Quyết định 648/2003/QĐ-NHNN

DECISION No. 648/2003/QD-NHNN OF JUNE 24, 2003 PROMULGATING THE REGULATION ON HANDLING OF BANKS' ASSETS PLEDGED AT THE STATE BANK FOR CAPITAL BORROWING THE STATE BANK GOVERNOR Pursuant to the Vietnam State Bank Law and the Credit Institution Law of December 12, 1997; Pursuant to the Government's Decree No. 86/2002/ND-CP of November 5, 2002 defining the functions, tasks, powers and organizational structures of the ministries and ministerial-level agencies; At the proposal of the director of the Department for Monetary Policies, DECIDES: Article 1.- To promulgate the Regulation on handling of banks' assets pledged at the State Bank for capital borrowing. Article 2.- This Decision takes implementation effect 15 days after its publication in the Official Gazette. Article 3.- The heads of the units under the State Bank, the directors of the State Bank's branches in the provinces and centrally-run cities, the chairmen of the Managing Boards and the general directors (directors) of banks shall have to implement this Decision. For the State Bank Governor Deputy Governor PHUNG KHAC KE REGULATION ON HANDLING OF BANKS ASSETS PLEDGED AT THE STATE BANK FOR CAPITAL BORROWING (Promulgated together with the State Bank Governor's Decision No. 648/2003/QD-NHNN of June 24, 2003) Article 1.- Scope and objects of application This Regulation applies to the handling of banks' assets pledged at the State Bank for capital borrowing under the State Bank Governor's Decision No. 251/2001/QD-NHNN of March 30, 2001 promulgating the Regulation on the provision of the State Bank's loans to banks with guarantee by pledging short-term valuable papers and Decision No. 1085/2002/QD-NHNN of October 7, 2002 promulgating the Regulation on overdrafts and overnight loans applicable to inter-bank electronic payment. Article 2.- Pledged assets and to be-handled cases 1. The to be-handled pledged assets mean valuable papers which are being pledged at the State Bank, including: a/ State Treasury bills; b/ State Bank bills; c/ Other valuable papers as prescribed by the State Bank Governor. 2. The State Bank shall handle pledged assets in order to recover loan principals and interests from banks in the following cases: a/ Upon the debt maturity, banks fail to repay debts as provided for in Article 15 of the Regulation on the provision of the State Bank's loans to banks with guarantee by pledging short-term valuable papers, issued together with Decision No. 251/2001/QD-NHNN of March 30, 2001. b/ Banks fail to repay debts after the duration prescribed in Article 9 of the Regulation on overdrafts and overnight loans applicable to inter-bank electronic payment, issued together with Decision No. 1085/2002/QD-NHNN of October 7, 2002. c/ Other cases as prescribed by the State Bank. Article 3.- Principles for handling pledged assets 1. Pledged assets shall be handled publicly and conveniently, ensuring the rights and interests of the concerned parties, thrift and suitability to the practical conditions of the monetary market. The handling of pledged assets shall comply with the provisions of Articles 4 and 5 of this Document. 2. The proceeds from the handling of pledged assets, after subtracting the arising expenses related to the handling of pledged assets, and accepted by the concerned parties, shall be used to repay banks' loan principals and interests counted by the time of debt collection; the remainder (if any) shall be returned to such banks by the State Bank. 3. In cases where the proceeds from the handling of pledged assets are not enough to fully repay loan principals and interests, banks shall continue to fulfil their debt-repayment obligations. Article 4.- Modes of handling pledged assets 1. For pledged assets being valuable papers which have become due: The State Bank shall consider and permit banks to settle the payment with the valuable paper-issuing organizations, or banks must transfer immediately the ownership over the pledged assets to the State Bank so that the latter requests the organizations responsible for settling the valuable papers pledged at the State Bank to make direct payment to the State Bank according to the obligations already committed by the payees. 2. For pledged assets being valuable papers which have not yet become due: The State Bank shall consider and permit banks to apply one of the following modes of handling: a/ Discounting the valuable papers at the State Bank. b/ Selling the valuable papers to finance-credit organizations on the monetary market. c/ Transferring the ownership over the pledged valuable papers to the State Bank in replacement of the debt-repayment obligation. Article 5.- Process for handling pledged assets and recovering debts 1. By the time prescribed in Clause 2, Article 2 of this Document, the State Bank's Transaction Office or the State Bank's branches in the provinces or cities, where banks borrow capital and carry out the asset-pledging procedures, shall notify by fax the modes of handling pledged assets to banks for implementation. Within 2 working days after receiving such notices, banks may propose modes of handling pledged assets other than the notified modes to the State Bank's Transaction Office or the State Bank's provincial/municipal branches for consideration and decision. 2. Based on the modes of handling pledged assets, which are notified by the State Bank's Transaction Office or the State Bank's provincial/municipal branches, the concerned parties shall perform the following jobs: a/ For the State Bank's Transaction Office or the State Bank's provincial/municipal branches: - To make lists of pledged assets awaiting the handling for loan-debt recovery; - To carry out settlement and handling procedures suitable to the modes of handling pledged assets for valuable papers, which have become due or not. In cases where the mode of transferring the ownership over the valuable papers pledged at the State Bank in replacement of the debt-repayment obligation is applied, the State Bank's Transaction Office or the State Bank's provincial/municipal branches shall determine the value of the pledged valuable papers according to the provisions in Clause 3, Article 5 of the Regulation on overdrafts and overnight loans applicable to inter-bank electronic payment, issued together with Decision No. 1085/2002/QD-NHNN of October 7, 2002, for accounting the decrease corresponding to the amount of loan principals and interests for banks. b/ For banks: To carry out settlement and handling procedures suitable to the modes of handling pledged assets for valuable papers which have become due or not. 3. The proceeds from the handling of pledged assets shall be accounted by the State Bank's Transaction Office or the State Bank's provincial/municipal branches into Account 468 - Other amounts awaiting settlement for recovery of loan principals and interests; in cases where the proceeds from the handling of pledged assets are not enough to fully repay loan principals and interests, the State Bank's Transaction Office or the State Bank's provincial/municipal branches may deduct the banks' deposit accounts in order to recover debts; the remainder, if any, after debt collection shall be transferred by the State Bank's Transaction Office or the State Bank's provincial/municipal branches into the banks' deposit accounts. 4. After receiving pledged valuable papers in replacement of the debt-repayment obligation, if the State Bank sells such valuable papers by open-market operations which gives rise to a positive or negative balance as compared to the value of valuable papers determined to replace the banks' obligation to repay debts, such balance shall be handled according to the Government's regulations and the State Bank's guidance on the State Banks' financial regime. Article 6.- Organization of implementation 1. The units under the State Bank and the State Bank's provincial/municipal branches shall have to monitor and guide banks and relevant units to settle in time difficulties and problems arising in the handling of pledged assets. 2. The amendment and supplementation of this Document shall be decided by the State Bank Governor. For the State Bank Governor Deputy Governor PHUNG KHAC KE