On June 30, 2018 the government issued Decree No.93/2018/NĐ-CP regulates on debt management of local authorities. This Decree takes effect from 01/07/2018.
Accordingly, Decree No.93/2018/NĐ-CP regulates on implementation borrowing and repaying of local authority debt as follows:
1. Bases for borrowing and debt repayment by local administrations
– Base on local budget estimates, total of annual borrow level and the policy of issuance of local authority bonds that is decided by Provincial People’s Councils and assumed the prime responsibility by the Finance Department.
– Base on the local budget estimates on the repayment of principals and sources of principal repayment; paying interest, fees and costs of loans that is decided by Provincial People’s Councils and assumed the prime responsibility by the Finance Department.
2. Organizing to borrow according to release local authority bonds
– Base on budget estimates, borrowing plan, annual payment, plan of releasing local authority bonds that is decided by Provincial People’s Councils and borrowing plan of local authority, Provincial People’s Committees release bonds.
– Procedures: Provincial People’s Committees shall send written requests to the Ministry of Finance for comments on conditions and terms of local administrations’ bonds within 15 days after receiving the written requests of localities.
3. Re-lending from ODA (Official Development Assistance), foreign preferential loans:
– Basic of re-lending agreement between Ministry of Finance and Provincial People’s Committee of each project; the number of re-lending that shall be assigned by the Prime Minister in the annual local budget estimates; The form of capital withdrawal and disbursement of ODA capital, foreign preferential loans within the scope of assigned estimates.
4. Organizing to borrow from other domestic sources such as: Borrowing from provincial financial reserve fund, credit organization in the country.
Therefore, Decree No.93/2018/NĐ-CP specifically regulated on management principles, forms and condition for borrowing, annual payment and borrowing plan of authorities local, this will facilitate the management and development of financial plans of state management agencies.