Tiếng Việt| THE PRIME MINISTER OF GOVERNMENT | SOCIALIST REPUBLIC OF VIET NAM |
| No: 180/2002/QD-TTg | Hanoi, December 19, 2002 |
PROMULGATING THE REGULATION ON FINANCIAL MANAGEMENT APPLICABLE TO THE SOCIAL POLICY BANK
THE PRIME MINISTER
Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the Governments Decree No.78/2002/ND-CP of October 4, 2002 on credits for poor people and other social policy beneficiaries;
Pursuant to the Prime Ministers Decision No.131/2002/QD-TTg of October 4, 2002 on the establishment of the Social Policy Bank;
At the proposals of the Finance Minister and the Minister-Director of the Government Office,
DECIDES:
Article 3.- This Decision takes effect as from January 1, 2003.
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PRIME MINISTER
Phan Van Khai
ON FINANCIAL MANAGEMENT APPLICABLE TO THE SOCIAL POLICY BANK
(Issued together with the Prime Ministers Decision No. 180/2002/QD-TTg of December 19, 2002)
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The Social Policy Bank is a unit applying centralized cost-accounting in its entire system; has financial autonomy and takes self-responsibility for its operations before law; effects capital preservation and development, and offsets expenses and credit risks according to the provisions of this Regulation. The Social Policy Bank does not have to participate in deposit insurance, has the compulsory reserve rate of 0% (zero percent), and is exempt from assorted taxes and other State budget remittances.
Article 6.- Working capital of the Social Policy Bank
1. Capital and funds:
a/ The charter capital of VND 5,000,000,000,000 (five thousand billion dong), allocated from the State budget upon its establishment;
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c/ The State budget capital (including the central budget and local budgets), for providing loans for hunger elimination and poverty alleviation, job creation and implementation of other social policies.
d/ The revenue-expenditure difference (if any), which is retained and not yet distributed to the funds;
e/ The non-refundable aid of organizations and individuals inside and outside the country;
f/ Other capital (if any).
When the scope of operation of the Social Policy Bank is expanded under the Governments direction, the chairman of the Banks Managing Board shall report such to the Finance Minister so that the latter can submit the charter capital supplementation to the Prime Minister for decision.
2. Capital mobilized in the following forms:
a/ Interest-bearing deposits, which shall be mobilized under the approved annual plans; interest-free voluntary deposits of organizations and individuals inside and outside the country; savings of poor people;
b/ ODA capital assigned by the Government;
c/ Bonds, deposit certificates and other valuable papers issued under law provisions;
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e/ Capital borrowed from the State Bank;
f/ Capital borrowed from domestic and foreign financial and credit institutions.
3. Capital entrusted by organizations and individuals inside and outside the country;
4. Other capital.
Article 7.- Use of capital by the Social Policy Bank
1. The working capital of the Social Policy Bank shall be used to provide loans for poor people and other social policy beneficiaries under law provisions. When using its capital and/or funds to build and/or procure fixed assets, the Social Policy Bank may use no more than 15% of its actual charter capital and must abide by all the State regulations on investment and construction management. The construction and procurement of fixed assets and other assets by the Social Policy Bank shall comply with the State-prescribed norms for non-business and administrative agencies as well as the plans approved by the Managing Board.
2. The transfer of capital and/or assets among units attached to the Social Policy Bank shall be effected by the general director on the basis of the plans approved by the Managing Board of the Social Policy Bank.
Annually, the Social Policy Bank shall be allocated capital by the State to offset the interest-rate difference and management charges.
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The management charges in the first 3 years after the Social Policy Bank�s establishment are determined not to exceed 0.6%/month of the average loan credit balance (including the Social Policy Banks direct management charge and the entrustment charge). The management charges to be enjoyed by the Social Policy Bank in the subsequent years shall be submitted by the Finance Minister to the Prime Minister for consideration and decision.
1. Managing and using capital for the right purposes, right subjects and in an efficient manner.
2. Buying insurance for its assets and observing other prescribed insurance regimes.
3. Being allowed to account into its operation expenses the following reserves:
a/ The credit risk reserve;
b/ The exchange-rate risk reserve.
The Finance Ministry shall guide in detail the deduction for setting up and use of the above-mentioned risk reserves.
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1. Periodically, upon the fiscal years end, the Social Policy Bank must inventory its assets, accurately determining the total amount of assets, surplus and deficit, the situation of credit balance of loans provided for social policy beneficiaries, overdue debts and irrecoverable debts, and determining the reasons and responsibility therefor for handling. The asset inventory must strictly comply with the stipulations for State enterprises.
2. The Social Policy Bank may reevaluate its assets and account the difference arising therefrom as capital increase or decrease under decisions of competent State agencies. The accounting of State capital increase or decrease must be approved by the Finance Ministry.
3. The Social Policy Bank may liquidate and/or sell assets of poor or degraded quality as well as damaged or technically- obsolete assets, which are no longer needed or used inefficiently. When liquidating and/or selling its assets, the Social Policy Bank must set up a sale and/or liquidation council. For assets, which, as required by law, must be auctioned when they are sold or liquidated, the Social Policy Bank must organize auctions according to the provisions of law.
The difference between the proceeds from asset liquidation and/or sale and the residual value of the liquidated and/or sold assets as well as the liquidation and/or sale expenses shall be accounted into the operation results of the Social Policy Bank.
1. The credit risk reserve fund
The Social Policy Bank is entitled to make deductions for setting up the credit risk reserve fund and account these into its expenses to offset losses and damage incurred sporadically due to objective causes. The deduction level shall be 0.02% of the annual average loan credit balance. In case the credit risk reserve fund is not used up in a year, it shall be transferred to the subsequent year to cover credit risks in the subsequent years. In case the credit risk reserve fund is not enough to cover risks of a year, the chairman of the Managing Board shall report such to the Finance Minister for consideration and decision.
The chairman of the Managing Board of the Social Policy Bank shall have to stipulate and effect the use of the reserve funds for handling risks in operation of the Social Policy Bank.
2. Risks incurred due to objective causes in a wide area shall be handled according to the Prime Ministers decision.
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FINANCIAL REVENUES AND EXPENDITURES
Article 13.- Incomes of the Social Policy Bank are the real revenues arising in a period, including:
1. Revenues from professional operations:
a/ The revenue from interests on loans provided for poor people and social policy beneficiaries;
b/ The deposit interest revenue;
c/ The revenue from entrustment service of providing loans for social policy beneficiaries;
d/ The revenue from payment and treasury services;
e/ The revenue from State budget allocations for offsetting interest-rate differences and management charges;
f/ The revenue from other professional operations and services.
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a/ The revenue from liquidation and/or sale of assets (after subtracting the liquidation and/or sale expenses);
b/ Other revenues generated in operation.
1. Expenses for professional operations of the Social Policy Bank:
a/ The expense for payment of interests on the mobilized capital; the expense for payment and treasury services;
b/ The expense for payment of service charges to organizations entrusted to provide loans for poor people and other social policy beneficiaries. The entrustment service charge rates shall be agreed upon between the Social Policy Bank and the entrusted lending organizations but must not exceed 0.22%/month, calculated on the credit balance of loans on which interests are collected.
c/ The expense for payment of commissions to capital-lending teams, which must not exceed 0.1%/month, calculated on the credit balance of loans on which interests are collected;
d/ The expense for payment of allowances to the Managing Board and its representations at all levels, as well as the Board of Consultants; the expense for payment of remunerations to commune/ward officials according to regulations of the Finance Ministry.
e/ The expense for deduction and setting up of the credit risk and exchange-rate reserve funds according to the provisions in Clause 3, Article 9 of this Regulation;
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2. The management expenses:
a/ The expense for fixed-asset depreciation; the deduction level shall comply with the general provisions for enterprises;
b/ The expense for payment of wages and remunerations to officials and employees;
c/ The expense for social and health insurance and contribution of trade union fees as prescribed;
d/ The expense for mid-shift meals for officials and employees of the Social Policy Bank; the per-capita expense level shall not exceed the minimum wage level prescribed by the State for State employees;
e/ The expense for official uniforms under regulations applicable to State enterprises;
f/ The expense for labor protection for subjects who should be equipped with protective devices in their work as prescribed;
g/ The expense for payment of severance allowances to laborers; the expense for female laborers under the prescribed regime;
h/ The expense for working trip allowances under the prescribed regime;
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j/ The expenses for transactions, external relations, conferences, guest reception, festivities and other expenses. These expenses must not exceed 7% of the total yearly expenditure of the Bank in the first three years after its establishment, and 5% in the subsequent years.
k/ The other management expenses (including expenses for liquidation and sale of fixed assets).
Article 16.- The Social Policy Bank must not account into its expenditures the following:
1. The risks and losses already offset by the Government or compensated by the insurance agencies or damage-causing party.
2. The expenses for payment of fines for law violations.
3. The expenses not related to operations of the Social Policy Bank such as expenses as support for organizations and individuals, expenses for difficulty allowances for laborers.
4. The expenses in excess of the norms prescribed by the financial regime.
5. The expenses covered by other funding sources: non-business expenses, reward and welfare expenses, and expenses covered by other funding sources.
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FINANCIAL REVENUE-EXPENDITURE DIFFERENCE AND DEDUCTION FOR SETTING UP OF FUNDS
Article 18.- Handling of annual financial revenue-expenditure difference
1. In cases where the incomes are bigger than expenses, the difference shall be handled as follows:
a/ To make deduction for setting up the reward fund and welfare fund. The deduction level for these two funds shall be equal to 3 months wages paid by the Social Policy Bank in the year; the proportion of each fund shall be decided by the Managing Board of the Social Policy Bank.
b/ The remaining revenue-expenditure difference amount shall further be distributed as follows:
- 50% for setting up the charter capital-supplementation reserve fund;
- 15% for setting up the financial reserve fund;
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- 5% for setting up the severance allowance reserve fund; this funds balance must not exceed 6 months wages paid by the Social Policy Bank in the year.
2. In cases where the incomes are smaller than expenses:
The Social Policy Bank is entitled to transfer the deficit to the following years for not more than 3 years. If after 3 years the Social Policy Bank fails to fully transferred this deficit, the chairman of the Banks Managing Board shall report such to the Finance Minister for submission to Prime Minister for consideration and decision.
ACCOUNTING, STATISTICAL AND AUDITING REGIMES, AND FINANCIAL PLANS
A fiscal year of the Social Policy Bank shall start on January 1 and end on December 31 of the calendar year.
1. The plan on capital sources and capital use, and the capital construction investment plan.
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3. The plan on State budget allocations for offsetting interest-rate difference and management charges.
4. The labor and wage plan.
The financial plans shall serve as basis for the Social Policy Bank to organize the yearly implementation thereof and must be approved by the Banks Managing Board and sent to the Finance Ministry. The time limit for drawing up and sending the Social Policy Banks financial plans shall comply with the provisions of the State Budget Law and current law provisions.
2. The contents of financial reports include:
a/ The grade-III account balance sheet (including off-sheet accounts);
b/ The asset inventory of the Social Policy Bank;
c/ The income and expense reports;
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e/ The situation of overdue debts, bad debts and irrecoverable debts;
f/ The report on the deduction for setting up and use of the credit risk reserve fund.
3. The general director of the Social Policy Bank shall be responsible for the accuracy and truthfulness of the financial reports.
4. The annual financial settlement reports shall be approved by the chairman of the Managing Board of the Social Policy Bank and sent to the Finance Ministry. The auditing and certification of the annual financial reports of the Social Policy Bank shall be effected by the State auditing bodies. The results of auditing of financial reports of the Social Policy Bank must be sent to the Finance Ministry and the State Bank.
5. Annually, on the basis of the financial settlement reports of the Social Policy Bank, the Finance Ministry shall make consideration and inspection according to functions of the State management agency.
ORGANIZATION OF IMPLEMENTATION
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PRIME MINISTER
Phan Van Khai