Tiếng Việt

Legal update relating to Finance and Credit (Monthly Legal Update – 10/2020)

by | Oct 5, 2020 | Banking, EN, Legal Update | 0 comments

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/10/2020

1.1. Circular No. 08/2020/TT-NHNN amending, supplementing to a number of articles of the Circular No.22/2019/TT-NHNN dated November 15, 2019 of the Governor of the State Bank of Vietnam limits and prudential ratios of banks and foreign bank branches

  • Name of legal document: Circular No. 08/2020/TT-NHNN issued on 14/08/2020 by the Governor of the State Bank amending, supplementing to a number of articles of the Circular No.22/2019/TT-NHNN dated November 15, 2019 of the Governor of the State Bank of Vietnam limits and prudential ratios of banks and foreign bank branches (referred to as the “Circular No. 08/2020/TT-NHNN).

  • Effective date: 01/10/2020.

The content should be noted: Amending and supplementing regulations on compliance with the maximum ratio of short-term capital for provision of medium-term and long-term loans according to the roadmap specified in Clause 5, Article 16 of Circular No. 22/2019/TT-NHNN dated November 15, 2019 of the Governor of the State Bank of Vietnam limits and prudential ratios of banks and foreign bank branches.

Specifically, Article 1 Circular No. 08/2020/TT-NHNN stipulates: “Article 1. Amending, supplementing to a number of articles of the Circular No.22/2019/TT-NHNN dated November 15, 2019 of the Governor of the State Bank of Vietnam limits and prudential ratios of banks and foreign bank branches

Clause 5 Article 16 is amended, supplemented as follow:

“5. Banks and / or foreign bank branches must comply with the maximum ratio of short-term capital for provision of medium-term and long-term loans according to the following roadmap:

a) From January 1, 2020 to the end of September 30, 2021: 40%;

b) From October 1, 2021 to the end of September 30, 2022: 37%;

c) From October 1, 2022 to the end of September 30, 2023: 34%;

d) From October 1, 2023: 30%.””

1.2. Decision No. 1729/QD-NHNN maximum interest rates of deposits in Vietnam dong of organizations and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNN dated March 17, 2014

  • Name of legal document: Decision No. 1729/QD-NHNN issued on 30/09/2020 by the State Bank of Viet Nam maximum interest rates of deposits in Vietnam dong of organizations and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNN dated March 17, 2014 (referred to as the “Decision No. 1729/QD-NHNN”).

  • Effective date: 01/10/2020.

Some contents should be noted:

  • Firstly, stipulating maximum interest rates of deposits in Vietnam Dong of organizations (except credit institutions and foreign bank branches) and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNNdated March 17, 2014.

Specifically, Article 1 Decision No. 1729/QD-NHNN stipulates: “Article 1. Maximum interest rates of deposits in Vietnam Dong of organizations (except credit institutions and foreign bank branches) and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNN dated March 17, 2014 are as follows:

  1. The maximum interest rate of demand deposits and deposits with term less than 1 month is 0.2%/year.

  2. The maximum interest rate of deposits with a term from 1 month to less than 6 months is 4.0%/year; in particular, people’s credit funds and microfinance institutions shall adopt the maximum interest rate of 4.5%/year with respect to deposits with a term from 1 month to less than 6 months.”

  • Secondly, Decision No. 1729/QD-NHNN supersedes the Decision No. 919/QD-NHNNdated May 12, 2020 of the Governor of the State Bank of Vietnam.

Specifically, Clause 1 Article 2 of Decision No. 1729/QD-NHNN stipulates: “Article 2. 

  1. This Decision comes into force from October 01, 2020 and supersedes Decision No. 919/QD-NHNNdated May 12, 2020 of the Governor of the State Bank of Vietnam prescribing maximum interest rates of deposits in Vietnam Dong of organizations and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNN dated March 17, 2014.”

1.3.  Decision No. 1730/QD-NHNN prescribing maximum interest rates of short-term loans in Vietnam dong offered by credit institutions and foreign bank branches to customers to meet their demand of fund in certain economic sectors according to Circular No. 39/2016/TT-NHNN dated December 30, 2016

  • Name of legal document: Decision No. 1730/QD-NHNN issued on 30/09/2020 by the State Bank of Viet Nam prescribing maximum interest rates of short-term loans in Vietnam dong offered by credit institutions and foreign bank branches to customers to meet their demand of fund in certain economic sectors according to Circular No. 39/2016/TT-NHNNdated December 30, 2016 (referred to as the “Decision No. 1730/QD-NHNN”).

  • Effective date: 01/10/2020.

Some contents should be noted:

  • Firstly, stipulating maximum interest rates of short-term loans in Vietnam Dong according to Clause 2 Article 13 of the Circular No. 39/2016/TT-NHNN dated December 30, 2016.

Specifically, Article 1 of Decision No. 920/QD-NHNN stipulates: “Article 1. Maximum interest rates of short-term loans in Vietnam Dong according to Clause 2 Article 13 of the Circular No. 39/2016/TT-NHNN dated December 30, 2016 are as follows:

  1. Credit institutions and foreign bank branches (except people’s credit funds and microfinance institutions) shall offer short-term loans in Vietnam Dong with the maximum interest rate of 4.5%/year.

  2. People’s credit funds and microfinance institutions shall offer short-term loans in Vietnam Dong with the maximum interest rate of 5.5%/year.”

  • Secondly, Decision No. 1730/QD-NHNN supersedes Decision No. 920/QD-NHNNdated May 12, 2020 of the Governor of the State Bank of Vietnam.

Specifically, Clause 1 Article 2 of Decision No. 1730/QD-NHNN stipulates: “Article 2. 

1. This Decision comes into force from October 01, 2020 and supersedes Decision No. 920/QD-NHNN dated May 12, 2020 of the Governor of the State Bank of Vietnam prescribing maximum interest rates of short-term loans in Vietnam Dong offered by credit institutions and foreign bank branches to customers to meet their demand of fund in certain economic sectors according to Circular No. 39/2016/TT-NHNN dated December 30, 2016.”