Principles and procedures for granting management fees to the Vietnam Development Bank

Principles and procedures for granting management fees to the Vietnam Development Bank (Internet image)

Circular 111/2007/TT-BTC stipulates: "The provision of management fees for the Development Bank is carried out on the principle of quarterly temporary provision along with interest rate differential compensation based on the actual loan interest revenue in the quarter." Concurrently, the procedure for providing management fees for the Development Bank is as follows:

- On the 15th day of the first month of the following quarter, based on the actual loan interest revenue data aggregated from the Development Bank branches up to the 30th day of the last month of the previous quarter, the Development Bank submits a written request for management fee provision, accompanied by an explanation, to the Ministry of Finance. Based on the allocated budget in the State Budget expenditure estimates and the request from the Development Bank, the Ministry of Finance provides management fees to the Development Bank as per regulations.

- At the end of the financial year, based on the settlement data approved by the Board of Directors, the Development Bank reassesses the annual management fee entitlement and submits an explanation to the Ministry of Finance.

- Based on the management fee provision estimate allocated in the State Budget for the year and the actual loan interest revenue settlement data for the year from the Development Bank, the Ministry of Finance determines the annual management fee entitlement for the Development Bank, effectuating any adjustments and providing the fees.

- If the annual settled management fee exceeds the temporary provision for the year, the Ministry of Finance provides additional funds for the shortfall within the announced budget estimate. Any surplus between the settled amount and the announced budget estimate (if any) will be allocated in the deficit compensation estimate for the following year.

- If the annual settled management fee is less than the temporary provision for the year, the difference is accounted as a temporary provision for the next year (if management fee provision occurs in the following year) or must be returned to the State Budget (if no management fee provision occurs in the following year).

- The additional provision during the settlement period is accounted in the actual budget expenditure for the year, while additional provision after the settlement period is accounted in the budget expenditure settlement for the following year.

Note: In case the estimated management fee provision for the year by the Development Bank is not fully utilized, it will be carried over to the next year for continued use.

For details, refer to Circular 111/2007/TT-BTC, effective October 10, 2007.

Ty Na

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