Borrowing with valuable notes as collateral security

Created on 15/3/2010
Updated at 12/8/2010

This service is only applicable to Operations Centre of the State Bank. The State Bank gives loan to Agribank based on the valuable notes that Agribank uses as collateral.

Main features:

 

-          Agribank has to open an account and deposit valuable notes at Operations Centre of the State bank.

-          Mortgaging limit: is the maximum mortgaged loan amount from the State bank that Agribank can be given per quarter or per year.

-          Mortgaging interest rate: to be fixed by the State bank and will be adjusted subject to the monetary policy in certain period.

-          Default interest: up to 150% of applicable pledge interest rate in certain period.

-          Compulsory conditions:

o         Agribank is not in special control condition.

o         Agribank hasn’t had outstanding debts at the State bank.

o        Agribank has to follow the rule of loan insurance.

o        Agribank has request of credit offer.

-          Assets used in pledge: Government securities, government bond

 

Dossiers including:

 

-          An application of request of credit

-          Balance sheet including report of financial condition and capital spending at the correlative time.

-          List of valuable notes used in pledge

-          Other documents related to prove valuable notes available.

 

Acceptance to valuable notes under these conditions:

 

-          Agribank is the beneficiary of valuable notes (for bearer valuable notes) or the legal holder (Subject to … valuable notes)

o        Allowed to mortgage, pay for the State bank on behalf of the third party according to undertaking of the beneficiary.

o        If valuable notes .., they require a confirmation and assurance of the organization having obligation to payment in which the organization shall commit to pay in case Agribank can not do its obligation.

o        If valuable notes are long term notes, the remained time of these notes can raise up to maximum 2 years.

-          Repayment of principal amount and interest: Agribank shall repay principal amount and interest under conditions as stipulated in its undertaking. The state bank shall not extend maturity date for mortgage loans.

 

Process:

 

-          Discount method: directly go to Operations Centre of the State bank  and provide “Request of valuable notes discount”

-          Transactions are completed through Reuters Dealing System, fax…

-          After transactions are approved, data will be entered into IPCAS by FX Managing Department

-          Loss limit in forex dealing of Agribank’s Operations Centre is decided by Chairman of Board of Directors.

-          Transaction principle: safe, effective, subject to FX dealing limit and ensure liquidity of the Agribank and maintain foreign currency balance adapted to the Sate bank’s rule for a certain period.

 

Distribution channel/ Contact:

 

-          Contact FX managing Department of Agribank’s Operations Centre.


Quang Hung
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