Conditions of financial instruments deposited at State Bank of Vietnam

Conditions of financial instruments deposited at State Bank of Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is financial instrument?

According to Clause 1, Article 3 of Circular 16/2022/TT-NHNN, financial instrument means an evidence of the issuer’s debt repayment obligation to the holder for a specified period of time that also indicates interest payment conditions and other terms and conditions. Financial instruments include book-entry financial instruments (in the form of book entries or electronic data) and certificated financial instruments.

2. Conditions of financial instruments deposited at State Bank of Vietnam

According to Clause 2, Article 4 of Circular 16/2022/TT-NHNN, the conditions of financial instruments deposited at SBV include:

- It is under the legal ownership of a member;

- It is one of types of financial instruments specified in Clause 1 of Article 4 of Circular 16/2022/TT-NHNN:

+ SBV bills;

+ Government bonds;

+ Bonds for which principal and interest payments are entirely guaranteed by the Government when they become due;

+ Municipal bonds which are used in SBV’s transactions conducted according to a decision issued by the SBV’s Governor in each period;

+ Special bonds and bonds directly issued to credit institutions that sell debts to buy bad debts of Vietnam Asset Management Company (VAMC) at market prices;

+ Bonds issued by commercial banks over 50% of charter capital of which is held by the State (except commercial banks which have been compulsorily acquired); bonds issued by credit institutions (except credit institutions placed under special control) and other enterprises;

+ Other types of financial instruments as specified in the decision issued by the SBV’s Governor in each period.

- The right to receive its principal and interest when they become due is not yet determined;

- Certificated financial instruments deposited at SBV must not be torn or deteriorated, and their color, images, letters and digits thereon must not be faded, wrinkled, blurred, dirty or erased.

3. Application for opening depository accounts at the State Bank of Vietnam

In order to deposit financial instruments at the SBV, any of the members defined in Clause 2 Article 2 of Circular 16/2022/TT-NHNN shall prepare and send, either directly or by post, an application to the SBV’s head office (single-window section). Such an application includes:

(i) The application form made according to Appendix 1a/LK enclosed with Circular 16/2022/TT-NHNN (03 copies);

Application for opening depository accounts

(ii) The list of specimen seals and signatures for using depository account at the SBV which is made according to Appendix 1b/LK enclosed with Circular 16/2022/TT-NHNN (03 copies);

List of specimen seals and signatures for using depository account at the SBV

(iii) The documentary evidences of the lawful establishment and operation of the applicant, including: the charter, license for establishment and operation, enterprise registration certificate or other documents of equivalent validity as prescribed by laws;  

(iv) The documentary evidences of the legal status of the legal representative of the applicant (such as the SBV’s decision on approval for provisional position holders and/or appointment decision) accompanied by ID card or Citizen Identity Card or unexpired passport of the representative;

(v) The document or decision on appointment and ID card or Citizen Identity Card or unexpired passport of the chief accountant or the person in charge of accounting works, person in charge of managing documents concerning transactions made with the SBV;

(vi) If another person is authorized by the legal representative or chief accountant (including re-authorization (if any)), the applicant shall submit the appointment decision of the authorized person and the power of attorney made according to Appendix 7/LK enclosed with Circular 16/2022/TT-NHNN, accompanied by the ID card or Citizen Identity Card or unexpired passport of the authorized person.

Decision of the authorized person and the power of attorney

The power of attorney made by the chief account must also bear signature of the representative of the account holder;

(vii) The documents in (iii), (iv), (v), (vi) shall not be required if they have been submitted to the SBV (SBV’s Operations Center) when the applicant follows procedures for opening and use of a checking account at the SBV or person identity (including number of ID card or Citizen Identity Card or passport) of the lawful representative, chief account or their authorized person may be obtained from the national population database.

(Clause 1, Article 6 of Circular 16/2022/TT-NHNN)

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