Standards of discounted valuable papers at the State Bank of Vietnam

Standards of discounted valuable papers at the State Bank of Vietnam (Internet image) 

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

1. Standards of discounted valuable papers at the State Bank of Vietnam

According to Clause 1, Article 6 of Circular 01/2012/TT-NHNN, the standards of discounted valuable papers at the State Bank include:

- Issued in Vietnam dong (VND)

- Transfer permitted

- Legally owned by the foreign credit institutions and bank branches offering discount;

- Not being the valuable papers issued by the foreign credit institutions and bank branches offering discounts;

- The maximum remaining term of valuable papers is 91 days for the case of discounting the entire remaining term of valuable papers.

- The remaining term of valuable papers must be longer the term the State Bank makes a discount for the case of term discount.

2. Objectives and principles for implementation of discount techniques of the State Bank of Vietnam

Objectives and principles for implementation of discount techniques of the State Bank according to Article 3 of Circular 01/2012/TT-NHNN are as follows:

- The State Bank implements the discount techniques with the foreign credit institutions and bank branches in order to carry out the national monetary policies contributing to boost the social and economic development.

- Based on the orientation of social and economic development of the Government and objectives of national monetary policy in each period, the State Bank Governor will make a decision on the banking sector the State Bank will prioritize the discount for the foreign credit institutions and bank branches

- Based on the total discount limit and priority objectives for credit investment in each period, the State Bank will allocate the discount limit for each foreign credit institution and bank branch.

- The foreign credit institutions and bank branches discounted must use their capital for the right purpose; upon termination of discount expiration for the case of term discount, the foreign credit institutions and bank branches must take back valuable papers under commitment and make full payment for the repurchase of valuable papers to the State Bank.

3. Conditions for implementation of discount technique of the State Bank of Vietnam

According to Article 8 of Circular 01/2012/TT-NHNN, the foreign credit institutions and bank branches participating in discount technique must fully meet the following conditions:

- Being the financial organizations that are not placed under spcial control.

- Not having overdue debts at the State Bank at the point of time of discount proposal.

- Having deposit account opened at the State Bank (Transaction Service or State Bank of branches in central-affiliated provinces and cities (hereinafter referred to as State Bank of authorized branches) implementing the discount.

- Having request dossier for the notification of discount limits of valuable papers deposited at the State Bank on time as stipulated in clause 3, Article 9 of Circular 01/2012/TT-NHNN.

- Having qualified and valuable papers and in the list of valuable papers discounted at the State Bank.

- In case making transaction under the indirect method, the foreign credit organizations and bank branches must be fully equipped with machinery, informatic equipment, transmission line and connected to the server system at the State Bank (Transaction Service and Department of Information Technology)

4. The competence of document signing for participating in the discount techniques of the State Bank of Vietnam

The competence of document signing for participating in the discount techniques of the State Bank of Vietnam according to Article 10 of Circular 01/2012/TT-NHNN is as follows:

- The competent person on behalf of the foreign credit organizations and bank branches to sign for approval of participation documents in the discount techniques at the State Bank is one of the following persons:

+ Chairman of the Board or Chairman of Member Board of the credit organizations;

+ The General Director (Director) of the foreign credit organizations and bank branches;

- The competent person as prescribed in clause 1 of Article 10 of Circular 01/2012/TT-NHNN can authorize the Deputy General Director ( Deputy Director) to sign the documents participation documents in the discount techniques at the State Bank in accordance with regulations of law and is responsible for this authorization. The delegate isnot entitled to authorize a third person.

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