New regulations on terms and deposit limits of state foreign exchange reserves at commercial banks

Currently, the State Treasury (KBNN) chooses commercial banks (NHTM) to make fixed-term deposits of temporarily idle state budget funds (NQNN). The deposit terms and fixed-term deposit limits at NHTMs are specifically stipulated in Circular 64/2019/TT-BTC. To be specific:

Illustrative image (source: internet)

- Temporarily idle NQNN deposited at NHTMs have terms of 01 month, 02 months, and 03 months. The KBNN selects the appropriate deposit terms at NHTMs in line with the state budget management plans approved quarterly by the Ministry of Finance;- The amount of fixed-term NQNN deposits at NHTMs must not exceed the idle state budget funds deposit limit as regulated in Clause 2, Article 13 of Circular 314/2016/TT-BTC.

In addition, Circular 64 also stipulates the term of fixed-term deposits at commercial banks, whereby NQNN fixed-term deposits at NHTMs are maintained until maturity except for early withdrawal to compensate for temporarily short state funds or other cases as decided by the KBNN General Director. When making new deposits of temporarily idle NQNN, the KBNN adjusts the deposit volume to fit the quarterly approved idle state budget funds deposit limit at NHTMs.

Conditions for KBNN to select NHTMs for depositing temporarily idle NQNN are also specified in Circular 64/2019/TT-BTC as follows:

- Be in the list of commercial banks with high safety levels provided annually by the State Bank of Vietnam to the Ministry of Finance (KBNN) according to Point c, Clause 1, Article 7 of Decree 24/2016/ND-CP;

- Meet the assessment criteria for total assets, total owner's equity, credit quality, and business performance as stipulated by the Ministry of Finance. The assessment criteria, score calculation for each criterion, overall assessment score, and the selection of NHTMs for expected deposits of temporarily idle NQNN as stipulated in Point c, Clause 4, Article 1 of Circular 64.

For more regulations, refer to Circular 64/2019/TT-BTC effective from November 1, 2019.

Thu Ba

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