Socialist Republic of Vietnam

DECISION ON MECHANIZM OF INTEREST RATES AGREED BY CREDIT INSTITUTIONS AND CUSTOMERS IN COMMERCIAL CREDIT OPERATIONS DENOMINATED IN VIETNAMESE DONG

No.546-2002-QD-NHNN, Hanoi, 30 May 2002


The Governor of the State Bank

Pursuant to the Law on State Bank of Vietnam and the Law on Credit Institutions dated 12 December 1997;

Pursuant to Decree 15-CP of the Government dated 2 March 1993 on Duties, Powers and Responsibilities for State Administration of Ministries and Ministerial Equivalent Bodies;

Pursuant to the opinion and direction of the Prime Minister of the Government in Document 28-CP-KTTH dated 27 May 2002 on implementation of the mechanism of agreed interest rates in commercial credit operations;

On the proposal of the Director of the Department of Monetary Policy,

Decides:


Article 1

1. To implement the mechanism of interest rates agreed by credit institutions and customers in commercial credit operations denominated in Vietnamese Dong. Credit institutions shall determine interest rates on loans denominated in Vietnamese Dong on the basis of supply and demand for capital in the market and the credit rating of borrowers being Vietnamese legal entities and individuals or foreign legal entities and individuals engaged in operations in Vietnam.

2. The State Bank of Vietnam shall continue to publish the basic interest rate on the basis of reference to interest rates on commercial loans applicable to the best customers of the group of credit institutions selected in accordance with the decision of the Governor of the State Bank from time to time for the purpose of reference and guidance for market interest rates in conformity with the provisions of the Law on the State Bank of Vietnam; at the same time shall take measures on its own initiative to control any fluctuation of market interest rates and to ensure the requirements and objectives of the monetary policy from time to time.


Article 2

1. At the time of effectiveness of this Decision, outstanding debts and credit contracts which were entered into but the loans have not been disbursed or not fully disbursed shall continue to be subject to the interest rate stated in respective credit contracts. With respect to such credit contracts, credit institutions and borrowers shall agree on adjustment of the loan interest rates.

2. The interest rate for overdue debts of principal shall be applied pursuant to the provisions of clause 2 of article 11 of the Regulations on Lending by Credit Institutions to Customers issued with Decision 1627-2001-QD-NHNN of the Governor of the State Bank dated 31 December 2001.

3. Preferential loan interest rates applicable to clients which are entitled to preferential treatment with respect to interest rates shall be applied pursuant to the applicable regulations of the Government and the State Bank of Vietnam.

Article 3

1. This Decision shall be of full force and effect as of 1 June 2002.

2. Documents which were issued by the Governor of the State Bank and shall no longer have effect include Decision 241-2000-QD-NHNN1 dated 2 August 2000 on Change of Mechanism to Control Interest Rates on Loans Provided by Credit Institutions to Customers; Decision 242-2000-QD-NHNN1 dated 2 August 2000 on Promulgation of Basic Interest Rate as Basis for Credit Institutions to Fix Interest Rates on Loans Denominated in Vietnamese Dong to Customers; Decisions 50-2000-QD-NHNN1 dated 3 February 2000 on Adjustment of Interest Rates on Loans Denominated in Vietnamese Dong Provided by People's Credit Funds to their Members.

3. Heads of entities under the State Bank, directors of State Bank branches of provinces and cities under central authority; boards of management and general directors (directors) of credit institutions shall be responsible for the implementation of this Decision.


Governor of the State Bank

LE DUC THUY