1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/05/2022
1.1. Decree No. 31/2022-ND-CP on interest rate support from the state budget for loans of enterprises, cooperatives, and household business
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Name of legal document: Decree No. 31/2022/ND-CP issued on 20/05/2022 by the Government on interest rate support from the state budget for loans of enterprises, cooperatives, and household business (referred to as the “Decree No. 31/2022/ND-CP”).
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Effective date: 20/05/2022.
Some contents should be noted:
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Firstly, stipulating on conditions for interest rate support.
Specifically, Article 4 of Decree No. 31/2022/ND-CP stipulates: “Article 4. Conditions for interest rate support
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The customer has requested interest rate support, meets the loan conditions in accordance with the current law on lending activities of credit institutions, foreign bank branches to customers.
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Interest rate-supported loan is a loan in Vietnam Dong, signed a loan agreement and disbursed during the period from January 1, 2022 to December 31, 2023, using the capital for the correct purposes specified in Clause 2, Article 2 of this Decree and have not been supported with any interest rate from the state budget under other policies.
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The loan may not continue to receive interest rate support in the following cases:a) Loans with overdue principal balance and/or late payment interest balance are not eligible for interest support for the interest payment obligation at the interest payment term which the time of repayment is within the specified time period in which overdue principal balance and/or late payment interest balance. The loan can only continue to receive interest support for the next interest payment terms after the customer has fully paid the overdue principal balance and/or the late payment interest balance.b) Loans with debt extension are not supported with interest rate for the debt extension period.”
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Secondly, stipulating on term and level of interest rate support.
Specifically, Article 5 of Decree No. 31/2022/ND-CP stipulates: “Article 5. Term and level of interest rate support
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The term of interest rate support is counted from the date of loan disbursement to the time when the customer pays off the loan principal and/or interest as agreed between the commercial bank and the customer, consistent with the announced interest rate support funding source, but not beyond December 31, 2023.
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The level of interest rate support for customers is 2%/year, calculated on the loan balance and the actual interest rate support loan term is within the period specified in Clause 1 of this Article.”
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Thirdly, stipulating on handling on recovery of interest rate support amounts.
Specifically, Article 9 of Decree No. 31/2022/ND-CP stipulates: “Article 9. Handling on recovery of interest rate support amounts
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In the process of implementation, in case it is discovered that a customer’s loan is determined not to be the subject, uses the loan for the wrong purpose or does not meet the conditions for interest rate support, the commercial bank shall notify customers and convert the interest-supported loan into a regular loan, and recover the entire amount of rate interest supported by commercial banks within 30 days from the date of notification.
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Where the state budget has paid the interest rate support amount or has already settled the interest rate support for the loan specified in Clause 1 of this Article, the commercial bank shall refund the state budget or report to deduct from the amount of state budget payment of interest rate support.
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In case the customer does not refund the interest rate supported amount as prescribed in Clause 1 of this Article, the commercial bank shall send a written request to the State Bank branch in the province or central city (where the customer’s head office is located) to report to the People’s Committee of the province or city to direct the competent authorities in the locality to coordinate with the commercial bank to recover the amount of interest rate support.”
1.2. Circular No. 03/2022/TT-NHNN guide commercial banks to implement interest rate support according to Decree No. 31/2022/ND-CP dated May 20, 2022 of the Government on interest rate support from the state budget for loans of enterprises, cooperatives, household business
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Name of legal document: Circular No. 03/2022/TT-NHNN issued on 20/05/2022 by the State Bank of Vietnam guide commercial banks to implement interest rate support according to Decree No. 31/2022/ND-CP dated May 20, 2022 of the Government on interest rate support from the state budget for loans of enterprises, cooperatives, household business (referred to as the “Circular No. 03/2022/TT-NHNN”).
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Effective date: 20/054/2022.
Some contents should be noted:
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Firstly, stipulating on principles of interest rate support loans.
Specifically, clause 3 Article 1 of Circular No. 03/2022/TT-NHNN stipulates: “Article 2. Principles of interest rate support loans
Commercial banks provide loans with interest rate support in accordance with the current law on lending activities of credit institutions and foreign bank branches to customers, as stipulated in Decree No. 31/ 2022/ND-CP, this Circular and relevant laws.”
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Secondly, stipulating on methods of interest rate support.
Specifically, Article 3 of Circular No. 03/2022/TT-NHNN stipulates: “Article 3. Methods of interest rate support
By the time of repayment of each interest payment term, commercial banks may choose to provide interest rate support to customers by one of the following methods:
1. Directly deduct the amount of loan interest payable by the customer equal to the interest rate supported loan amount.
2. Collect the entire loan interest from the customer in the period and refund the customer the interest supported loan amount on the same day of interest collection. In case the collection of loan interest in the period is performed after business hours of the commercial bank, the refund of the interest supported loan amount can be done on the next day.”
