What sources contribute to the legal capital of the State Bank of Vietnam?

21:43, 09/07/2024

Recently, the Government of Vietnam issued Decree 07/2006/ND-CP on financial policies of the State Bank of Vietnam (not applicable to public service providers funded by the state budget, and businesses with independent economic accounting directly under SBV).

Vốn pháp định của Ngân hàng Nhà nước , Nghị định 07/2006/NĐ-CP

What sources contribute to the legal capital of the State Bank of Vietnam? (Illustration)

Decree 07/2006/ND-CP stipulates that the legal capital of the State Bank of Vietnam is 5,000 (five thousand) billion VND. The adjustment of this legal capital is decided by the Prime Minister of the Government of Vietnam based on the proposal from the Governor of the State Bank and the Minister of Finance of Vietnam. The legal capital of the State Bank of Vietnam is formed from the following sources:

1. Existing capital sources: state budget capital provided and capital for basic construction and procurement of fixed assets.

2. Additional capital sources:

- State budget capital provided (if any).

- 12% of the average annual value of fixed assets allocated to invest in the development of technical operations and banking technology.

- The increase in value from the revaluation of fixed assets as prescribed by law.

- Other sources of capital (if any).

In addition, this Decree stipulates that the State Bank is allowed to set up a risk reserve fund and account it as an expense at 10% of the total revenue minus expenses that do not include the risk reserve fund (excluding revenue and expenses from the state budget funding). This risk reserve fund is to be used to cover: losses or presumed losses in credit operations, payment services, and treasury due to objective reasons; the difference in losses after compensation by the collective or individual according to the law. In case the risk reserve fund is insufficient to cover the losses, the State Bank and the Ministry of Finance shall submit to the Prime Minister of the Government of Vietnam measures to handle the remaining deficit. (Note: The State Bank shall coordinate with the Ministry of Finance to issue regulations on the management and use of the risk reserve fund)

dttc Decree 07/2006/ND-CP which comes into force in Vietnam from March 28, 2006.

Ty Na

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