's staff.

7. Other ministries and branches:

Other ministries and agencies shall perform state management of the Development Bank according to their respective functions and competence.

Article 9.- This Decision takes effect 15 days after its publication in "CONG BAO."

Article 10.- Ministers, heads of ministerial-level agencies and Government-attached agencies, presidents of People's Committees of provinces and centrally-run cities, the chairman of the Managing Board and the general director of the Development Bank shall have to implement this Decision.