Vietnam Development Bank’s New Regulations
- HANOI, Vietnam (AP) — The Vietnam Development Bank (VDB), also known internationally as the Development Bank, operates under specific laws adn regulations.
- The VDB is headquartered in Hanoi, with branches and exchanges located in cities and regions throughout Vietnam.The bank also oversees subsidiary units.
- Established by the Prime minister, the Development Bank functions as a policy bank, adhering to the Credit Act and other relevant legal frameworks.
Vietnam development Bank Outlines Operations, Legal framework
Table of Contents
HANOI, Vietnam (AP) — The Vietnam Development Bank (VDB), also known internationally as the Development Bank, operates under specific laws adn regulations. Its official abbreviation is VDB.
VDB Headquarters and Structure
The VDB is headquartered in Hanoi, with branches and exchanges located in cities and regions throughout Vietnam.The bank also oversees subsidiary units. Its website is www.vdb.gov.vn.
Legal Standing and Governance
Established by the Prime minister, the Development Bank functions as a policy bank, adhering to the Credit Act and other relevant legal frameworks.
The VDB possesses full legal status, with capital and operational guidelines defined by law. The secretary general serves as the bank’s legal representative.
Non-Profit Operations and Funding
The VDB operates on a non-profit basis, dedicated to implementing national socio-economic policies as mandated by law.
The bank receives funding guarantees from the state, perhaps including compensation for interest rate differentials and management fees.It may also be exempt from certain taxes and national budget expenses. Unlike commercial banks, the VDB is not required to maintain required reserves or participate in deposit insurance.
The VDB’s capital is derived from the national budget and supplemented by other legally permissible financial resources, managed according to the Act on the Development Bank’s Fiscal Management System.
Management Structure
The Vietnam Development Bank’s management structure comprises:
- Board of Directors
- Control Committee
- Chief Executive Officer (CEO)
the Development Bank is responsible for the safe management and use of national capital and assets allocated to it, ensuring thier preservation in accordance with legal provisions. It is also obligated to repay principal and interest on raised capital in a timely manner. The VDB is subject to inspection, screening, and audits by relevant state management agencies, as prescribed by law.
The bank is authorized to open payment accounts at the State Bank of Vietnam, the National Treasury, and both domestic and international commercial banks, in accordance with legal guidelines.It can also open accounts for domestic and overseas clients. Furthermore, the VDB can obtain loans from the State Bank of Vietnam and invest capital to establish companies, subject to the Prime Minister’s approval.
Business Activities
The VDB’s business activities encompass several key areas:
Capital Procurement:
- Issuance of goverment-guaranteed bonds.
- Issuance of bonds and securities.
- Securing loans from Vietnamese social security funds.
- Obtaining loans from domestic and foreign financial institutions.
Credit Activities:
- Providing loans based on the state’s investment credit policy.
- Offering credit guarantees for small and medium-sized enterprises (SMEs) borrowing from commercial banks, as per guarantee regulations.
- Re-lending official development assistance (ODA) and foreign concessional loans.
Consignment and Trust Activities:
- loan activities based on trust approval and capital allocation.
- Guarantee by trust.
- Providing financial and banking services to customers through entrusted or consigned arrangements.
Financial Management
The VDB’s financial management mechanism adheres to government regulations. The bank implements accounting and statistics systems in accordance with the law and guidelines set by the Ministry of Finance.
Effective Date
This law took effect April 29, 2025. the charter on the organization and operation of the Vietnam Development Bank,issued under Decision 1515/QD-TTG on Sept. 3, 2015, is superseded by this new legislation.
Vietnam Development Bank: Your Questions Answered
Q: What is the Vietnam Development Bank (VDB)?
A: The Vietnam Development bank (VDB),also known as the Development Bank internationally,is a policy bank operating under specific laws and regulations in Vietnam. Its official abbreviation is VDB.
Q: Where is the VDB located?
A: the VDB is headquartered in Hanoi, Vietnam. It has branches and exchanges in cities and regions across Vietnam, and also subsidiary units.
Q: What is the legal basis for the VDB’s operations?
A: The VDB operates under the legal frameworks outlined by the Prime Minister, adhering to the Credit Act and other relevant laws.It possesses full legal status, with its capital and operational guidelines defined by law.
Q: What is the role of the Secretary General?
A: The Secretary General serves as the VDB’s legal representative.
Q: How does the VDB operate in terms of its goals?
A: The VDB operates on a non-profit basis, focusing on implementing national socio-economic policies as mandated by law.
Q: How is the VDB funded?
A: The VDB receives funding guarantees from the state and may also be exempt from certain taxes and national budget expenses. Its capital comes from the national budget and is supplemented by other legally permissible financial resources, managed in accordance with the Act on the Development Bank’s Fiscal Management System.
Q: Is the VDB subject to the same regulations as commercial banks?
A: No. Unlike commercial banks, the VDB is not required to maintain required reserves or participate in deposit insurance.
Q: What is the VDB’s management structure?
A: The VDB’s management structure includes:
Board of Directors
Control Committee
Chief Executive Officer (CEO)
Q: What are the VDB’s responsibilities?
A: The VDB is responsible for:
Safe management and use of national capital and assets allocated to it.
Ensuring the preservation of national capital and assets.
Repaying principal and interest on raised capital in a timely manner.
The VDB is subject to inspection, screening, and audits by relevant state management agencies.
Q: what authority does the VDB have?
A: The VDB is authorized to:
Open payment accounts at the State Bank of vietnam, the National Treasury, and both domestic and international commercial banks.
Open accounts for domestic and overseas clients.
Obtain loans from the State Bank of Vietnam.
Invest capital to establish companies, subject to the Prime Minister’s approval.
Q: What are the main business activities of the VDB?
A: The VDB’s business activities include:
Capital Procurement:
Issuing government-guaranteed bonds.
Issuing bonds and securities.
Securing loans from Vietnamese social security funds.
Obtaining loans from domestic and foreign financial institutions.
Credit Activities:
Providing loans based on the state’s investment credit policy.
Offering credit guarantees for small and medium-sized enterprises (SMEs) borrowing from commercial banks.
Re-lending official development assistance (ODA) and foreign concessional loans.
Consignment and Trust Activities:
Loan activities based on trust approval and capital allocation.
Guarantee by trust.
* Providing financial and banking services to customers through entrusted or consigned arrangements.
Q: how does the VDB manage its finances?
A: The VDB’s financial management adheres to government regulations. The bank implements accounting and statistics systems in accordance with the law and guidelines set by the Ministry of Finance.
Q: when did the current regulations for the VDB take effect?
A: The current law took effect on April 29, 2025. This legislation superseded the charter on the institution and operation of the Vietnam Development Bank, issued under Decision 1515/QD-TTG on Sept. 3,2015.