THE GOVERNMENT
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 146/2005/ND-CP
Hanoi, November 23, 2005
 
DECREE
ON FINANCIAL REGIME APPLICABLE TO CREDIT INSTITUTIONS
THE GOVERNMENT
Pursuant to the Law on Organization of the Government dated 25 December 2001;
Pursuant to the Law on Credit Institutions dated 12 December 1997 as amended by Law No. 20/2004/QH11 dated 15 June 2004;
Pursuant to the Law on Enterprises dated 12 June 1999;
Pursuant to the Law on State Owned Enterprises dated 26 November 2003; On the proposal of the Minister of Finance;
DECREES:
Chapter I
GENERAL PROVISIONS
Article 1. Governing scope
This Decree regulates the financial regime applicable to credit institutions established, organized and operating pursuant to the Law on Credit Institutions dated 12 December 1997 as amended by Law No. 20/2004/QH11 dated 15 June 2004.
Article 2. Principles on financial management
1. Credit institutions shall be financially autonomous and self-responsible for their own business operations, and shall discharge their obligations and fulfil their commitments in accordance with law.
2. Credit institutions shall make their finances known to the public1.
Article 3. Chairmen of boards of management and general directors (directors) of credit institutions shall be liable before the law and before State administrative bodies for the observance of the financial, accounting and auditing regimes applicable to credit institutions.
Article 4. The Ministry of Finance shall perform the function of State financial administration of credit institutions, and shall guide and inspect credit institutions in implementing the financial regime pursuant to law.
Chapter II
MANAGEMENT AND USE OF CAPITAL AND ASSETS
Article 5. Working capital of credit institutions
[The working capital of a credit institution shall comprise:]
1. Equity:
(a) Charter capital;
(b) Differences arising from revaluation of assets and exchange rate differences prescribed by law;
(c) Shareholding capital surplus;
(d) Reserve fund for supplementation of charter capital, professional development investment fund, and financial reserve fund;
(dd) Retained profit.
2. Mobilized capital:
(a) Capital mobilized from cash deposits of organizations and individuals;
(b) Capital borrowed from domestic and foreign credit institutions;
(c) Borrowings from the State Bank;
(d) Issuance of valuable papers.
3. Other capital as stipulated by law.
Article 6. Credit institutions must, throughout the course of their operation, ensure that their actual charter capital level is not lower than the legal capital level stipulated by the Government for such type of credit institution.
In a case of changing the charter capital, the credit institution must publicize the new amount of its charter capital.
Article 7. Use of capital and assets
1. Credit institutions shall be permitted to use their working capital to conduct business pursuant to the Law on Credit Institutions, ensuring the principle of capital safety and development. Credit institutions may use not more than 50% of their own level one equity (pursuant to guidelines of the State Bank) for investment in construction and procurement of fixed assets, and they must observe all State regulations on management of investment and construction.
2. Credit institutions shall have the right to restructure their capital and assets in order to service development of their business operation.
3. The transfer of capital and assets as between branches or independent member companies of a credit institution shall comply with the regulations of the board of management of such credit institution.
Article 8. Capital contribution and share purchase
1. Credit institutions shall be permitted to use their charter capital and reserve funds in order to contribute capital to [and/or] purchase shares in enterprises and other credit institutions in accordance with law.
2. The board of management of a credit institution shall itself decide or authorize the general director (director) to decide on contribution of capital to [and/or] purchase of shares in enterprises and other credit institutions in accordance with law.
3. Credit institutions shall be permitted to contribute capital to joint ventures using the value of land use rights in accordance with the law on land.
4. A credit institution shall not be permitted to purchase shares in, or to contribute capital to another enterprise where a manager, executive or principal owner of such other enterprise is the spouse, parent, child or sibling of a member of the board of management, board of controllers or board of directors of such credit institution, or of the chief accountant of such credit institution.
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