Law amending the Vietnam State Bank Law, No.10/2003/QH11

LAW

AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE VIETNAM STATE BANK LAW
(No. 10/2003/QH11 of June 17, 2003)

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10 of December 25, 2001 of the Xth National Assembly, the 10th session;

This Law amends and supplements a number of articles of the Vietnam State Bank Law of December 12, 1997.

Article 1.-

To amend and supplement a number of articles of the Vietnam State Bank Law as follows:

1. Article 9 is amended and supplemented as follows:

"Article 9.- Interpretation of terms

In this Law, the following words and phrases are construed as follows:

1. Currency means a payment instrument, including bank notes, coins and papers of money value.

2. Monetary market means a short-term capital market, where the short-term purchase and sale of valuable papers, including treasury bills, the State Bank's bills, deposit certificates and other valuable papers are carried out.

3. Banking activities mean currency-trading and banking service-providing activities with regular contents being to receive deposits and use them for the supply of credits and/or provision of payment services.

4. Open-market operations mean the short-term purchase and sale of valuable papers, which are conducted by the State Bank on the monetary market in order to implement the national monetary policy.

5. Compulsory reserve means a sum of money which must be deposited at the State Bank by credit institutions for the implementation of the national monetary policy.

6. Foreign exchange means foreign currencies, gold of international standard, valuable papers and payment instruments in foreign currencies.

7. Foreign exchange transactions mean the operations of investment, borrowing, lending, guarantee, purchase, sale and other transactions related to foreign exchange.

8. Foreign exchange rate means the rate between the value of Vietnam dong and that of a foreign currency.

9. International reserve means the State's foreign exchange reserve managed by the State Bank and the foreign exchange reserves of credit institutions licensed to conduct foreign exchange transactions.

10. Re-financing means a form of allocating the State Bank-secured credits with a view to supplying short-term capital and payment instruments to banks.

11. Sub-lending under credit dossiers means a form of re-allocating capital of the State Bank to banks which have already provided loans to their customers.

12. Base interest rate means the interest rate announced by the State Bank, which shall serve as a basis for credit institutions to set their business interest rates.

13. Re-financing interest rate means the interest rate applied by the State Bank when re-allocating capital.

14. Re-discount interest rate means a form of re-financing interest rates to be applied when the State Bank re-discounts negotiable instruments and other valuable papers for credit institutions.

15. Short-term valuable papers are those with a term of less than one year.

16. Long-term valuable papers are those with a term of one year or more, counting from their issuance till their maturity.

17. Short-term purchase or sale mean the purchase or sale of valuable papers with a term of less than one year."

2. Article 17 is amended and supplemented as follows:

"Article 17.- Forms of re-financing

The State Bank shall re-finance banks in the following forms:

1. Sub-lending under credit dossiers;

2. Discounting or re-discounting of negotiable instruments and other valuable papers;

3. Providing loans secured by pledging negotiable instruments and other valuable papers."

3. Article 21 is amended and supplemented as follows:

"Article 21.- Open-market operations

The State Bank shall conduct open-market operations through short-term purchase and/or sale of treasury bills, deposit certificates, the State Bank's bills and other valuable papers on the monetary market for the implementation of the national monetary policy."

4. Article 32 is amended and supplemented as follows:

"Article 32.- Advances for the State budget

The State Bank shall provide advances for the central budget to deal with a temporary deficit in the State budget fund under the Prime Minister's decision. Such advance amount must be refunded in the budget year, except for special cases to be decided by the National Assembly Standing Committee."

Article 2.-

To remove the phrase "agencies attached to the Government" in the title of Article 6 and in Clause 1 of Article 6; and to replace the phrase "the Ministry of the Interior" with the phrase "the Ministry of Public Security" in Clause 2 of Article 28.

Article 3.-

1. This Law takes implementation effect as from August 1, 2003.

2. The Government shall detail and guide the implementation of this Law.

This Law was adopted on June 17, 2003 by the XIth National Assembly of the Socialist Republic of Vietnam at its 3rd session.