Decision No. 1158/QD-NHNN dated May 29, 2018 of the State Bank of Vietnam on compulsory reserve rates applicable to credit institutions and foreign bank branches

DECISION

On compulsory reserve rates applicable to credit institutions and foreign bank branches

THE GOVERNOR OF THE STATE BANK OF VIETNAM

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 Department of Monetary Policy,

DECIDES:

Article 1. The compulsory reserve rates applicable to credit institutions and foreign bank branches (below referred to as credit institutions) are as follows:

1. For people’s credit funds and microfinance institutions: The compulsory reserve rate for Vietnam-dong and foreign-currency deposits is 0%.

2. For policy banks: The compulsory reserves rates must comply with the Government’s regulation.

3. In case the credit institutions specified in Clauses 1 and 2 of this Article are allowed to apply the compulsory serve rate of 0% for all types of deposit, they shall not be required to report to the State Bank on their average mobilized deposit balance subject to compulsory reserve under regulations on compulsory reserve applicable to credit institutions.

4. The Vietnam Bank for Agriculture and Rural Development and the Cooperative Bank of Vietnam shall apply the compulsory reserve rates corresponding to each type of deposit as follows:

a/ For Vietnam-dong demand deposit and under 12-month term deposits, the compulsory reserve rate is 3% of the deposit balance subject to compulsory reserve;

b/ For Vietnam-dong deposits of a term of 12 months or longer, the compulsory reserve rate  is 1% of the deposit balance subject to compulsory reserve;

c/ For overseas foreign-currency deposits of credit institutions, the compulsory reserve rate is 1% of the deposit balance subject to compulsory reserve;

d/ For demand and under 12-month term foreign-currency deposits, the compulsory reserve rate is 7% of the deposit balance subject to compulsory reserve;

dd/ For foreign-currency deposits of a term of 12 months or longer, the compulsory reserve rate is 5% of the deposit balance subject to compulsory reserve;

5. Other credit institutions (other than those specified in Clauses 1, 2 and 4 of this Article) shall apply the compulsory reserve rates corresponding to each type of deposit as follows:

a/ For Vietnam-dong demand and under-12 month-term deposits, the compulsory reserve rate is 3% of the deposit balance subject to compulsory reserve;

b/ For Vietnam-dong deposits of a term of 12 months or longer, the compulsory reserve rate is 1% of the deposit balance subject to compulsory reserve;