1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/10/2021

1.1. Circular No. 11/2021/TT-NHNN prescribing classification of assets, amounts and methods of setting up risk provisions and use of provisions for control and management of risks arising from operations of credit institutions and foreign bank branches

• Name of legal document: Circular 11/2021/TT-NHNN dated July 30, 2021 of the State Bank of Vietnam prescribing classification of assets, amounts and methods of setting up risk provisions and use of provisions for control and management of risks arising from operations of credit institutions and foreign bank branches (referred to as the “Circular No. 11/2021/TT-NHNN”).

• Effective date: 01/10/2021.

The content should be noted: Stipulating on specific provision amounts

Specifically, Article 12 of Circular No. 11/2021/TT-NHNN stipulates: “Article 12. Specific provision amounts

1. The borrower-specific provision amount is calculated according to the following formula:

Where:

– R: Total borrower-specific provision amount;

–  : refers to total provision amount for the borrower owing the outstanding amounts ranging from 1 to n.

Ri refers to the amount of provision for the outstanding balance of the loan i. Ri is calculated according to the following formula:

Ri = (Ai – Ci) x r

Where:

Ai: The outstanding principal i.

Ci: Deductible value of the security property, financial lease assets, negotiable instruments, other securities used in discounting and resale of Government bonds (hereinafter referred to as collateral) of the debt i.

r: Provisioning rates specific to groups prescribed in clause 2 of this Article.

Where Ci > Ai, Ri is calculated as 0 (zero).

2. Provisioning rates specific to debt groups are as follows:

a) Group 1: 0%;

b) Group 2: 5%;

c) Group 3: 20%;

d) Group 4: 50%;

dd) Group 5: 100%.

3. The collateral or security used as a deduction for calculation of the specific provision amount (R) specified in Clause 1 of this Article must satisfy the following conditions:

a) Credit institutions, foreign bank branches may dispose of security or collateral under guarantee contracts and in accordance with law when borrowers fail to perform their agreed obligations;

b) The expected period of disposition of collateral or security property is not more than 01 (one) year if it is not a real property, and not more than 02 (two) years if it is a real property, and starts from the date on which credit institutions, foreign bank branches have the right to dispose of collateral or security;

c) Collateral or security must conform to laws on secured transactions and other relevant laws;

d) In case where the security or collateral fails to satisfy the conditions specified at point a, b and c of this clause, the deductible value of that security or collateral must be deemed 0 (zero).

4. The deductible value of security property or collateral is determined by multiplying the value of security property or collateral specified in clause 5 of this Article by the deduction rate for each type of security or collateral as provided in Clause 6 of this Article.

Credit institutions, foreign bank branches shall, of their own accord, determine the deduction rate for each type of security or collateral on the basis of the assessment of recoverability when disposing of that security or collateral provided that rate does not exceed the maximum deduction rate applied to specific types of collateral or security property in accordance with clause 6 of this Article.

5. Value of collateral or security property used as a basis to calculate the deduction during the process of setting up a risk provision shall be determined as follows:

a) Gold bars: Their value is determined at the buying price at the head office of an enterprise or credit institution that owns the gold bar brand at the end of the trading day prior to the specific provisioning date;

b) Listed securities (including stocks, fund certificates, derivatives, covered warrants that are already listed): Their value is determined at the closing price quoted on the latest trading day prior to the specific provisioning date. In case where securities already listed on the stock exchange are not traded in 30 (thirty) days before the provisioning date, or are delisted or suspended from trades or cease being traded on the provisioning date, credit institutions, foreign bank branches shall value the collateral or security property in accordance with point e of this clause;

c) Stocks registered for trades on Upcom: Their value is determined at the reference price at the latest trading day promptly before the provisioning date announced by the Stock Exchange. In case where securities already listed on Upcom are not traded in 30 (thirty) days before the specific provisioning date, or are delisted or suspended from trades or cease being traded on the provisioning date, credit institutions, foreign bank branches shall value the collateral or security property in accordance with point e of this clause;

d) Government bonds listed on Stock Exchanges: Their value is determined at the average price by averaging trading prices in the firm-commitment offering session in accordance with the Government’s regulations on issuance, registration, depository, listing and trading of Government debt instruments on the stock market; guiding documents of the Ministry of Finance and other amending, supplementing documents or replacement ones (if any). In case where there is no trading price in the above-mentioned firm-commitment offering session, the bond price applied to calculation of the deduction is the average of the trading prices on the secondary market within the last 10 (ten) working days till the date of setting up of the provision for risk. In case where no trade takes place within the last 10 (ten) working days till the date of setting of the provision for risk, credit institutions, foreign bank branches shall use the par value of the collateral or security property;

dd) Municipal bonds, government-guaranteed bonds and corporate bonds (including credit institutions) listed and registered for trades: Their value is determined at the price defined by averaging trading prices on the secondary market within the last 10 (ten) working days before the provisioning date according to the announcement of the Stock Exchange. In case where no trade takes place within the last 10 (ten) working days till the specified provisioning date, credit institutions, foreign bank branches shall use the par value of the collateral or security property;

e) Securities not listed on the Stock Exchanges, promissory notes, bills, certificates of deposit issued by enterprises (including credit institutions, foreign bank branches): Their par value is used.

In case where, on the specific provisioning date, the equity value is lower than the actual investment capital value of the owners at the issuing organization, the value of collateral or security property shall be determined by

Multiplying the par value of stocks or other securities multiplied by (x) the equity of the issuing organization and then divided by (:) the actual investment capital of owners at the issuing organization.

Where:  The actual investment capital of the owners at the issuing organization and the equity of the issuing organization are determined on the latest balance sheet prior to the specific provisioning date in accordance with regulations of the Ministry of Finance, providing instructions about the corporate accounting regime.

In case where the equity of the issuing organization is negative, the value of collateral or security property used for deduction (Ci) must be deemed zero (zero);

g) Financially leased assets: Their value uses the value determined according to point h of this clause, or the value of the financially leased asset remaining over lease periods is calculated according to the formula:

Value of financially leased assets divided by (:) the lease period agreed upon under the contract multiplied by (x) the remaining lease term under the contract;

h) The value of collateral or security property used as deduction for calculation of the specific provision for movable assets, real property and other types of security or collateral, except for the assets specified at point a, b, c, d, dd and e of this clause is calculated as follows:

(i) Credit institutions, foreign bank branches must hire legally licensed valuing organizations to value collateral or security property used as deduction for calculation of the specific amount of provision at the end of the financial year in the following cases:

Collateral or security property valued by credit institutions, foreign bank branches at VND 50 billion or more is provided to secure debts of borrowers who are related to credit institutions, foreign bank branches and other persons subject to restrictions on credit extension as prescribed in Article 127 of the Law on Credit Institutions (amended and supplemented); collateral or security property is valued by credit institutions or foreign bank branches at VND 200 billion or more.

Results of valuation of collateral or security property issued by the legally licensed valuing organization are used by credit institutions, foreign bank branches for valuation of collateral or security property used as deduction for calculation of the specific amount of provision.

In case the licensed valuing organization is not capable of valuing, or no other licensed valuing organization values collateral or security property, credit institutions, foreign bank branches shall use the valuation results according to the internal regulations specified at point h of clause 2 of Article 6 herein. If there is no written document on the valuation of the collateral or security property from the valuing organization, and the value of the collateral or security property cannot be determined according to internal rules and regulations, the value of the collateral or security property used as deduction must be deemed 0 (zero);

(ii) Except for the case specified at point h(i) of this clause, credit institutions, foreign bank branches may value the collateral or security property as deduction when calculating the specific amount of provision according to internal rules and regulations laid down at point h of clause 2 of Article 6 in this Circular.

6. Credit institutions, foreign bank branches shall determine the specific deduction rate of each type of collateral or security property according to the principle that the lower the liquidity of the collateral or security property, and the greater the price fluctuation, then the lower the collateral deduction rate. In this principle, the maximum deduction rate of the collateral or security property is calculated as follows:

a) Borrower’s deposit balance, certificate of deposit in Vietnam Dong at the lending credit institution, foreign bank branch: 100%;

b) Government bonds, gold bars in accordance with law on gold trading activities; borrower’s deposit balance, certificate of deposit in foreign currency at the lending credit institution, foreign bank branch: 95%;

c) Municipal bonds, Government-guaranteed bonds; negotiable instruments, promissory notes, bills, bonds issued by the lending credit institutions; balance of deposits, certificates of deposit, promissory notes, bills issued by other credit institutions, foreign bank branches:

– The time left to maturity of less than 1 year:  95%;

– The time left to maturity of 1 year – 5 years:  85%;

– The time left to maturity of more than 5 year:  80%.

d) Securities issued by other credit institutions and listed on the Stock Exchanges: 70%;

dd) Securities issued by enterprises (except credit institutions) and listed on the Stock Exchanges: 65%;

e) Securities that have not yet been listed on the Stock Exchanges, valuable papers, except those specified at point c of this Clause, issued by other credit institutions that have registered for listing securities on the Stock Exchanges: 50%;

Securities that have not yet been listed on the Stock Exchanges, security instruments, except those specified at point c of this clause, issued by other credit institutions that do not register for listing their securities on the Stock Exchanges: 30%;

g) Securities that have not yet been listed on the Stock Exchanges, security instruments issued by enterprises that register for listing their securities on the Stock Exchanges: 30%;

Securities that have not yet been listed on the Stock Exchanges, security instruments issued by enterprises that do not register for listing their securities on the Stock Exchanges: 10%;

h) Real property: 50%;

i) Others: 30%.

7. If any credit institution is in the process of execution of the plan for restructuring, amalgamation and merger under the proposal for restructuring of credit institutions associated with dealing with bad debts that is approved by the Prime Minister, and have financial difficulties, they should report to SBV to seek its approval decision on setting up of risk provisions; In case where the amount of provision for risk is larger than the difference between income and expenditure from the annual business results (excluding the amount set aside in advance for provision for risk within the year), the minimum amount of provision for risk shall be equal to the difference between revenue and expenditure and the credit institution must monitor the amount set aside as the provision for risk in full in accordance with this Circular.”

1.2. Circular No. 12/2021/TT-NHNN prescribing credit institutions and foreign bank branches’ trading of promissory notes, treasury bills, deposit certificates and bonds domestically issued by other credit institutions and foreign bank branches

• Name of legal document: Circular No. 12/2021/TT-NHNN issued on 30/07/2021 by the State Bank of Vietnam prescribing credit institutions and foreign bank branches’ trading of promissory notes, treasury bills, deposit certificates and bonds domestically issued by other credit institutions and foreign bank branches (referred to as the “Circular No. 12/2021/TT-NHNN”).

• Effective date: 27/10/2021.

Some contents should be noted:

• Firstly, regulating on rules for trading of financial instruments.

Specifically, Article 3 Circular No. 12/2021/TT-NHNN stipulates: “Article 3. Rules for trading of financial instruments

1. Credit institutions/FBBs are allowed to carry out the trading of financial instruments according to the contents about trading of corporate bonds and/or other financial instruments specified in their licenses issued by SBV.

2. Buyers and sellers shall assume legal responsibility for their compliance with regulations herein and relevant laws when carrying out trading of financial instruments.

3. VND (Vietnamese Dong) shall be the currency used in trading of financial instruments.

4. The financial instrument to be purchased or sold is under the lawful ownership of the seller and is not matured; the seller undertakes that the financial instrument is not in any disputes, is eligible for trading as prescribed by law, and is not undergoing any discounting or rediscounting.

5. Credit institutions/FBBs shall carry out the trading of bonds in accordance with the Law on Credit Institutions, the Law on Securities, Government’s Decrees on issuance of corporate bonds, legislative documents providing guidance on the Law on Securities, relevant laws and this Circular.

6. Credit institutions/FBBs shall only purchase promissory notes, treasury bills and deposit certificates whose remaining term to maturity is less than 12 months.  The remaining term to maturity is the length of time commencing on the date of payment for the financial instrument as prescribed in Clause 3 Article 4 hereof and ending on the maturity date of that financial instrument on which its principal and interest must be fully paid.

7. FBBs shall not be allowed to purchase convertible bonds.

8. Credit institutions/FBBs shall only carry out trading of financial instruments issued by finance companies or finance lease companies with organizations (including credit institutions/FBBs).”

• Secondly, regulating on transaction information.

Specifically, Article 3 Circular No. 12/2021/TT-NHNN stipulates: “Article 4. Transaction information

The form of transactions in financial instruments must comply with relevant laws.  An agreement on trading of financial instrument shall, inter alia, include the following contents:

1. Information about the seller and the buyer.

2. Name of the financial instrument; issuer; term, maturity date and value determined according to face value of the financial instrument.

3. Date of payment for financial instrument.

4. Payment amount for financial instrument.

5. Rights and obligations of the seller and the buyer.”

2. LEGAL DOCUMENTS ARE ISSUED IN 09/2021

Circular No. 14/2021/TT-NHNN amendments to Circular no. 01/2020/TT-NHNN dated march 13, 2020 of the Governor of the State bank of Vietnam providing instructions for credit institutions and foreign branch banks (FBB) on 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. 14/2021/TT-NHNN issued on 07/09/2021 by the State Bank of Vietnam amendments to Circular no. 01/2020/TT-NHNNdated march 13, 2020 of the Governor of the State bank of Vietnam providing instructions for credit institutions and foreign branch banks (FBB) on 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. 14/2021/TT-NHNN”).

• Effective date: 07/09/2021.

Some contents should be noted:

• Firstly, amending and supplementing on debt rescheduling.

Specifically, Clause 1 Article 1 of Circular No. 14/2021/TT-NHNN stipulates: “Article 1. Amendments to some Articles of Circular No. 01/2020/TT-NHNN

1. Amendments to Article 4:

“Article 4. Debt rescheduling

An outstanding debt, including the principal and/or interest (including the debts regulated by the Government’s Decree No. 55/2015/ND-CP amended)) may be rescheduled by the credit institution or foreign bank branch (FBB) if it fully satisfies the following conditions:

1. The debt is a loan or finance lease that is granted before 01/8/2021;

2. The principal and/or interest occur during the period from 23/01/2020 to 30/6/2022;

3. The outstanding debt may be rescheduled in one of the following cases:a) The outstanding debt is undue or has been overdue for not more than 10 days according to the concluded agreement, except the cases specified in Point b, Point c, Point d of this Clause;b) The outstanding debt belongs to a debt that occurs before 23/01/2020 and becomes overdue during the period from 23/01/2020 to 30/6/2020;c) The outstanding debt belongs to a debt that occurs during the period from 23/01/2020 to before 10/6/2020 and becomes overdue before 17/5/2021;d) The outstanding debt belongs to a debt that occurs during the period from 10/6/2020 to before 01/8/2021 and becomes overdue during the period from 17/7/2021 to before 07/9/2021.

4. The borrower is assessed by the credit institution or FBB as incapable of paying the principal and/or interest on schedule under the agreement due to decrease in revenue or income caused by Covid-19 pandemic.

5. The borrower applies for rescheduling of the debt and is assessed by the credit institution or FBB as capable of fully paying the principal and/or interest after the debt is rescheduled.

6. Credit institutions and FBBs shall not reschedule debts that violate regulations of law.

7. The rescheduling period (including debt deferral) shall be appropriate for the impacts of Covid-19 pandemic on the borrower and shall not exceed 12 months from the day on which rescheduling is granted by the credit institution/FBB, or from the original deadline for payment of the outstanding debt.

8. Debt rescheduling shall be carried out until 30/6/2022.””

• Secondly, amending and supplementing on reduction and exemption of interest and/or fees.

Specifically, Clause 2 Article 1 of Circular No. 14/2021/TT-NHNN stipulates: “Article 1. Amendments to some Articles of Circular No. 01/2020/TT-NHNN

…

2. Amendments to Article 5:

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

1. Credit institutions and FBBs shall, according to their own rules and regulations, decide reduction and exemption of interest and/or outstanding debts of the debts that arise before 01/8/2021from extend credit (except purchases of corporate bonds) whose principal and/or interest are due during the period from 23/01/2020 to 30/6/2022 but the borrowers are not capable of fully paying the principal and/or interest by the deadline specified in the original agreement due to decrease in revenue or income caused by Covid-19.

2. Reduction and exemption of interest and/or fees shall be carried out until 30/6/2022.”

3. Amendments to Clause 2 Article 6 of Circular No. 01/2020/TT-NHNN , which is already amended by Clause 4 Article 1 of Circular No. 03/2021/TT-NHNN):

“2. Credit institutions and FBBs may retain the categories of the debts that occur during the period from 23/01/2020 to before 01/8/2021 and have been categorized in accordance with regulations of the State bank of Vietnam (SBV) regarding the outstanding debts that have been granted rescheduling, reduction or exemption of interest and/or fees as prescribed in Article 4 and Article 5 of this Circular. To be specific:

a) Retain the categories of debts that are categorized on the latest day before the first rescheduling of the outstanding debts mentioned in Point a Clause 3 Article 4 of this Circular;

c) Retain the categories of debts that are categorized on the latest day before the outstanding debts mentioned in Point c and Point d Clause 3 Article 4 of this Circular are categorized as overdue debts;

c) Retain the categories of debts that are categorized on the latest day before the first reduction or exemption of interests on the outstanding debts mentioned in Article 5 of this Circular.””

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/08/2021

1.1. Decree No. 58/2021/ND-CP on provision of credit information service

• Name of legal document: Decree 58/2021/ND-CP dated June 10, 2021 of the Government on provision of credit information service (referred to as the “Decree No. 58/2021/ND-CP”).

• Effective date: 15/08/2021.

Some content should be noted:

• Firstly, stipulating on operating principles of provision of credit information.

Specifically, Article 4 of Decree No. 58/2021/ND-CP stipulates: “Article 4. Operating principles of provision of credit information

1. Credit information companies shall provide credit information only after receiving certificate issued by the SBV.

2. Provision of credit information must comply with regulations and law, ensure truthfulness, objectivity, and not affect legal rights and benefits of relevant organizations and individuals.

3. Agreements and commitments in provision of credit information specified under this Decree must be made into records or other equally legitimate forms as written documents as per the law.

4. Credit information companies shall only collect credit information of debtors from participating organizations when the debtors allow the participating organizations to provide their credit information according to Annex I attached hereto.

5. Principles of providing credit information products:a) Credit information companies shall provide credit information products according to Article 21 hereof;b) Credit information companies shall only provide credit information products which contain identification information of debtors to other participating organizations under consent of the debtors under Annex II attached hereto, except for cases where the organizations receive consent of the debtors according to Clause 4 of this Article;c) Credit information companies shall not provide credit information products which contain identification information of debtors to other organizations and individuals under Point dd Clause 1 Article 21 hereof.”

• Secondly, stipulating on restrictions in provision of credit information service.

Specifically, Article 6 of Decree No. 58/2021/ND-CP stipulates: “Article 6. Restrictions in provision of credit information service

1. Do not illegally collect, provide information classified as Government secret.

2. Do not intentionally deviate credit information thereby affecting legal rights and benefits of relevant organizations and individuals.

3. Do not exchange credit information, or provide credit information for the wrong individuals, for the wrong purposes or illegally.

4. Do not exploit provision of credit information for personal gain, violating benefits of the Government, or legal rights and benefits of organizations and individuals.

5. Do not obstruct legal collection and use of credit information of organizations and individuals.”

1.2. Decision No. 1172/QD-NHNN on the publication of administrative procedures to be amended, supplemented, and replaced in the field of credit information activities performed at the single-window divisions within the scope of the State of Vietnam’s management functions.

• Name of legal document: Decision No. 1172/QD-NHNN issued on 07/07/2021 by the State Bank of Vietnam on the publication of administrative procedures to be amended, supplemented, and replaced in the field of credit information activities performed at the single-window divisions within the scope of the State of Vietnam’s management functions (referred to as the “Decision No. 1172/QD-NHNN”).

• Effective date: 15/08/2021.

The content should be noted: Regulating on the list of administrative procedures to be amended and supplemented within the scope of management functions of the State Bank of Vietnam, including procedure for approving changes to the content of the Certificate of Credit Information Operations.

Specifically, Section 1, Part I Administrative procedures to be amended, supplemented and replaced within the jurisdiction of the State Bank of Vietnam (Issued together with Decision No. 1172/QD-NHNN) stipulates:

“PART I.

LIST OF ADMINISTRATIVE PROCEDURES

1. List of administrative procedures to be amended and supplemented within the scope of management functions of the State Bank of Vietnam

”

1.3. Circular No. 13/2021/TT-NHNN on amendments to Circular No. 26/2013/TT-NHNN dated December 5, 2013 of the State Bank of Vietnam on promulgation of the tariff of charges for payment services offered via the State Bank of Vietnam

• Name of legal document: Circular No. 13/2021/TT-NHNN issued on 23/08/2021 by the State Bank of Vietnam on amendments to Circular No. 26/2013/TT-NHNN dated December 5, 2013 of the State Bank of Vietnam on promulgation of the tariff of charges for payment services offered via the State Bank of Vietnam (referred to as the “Circular No. 13/2021/TT-NHNN”).

• Effective date: 01/09/2021.

The content should be noted: Amending regulations related to Charges for payment transactions performed via the IBPS is specified in Circular No. 26/2013/TT-NHNN.

Specifically, Article 1 of Circular No. 13/2021/TT-NHNN stipulates: “Article 1. Amendments certain articles of Circular No. 26/2013/TT-NHNN

Article 1a shall be added as follows:

“Article 1a:  The charges for payment services as prescribed in point 1.1, 1.2 Section 1 “Charges for payment transactions performed via the IBPS” in Part III “In-country payment service charges” in the Tariff of charges for payment services offered via the State Bank of Vietnam promulgated herewith will be reduced by 50 per cent from September 1, 2021 to June 30, 2022 inclusive.”.

2. LEGAL DOCUMENTS ARE ISSUED IN 07/2021

Circular No. 12/2021/TT-NHNN prescribing credit institutions and foreign bank branches’ trading of promissory notes, treasury bills, deposit certificates and bonds domestically issued by other credit institutions and foreign bank branches

• Name of legal document: Circular No. 12/2021/TT-NHNN issued on 30/07/2021 by the State Bank of Vietnam prescribing credit institutions and foreign bank branches’ trading of promissory notes, treasury bills, deposit certificates and bonds domestically issued by other credit institutions and foreign bank branches (referred to as the “Circular No. 12/2021/TT-NHNN”).

• Effective date: 27/10/2021.

Some contents should be noted:

• Firstly, regulating on rules for trading of financial instruments.

Specifically, Article 3 Circular No. 12/2021/TT-NHNN stipulates: “Article 3. Rules for trading of financial instruments

1. Credit institutions/FBBs are allowed to carry out the trading of financial instruments according to the contents about trading of corporate bonds and/or other financial instruments specified in their licenses issued by SBV.

2. Buyers and sellers shall assume legal responsibility for their compliance with regulations herein and relevant laws when carrying out trading of financial instruments.

3. VND (Vietnamese Dong) shall be the currency used in trading of financial instruments.

4. The financial instrument to be purchased or sold is under the lawful ownership of the seller and is not matured; the seller undertakes that the financial instrument is not in any disputes, is eligible for trading as prescribed by law, and is not undergoing any discounting or rediscounting.

5. Credit institutions/FBBs shall carry out the trading of bonds in accordance with the Law on Credit Institutions, the Law on Securities, Government’s Decrees on issuance of corporate bonds, legislative documents providing guidance on the Law on Securities, relevant laws and this Circular.

6. Credit institutions/FBBs shall only purchase promissory notes, treasury bills and deposit certificates whose remaining term to maturity is less than 12 months.  The remaining term to maturity is the length of time commencing on the date of payment for the financial instrument as prescribed in Clause 3 Article 4 hereof and ending on the maturity date of that financial instrument on which its principal and interest must be fully paid.

7. FBBs shall not be allowed to purchase convertible bonds.

8. Credit institutions/FBBs shall only carry out trading of financial instruments issued by finance companies or finance lease companies with organizations (including credit institutions/FBBs).”

• Secondly, regulating on transaction information.

Specifically, Article 3 Circular No. 12/2021/TT-NHNN stipulates: “Article 4. Transaction information

The form of transactions in financial instruments must comply with relevant laws.  An agreement on trading of financial instrument shall, inter alia, include the following contents:

1. Information about the seller and the buyer.

2. Name of the financial instrument; issuer; term, maturity date and value determined according to face value of the financial instrument.

3. Date of payment for financial instrument.

4. Payment amount for financial instrument.

5. Rights and obligations of the seller and the buyer.”

1. LEGAL DOCUMENTS ARE ISSUED IN 06/2021

Decree No. 58/2021/ND-CP on provision of credit information service

• Name of legal document: Decree 58/2021/ND-CP dated June 10, 2021 of the Government on provision of credit information service (referred to as the “Decree No. 58/2021/ND-CP”).

• Effective date: 15/08/2021.

Some content should be noted:

• Firstly, stipulating on operating principles of provision of credit information.

Specifically, Article 4 of Decree No. 58/2021/ND-CP stipulates: “Article 4. Operating principles of provision of credit information

1. Credit information companies shall provide credit information only after receiving certificate issued by the SBV.

2. Provision of credit information must comply with regulations and law, ensure truthfulness, objectivity, and not affect legal rights and benefits of relevant organizations and individuals.

3. Agreements and commitments in provision of credit information specified under this Decree must be made into records or other equally legitimate forms as written documents as per the law.

4. Credit information companies shall only collect credit information of debtors from participating organizations when the debtors allow the participating organizations to provide their credit information according to Annex I attached hereto.

5. Principles of providing credit information products:a) Credit information companies shall provide credit information products according to Article 21 hereof;b) Credit information companies shall only provide credit information products which contain identification information of debtors to other participating organizations under consent of the debtors under Annex II attached hereto, except for cases where the organizations receive consent of the debtors according to Clause 4 of this Article;c) Credit information companies shall not provide credit information products which contain identification information of debtors to other organizations and individuals under Point dd Clause 1 Article 21 hereof.”

• Secondly, stipulating on restrictions in provision of credit information service.

Specifically, Article 6 of Decree No. 58/2021/ND-CP stipulates: “Article 6. Restrictions in provision of credit information service

1. Do not illegally collect, provide information classified as Government secret.

2. Do not intentionally deviate credit information thereby affecting legal rights and benefits of relevant organizations and individuals.

3. Do not exchange credit information, or provide credit information for the wrong individuals, for the wrong purposes or illegally.

4. Do not exploit provision of credit information for personal gain, violating benefits of the Government, or legal rights and benefits of organizations and individuals.

5. Do not obstruct legal collection and use of credit information of organizations and individuals.”

1. LEGAL DOCUMENTS ARE ISSUED IN 05/2021

Decision No. 810/QD-NHNN on approving Plan for digital transformation of banking sector by 2025 with orientations towards 2030

• Name of legal document: Decision 810/QD-NHNN dated May 11, 2021 of the State Bank of Vietnam on approving Plan for digital transformation of banking sector by 2025 with orientations towards 2030 (referred to as the “Decision No. 810/QD-NHNN”).

• Effective date: 11/05/2021.

Some content should be noted:

• Firstly, stipulating on basic objectives by 2025 for credit institutions and foreign bank branches.

Specifically, Clause 2.1.2 Subsection 2 Section III of Plan for digital transformation of banking sector by 2025 with orientations towards 2030 (Promulgated together with Decision No. 810/QD-NHNN) stipulates:

“III. OBJECTIVES

…

2. Some specific objectives

…

2.1.2. For credit institutions and foreign bank branches (hereinafter referred to as “credit institutions”):

a) Customers can perform at least 50% of banking operations completely by digital means;

b) At least 50% of adults use electronic payment services;

c) At least 70% of customer’s transactions can be carried out via digital channels (online channels between customers and banks);

d) More than 30% revenue of at least 60% of credit institutions come from digital channels;

dd) At least 50% of disbursement and lending decisions of commercial banks and financial companies for small loans and consumer loans of individual customers are made in a digital and automated manner;

e) At least 70% of work dossiers of credit institutions are processed and stored by digital means (excluding work dossiers concerning state secrets);”

• Secondly, stipulating on the task of establishment and development of digital bank models at credit institutions and foreign bank branches in implementation of Plan for digital transformation of banking sector by 2025 with orientations towards 2030.

Specifically, Section 5 of Appendix List of key tasks in implementation of Plan for digital transformation of banking sector by 2025 with orientations towards 2030 (Promulgated together with Decision No. 810/QD-NHNN) stipulates:

“

”

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/05/2021

1.1. Decree No. 21/2021/NĐ-CP on elaborating to the Civil Code regarding security for fulfillment of obligations

• Name of legal document: Degree No. 21/2021/NĐ-CP issued on 19/03/2021 by the Government on elaborating to the Civil Code regarding security for fulfillment of obligations (referred to as the “Decree No. 21/2021/NĐ-CP”).

• Effective date: 15/05/2021.

Some contents should be noted:

·        Firstly, stipulating on collateral for security for obligation fulfillment

Specifically, Article 8 of Decree No. 21/2021/NĐ-CP stipulates: “Article 8. Collateral for security for obligation fulfillment

Collateral for security for obligation fulfillment includes:

1. Current properties or off-plan properties, except for cases where the Civil Code or other relevant laws forbid sale, transfer or other change of ownership at the time of establishing security contracts, security measures;

2. Properties sold under property sale agreements with retention of ownership;

3. Properties considered as subjects of obligations under infringed bilateral contracts in case of lien measures;

4. Properties under general public’s ownership if prescribed by relevant laws.”

• Secondary, stipulating on effectiveness of security contracts

Specifically, Article 22 of Decree No. 21/2021/NĐ-CP stipulates: “Article 22. Effectiveness of security contracts

1. Security contracts certified, verified under the Civil Code or relevant law provisions or at request shall enter into force from the date on which they are certified, verified.

2. Security contracts not specified under Clause 1 of this Article shall enter into force from the date agreed upon by all parties.  In case no agreement is made, security contracts shall enter into force from the date on which the contracts are signed.

3. In case collateral is withdrawn under agreement, sections of security contracts that relate to the withdrawn collateral shall no longer be effective; in case collateral is added or replaced, revision of security contracts relating to this collateral shall be implemented according to the Civil Code and other relevant law provisions.

4. Security measures that have not entered into effect against a third individual shall not alter or nullify security contracts.”

• Thirdly, stipulating on Effects of security measures against a third individual

Specifically, Article 33 of Decree No. 21/2021/NĐ-CP stipulates: “Article 23. Effects of security measures against a third individual

1. Security measures shall only take effect against a third individual when security contracts have legally entered into force.

2. In case security measures require registration according to the Civil Code or other relevant law provisions or are registered under agreement or at request of secured parties, registration shall be carried out in competent agencies as per relevant law provisions when security measures take effect against a third individual.

3. For cases not specified under Clause 2 of this Article, effect against a third individual in case of pledge of property, deposit or security collateral measure shall start from the date on which secured parties hold collateral. “holding of collateral” specified under this Clause refers to when secure parties directly manage and control collateral or when other individuals manage collateral according to agreements or regulations and law and secured parties control the collateral.

4. In case collateral under security measures specified under Clause 3 of this Article is given to other individuals for management, effect against a third individual of security measures shall start from the date on which:a) Pledgees, depositees or security collateral receiving parties hold collateral;b) Individuals managing collateral receive collateral directly from pledgers, depositors or security collateral making parties;c) Security contracts take effect when other individuals are directly managing properties which are used as pledge, deposit or security collateral.

5. Effect against a third individual of escrow deposit measure shall start from the date on which escrow deposit is sent to escrow accounts in credit institutions where escrow deposit is made.”

1.2. 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. ”

1.3. 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. ”

1.4. 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

…

3. 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.””

1.5. Decision No. 649/QĐ-NHNN on the announcement of administrative procedures to be abolished in the monetary operation sector performed at the One-Stop Department under the jurisdiction of the State Bank of Vietnam

• Name of legal document: Decision No. 649/QĐ-NHNN issued on 15/04/2021 by the State Bank Decision No. 649/QĐ-NHNN on the announcement of administrative procedures to be abolished in the monetary operation section performed at the One-Stop Department under the jurisdiction of the State Bank of Vietnam (referred to as the “Decision No. 649/QĐ-NHNN”).

• Effective date: 17/05/2021.

The content should be noted: Annul the procedures for approval of plan for public bond issuance of credit institutions.

Specifically, ADMINISTRATIVE PROCEDURES TO BE ABOLISHED IN THE MONETARY OPERATION SECTOR UNDER THE JURISDICTION OF THE STATE BANK OF VIETNAM (Issued together with Decision No. 649/QĐ-NHNN dated April 15, 2021 of the Governor of the Bank State) stipulates:

“

”

2. LEGAL DOCUMENTS ARE ISSUED IN 04/2021

2.1. Circular No. 04/2021/TT-NHNN on refinancing of credit institutions after credit institutions for VIETNAM AIRLINES JSC and the restructuring of repayment term, keeping intact debt group, setting up a risk provision for debts of VIETNAM AIRLINES JSC due to the influence of Covid-19pandemic

• Name of legal document: Circular No. 04/2021/TT-NHNN dated April 5, 2021 of the Governor of the State Bank of Vietnam on refinancing of credit institutions after credit institutions for VIETNAM AIRLINES JSC and the restructuring of repayment term, keeping intact debt group, setting up a risk provision for debts of VIETNAM AIRLINES JSC due to the influence of Covid-19pandemic (referred to as the “Circular No. 04/2021/TT-NHNN”).

• Effective date: 05/04/2021.

Some content should be noted:

• Firstly, stipulating on refinance amount.

Specifically, Article 4 of Circular No. 04/2021/TT-NHNN stipulates: “Article 4. Refinance amount

1. The maximum refinance amount for each VNA loan must not exceed the loan amount of each VNA loan under the refinancing application form of a credit institution.

2. The total refinance amount for credit institutions is maximum of 4,000 billion dong (four thousand billion dong).”

• Secondly, stipulating on refinance interest rate.

Specifically, Article 5 of Circular No. 04/2021/TT-NHNN stipulates: “Article 5. Refinance interest rate

1. The refinance interest rate is 0%/year, applicable to the refinancing term and the refinancing term (if any).

2. The interest rate applicable to overdue refinancing principals is equal to 150% of the refinancing interest rate announced by the State Bank from time to time at the time when the refinancing is transferred overdue.”

• Thirdly, stipulating on collateral.

Specifically, Article 6 of Circular No. 04/2021/TT-NHNN stipulates: “Article 6. Collateral

The State Bank refinancing without collateral for credit institutions.”

2.2. Decision No. 617/QĐ-NHNN on the announcement of new administrative procedures issued in the monetary operation sector, performed at the One-door Department under the jurisdiction of the State Bank of Vietnam

• Name of legal document: Decision No. 617/QĐ-NHNN issued on 06/04/2021 by the State Bank on the announcement of new administrative procedures issued in the monetary sector, performed at the one-door department under the jurisdiction of the State Bank of Vietnam (referred to as the “Decision No. 617/QĐ-NHNN”).

• Effective date: 06/04/2021.

The content should be noted: Stipulating procedures for refinancing approval for credit institutions after the credit institution lends to VIETNAM AIRLINES JSC.

Specifically, Item 1, Part II New administrative procedures issued in the monetary sector, performed at the one-door department under the jurisdiction of the State Bank of Vietnam, issued together with Decision No. 617/QD-NHNN stated: “1. Procedures for refinancing approval for credit institutions after credit institutions lend to VIETNAM AIRLINES JSC.

– The order of execution:

Step 1: The credit institution sends 01 application for refinancing loan according to Appendix I issued together with Circular No. 04/2021/TT-NHNN dated April 5, 2021 to the head office of the State Bank.

Step 2: Within 12 working days from the date of receipt of the request for refinancing loan from the credit institution, the State Bank of Vietnam shall issue a decision to refinance the credit institution, in case of disagreement, the State Bank shall issue a written document clearly stating the reason to the credit institution.

– The way to perform:

+ Head office of the State Bank (directly at the One-Door Department); or

+ Postal service.

– Dossier composition: Application for refinancing loan according to Appendix I issued together with Circular No. 04/2021/TT-NHNN.

– Number of dossier: 01 set.

– Processing term: 12 working days from the date of receipt of complete and valid dossier.

– Subjects of administrative procedures: Credit institutions.

– Administrative procedure settlement agency: State Bank of Vietnam (Monetary Policy Department).

– Result of the implementation of administrative procedures: Decision on refinancing.

– Fees and charges: No.

– Name of application form, declaration form: Re-financing application form according to Appendix I issued together with Circular No. 04/2021/TT-NHNN.

– The legal basis of administrative procedures:

+ Law on the State Bank of Vietnam dated June 16, 2010;

+ Law on Credit Institutions dated June 16, 2010; Law amending and supplementing a number of articles of the Law on Credit Institutions dated November 20, 2017;

+ Circular No. 04/2021/TT-NHNN dated April 5, 2021 of the Governor of the State Bank of Vietnam on refinancing of credit institutions after credit institutions for VIETNAM AIRLINES JSC and the restructuring of repayment term, keeping intact debt group, setting up a risk provision for debts of VIETNAM AIRLINES JSC due to the influence of Covid-19pandemic./ .”

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

…

3. 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.””