Circular 111: Procedures for quarterly interest rate differential compensation in Vietnam

Circular 111: Procedures for quarterly interest rate differential compensation in Vietnam​ (Illustrative Image)

According to Circular 111/2007/TT-BTC,  onJuly 20 annually, based on the projected mobilization of capital sources and the State's policy on development investment credit, the Vietnam Development Bank shall prepare an estimation of interest rate difference compensation for the planning year and send it to the Ministry of Finance of Vietnam and the Ministry of Planning and Investment of Vietnam for inclusion in the state budget expenditure estimates for submission to competent authorities for decision. The procedure for quarterly interest rate difference compensation is regulated as follows:

- By the 15th of the first month of the following quarter, based on aggregated data from the branches, the Vietnam Development Bank shall prepare a quarterly compensation estimate, accompanied by an explanation and send it to the Ministry of Finance.

- Based on the compensation estimate allocated in the state budget expenditure; on the basis of the quarterly compensation estimate from the Vietnam Development Bank, by the 25th of the first month of each quarter, the Ministry of Finance shall provisionally compensate the Vietnam Development Bank according to the provisions of Point 2 - Section V of this Circular.

- Adjustment of quarterly compensation amount

By the 15th of the first month of the following quarter, based on aggregated data from the branches, the Vietnam Development Bank shall calculate the actual compensation required for the previous quarter, the difference with the provisionally compensated amount for the previous quarter, accompanied by an explanation and send it to the Ministry of Finance.

Based on the estimate allocated in the state budget expenditure, on the basis of the compensation request from the Vietnam Development Bank, the Ministry of Finance shall determine the actual compensation required for the previous quarter:

• If the actual compensation required for the previous quarter is higher than the provisionally compensated amount, the Ministry of Finance shall supplement the shortfall along with the provisional compensation for the following quarter.
• If the actual compensation required for the previous quarter is lower than the provisionally compensated amount, the Ministry of Finance shall deduct the excess amount from the provisional compensation for the following quarter.

Details can be found at Circular 111/2007/TT-BTC, effective from October 10, 2007.

Ty Na

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