Circular 08/2013/TT-NHNN stipulating the maximum interest rate for deposits in Vietnam dong of organizations and individuals at credit institutions and foreign bank branches approved by the Governor of the State Bank of Vietnam promulgate

CIRCULAR

ON THE MAXIMUM INTEREST RATES OF THE VND DEPOSITS OF ORGANIZATIONS AND INDIVIDUALS AT CREDIT INSTITUTIONS AND BRANCHES OF FOREIGN BANKS

Pursuant to the Law on the State bank of Vietnam No. 46/2010/QH12 dated June 16th 2010;

Pursuant to the Law on credit institutions No. 47/2010/QH12 dated June 16th 2010;

Pursuant to the Government's Decree No. 96/2008/ND-CP on August 26th 2008, defining the functions, tasks, powers and organizational structure of the State bank of Vietnam;

At the proposal of the Director of the Monetary Policy Department;

The Governor of the State bank of Vietnam promulgates the Circular providing on the maximum interest rates of the VND deposits of organizations and individuals at credit institutions and branches of foreign banks,

Article 1. The credit institution and branches of foreign banks shall fix the interest rates of the VND deposits of organizations (except for credit institutions and branches of foreign banks) and individuals, including the expenditure on promotion in any form as follows:

1. The maximum interest rate of demand deposits and deposits with term of less than one month is 2% per annum.

2. The maximum interest rate of deposits with term of between one month and less than 12 months is 7.5% per year; people's credit funds and microfinance organizations may fix the maximum interest rate applicable to deposits with term of between one month and less than 12 months to be of 8% per annum.

3. Credit institutions and branches of foreign banks shall fix the interest rates of the deposits with terms of 12 months or more on the basis of market capital demand and supply.

4. Deposits includes demand deposits, term deposits, saving deposits, certificates of deposit, exchange bills, treasury bills, bonds, and other form of deposit receipt performed by organizations (except for credit institutions and branches of foreign banks) and individuals shall comply with Clause 13 Article 4 of the Law on credit institutions.

Article 2. The maximum interest rate applicable to deposits as provided for in Article 1 of this Circular shall be applicable to the method under which the interest is paid at the maturity and other methods of interest payment that are converted under the method of interest payment on maturity.

Article 3. Credit institutions shall post in public the interest rates applicable to deposits in Vietnamese dong at premises of receiving deposits in accordance with provisions of the State Bank of Vietnam. Credit institutions and branches of foreign banks shall be strictly prohibited from providing sale promotion in receiving deposits in any form (in cash, interest rate or other forms) that are not in conformity with provisions of applicable laws and this Circular.

Article 4. Implementation organization

1. This Circular shall be effective from March 26, 2013 and replace the Circular No. 32/2012/TT-NHNN dated 21 December 2012 of the Governor of the State Bank of Vietnam providing for the maximum interest rate applicable to VND deposits of organizations, individuals at credit institutions, branches of foreign banks.

2. For interest rates applicable to term deposits in Vietnamese dong mobilized from organizations, individuals at credit institutions, branches of foreign banks arising prior to the effective date of this Circular shall be implemented until their expiry; in the event where at the ending of the agreed period, the organizations, individuals do not come to draw their deposits, then the credit institutions, branches of foreign banks shall fix the interest rate applicable to those deposits in line with provisions of this Circular.

3. Banking Inspection and Supervision Department and State Bank's branches in provinces, cities under the central Government's management shall carry out the inspection, supervision over the implementation of provisions on the interest rates of VND deposits; apply the measures within their authorities to deal with credit institutions, branches of foreign banks which violate this Circular.

4. The Chief of office, Director of the Monetary Policy Department and Heads of units of the State Bank of Vietnam, General Managers of the State Bank’s branches in provinces and cities under the central Government’s management; Chairman of Board of Directors, Board of Members and General Directors (Directors) of credit institutions, branches of foreign banks and related organizations, individuals shall be responsible for the implementation of this Circular.

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