Directive 06/CT-NHNN solutions managing monetary, credit policies, banking activities at end of year 2012 - beginning of year 2013

DIRECTIVE

ON SOLUTIONS MANAGING MONETARY, CREDIT POLICIES AND BANKING ACTIVITIES IN MONTHS AT THEEND OF THE YEAR 2012 ANDTHEBEGINNING OF THE YEAR 2013

In order to implement directions of Government in the Resolution No.01/NQ-CP, of January 03, 2012 on major solutions for guiding and managing the implementation of socio-economic development plan and state budget estimation of the year 2012 and Resolution No.13/NQ-CP, of May 10, 2012 on some solutions to remove difficulties for production-business and market support, the banking system have implemented drastic solutions in managing monetary policy on a tight, careful and flexible manner, concentrating to remove difficulties for production-business and market support aiming to control inflation, contributing in stability of macro-economy, assurance of social security and maintenance of economic growth at reasonable level. The result of managing the monetary policy, banking activities in over 10 months beginning of year 2012 basically attains target as guideline of Government, liquidity of banking system has been ensured and tended to improve, the interest rate surface has reduced strongly, credit structure has continued to shift towards concentrating on incentive fields, the foreign exchange market has been stable, the state foreign exchange reserves have increased, program on restructuring credit institutions have been implemented in drastic manner, risks of system gradually have been controlled, activities of credit institutions basically have been safe.

However, managing the monetary policy and banking activities in the future shall be still difficult with challenges, need be continued to care and settle, the inflation although it has been controlled at low level, it still has risk of increasing again, the production-business activities have been positive changes but there are still difficulties because domestic and overseas demand is weak, inventory still at high level, banking credit growth is low, bad debts of banks at high level. In order to continue to carry out effective solutions managing monetary, credit policies and banking activities in months at end of the year 2012 and beginning of the year 2013, in conformity with guidance of Government on solutions to control inflation, stabilize macro-economy, support economic growth at rational level in association with the economic restructuring and assurance of social security, governor of the state bank request:

1.The banking system continues to implement in drastic, synchronous and effective manner solutions managing the monetary, credit policies and banking activities according to guidance of Government in the Resolution No.01/NQ-CP and Resolution No.13/NQ-CP, of the State bank of Vietnam in the Directive No.01/CT-NHNN, of February 13, 2012 and relevant documents.

2.For credit institutions and branches of foreign banks (hereinafter referred to as credit institutions):

2.1.To implement in synchronous and effective manner solutions mobilizing capital, on initiative to balance between capital source and capital use in order to ensure liquidity, meet timely credit demand for economy, payment demand, especially in occasions of New year and Quy Ty Lunar Tet 2013.

2.2.To implement solutions to expand credit effectively in order to support economic growth at rational level and contribute to control inflation according to guidance of the Government, strengthen controlling credit quality in order to enhance business efficiency and ensure safety for system:

-Managing credit activities as prescribed by law and on the basis of assessment of actual situation, ability to expand credit aiming to increase business effectiveness and ensure credit safety; arrange capital sources in order to meet timely credit capital demand for economy; prioritizing to concentrate capital serving for agriculture and rural fields, export goods production, support industry, medium and small enterprises, labor-intensive enterprises, effective projects and plans.

-Researching to consider development of credit product pack based on strings combining from production to consumption aiming to enhance effectiveness and reduce expenditures of loan activities, support for client to borrow capital for investment, production-business and consumption of goods, such as loaning in string including breeding persons, purchasers, persons processing seafood for export, loaning with combination of investors, constructors, suppliers of building materials and house buyers.

-Organizing and carrying out programs, credit policies according to guidance of Government and the Prime Minister, such as: The credit policy for agriculture and rural field as prescribed in the Government’s Decree No. 41/2010/ND-CP of April 12, 2010, the policy on loaning to breeding shark catfish in according to direction of the Prime Minister in the official dispatch No.1149/TTg-KTN, of August 08, 2012; policy on support to reduce losses after harvest for agriculture products, seafood as prescribed in the Decision No.63/2010/QD-TTg, of October 15, 2010 and Decision No.65/2011/QD-TTg, of December 02, 2011 of the Prime Minister; loaning to purchase, store up food, coffee, etc

-Continuing to carry out in drastic manner solutions to remove difficulties in credit relation between credit institutions and clients in according to guidance of Government and the State bank of Vietnam aiming to facilitate for clients to access banking credit capital sources in accordance to provisions of law, and contributing to support enterprises and people in production and business maintaining and development, such as re-structuring time limit of paying debts (adjusting debt duration, prolonging debts), exemption, reduction of loan interest on basis of financial ability of credit institutions, etc Any difficulties, problems arising should be reported to the State bank of Vietnam for consideration and handling timely.

2.3.For interestrateof mobilization and loan:

-To strictly implement provisions and guidance of the State bank of Vietnam on interestrates; apply the rational loaning interest rate on the basis of mobilization interestrateand risk level of loan amounts; save expenditures, reduce maximally cost for management, advertisement, promotion and operation cost in order to have condition for reduction of loaning interest rates aiming to share difficulties with borrowers.

-Not allow to collect types of charges relating to loan amounts, except for some types of charge specified in the Circular No.05/2011/TT-NHNN, of March 10, 2011 of Governor of the State bank stipulating on the charge of credit institutions’ loans to clients.

-Regularly supervise the strict implementation of regulations of the State bank of Vietnam on mobilization interestrateand loan, timely detect violations in order to have suitable handling measures on the basis of clear delimiting the responsibility of organizations, individuals. Credit institutions violating provisions on interest shall be handled as prescribed by law and the Directive No. 02/CT-NHNN, of September 07, 2011 of Governor of the State bank on regulating the implementation of provisions on mobilization interest rate in Vietnam dong and US dollar.

2.4.Implementation of provisions on managing foreign exchange and gold business:

-To strictly comply with provisions on listing exchange rates, foreign exchange management of Government and the State bank of Vietnam; implement properly provisions of the State bank of Vietnam on mobilization and loan in gold.

-Credit institutions after being granted the permit to trade gold bar by the State bank of Vietnam, urgently carry out network of branches, locations to trade gold bar as planned and as prescribed in the Circular No.16/2012/TT-NHNN, of May 25, 2012 of Governor of the State bank guiding a number of articles of the Government s Decree No.24/2012/ND-CP, of April 03, 2012 on managing gold business activities.

2.5.To implement safety measures in banking activities, on initiative implement solutions to handle bad debts:

-To strictly comply with regulations of the State bank of Vietnam on monetary, credit and banking activities, safety guarantee rates in banking activities, classification of debts, making risk provision fully as prescribed by law; enhance quality, effectiveness of internal audit and controlling system; strengthen strict supervision for all business activities in order to prevent and timely handle mistakes and violations.

-To positively carry out synchronously solutions to restrain increase of bad debts, boost handling bad debts through risk provisions, buying debts, handling guaranteed assets and other methods of handling bad debts as prescribed by law; not permitted to take advantage of provisions on restructuring debt and other professional operations in order to hide bad debts or falsify credit quality.

-Credit institutions that have not yet made risk provisions fully as prescribed by law are not permitted to divide dividend, profit of the year 2012 and not permit to increase salaries, bonuses, remunerations for officers. The joint-stock commercial banks report plan on distributing dividend, profit of the year 2012 before performance at least 15 working days to the State bank – branch in cities, provinces where set their head office in order to ask for opinion.

3.For units of the State bank of Vietnam:

3.1.Units in head office of the State bank of Vietnam consult for Governor of the State bank and proactively implement solutions under their functions and task, concentrating on the following focus:

-To complete promulgation of legal documents under program of years 2012 and 2013, specially promulgation of new mechanism on classification of debts, making risk provisions and safe rates for banking activities being suitable with the actual situation, management requirement of the State bank of Vietnam and operation of credit institutions.

-To manage the monetary policies in a tight, careful and flexible manner aiming to stabilize the monetary market, ensure the liquidity of credit institutions, especially on the occasion of New year and Quy Ty Lunar Tet 2013; manage interest in conformity with movements of the macroeconomy and monetary market; implement monetary policy tools to encourage expansion of credit servicing for agriculture and rural development according to guidance of Government.

-To coordinate with the Ministry of Agriculture and Rural Development, relevant ministries, sectors and credit institutions to assess attained results and difficulties, problems during the course of implementation of the Government’s Decree No. 41/2010/ND-CP in order to consider, submit to Government for amendment and supplement in conformity with reality; and handle difficulties, problems on credit operation for economic sectors, fields.

-To control the foreign exchange market and manage exchange rate flexibly according to the market signals, in line with the foreign currency demand-supply relation, interest rates, inflation, international payment balance, facilitating to increase the state foreign exchange reserves; to monitor closely situation of mobilization and use of capital in gold of credit institutions in order to handle difficulties, problems, ensure ending properly as prescribed, to monitor closely the movements of gold market in order to timely handle, remove difficulties, problems of credit institutions licensed to trade gold bar.

-Positively, on initiative inspect, supervise safety of banking activities on compliance of provisions of law on monetary, credit, bank, especially coordinate closely with functional agencies to implement inspection, supervision of compliance of regulations on interest; detect and handle strictly cases of lawbreaking. To strictly control amounts, items of expenditure and profit distribution of credit institutions.

-To continue to carry out the plan on re-structuring weak commercial banks in accordance to the Scheme on re-structuring system of credit institutions in the 2011-2015 period being approved by the Prime Minister in the Decision No.254/QD-TTg, of March 01, 2012. To urgently complete the Scheme on establishing a Company of asset management in order to push up handling bad debts, increasing credit supply of system of credit institutions for the economy.

-Proactively propagate, popularize provisions of law, guidance of the Government and the State bank of Vietnam on managing the monetary, credit policies and banking activities.

3.2.The state bank – branches in central-affiliated cities and provinces implement their duties and solutions:

-Proactively research, guide credit institutions in their localities to implement solutions on monetary, credit and banking activities aiming to contribute in implementation of managing the monetary policies effectively under target of restraining inflation, stabilizing macro-economy, assuring social security and removing difficulties for production-business activities, market support according to direction of Government and the State bank of Vietnam.

-To strengthen examination, inspection of compliance of regulations on monetary, credit and banking activities of credit institutions in their localities. To strictly supervise compliance of credit institutions with respect to regulations of the State bank of Vietnam on interest rates, collection of charges, in conformity with solutions concentrating on removing difficulties for production-business activities. To strictly handle violations of credit institutions in their localities; in case arising problems exceeding their authorities, timely report to Governor of the State bank for consideration, handling.

-To monitor and give out opinion on plan of distribution of dividend, profit of the year 2012 of the joint-stock commercial banks which have head office in their localities, in conformity with law and direction of Governor of the State bank.

-Urgently carry out necessary measures in order to set up a network to license for trading gold bar in their localities according to direction of Governor of the State bank.

-To catch up socio-economic situation and banking activities in their localities in order to report and propose with executive committees, local authorities and Governor of the State bank on measures to manage activities, networks of credit institutions and amend mechanisms, policies for conformity with actual conditions; strengthen coordination to exchange information with units in head office of the State bank of Vietnam.

-Proactively propagate, popularize provisions of law, guidance of Government and the State bank of Vietnam for enterprises and people to understand, implement in accordance to provisions of law on the monetary, credit and banking activities.

4.Organizing implementation:

4.1.This directive takes effect on the day of signing.

4.2.The Chief officers, the Director of the Financial policy department and heads of units of the State bank of Vietnam, Directors of the State bank branch in central-affiliated cities and provinces, presidents of Board of Directors, presidents of Members Council and directors general (directors) of credit institutions, branches of foreign banks shall implement this Directive.