Vietnam Development Bank
THE ESTABLISHMENT AND DEVELOPMENT OF VDB
The Vietnam Development Bank (VDB in abbreviation) was established in accordance with Decision No. 108/2006/QD-TTg dated May 19th, 2006 by the Prime Minister on the establishment of Vietnam Development Bank on the basis of reorganization of the Development Assistance Fund, to execute investment credit and export credit policies with operational term of ninety nine (99) years upon effectiveness of this Decision. The approval of the Organization and Operation of the VDB are in accordance with the Decision No. 1515/QĐ-TTg dated September 3, 2015 by the Prime Minister. On March 30th, 2007, the Prime Minister issued Decision No. 44/2007/QĐ-TTg on financial management regulations at VDB.
On September 3rd 2015, the Prime Minister issued Decision No.1515/QĐ-TTg on the organization and operational regulations of VDB according to which:
VDB is a policy bank operating under the model of one member limited liability company with 100% state-owned charter capital.
VDB is a legal entity defined in accordance with Vietnamese laws with its own chartered capital, stamp and account registered at the State Bank of Vietnam, State Treasury, and at domestic and foreign commercial banks; VDB is allowed to participate in the interbank payment system and provide payment services as stipulated by law provisions.
The State is the owner of VDB. Government manage in unified way, rights and duties a rising from VDB’s state-ownership. The Prime Minister, as assigned by the Government, exercises in person rights and obligations of the owner or authorizes the Ministry of Finance to certain of them on his behalf. As assigned by the Government or under the authorization of the Prime Minister and according to this Charter’s provision, the Ministry of Finance shall exercise certain ownership’s rights and obligations. The Board of Directors are direct representatives of the Sate owner at VDB and have decision on issues related to VDB according to the authorization procedure prescribed in the Charter.
Legal representative of VDB is General Director.
VDB operates for non-profit purposes in order to carry out the task of State policy credit and other tasks as stipulated by the Government or the Prime Minister; The State budget shall cover the interest rate difference and the management fee and guarantee VDB’s solvency. VDB is exempted from government tax and obligation to state contribution. VDB is allowed to have compulsory reserve rate of 0% (zero percent) and does not have to make deposit insurance.
The VDB’s chartered capital is VND 30,000 billion (thirty trillion). Any chartered capital change shall be decided by the Prime Minister at the proposal of the Ministry of Finance, ensuring compliance with the requirements, tasks and capital adequacy ratios of VDB in each period.
VDB has an operation term of 99 years accounting from the effective date of Decision No.108/206/QĐ-TTg on May 19th 2006 of the Prime Minister on the VDB’s establishment.
FUNCTIONS AND MISSIONS OF VDB
1. Fund mobilization
a) Issue bonds guaranteed by the Government in accordance of law provisions;
b) Issue bonds, promissory notes, certificates of deposit, valuable papers in VND in accordance of law provisions;
c) Borrow from Vietnam Social Insurance, domestic and foreign financial and credit institutions in accordance of law provisions;
d) Have access to loan allocation from the State Bank of Vietnam in accordance of law provisions and of the guidance of the State Bank of Vietnam;
e) Take deposits entrusted by domestic and foreign organizations;
f) Mobilize other capital sources in accordance with provision of laws.
2. Credit activities:
a) Provide loans under the State’s credit policies; provide loans to programs and projects assigned by the Government or the Prime Minister;
b) Provide credit guarantees for SME to apply for loans from commercial banks according to the Prime Minister’s regulations;
c) On-lend from foreign loan capital of the Government;
d) Provide short-term loans under the Decision of the Prime Minister in the principle that the State budget shall not cover the interest difference.
3. Entrustment and receiving entrust:
a) To be entrusted to mobilize capital and to provide loans in accordance of law provisions;
b) To be entrusted to manage credit guarantee funsd for SME and local financial funds according to the local development objectives;
c) Entrust credit institutions to perform certain VDB's activities according to the provisions of law;
d) Entrust or to be entrusted to provide financial and banking services to clients according to the provisions of law.
4. Participate in the interbank market; implement inter-payment; provide payment services, foreign exchange services and other banking services to customers; implement foreign exchange activities; participate in the domestic and international payment systems according to the provisions of laws and to the guidance of the State Bank of Vietnam.
5. Perform other tasks assigned by the Government or the Prime Minister.