Tiếng Việt

Legal update relating to Finance and Credit (Monthly Legal Update – 04/2021)

by | Apr 12, 2021 | Banking, EN, Legal Update | 0 comments

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/04/2021

1.1. Circular No. 01/2021/TT-NHNN regulating on domestic issuance of promissory notes, treasury bills, certificates of deposit, bonds by credit institutions, foreign bank branches

  • Name of legal document: Circular No. 01/2021/TT-NHNN issued on 31/03/2021 by the State Bank regulating on domestic issuance of promissory notes, treasury bills, certificates of deposit, bonds by credit institutions, foreign bank branches (referred to as the “Circular No. 01/2021/TT-NHNN”).

  • Effective date: 17/05/2021.

Some contents should be noted:

  • Firstly, regulating the face value of valuable papers.

Specifically, Article 8 Circular No. 01/2021/TT-NHNN stipulates: “Article 8. Face value of valuable papers

  1. The face value of a valuable paper is 100,000 (one hundred thousand) Viet Nam Dong or a multiple of 100,000 (one hundred thousand) Viet Nam Dong.

  2. The face value of valuable papers (except bonds) issued in the form of pre-printed certificates or under agreement issued by credit institutions, foreign bank branches with buyers.

  3. The face value of a bond issued in the form of a certificate is pre-printed on the bond.

  4. The face value of the valuable paper issued not in the form of a certificate is agreed upon by the issuing credit institution or foreign bank branch with the buyer. ”

  • Secondly, stipulating the time limit, issuance date and maturity date of the valuable paper.

 Specifically, Article 10 of Circular No. 01/2021/TT-NHNN stipulates: “Article 10. Time limit, issuance date and payment due date of valuable papers

  1. Bonds with a time limit of one year or more, with a specific term prescribed by the credit institution. Bonds that are issued in the same batch and the same term are recorded on the same date of issue and the same date of maturity.

  2. Time limit, date of issue and due date for promissory notes, treasury bills and certificates of deposit shall be stipulated by credit institutions, foreign bank branches. ”

1.2. Circular No. 02/2021/TT-NHNN guiding foreign currency transactions on the foreign currency market by credit institutions licensed to conduct foreign exchange activities

  • Name of legal document: Circular No. 02/2021/TT-NHNN issued on 31/03/2021 by the State Bank guiding foreign currency transactions on the foreign currency market by credit institutions licensed to conduct foreign exchange activities (referred to as the “Circular No. 01/2021/TT-NHNN”).

  • Effective date: 17/05/2021.

Some contents should be noted:

  • Firstly, regulating on the transaction currency and the exchange rate.

Specifically, Article 5 of Circular No. 02/2021/TT-NHNN stipulates: “Article 5. Currency of the transaction and exchange rate

  1. An authorized credit institution must prescribe the types of foreign currency transacted at the credit institution.

  2. The spot exchange rate between VND and USD in a spot transaction and a spot transaction in a swap transaction is determined on the basis of the central exchange rate announced by the State Bank on the date of the transaction and the amplitude range specified by the State Bank.

  3. The forward exchange rate between the Viet Nam Dong and the US dollar in a forward transaction or a forward transaction in a swap transaction shall be agreed upon by the parties to the transaction but must not exceed the rate determined on the basis:a) The spot exchange rate on the transaction date;b) The difference between the two current interest rates is the refinancing rate announced by the State Bank and the US dollar target rate of the Federal Funds Target Rate. If the US dollar target interest rate is in the range, the lowest interest rate within that range will be applied.c) Term of the transaction.

  4. The exchange rate between Viet Nam Dong and foreign currencies other than the US dollar and the exchange rate between those foreign currencies in foreign currency transactions shall be agreed upon by the parties.

  5. Authorized credit institutions must post up spot rates between Viet Nam Dong and foreign currencies in transactions with customers at foreign currency transaction locations of the authorized credit institutions and on the official website (if applicable). Authorized credit institutions conducts transactions with customers at the listed exchange rate, unless the two parties agree otherwise on the applicable exchange rate at the time of transaction.”

  • Secondly, Specifically, Article 8 of Circular No. 02/2021 / TT-NHNN stipulates: “Article 8. Transaction fees

Authorized credit institutions are not allowed to charge transaction fees for foreign currency transactions. ”

1.3. Circular No. 03/2021/TT-NHNN amending and supplementing a number of articles of the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of the State bank of Vietnam regulations debt rescheduling, exemption or reduction of interest and fees, retention of debt category to assist borrowers affected by covid-19 pandemic

  • Name of legal document: Circular No. 03/2021/TT-NHNN issued on 02/04/2021 by the State Bank amending and supplementing a number of articles of the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of the State bank of Vietnam regulations debt rescheduling, exemption or reduction of interest and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic (referred to as the “Circular No. 02/2021/TT-NHNN”).

  • Effective date: 17/05/2021.

The content should be noted: amending and supplementing regulation on reduction and exemption of interest and/or fees.

Specifically, Clause 3 of Article 1 stipulates: “Article 1. Amending and supplementing a number of articles of Circular No. 01/2020/TT-NHNN

…

  1. Amending and supplementing Article 5 as follows:

“Article 5. Reduction and exemption of interest and/or fees

  1. Credit institutions and foreign bank branches shall decide on the exemption or reduction of interests and fees according to internal regulations for the outstanding balance of debts arising before June 10, 2020 from credit extension activities. (except for the purchase and investment of corporate bonds) whose obligations to repay principal and / or interest are due during the period from January 23, 2020 to December 31, 2021 and the customer has no ability to repay principal and / or interest on time according to contracts or agreements due to declining revenue and income due to the impact of Covid-19 pandemic.

  2. The exemption or reduction of interests and fees for customers according to the provisions of this Circular will be implemented until December 31, 2021.””