Legal Document Updates in English (22/2012)

CREDIT INSTITUTIONS ARE ENCOURAGED TO MERGE, INTEGRATE, ACQUIRE
 

The Prime Minister issued the Decision No. 254/QD-TTg dated March 03, 2012 on approving the Scheme of "restructuring the credit institutions system in the 2011-2015 period”  with the objective of developing the system of credit institutions for multi-purpose towards the modernity, prudence, efficiency and sustainability with a diversified structure in terms of ownership, scale, type with better competitiveness.

The first objective by 2015 is to focus on making the financial condition healthy and fortifying the operation capacity of the credit institutions; improving prudential level and operation efficiency of the credit institutions; improving the order, rules and principles of market in banking activity. It is targeted that by late 2015, there shall be at least one or two commercial banks whose scale and level are equivalent to those of regional banks.

The Government encourages and facilitates credit institutions to perform the merger, integration and acquisition on a voluntary basis, providing that benefits of the depositors and rights, obligations of involved parties are secured in accordance with provisions of applicable laws. Besides, it is required to avoid any collapse and insecure circumstance in banking activity that is out of control of the State.
Under this Decision, restructuring the system of credit institutions and each credit institution is a regular and permanent process in order to make good difficulties, shortcomings and to be proactive in coping with challenges so that the credit institutions shall continuously develop on a prudent, efficient, firm manner and better satisfy the requirement of socio-economic development in the new period.
This Decision shall come into effect from its signing date.

THE CRITERIA TO DETERMINE THE FACILITY CAUSING ENVIRONMENTAL POLLUTION
 

On May 08, 2012, the Ministry of Natural Resources and Environment promulgates the Circular No. 04/2012/TT-BTNMT specifying the criteria to determine the facility causing environmental pollution, severe environmental pollution.
Accordingly, facility causing serious environmental pollution on solid waste is the one having acts of burying and discharging in the soil and water environment the contaminants in solid and sludge modeling that make at least one environmental parameter of the area receiving solid waste (soil, water and air environment) on chemicals, heavy metals exceeding the technical regulations on the environment from 03 times or more or make at least one other environmental parameter of the area receiving the solid waste exceeding the technical regulations on the environment from 05 times or more.

The competent State agencies will base on the nature and composition of the pollutants in solid and sludge modeling to determine environmental parameters of the area that receives the solid waste in order to identify and classify the facility causing severe environmental pollution according to Law.

RECALCULATING THE WAGE AND BENEFITS BASED ON
THE GENERAL MINIMUM WAGE 1,050,000 VND/MONTH
 

Minister of Labor, War Invalids and Social Affairs promulgates the Circular No. 10/2012/TT-BLDTBXH dated April 26, 2012 on guiding the application of the general minimum wage to State-owned one-member limited liability companies.

From May 01, 2012, based on the general minimum wage being 1,050,000 VND/month and the wage coefficient in the wage scales, payrolls and benefits, the company shall recalculate the wage and benefits as a basis for paying and benefiting social insurance, unemployment insurance, medical insurance, severance pay, holiday pay, annual days off and other regulations as prescribed by labor law.
The calculation of wages in the wage scales, payrolls and benefits are implemented

as follows: the hierarchical wage coefficient by occupation, jobs;the wage coefficient by profession; the wage by position, benefits, the reserved difference coefficient (if any) multiplied by the general minimum wage.

The company shall apply the general minimum wage to calculate benefits (the severance, additional support the time for seeking jobs) under the Government's Decree No. 91/2010/ND-CP of August 20, 2010. When implementing the general minimum wage as regulated under this Circular, the mid-shift meal expenditure for workers doesn’t exceed 680,000 VND/person/month.

EXTENDING TIME FOR THE MOBILIZATION IN GOLD UNTIL NOVEMBER 25, 2012
 

Under the Circular No. 12/2012/TT-NHNN dated April 27, 2012, the State Bank of Vietnam allows banks to mobilize capital in gold until November 25, 2012. It means extending more 07 months compared with the previous regulations.

In order to restrict the mobilization and provision of loans in gold by commercial banks, the State Bank of Vietnam issued the Circular No. 11/2011/TT-NHNN providing the termination of the mobilization of deposits and provision of loans in gold by credit institutions and foreign bank branches, except for the mobilization used for the payment purpose; However, this mobilization is also implemented till the end of May 01, 2012.

Under this Circular, the issuance of short-term gold certificates of credit organization will be terminated on November 25, 2012. Besides, credit institutions

are not entitled to use gold mobilized for pledge, mortgage, and collateral to ensure the obligations of loan payment at other credit organizations.
Banks must build the roadmap and plan to terminate the mobilization in gold for submission to the State Bank of Vietnam to monitor the implementation; In the case the credit institutions that have converted gold into cash must make final settlement all of the gold converted into cash and close gold accounts in foreign countries according to notice of the State Bank of Vietnam. Periodically on weekly Monday, the credit institutions will send report to the State Bank of Vietnam on the situation of mobilization and capital loan as regulated.

This Circular will take effect on April 30, 2012 and replace the Circular No. 32/2011/TT-NHNN dated October 06, 2011.

BANKS PROHIBITED FROM RECEIVING INDIVIDUAL TRUST FUNDS
 

This is one of the strong measures to manage the credit operation regulated by the State Bank of Vietnam under the Circular No. 04/2012/TT-NHNN dated March 08, 2012 providing for the entrustment taking and entrustment operation of the credit institutions, foreign bank's branches (hereinafter referred to as banks).

Under this Circular, the trustees shall include commercial banks, cooperative banks, micro-financial institutions and foreign bank's branches; legal entities with civil legal capacity. Individuals shall not be permitted to take entrustment at banks.

After receiving the capital, the entrusting party being banks must classify debt, make provisions and dealing with risks for the outstanding loan in line with provisions of applicable laws and guidelines of the State Bank of Vietnam.

According to judgments of some specialists, the new regulations will help to enhance the transparency in trust activity by credit institutions instead of distortion as previously when the State Bank applied the ceiling rate at 14% per year to Vietnam dong mobilization, some banks took the entrusted capital from individuals with the high interest rate above the ceiling rate. It results in the distortion of the mobilization in market because, when accepting to take the entrustment, banks not only attract the deposited capital but also spleen the ceiling interest rate, avoid the credit growth.

This Circular shall come into effect from 02 May 2012 and replace the Decision No. 742/2002/QD-NHNN dated 17 July 2002 of the Governor of the State Bank.