1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/12/2022
1.1. Decision No. 2081/QD-NHNN prescribing interest rates imposed by commercial banks in 2023 on outstanding debts of concessional housing loans granted under Circular No. 11/2013/TT-NHNN dated May 15, 2013, Circular No. 32/2014/TT-NHNN dated November 18, 2014 and Circular No. 25/2016/TT-NHNN dated July 29, 2016
- Name of legal document: Decision No. 2081/QD-NHNN issued on 12/12/2022 by the State Bank of Vietnam prescribing interest rates imposed by commercial banks in 2023 on outstanding debts of concessional housing loans granted under Circular No. 11/2013/TT-NHNNdated May 15, 2013, Circular No. 32/2014/TT-NHNN dated November 18, 2014 and Circular No. 25/2016/TT-NHNN dated July 29, 2016 (referred to as the “Decision No. 2081/QD-NHNN”).
- Effective date: 01/01/2023.
The content should be noted: Stipulating on the interest rate imposed by commercial banks in 2023 on outstanding debts of concessional housing loans.
Specifically, Article 1 of Circular No. 2081/QD-NHNN stipulates: “Article 1. The interest rate imposed by commercial banks in 2023 on outstanding debts of concessional housing loans granted under the Circular No. 11/2013/TT-NHNN dated May 15, 2013, the Circular No. 32/2014/TT-NHNN dated November 18, 2014 and the Circular No. 25/2016/TT-NHNN dated July 29, 2016 is 5,0%/year.”
1.2. Circular No. 18/2022/TT-NHNN amending and supplementing a number of articles of the Circular No. 09/2015/TT-NHNN dated July 17, 2015 of the Governor of the State Bank of Vietnam prescribing debt purchase and sale by credit institutions and foreign bank branches
- Name of legal document: Circular 18/2022/TT-NHNN issued on 26/12/2022 by the State Bank of Vietnam amending and supplementing a number of articles of the Circular No. 09/2015/TT-NHNN dated July 17, 2015 of the Governor of the State Bank of Vietnam prescribing debt purchase and sale by credit institutions and foreign bank branches (referred to as the “Circular No. 18/2022/TT-NHNN”).
- Effective date: 09/02/2023.
The content should be noted: Amending and supplementing regulations on principles of debt purchase and sale
Specifically, Clause 3 of Article 1 of Circular No. 18/2022/TT-NHNN stipulates: “Article 1. amending and supplementing a number of articles of the Circular No. 09/2015/TT-NHNN dated July 17, 2015 of the Governor of the State Bank of Vietnam prescribing debt purchase and sale by credit institutions and foreign bank branches
…
3. Amending Clauses 3, 4, 6, and 7 and suplementing Clauses 11, 12, Article 5 as follows:
“3. Credit institutions and foreign bank branches that are considered and approved by the State Bank for debt purchase activity must have a bad debt ratio of less than 3% according to the latest classification period according to the State Bank’s regulations on classification of assets, level of deduction, method of setting up risk provisions and use of provisions to deal with risks in the operation of credit institutions, foreign bank branches before the time of requesting for requesting for approval of debt purchase activity, except for credit institutions under special control. Credit institutions and foreign bank branches that sell debts are not required to obtain permission from the State Bank.
Credit institutions, foreign bank branches may purchase debt only when they are approved by the State Bank for debt purchase activities in the establishment and operation license of the credit institution, the establishment license of the bank branch (hereinafter referred to as the License) and has a bad debt ratio of less than 3% according to the latest classification period according to the State Bank’s regulations on classification of assets, level of deduction, method of setting up risk provisions and the use of provisions to deal with risks in the operation of credit institutions, foreign bank branches before the time of signing debt purchase contracts, except for the cases specified in Clause 12 of this Article.
4. Before performing debt purchase and sale as prescribed in Clause 3 of this Article, credit institutions and foreign bank branches must issue internal regulations on debt purchase and sale activities (in which, clearly define the decentralization of authority according to the principle of division of responsibilities between the appraisal stage and the decision to purchase and sell debt; method of purchase and sell debt, method of payment; debt purchase and sale process; debt valuation process and methods; risk management process for debt purchase and sell activities).”
“6. Repurchase of sold debt of a credit institution:
a) The debt seller does not repurchase the sold debt, except in the following cases:
(i) The credit institution repurchases the sold debt to the specially controlled credit institution as prescribed at Point a, Clause 12 of this Article;
(ii) The credit institution shall assist in the redemption of debts sold to the specially controlled credit institution according to the approved plan for the rehabilitation of the specially controlled credit institution as prescribed in Clause 6 of this Article148dd of Law on Credit Institutions;
(iii) The credit institution receiving the compulsory transfer repurchases the debt that has been sold to the commercial bank subject to the compulsory transfer under the provisions of Point c, Clause 12 of this Article.
b) The credit institution shall repurchase the sold debt specified at Points a(ii), a(iii) of this Clause according to the contents of its commitment to repurchase the debt in the restructuring plan approved by the competent authority in the following cases:
(i) The repurchased debt is being used by a specially controlled credit institution as security for a special loan at the State Bank but is no longer classified as a qualified debt under the provisions of the State Bank and sell replacement with other qualified debt.
(ii) When the special loan is due, the specially controlled credit institution has not yet had enough money to repay the special loan to the State Bank according to the special loan repayment plan.
7. A credit institution is not allowed to sell debt to its own subsidiary, except in the following cases:
a) Selling debt to a debt management and asset exploitation company according to the restructuring plan approved by a competent authority;
b) The credit institution that is the compulsory transferee sells the qualified debt to the commercial bank subject to the compulsory transfer according to the approved compulsory transfer plan.”
“11. Credit institutions, foreign bank branches are not allowed to grant credit to customers to purchase debt owned by that credit institution or foreign bank branch.
12. Credit institutions are not required to have a bad debt ratio of less than 3% when purchasing debt in the following cases:
a) A specially controlled credit institution shall purchase qualified debt as prescribed in Clause 2, Article 146a of the Law on Credit Institutions;
b) The specially controlled credit institution shall purchase qualified debt from the supporting credit institution according to the approved plan for rehabilitation of the specially controlled credit institution as prescribed in Clause 1 of this Article 148b of Law on Credit Institutions;
c) The transferred commercial bank purchases qualified debt from the credit institution receiving the compulsory transfer according to the compulsory transfer plan already approved by the competent authority;
d) Cases of debt purchase specified at Points a(ii), a(iii) Clause 6 of this Article.””
1.3. Circular No. 11/2022/TT-NHNN regulating on bank guarantee
- Name of legal document: Circular 11/2022/TT-NHNN issued on 30/09/2022 by the State Bank of Vietnam regulating on bank guarantee (referred to as the “Circular No. 11/2022/TT-NHNN”).
- Effective date: 01/04/2023.
The content should be noted:
- Firstly, stipulating on cases of non-guarantee, guarantee restriction and implementation of credit limit
Specifically, Article 5 of Circular No. 11/2022/TT-NHNN stipulates: “Article 5. Cases of non-guarantee, guarantee restriction and implementation of credit limit
When making guarantees, credit institutions and foreign bank branches must comply with the provisions of the Law on Credit Institutions and the guidance of the State Bank of Vietnam (hereinafter referred to as the State Bank) about the cases of not being granted credit, restrict credit granting, limiting credit granting.”
- Secondly, stipulating on requirements for customers.
Specifically, Article 11 of Circular No. 11/2022/TT-NHNN stipulates: “Article 11. Requirements for customers
- Credit institutions, foreign bank branches shall consider and decide to grant guarantees, reciprocal guarantees, and confirm guarantees for customers when customers satisfy the following requirements:a) Having full civil legal capacity and civil act capacity as prescribed by law;b) The guaranteed obligation is a lawful financial obligation;c) Being assessed by the credit institution, foreign bank’s branch with guarantee to be able to repay the amount that the credit institution or foreign bank branch has to pay on behalf of when performing the guarantee obligation.
- Credit institutions, foreign bank branches are not allowed to guarantee for the bond payment obligations of the issuing enterprises for the purposes of: restructuring the debts of the issuing enterprises themselves; contribute capital, buy shares in other enterprises and increase the scale of operating capital.”
1.4. Circular No. 17/2022/TT-NHNN providing guidelines on environmental risk management in credit extension by credit institutions and foreign bank branches
- Name of legal document: Circular 17/2022/TT-NHNN issued on 23/12/2022 by the State Bank of Vietnam providing guidelines on environmental risk management in credit extension by credit institutions and foreign bank branches (referred to as the “Circular No. 17/2022/TT-NHNN”).
- Effective date: 01/06/2023.
The content should be noted: Internal regulations on environmental risk management in extending credit.
Specifically, Article 6 of Circular No. 17/2022/TT-NHNN stipulates: “Article 6. Internal regulations on environmental risk management in extending credit
- Each credit institution shall formulate its own internal regulations on environmental risk management in extending credit which may be separated from or included in its internal regulations on credit extension and internal control, and must be conformable with regulations of law on credit extension and credit risk management.
- Internal regulations on environmental risk management in extending credit of a credit institution shall, inter alia, have the following contents:a) Identification and classification of applications for credit extension which require environmental risk assessment in extending credit;b) Information to be collected to serve the environmental risk management in extending credit;c) Environmental risk assessment in extending credit that is carried out in conformity with the provisions of this Circular;d) Environmental risk management in extending credit during the consideration, appraisal, approval and management of credit amounts extended;dd) Internal reporting on environmental risk management in extending credit.”
