Vietnam legal Document page
The State Bank of Vietnam   Socialist Republic of Vietnam
   No. : 212/QD-NH1        Independence-freedom-Happiness
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                             Hanoi, September 22, 1994.

DECISION Of THE GOVERNOR Of THE STATE BANK ON THE PROMULGATION Of REGULATION ON THE ISSUANCE Of THE BONDS Of COMMERCIAL BANK, INVESTMENT AND DEVELOPMENT BANK

The Governor of the State Bank

- Pursuant to the Ordinance on the State Bank of Vietnam and the Ordinance on Banks, Credit Cooperatives and financial Corporations issued in accordance with Order No. 37 LCT-HDNN8 and Order No. 38/LCT-HDNN8 dated may 24, 1990 of the President of State Co uncil.

- Pursuant to the Decree No. 15/CP dated March 2nd, 1993 of the Government on the tasks, powers and responsibilities for state management of the Ministries and Ministerial-ranking bodies.

- Aiming to meet the demand on mid-term and long-term capital for the economy.

- On the proposal of the Director of the Department for Economic Research.

DECIDES

Article 1

To promulgate in connection with this Decision the "Regulation on the issuance of the bonds of Commercial Bank, Investment and Development Bank".

Article 2

This Decision shall come into effect from the signing date.

Article 3

The chief of Governor's Office, the Director of the Department for Economic Research, the Bank General Inspector, Heads of the units belonging to the Central State Bank, Directors of provincial and city branches of the State Bank, General Directors, Dire ctors of Commercial Banks, Investment and Development Banks, joint-venture banks, branches of foreign banks in Vietnam, the financial corporations having permission to issue bonds are responsible for the implementation of this Decision.

for the State Bank of Vietnam The Governor

CAO SY KIEM (Signed)


REGULATION ON THE ISSUANCE Of THE BONDS Of COMMERCIAL BANK, INVESTMENT AND DEVELOPMENT BANK
(Promulgated in Connection with Decision No. 212/QD-NH1 dated September 22nd, 1994 of the Governor of the State Bank)

Chapter I

General provisions

Article 1

Bond of Commercial Bank, Investment and Development Bank - hereinafter referred to as Bank Bonds is a long-term borrowing instrument on the capital market in form of loan receipts issued by credit organizations so as to mobilize capital with a commitment to pay both principal and interests for bond buyer (or bond owner) after a certain period of time. for the buyer, bank bond is a certificate on capital investment and the buyer's right to earn interest on the bond.

Article 2

The ownership of bank bonds can be transferred in the forms of buying, selling, giving, awarding and inheriting. Bond-owner can use bonds as collateral for loans if the lender accepts and inherits them in accordance with the Law on Inheritance.

Article 3

Bank bonds can be issued in either of two forms : bond with a name and bond without a name :

3.1. for the bond with a name on its : The credit organization issuing the bank bond has to open a book to register its ownership and where there is a request for transferring its ownership to conduct again the registration. The procedure for transferring the ownership of bank bond is conducted in accordance with Article 26 of this Regulation.

3.2. Bank bon without a name on its belongs to the person who processes it and can be freely transferred.

Article 4

The following credit organization if having all the conditions as prescribed in Article 19 of this Regulation are eligible for issuing bank bonds :

- State commercial banks, investment and development banks.

- Commercial stock banks, joint-venture banks, branches of foreign banks in Vietnam and financial corporations.

Article 5

On the basis of the characteristics of their operations, the issuance of bank bonds by credit organizations shall be conducted in either of two following forms :

1. Regular issuance of bank bonds : This form of issuance is carried out by credit organizations which operate mainly in the field of offering long-term investment loans, not mobilizing short-term deposits or very little, if any, from inhabitants.

2. Irregular issuance of bank bonds : This form of issuance is carried out by other credit organizations on the basis of occasion by occasion according to the demand of investment capital for long-term projects.

The permission granted to credit organizations for regular or irregular issuance of bank bonds shall be decided by the Governor of the State Bank and is prescribed in operation license or in document of supplementary permission.

Article 6

All juridical persons, legal institutions, people residing in Vietnam and Vietnamese nationals living abroad are eligible for buying bank bonds.

Article 7

Bank bonds are issued in Vietnamese dong (VND) and on nation-wide scale.

In the case that, bank bonds are issued for mobilizing capital from abroad, there will be a separate regulation for them in accordance with the Law on foreign Investment in Vietnam.

Article 8

Each bank bond has a term of at least one year.

Article 9

The capital source mobilized by issuing bank bonds is long-term one of credit organizations for mainly investment according to plan for the projects.

Credit organizations are not compulsory to make reserve on the fund mobilized from issuing bank bonds.

Article 10

Credit organizations can both directly issue bank bonds and conduct the services of storing, opening accounts, making payment, bank bond brokering and bank bond buying or selling.

Chapter II

Specific provisions

Article 11

3A bank bond has a term of at least one year. Specific terms for bank bonds are determined by credit organizations depending on the plan for using fund mobilized from issuing bank bonds.

Bank bonds issued on one occasion have the same terms and are liquidated at the same time.

Article 12

The interest rate of bank bond is determined by credit organizations on the basis of relationship between the demand for and supply of funds on financial market, so that it can encourage clients to deposit long-term capital, the borrowers can accept and c redit organizations assure their business efficiency.

Article 13

Ways of paying interests :

13.1. In order to meet the different requirements of bank bond buyers, credit organizations can choose one of the three following ways :

1. Paying interests in advance : This means that bank bonds shall be sold at prices lower than their denominations, when the bank bonds reach their maturity, bank bond buyers shall get back the amount of money as defined by the denominations and an intere st as much as the gap between the denominations and their selling prices.

2. Paying interests later : Bank bonds are sold at prices of their denominations, when bank bonds reach their maturity the bond buyers shall be paid both principals (denominations) and the interests as announced when issuing bank bonds.

3. Paying interests periodically on the basis of every six months or a year depending on the interest rates defined on the interests - withdrawal sheets accompanying bank bonds.

13.2. Credit organizations can pay bank bond interests on the basis of periodically adjusted interests rates according to a base rate approved by the Governor of the State Bank of Vietnam.

Article 14

Bank bond denomination is the amount of money defined on the bond when it is issued and it has a minimum value of VND 500,000. Higher denominations are identified by the multiple of minimum denominations.

Article 15

Bank bonds are printed on special paper in the State Bank's Printing House in accordance with the united regulations of the Governor of the State Bank and are sold to credit organizations at the prices that cover the printing cost.

Article 16

Content of a bank bond includes the following details :

16.1. On the front side of a bank bond :

- Name of the credit organization which issues the bank bond.

- A group of words : "BANK BOND"

- Term of the bank bond

- Denomination of the bank bond

- Interest rate of the bank bond

- Way of paying interests, time and place of paying interests

- Date of selling bank bond

- Date of maturity, place of cashing - in bond

- Name of bond buyer, ID number, residence, signature of bond buyer (if it is the bank bond with a name on it) or clearly stated that it is the bank bond without a name on it.

Apart from that the bank bond has to include other legal factors on its front side such as : Issuing code and series, signatures of the General Director or his trustee , the accountant, the treasurer of the credit organization which issues the bond.

16.2. On the back side of a bank bond : The back side is used for recording those factors arising in case of transferring the ownership of bank bond with a name on it, due to the practices of buying, selling, giving, awarding and inheriting of bank bonds. Those factors should include : The name, address, ID number, signature of the person who sells, buys, gives, awards, transfers his inheritance right and those of the new owner of the bond; the contents necessary to be noted by the credit organization whe n registering again its ownership.

Article 17

If it is bank bond whose interests are periodically paid, there are interest - withdrawal sheets accompanied it for withdrawing interests periodically until the bank bond expires. On each interest - withdrawal sheet, there must be details relating to the bank bond, the amount of money to be withdrawn and the fixed time for interests withdrawal. By the date of paying interests and since then, the bank bond owner has only to bring interest - withdrawal sheet and bank bond to the credit organization which is sued it or the place of cashing in bond of the credit organization for withdrawing the interests.

Bank bond owner may authorize another person or a credit organization to withdraw bond interests on his behalf.

If the date for withdrawing interests coincides with a holiday as defined by the State, the withdrawal of interests shall be conducted in the next working day.

Article 18

for bank bonds with names on them, credit organizations which issue them, have to open books to register their ownership and to register again their ownership in the case there is a transferring of ownership due to the practices of selling, buying, givi ng, awarding and inheriting.

Article 19

The credit organizations mentioned in Article 4 of this Regulation wishing to issue bank bonds have to meet the following conditions :

1. Having operated stablely for at least three years, with profit including business, healthy financial situation, a good prospect for development, a good machine of management and having complied strictly with the state laws and regulations of the State Bank.

2. Having legal stock capital or prescribed capital of at least VND 50 billion.

3. Having been granted permission in writing by the Governor of the State Bank.

4. Having completed all the procedures for bank bond issuance prescribed by the Governor of State Bank in this Regulation.

Article 20

The procedures for obtaining permission to issue bank bonds : Credit organizations having all conditions in Article 19 have to carry out procedures for obtaining permission from the State Bank to issue bank bonds; The dossier includes :

20.1 - for the credit organizations which don't issue bank bonds regularly : Each time they wish to issue bank bonds, they have to send to the State Bank the following documents :

1. Reports on results of their operations for the latest two years (reports on situations of their business activities and the results of losses and profits), reports on financial situations of the units. The financial reports must be ratified by an audit ing organization recognized by the State Bank or inspection office of the State Bank.

2. Application for issuing bank bonds. In the application, there should be an explanation for the purpose of bank bond issuance, the total value of bank bonds to be issued, terms of different denominations, interests rates, the areas for bank bond issuanc e, ways and places of paying interests, principals.

for commercial stock banks, apart from the above - listed documents, they have to send the resolutions on bank bond issuance approved by the shareholders' congress or the Board of trustees.

3. Content of the public announcement on bank bond issuance. The announcement on bank bond issuance has to include the contents mentioned in item 1.2 above.

4. forms of bank bonds to be issued

Within 20 working days, the State Bank has to inform the bank which submit application for issuing bank bonds, of the results of the consideration and approval, and to let it know if its application for issuing bank bonds have met all conditions defined b y the State Bank.

20.2. for the credit organizations which issue bank bonds regularly : The procedures for approval prescribed in item 20.1 above are only applied for the first time to issue bank bonds. for the following occasions of the bank bond issuance, credit organiz ations should send the above-mentioned documents to the State Bank for announcement 5 days before the registered time for issuing bank bonds.

Article 21

The total value of bank bonds to be issued plus the total capital mobilized by credit organizations from other sources such as deposited funds of other economic organizations and the public, time bonds, issued bank bonds having not reached their maturity for making payment at the end of the present month can not exceed 20 times the self-generated capital and reserve funds of the credit organization.

Article 22

for a credit organization operating well and with good reputation, the Governor of the State Bank can consider and decide to exempt some of the provisions permitting the bank bond issuance.

Article 23

To organize the issuance of bank bonds :

23.1. After being approved in writing by the Governor of the State Bank to issue bank bonds, the credit organizations have to make public the announcements of bank bond issuance on mass media in at least 5 consecutive days.

23.2. Credit organizations can organize the bank bond issuance itself or do it through mediating organizations being their issuing agents or trustees. With the bank bond being issued by the issuing agents or trustees, the credit organizations have to pay commission fees at a ratio agreed upon by two sides.

23.3. The credit organizations which don't issue bank bonds regularly are only allowed to issue bank bonds within a period of not more than 60 days for each occasion. After that period of time, if they have not sold all bank bonds and want to sell of them , they have to obtain permission from the State Bank.

Article 24

Obligations of reporting : When the time for issuing bank bonds has come to an end the credit organizations have to report the results of bank bond issuance to the provincial and city branches of the State Bank where the credit organizations locate their main offices for making synthesis and reports to the Central State Bank in accordance with the existing regime of information reporting of the Governor of the State Bank. The data of the reports includes total value of issued bank bonds categorized in dif ferent denominations and terms. Apart from that, in periodical reports in accordance with the regime of information reporting of the Governor of the State Bank, the credit organizations have to report separately the capital mobilized from the owing bank b onds by the time of reporting.

Article 25

Cashing - in bank bonds when they reach their maturity :

25.1. The credit organizations issuing bank bonds have to assure the paying of both the principals and interests in time.

25.2. for the bank bond with a name on it, when it reaches its maturity and its owner does not come for money withdrawal, the credit organization which issued the bank bond has to open for its client a personal money - depositor account and record the amo unt of money it has to pay him into this account and calculate the interests according to the interest rate of indefinite savings at that time.

Article 26

Procedures for transferring ownership :

26.1. for bank bond with a name : The owner of the bank bond write down the name, address and ID number of the endorsee or heir then sign on the back of the bank bond. The endorsee or heir shall come to the credit organization where issued the bank bond t o ask it to change the owner whose name has been registered at the credit organization.

26.2. for the bank bond without a name on it. Person who processes it is its owner and is free to transfer it.

Article 27

The credit organizations which issue bank bonds can conduct the following services :

27.1. Services of keeping and preserving bank bonds (to open bond accounts for each individual who wants and to preserve bank bonds on his behalf).

27.2. Services of transfer brokering, and of calculating the transfer payment for the clients who buy and leave their bonds at the office of credit organizations.

27.3. To rebuy the bank bonds which were issued but have not reached their maturity for making payment.

Credit organizations shall work out the specific regulation and the service fee for these services.

Article 28

Dealing with violations :

28.1. Credit organizations violating the provisions of this Regulation, shall, depending on the seriousness of the violations, be subject to one of the following penalties :

- Reprimand

- Paying a fine

- Restriction or prohibition on the issuance of bank bonds

- Withdrawal of license for banking operations.

28.2. Any individuals having acts of making fraudulent bank bonds shall be charged in accordance with the existing laws.

Article 29

Any addition to and revision of this Decision shall be determined by the Governor of the State Bank.

for the State Bank of Vietnam The Governor

CAO SY KIEM