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Legal update relating to Finance and Credit (Monthly Legal Update – 02&03/2023)

Legal update relating to Finance and Credit (Monthly Legal Update – 02&03/2023)

by | Mar 28, 2023 | Banking, EN, Legal Update

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/02/2023

1.1. 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.””

1.2. Circular No. 20/2022/TT-NHNN on guidelines for one-way money transfer from Vietnam to abroad and payment, money transfer for other current transactions of residents being organizations and individuals

  • Name of legal document: Circular 20/2022/TT-NHNN issued on 30/12/2022 by the State Bank of Vietnam on guidelines for one-way money transfer from Vietnam to abroad and payment, money transfer for other current transactions of residents being organizations and individuals (referred to as the “Circular No. 20/2022/TT-NHNN”).
  • Effective date: 15/02/2023.

The content should be noted: Stipulating on cases of purchase, transfer and carrying of foreign currency abroad for one-way money transfer purposes of organizations.

Specifically, Article 4 of Circular No. 20/2022/TT-NHNN stipulates: “Article 4. Cases of purchase, transfer and carrying of foreign currency abroad for one-way money transfer purposes of organizations

  1. Cases of purchase, transfer and carrying of foreign currency abroad to serve the organization’s sponsorship and aid purposes:a) Purchase, transfer, carrying of foreign currency abroad for sponsorship and aid according to commitments and agreements between the State, Government, local authorities and foreign countries. Sponsorship and aid sources are funds from the budget or the money source of the funding body itself;b) Purchase and transfer of foreign currency abroad to provide finance and aids in mitigating the impacts of natural disasters, epidemics and wars. Sources of sponsorship and aids are voluntary contributions from domestic organizations and individuals and/or funds from the funding body itself;c) Purchase and transfer of foreign currency abroad to finance programs, funds and projects established by domestic and/or overseas organizations for the purpose of supporting and encouraging development in the fields of: culture, education (scholarship funding), health. Sources of sponsorship is the funding source of the funding body itself.
  2. Cases of purchase and transfer of money abroad by an organization to serve other purposes:a) Award prize money to non-residents being overseas organizations and individuals participating in programs and contests held in Vietnam in accordance with relevant laws. The source of prize money is from non-residents being overseas organizations or individuals or residents being organizations;b) One-way money transfer abroad for the following purposes from sponsorship sources received by non-residents being overseas organizations and individuals:

(i) Allocate funding to overseas members to participate in scientific research projects in Vietnam and abroad;

(ii) Refund sponsorships for projects in Vietnam according to commitments and agreements with foreign parties.”

1.3. Decision No. 181/QD-NHNN on the announcement of periodical reports stipulated in Circular no. 20/2022/TT-NHNN date 30/12/2022 of the State bank of Vietnam

  • Name of legal document: Decision No. 181/QD-NHNN issued on 10/02/2023 by the State Bank of Vietnam on the announcement of periodical reports stipulated in Circular no. 20/2022/TT-NHNN date 30/12/2022 of the State bank of Vietnam (referred to as the “Decision No. 181/QD-NHNN”).
  • Effective date: 15/02/2023.

The content should be noted: Stipulating on the report on the situation of buying, transferring and bringing foreign currency abroad by residents being organizations for the purpose of sponsoring or giving aid abroad.

Specifically, Section 1 List of Periodical reporting regimes within the scope of management functions of the State Bank of Vietnam specified in Circular No. 20/2022/TT-NHNN promulgated together with Decision No. 181/QD-NHNN regulates:

No. Name of report Frequency to perform The subject of perform the report The agency receiving the report Data closing time Deadline for submission of reports Method of sending and receiving Report form
1 Report on the situation of buying, transferring and bringing foreign currency abroad by residents being organizations for the purpose of sponsoring or giving aid abroad Monthly Banks and foreign bank branches are allowed to do business and provide foreign exchange services State Bank of Vietnam (Foreign Exchange Management Department) The closing time for reporting data is calculated from the 15th of the previous month to the 14th of the reporting month No later than the 20th of the reporting month The report is sent by email to the email address baocaongoaite@sbv.gov.vn of the State Bank of Vietnam. Attached Appendix

”

1.4. Decision No. 313/QD-NHNN pertaining to refinancing interest rate, rediscounting interest rate, and interest rate of overnight lending for interbanking electronic payments and loans compensating for shortage of funds used for the State Bank of Vietnam’s settlement transactions with credit institutions and foreign bank branches

  • Name of legal document: Decision No. 313/QD-NHNN issued on 14/03/2023 by the State Bank of Vietnam pertaining to refinancing interest rate, rediscounting interest rate, and interest rate of overnight lending for interbanking electronic payments and loans compensating for shortage of funds used for the State Bank of Vietnam’s settlement transactions with credit institutions and foreign bank branches (referred to as the “Decision No. 313/QD-NHNN”).
  • Effective date: 15/03/2023.

The content should be noted: Stipulating on the State Bank of Vietnam’s interest rates.

Specifically, Article 1 of Circular No. 313/QD-NHNN stipulates: “Article 1. Regulations on SBV’s interest rates, including:

  1. Refinancing interest rate: 6.0%/year.
  2. Rediscounting interest rate: 3.5%/year.
  3. Interest rate of overnight lending for interbanking electronic payments and loans compensating for shortage of funds used for SBV’S settlement transactions with credit institutions and foreign bank branches: 6.0%/year.”

1.5. Decision No. 314/QD-NHNN pertaining to maximum short-term lending interest rates in Vietnam Dong of credit institutions and foreign bank branches applied to loan borrowers to meet capital demands for certain sectors and industries as per Circular No. 39/2016/tt-nhnn dated december 30, 2016

  • Name of legal document: Decision No. 314/QD-NHNN issued on 14/03/2023 by the State Bank of Vietnam pertaining to maximum short-term lending interest rates in Vietnam Dong of credit institutions and foreign bank branches applied to loan borrowers to meet capital demands for certain sectors and industries as per Circular No. 39/2016/tt-nhnndated december 30, 2016 (referred to as the “Decision No. 314/QD-NHNN”).
  • Effective date: 15/03/2023.

The content should be noted: Stipulating on the maximum interest rates applied to Vietnamese-dong short-term loans according to clause 2 of Article 13 in the Circular No. 39/2016/TT-NHNN.

Specifically, Article 1 of Circular No. 314/QD-NHNN stipulates: “Article 1. Maximum interest rates applied to Vietnamese-dong short-term loans according to clause 2 of Article 13 in the Circular No. 39/2016/TT-NHNN dated December 30, 2016 shall be as follows:

  1. Credit institutions and foreign bank branches (except people’s credit funds and microfinance institutions) will apply the maximum interest rate of 5.0%/year to Vietnamese-dong short-term loans.
  2. People’s credit funds and microfinance institutions will apply the maximum interest rate of 6.o%/year to Vietnamese-dong short-term loans.”

1.6. 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

  1. 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.
  2. 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.”

1.7. 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

  1. 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.
  2. 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.”
Legal update relating to Finance and Credit (Monthly Legal Update – 02&03/2023)

Legal update relating to Finance and Credit (Monthly Legal Update – 12/2022&01/2023)

by | Jan 1, 2023 | Banking, EN, Legal Update

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

  1. 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.
  2. 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

  1. 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.
  2. 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.”

Legal update relating to Finance and Credit (Monthly Legal Update – 11/2022)

by | Nov 4, 2022 | Banking, EN, Legal Update

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/11/2022

1.1. Circular No. 12/2022/TT-NHNN guidelines on foreign exchange management for foreign loans and foreign debt repayment of enterprise

  • Name of legal document: Circular 12/2022/TT-NHNN issued on 30/09/2022 by the State Bank of Vietnam guidelines on foreign exchange management for foreign loans and foreign debt repayment of enterprise (referred to as the “Circular No. 12/2022/TT-NHNN”).

  • Effective date: 15/11/2023.

The content should be noted: Stipulating on monitoring foreign borrowing and repayment of borrowers being commercial banks or foreign bank branches

Specifically, Article 27 of Circular No. 12/2022/TT-NHNN stipulates: “Article 27. Monitoring foreign borrowing and repayment of borrowers being commercial banks or foreign bank branches

  1. Commercial banks, foreign bank branches that are borrowers are not required to open and use foreign loan and debt repayment accounts at a credit institution or foreign bank branch to make the foreign loans.

  2. Commercial banks, foreign bank branches being borrowers are responsible for monitoring their transactions related to foreign loans in strict accordance with current regulations on accounting and bookkeeping for commercial banks, foreign bank branches; be responsible for and ensure the implementation of transactions related to foreign loans in accordance with the contents of the State Bank’s document certifying the registration and registration of changes to foreign loans of the commercial bank orforeign bank branches.”

1.2. Decision No. 1826/QD-NHNN on the announcement of procedure amended and supplemented in the field of foreign exchange activities performed in the one-stop department subject to the management functions of the State bank of Vietnam

  • Name of legal document: Decision 1826/QD-NHNN issued on 26/10/2022 by the Governor of the State Bank of Vietnam on the refinancing rate, rediscount rate, overnight rate for inter-bank electronic payment, and interest rate for (referred to as the “Decision No. 1826/QD-NHNN”).

  • Effective date: 15/11/2022.

The content should be noted: The list of administrative procedures which are performed at the State Bank of Vietnam and branches of the State Bank in provinces, cities under central have been amended and supplemented subject to the management functions of the State Bank.

Specifically, Item A, Section 1, Part I of administrative procedures to amend and supplement in the field of foreign exchange activities subject to the management function of the State Bank of Vietnam promulgated together with Decision No. 1826/QD-NHNN stipulates:

“ADMINISTRATIVE PROCEDURES TO AMEND AND SUPPLEMENT IN THE FIELD OF FOREIGN EXCHANGE ACTIVITIES SUBJECT TO THE MANAGEMENT FUNCTION OF THE STATE BANK OF VIETNAM

(Promulgated together with Decision No. 1826/QD-NHNN dated October 26, 2022 of the Governor of the State Bank of Vietnam)

PART I.

LIST OF ADMINISTRATIVE PROCEDURES

  1. The list of administrative procedures have been amended and supplemented subject to the management functions of the State Bank

No.

Case number of administrative procedure

Name of administrative procedure

The name of the legal document stipulating the content of amendments and supplements

Field

Implementing agency

A. Administrative procedures which are performed at the State Bank of Vietnam and branches of the State Bank in provinces, cities under central

1

1.000122

Procedures for registering an account to access the Website for management of foreign loans and repayments that are not guaranteed by the Government

Circular No. 12/2022/TT-NHNN dated on September 30, 2022 on guidelines for foreign exchange administration in respect of enterprise’s foreign borrowing and foreign debt repayment of enterprises

Foreign exchange activities

State Bank of Vietnam (Foreign Exchange Management Department); branches of the State Bank in provinces, cities under central

2

1.000972

Procedures for registration of foreign loans of enterprises that are not guaranteed by the Government

Circular No. 12/2022/TT-NHNN dated on September 30, 2022 on guidelines for foreign exchange administration in respect of enterprise’s foreign borrowing and foreign debt repayment of enterprises

Foreign exchange activities

State Bank of Vietnam (Foreign Exchange Management Department); branches of the State Bank in provinces, cities under central

3

1.000111

Procedures for registration of changes in foreign loans of enterprises that are not guaranteed by the Government

Circular No. 12/2022/TT-NHNN dated on September 30, 2022 on guidelines for foreign exchange administration in respect of enterprise’s foreign borrowing and foreign debt repayment of enterprises

Foreign exchange activities

State Bank of Vietnam (Foreign Exchange Management Department); branches of the State Bank in provinces, cities under central

”

2. LEGAL DOCUMENTS ARE ISSUED IN 10/2022

2.1. Decision No. 1809/QD-NHNN on the refinancing rate, rediscount rate, overnight rate for inter-bank electronic payment, and interest rate for loans for covering the capital shortfall regarding clearing of the State bank of Vietnam for credit institutions and branches of foreign banks

  • Name of legal document: Decision 1809/QD-NHNN issued on 24/09/2022 by the Governor of State Bank of Vietnam on the refinancing rate, rediscount rate, overnight rate for inter-bank electronic payment, and interest rate for loans for covering the capital shortfall regarding clearing of the State bank of Vietnam for credit institutions and branches of foreign banks (referred to as the “Decision No. 1809/QD-NHNN”).

  • Effective date: 25/10/2022.

The content should be noted:

  • Firstly, stipulating on interest rates of the State Bank of Vietnam.

Specifically, Article 1 of Decision No. 1809/QD-NHNN stipulates: “Article 1. Regulations on interest rates of the State Bank of Vietnam are as follows:

  1. Refinancing rate: 6,0%/year.

  2. Rediscount rate: 4,5%/year.

  3. Overnight rate for inter-bank electronic payment and interest rate for loans for covering the capital shortfall regarding clearing of the State Bank of Vietnam for credit institutions and foreign bank branches: 7,0%/year.”

  • Secondly, stipulating on the effective time of Decision No. 1809/QD-NHNN.

Specifically, Article 2 of Decision No. 1809/QD-NHNN stipulates: “Article 2. This Decision comes into force from October 25, 2022 and replaces Decision No. 1606/QD-NHNN dated September 22, 2022 of the Governor of the State bank of Vietnam on the refinancing rate, rediscount rate, overnight rate for inter-bank electronic payment, and interest rate for loans for covering the capital shortfall regarding clearing of the State Bank of Vietnam for credit institutions and foreign bank branches.”

2.2. Decision No. 1812/QD-NHNN on 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 1812/QD-NHNN issued on 24/10/2022 by the Governor of State Bank of Vietnam on 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-NHNNdated March 17, 2014 (referred to as the “Decision No. 1812/QD-NHNN”).

  • Effective date: 25/10/2022.

The content should be noted:

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

Specifically, Article 1 of Decision No. 1812/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 branches of foreign banks according to Circular No. 07/2014/TT-NHNN dated March 17, 2014 are as follows:

  1. The maximum interest rate applicable to demand deposits and term deposits under 1 month is 1,0%/year.

  2. The maximum interest rate applicable to term deposits from 1 month to less than 6 months is 6,0%/year; except People’s Credit Funds and microfinance institutions, which shall apply the maximum interest rate of 6,5%/year with respect to term deposits from 1 month to less than 6 months.”

  • Secondly, stipulating on the effective time of Decision No. 1812/QD-NHNN.

Specifically, Article 2 of Decision No. 1812/QD-NHNN stipulates: “Article 2.

  1. This Decision comes into force from September 25, 2022 and replaces Decision No. 1607/QD-NHNN dated September 22, 2022 of Governor of State Bank of Vietnam on 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.”

2.3. Decision No. 1813/QD-NHNN on the maximum short-term loan interest rate in Vietnam dong of credit institutions and foreign bank branches for borrowers to satisfy the capital requirements for certain economic fields and sectors according to Circular No. 39/2016/TT-NHNN dated December 30, 2016

  • Name of legal document: Decision 1813/QD-NHNN issued on 24/10/2022 by the Governor of State Bank of Vietnam on the maximum short-term loan interest rate in Vietnam dong of credit institutions and foreign bank branches for borrowers to satisfy the capital requirements for certain economic fields and sectors according to Circular No. 39/2016/TT-NHNNdated December 30, 2016 (referred to as the “Decision No. 1813/QD-NHNN”).

  • Effective date: 25/10/2022.

The content should be noted:

  • Firstly, stipulating on the maximum short-term loan interest rates in Vietnam dong according to clause 2 Article 13 of Circular No. 39/2016/TT-NHNNdated December 30, 2016.

Specifically, Article 1 of Decision No. 1813/QD-NHNN stipulates: “Article 1. The maximum short-term loan interest rates in Vietnam dong according to clause 2 Article 13[1] of Circular No. 39/2016/TT-NHNN dated December 30, 2016 are as follows:

  1. Credit institutions and foreign bank branches (except for People’s Credit Funds and microfinance institutions) shall apply a maximum short-term loan interest rate of 5,5% per year.

  2. People’s Credit Funds and microfinance institutions shall apply a maximum short-term loan interest rate in Vietnam Dong of 6,5% per year.”

  • Secondly, stipulating on the effective time of Decision No. 1813/QD-NHNN.

Specifically, Article 2 of Decision No. 1813/QD-NHNN stipulates: “Article 2.

1. This Decision comes into force from October 25, 2022 and replaces Decision No. 1730/QD-NHNN dated September 30, 2020 of the Governor of the State Bank of Vietnam on the maximum short-term loan interest rate in Vietnam dong of credit institutions and foreign bank branches for borrowers to satisfy the capital requirements for certain economic fields and sectors according to Circular No. 39/2016/TT-NHNN dated December 30, 2016.”

[1] Clause 2 Article 13[1] of Circular No. 39/2016/TT-NHNN dated December 30, 2016 stipualates: “Article 13. Loan interest rate …2. A credit institution and customer shall agree on the interest rate on short-term loan denominated in Vietnamese dong but shall not allow it to exceed the maximum interest rate decided by the State Bank’s Governor over periods of time in order to meet certain demands for borrowed fund as follows: a) Loans taken out to support the agricultural and rural development sector under regulations of the Government on credit policies for agricultural and urban development; b) Loans taken out to implement the export business plan in accordance with the Law on Commerce and other instructional directives thereof; c) Loans taken out to finance business activities of small and medium-sized enterprises under the Government’s regulations on support for development of small and medium-sized enterprises; d) Loans taken out to develop ancillary industries under the Government’s regulations on development of ancillary industries; dd) Loans taken out to finance business operations of high technology application enterprises under the provisions of the Law on High Technology and other instructional directives thereof.”

 

Legal update relating to Finance and Credit (Monthly Legal Update – 10/2022)

by | Oct 7, 2022 | Banking, EN, Legal Update

1. LEGAL DOCUMENTS ARE ISSUED IN 09/2022

1.1. Decision No. 1606/QĐ-NHNN on the refinancing interest rate, re-discount interest rate, overnight lending interest rate in inter-bank electronic payment and lending to offset the capital shortage in the clearing of the State Bank of Vietnam for credit institutions, foreign bank branches

  • Name of legal document: Decision 1606/QD-NHNN issued on 22/09/2022 by the State Bank of Vietnam on the refinancing interest rate, rediscounting interest rate, overnight lending interest rate in inter-bank electronic payment and lending to offset the capital shortage in the clearing of the State Bank of Vietnam for credit institutions, foreign bank branches (referred to as the “Decision No. 1606/QD-NHNN”).

  • Effective date: 23/09/2022.

The content should be noted:

  • Firstly, stipulating on interest rates of the State Bank of Vietnam.

Specifically, Article 1 of Decision No. 1606/QD-NHNN stipulates: “Article 1. Regulations on interest rates of the State Bank of Vietnam are as follows:

  1. Refinancing interest rate: 5.0%/year.

  2. Rediscounting interest rate: 3.5%/year.

  3. overnight lending interest rate in inter-bank electronic payment and lending to offset the capital shortage in the clearing of the State Bank of Vietnam for credit institutions, foreign bank branches: 6.0%/year.

  • Secondly, stipulating on the effective time of Decision No. 1606/QD-NHNN.

Specifically, Article 2 of Decision No. 1606/QD-NHNN stipulates: “Article 2. This Decision takes effect from September 23, 2022 and replaces Decision No. 1728/QD-NHNN dated September 30, 2020 of the Governor of the State Bank refinancing interest rate, rediscounting interest rate, overnight lending interest rate in inter-bank electronic payment and lending to offset the capital shortage in the clearing of the State Bank of Vietnam for banks.”

1.2. Decision No. 1607/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 1607/QD-NHNN issued on 22/09/2022 by the State Bank of Vietnam 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-NHNNdated March 17, 2014 (referred to as the “Decision No. 1607/QD-NHNN”).

  • Effective date: 23/09/2022.

The content should be noted:

  • Firstly, stipulating on maximum interest rates of deposits in Vietnam dong of organizations and individuals at credit institutions and branches of foreign banks according to circular No. 07/2014/TT-NHNNdated March 17, 2014.

Specifically, Article 1 of Decision No. 1607/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 branches of foreign banks according to circular No. 07/2014/TT-NHNN dated March 17, 2014 are as follows:

  1. The maximum interest rate applicable to demand deposits and term deposits under 1 month is 0.5%/year.

  2. The maximum interest rate applicable to term deposit from 1 month to less than 6 months is 5.0%/year; in particular, People’s Credit Funds and microfinance institutions shall adopt the maximum interest rate of 5.5%/year with respect to term deposit from 1 month to less than 6 months.”

  • Secondly, stipulating on the effective time of Decision No. 1607/QD-NHNN.

Specifically, Article 2 of Decision No. 1607/QD-NHNN stipulates: “Article 2.

  1. This Decision comes into force from September 23, 2022 and replaces Decision No. 1729/QD-NHNN dated September 30, 2020 of Governor of State Bank of Vietnam on 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.

  2. With respect to interest rates of term deposit in Vietnam Dong of organizations and individuals at credit institutions and foreign bank branches made before the effective date hereof, the interest rates shall continue to be applied for the whole period; in case the agreed period is expired and organizations and individuals do not withdraw the deposits, the credit institutions and foreign bank branches shall adopt interest rates of deposits as specified in this Decision.”\

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

  1. 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.

  2. 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. 12/2022/TT-NHNN guidelines on foreign exchange management for foreign loans and foreign debt repayment of enterprise

  • Name of legal document: Circular 12/2022/TT-NHNN issued on 30/09/2022 by the State Bank of Vietnam guidelines on foreign exchange management for foreign loans and foreign debt repayment of enterprise (referred to as the “Circular No. 12/2022/TT-NHNN”).

  • Effective date: 15/11/2023.

The content should be noted: Stipulating on monitoring foreign borrowing and repayment of borrowers being commercial banks or foreign bank branches

Specifically, Article 27 of Circular No. 12/2022/TT-NHNN stipulates: “Article 27. Monitoring foreign borrowing and repayment of borrowers being commercial banks or foreign bank branches

1. Commercial banks, foreign bank branches that are borrowers are not required to open and use foreign loan and debt repayment accounts at a credit institution or foreign bank branch to make the foreign loans.

2. Commercial banks, foreign bank branches being borrowers are responsible for monitoring their transactions related to foreign loans in strict accordance with current regulations on accounting and bookkeeping for commercial banks, foreign bank branches; be responsible for and ensure the implementation of transactions related to foreign loans in accordance with the contents of the State Bank’s document certifying the registration and registration of changes to foreign loans of the commercial bank orforeign bank branches.”

Legal update relating to Finance and Credit (Monthly Legal Update – 08&09/2022)

by | Sep 5, 2022 | Banking, EN, Legal Update

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/08/2022

1.1. Circular No. 04/2022/TT-NHNN regulations on application of interest rates on premature withdrawal of deposits from credit institutions and foreign bank branches

  • Name of legal document: Circular No. 04/2022/TT-NHNN issued on 16/06/2022 by the State Bank of Vietnam regulations on application of interest rates on premature withdrawal of deposits from credit institutions and foreign bank branches (referred to as the “Circular No. 04/2022/TT-NHNN”).
  • Effective date: 01/08/2022.

Some contents should be noted: Stipulating on interest rates on premature withdrawal of deposits.

Specifically, Article 5 of Circular No. 04/2022/TT-NHNN stipulates: “Article 5. Interest rates on premature withdrawal of deposits

  1. When a client withdraws all of the deposit: credit institutions shall apply a maximum interest rate equal to its lowest interest rate of demand deposits based on the type of client and/or the currency of the deposit when such client withdraws it.
  2. When a client withdraws a part of the deposit:a) Regarding the part of withdrawn deposit before maturity, credit institutions shall apply a maximum interest rate equal to its lowest interest rate of demand deposits based on the type of client and/or currency of the deposit when such client withdraws it;b) Regarding the remaining deposit, credit institutions shall apply the interest rate equal to the interest rate applied to the deposit that the client has withdrawn a part.”

1.2. Circular No. 05/2022/TT-NHNN abolish a number of legal documents promulgated by the Governor of the State Bank of Vietnam

  • Name of legal document: Circular No. 05/2022/TT-NHNN issued on 29/06/2022 by the State Bank of Vietnam abolish a number of legal documents promulgated by the Governor of the State Bank of Vietnam (referred to as the “Circular No. 05/2022/TT-NHNN”).
  • Effective date: 15/08/2022.

Some contents should be noted: Abolish (i) Decision No. 1557/2001/QD-NHNN dated December 14, 2001 of the Governor of the State Bank promulgating the regulation on inter-bank electronic clearing; and (ii) Circular No. 27/2014/TT-NHNN dated September 18, 2014 of the Governor of the State Bank on amendments to Circular no. 16/2010/TT-NHNN dated June 25, 2010 providing guidance on implementation of Decree no. 10/2010/ND-CP dated February 12, 2010 of the Government on credit information.

Specifically, clause 1 and clause 7 Article 1 of Circular No. 05/2022/TT-NHNN stipulates: “Article 1. Abolish all legal documents

The following legal documents promulgated by the Governor of the State Bank are abolished:

Decision No. 1557/2001/QD-NHNN dated December 14, 2001 of the Governor of the State Bank promulgating the regulation on inter-bank electronic clearing.

…

Circular No. 27/2014/TT-NHNN dated September 18, 2014 of the Governor of the State Bank on amendments to Circular no. 16/2010/TT-NHNN dated June 25, 2010 providing guidance on implementation of Decree no. 10/2010/ND-CP dated February 12, 2010 of the Government on credit information.”

1.3. Circular No. 06/2022/TT-NHNN amendments and supplements to some Articles of Circular No. 50/2018/TT-NHNN December 31, 2018 of the Government of the state bank of Vietnam applications and procedures for granting approval for changes of commercial banks and foreign branch banks

  • Name of legal document: Circular 06/2022/TT-NHNN issued on 30/06/2022 by the State Bank of Vietnam amendments and supplements to some Articles of Circular No. 50/2018/TT-NHNN December 31, 2018 of the Government of the state bank of Vietnam applications and procedures for granting approval for changes of commercial banks and foreign branch banks (referred respectively to as the “Circular No. 06/2022/TT-NHNN” and “Circular No. 50/2018/TT-NHNN”).
  • Effective date: 15/08/2022.

The content should be noted:

  • Firstly, amending and supplementing regulations on rules for preparing and submitting applications for approval for changes specified in Clause 4, Article 3 of Circular No. 50/2018/TT-NHNN.

Specifically, Clause 1 Article 1 of Circular No. 06/2022/TT-NHNN stipulates: “Article 1. Amending and supplementing a number of articles of Circular No. 50/2018/TT-NHNN

  1. Amending and supplementing Clause 4, Article 3[1] as follows:

“4. Dossiers shall be submitted directly at the One Door Department or via postal service to the State Bank of Vietnam or the State Bank’s branches in provinces and cities (hereinafter collectively referred to as the State Bank).””

Secondly, amending and supplementing regulations on the power to grant approval for changes are specified in Clause 1, Article 4 of Circular No. 50/2018/TT-NHNN.

Specifically, Clause 1 Article 1 of Circular No. 06/2022/TT-NHNN stipulates: “Article 1. Amending and supplementing a number of articles of Circular No. 50/2018/TT-NHNN

…

2. Amending and supplementing Clause 1, Article 4[2] as follows:

“1. The Governor of the State Bank shall approve the changes specified in Clause 1, Article 1 of this Circular for commercial banks and large-scale foreign bank branches under the decision of the Governor of the State Bank; content of changing the location of the head office of the foreign bank branch other than the province or city where the foreign bank branch is located.””

1.4. Circular No. 08/2022/TT-NHNN regulations on banking supervision order and procedures

  • Name of legal document: Circular 08/2022/TT-NHNN issued on 30/06/2022 by the State Bank of Vietnam regulations on banking supervision order and procedures (referred to as the “Circular No. 08/2022/TT-NHNN”).
  • Effective date: 01/09/2022.

The content should be noted: Stipulating banking supervision order and procedures

Specifically, Article 5 of Circular No. 08/2022/TT-NHNN stipulates: “Article 5. Order and procedures for banking supervision

  1. The order and procedures for banking supervision shall be as follows:a) Step 1: Collect, synthesize and process documents, information and data;b) Step 2: Implement compliance monitoring and/or risk monitoring;c) Step 3: Make a monitoring report, propose handling measures.
  2. The monitoring, expediting and inspecting of the implementation of inspection conclusions by credit institutions and foreign bank branches shall comply with the Government’s regulations on the implementation of inspection conclusions and regulations in this Circular.”

2. LEGAL DOCUMENTS ARE ISSUED IN 07/2022

Consolidated document No. 11/VBHN-NHNN stipulating applications and procedures for granting approval for changes of commercial banks and foreign branch banks

  • Name of legal document: Consolidated document No. 11/VBHN-NHNN issued on 07/07/2022 by the State Bank of Vietnam stipulating applications and procedures for granting approval for changes of commercial banks and foreign branch banks.
  • Effective date: 07/07/2022.

The content should be noted: Consolidating (i) Circular No. 50/2018/TT-NHNN dated December 31, 2018 of the Governor of the State Bank of Vietnam stipulating applications and procedures for granting approval for changes of commercial banks and foreign branch banks, effective from February 15, 2019; and (ii) Circular No. 06/2022/TT-NHNN dated June 30, 2022 of the Governor of the State Bank of Vietnam amending and supplementing a number of articles of Circular No. 50/2018/TT-NHNN dated 31 December 2018 of the Governor of the State Bank of Vietnam stipulating applications and procedures for granting approval for changes of commercial banks and foreign branch banks, effective from August 15, 2022.

[1] Article 3. Rules for preparing and submitting applications for approval for changes

…

4. The application shall be submitted, directly or by post, to the State Bank of Vietnam (through the Banking Supervision Agency) or the authorized State Bank branch of a province or city (hereinafter referred to as “the State Bank”).

[2] Article 4. The power to grant approval for changes

1. The Governor of the State Bank shall grant approval for changes specified in Clause 1 Article 1 of this Circular, of large-scale commercial banks and FBBs under the decision of the Governor of the State Bank of Vietnam.

 

Legal update relating to Finance and Credit (Monthly Legal Update – 07/2022)

by | Jul 11, 2022 | Banking, EN, Legal Update

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/07/2022

1.1. Circular No. 04/2022/TT-NHNN regulations on application of interest rates on premature withdrawal of deposits from credit institutions and foreign bank branches

  • Name of legal document: Circular No. 04/2022/TT-NHNN issued on 16/06/2022 by the State Bank of Vietnam regulations on application of interest rates on premature withdrawal of deposits from credit institutions and foreign bank branches (referred to as the “Circular No. 04/2022/TT-NHNN”).
  • Effective date: 01/08/2022.

Some contents should be noted: Stipulating on interest rates on premature withdrawal of deposits.

Specifically, Article 5 of Circular No. 04/2022/TT-NHNN stipulates: “Article 5. Interest rates on premature withdrawal of deposits

  1. When a client withdraws all of the deposit: credit institutions shall apply a maximum interest rate equal to its lowest interest rate of demand deposits based on the type of client and/or the currency of the deposit when such client withdraws it.
  2. When a client withdraws a part of the deposit:a) Regarding the part of withdrawn deposit before maturity, credit institutions shall apply a maximum interest rate equal to its lowest interest rate of demand deposits based on the type of client and/or currency of the deposit when such client withdraws it;b) Regarding the remaining deposit, credit institutions shall apply the interest rate equal to the interest rate applied to the deposit that the client has withdrawn a part.”

1.2. Circular No. 05/2022/TT-NHNN abolish a number of legal documents promulgated by the Governor of the State Bank of Vietnam

  • Name of legal document: Circular No. 05/2022/TT-NHNN issued on 29/06/2022 by the State Bank of Vietnam abolish a number of legal documents promulgated by the Governor of the State Bank of Vietnam (referred to as the “Circular No. 05/2022/TT-NHNN”).
  • Effective date: 15/08/2022.

Some contents should be noted: Abolish (i) Decision No. 1557/2001/QD-NHNN dated December 14, 2001 of the Governor of the State Bank promulgating the regulation on inter-bank electronic clearing; and (ii) Circular No. 27/2014/TT-NHNN dated September 18, 2014 of the Governor of the State Bank on amendments to Circular no. 16/2010/TT-NHNN dated June 25, 2010 providing guidance on implementation of Decree no. 10/2010/ND-CP dated February 12, 2010 of the Government on credit information.

Specifically, clause 1 and clause 7 Article 1 of Circular No. 05/2022/TT-NHNN stipulates: “Article 1. Abolish all legal documents

The following legal documents promulgated by the Governor of the State Bank are abolished:

Decision No. 1557/2001/QD-NHNN dated December 14, 2001 of the Governor of the State Bank promulgating the regulation on inter-bank electronic clearing.

…

Circular No. 27/2014/TT-NHNN dated September 18, 2014 of the Governor of the State Bank on amendments to Circular no. 16/2010/TT-NHNN dated June 25, 2010 providing guidance on implementation of Decree no. 10/2010/ND-CP dated February 12, 2010 of the Government on credit information.”

1.3.  Circular No. 06/2022/TT-NHNN amendments and supplements to some Articles of Circular No. 50/2018/TT-NHNN December 31, 2018 of the Government of the state bank of Vietnam applications and procedures for granting approval for changes of commercial banks and foreign branch banks

  • Name of legal document: Circular 06/2022/TT-NHNN issued on 30/06/2022 by the State Bank of Vietnam amendments and supplements to some Articles of Circular No. 50/2018/TT-NHNN December 31, 2018 of the Government of the state bank of Vietnam applications and procedures for granting approval for changes of commercial banks and foreign branch banks (referred respectively to as the “Circular No. 06/2022/TT-NHNN” and “Circular No. 50/2018/TT-NHNN”).
  • Effective date: 15/08/2022.

The content should be noted:

  • Firstly, amending and supplementing regulations on rules for preparing and submitting applications for approval for changes specified in Clause 4, Article 3 of Circular No. 50/2018/TT-NHNN.

Specifically, Clause 1 Article 1 of Circular No. 06/2022/TT-NHNN stipulates: “Article 1. Amending and supplementing a number of articles of Circular No. 50/2018/TT-NHNN

1. Amending and supplementing Clause 4, Article 3[1] as follows:

“4. Dossiers shall be submitted directly at the One Door Department or via postal service to the State Bank of Vietnam or the State Bank’s branches in provinces and cities (hereinafter collectively referred to as the State Bank).””

Secondly, amending and supplementing regulations on the power to grant approval for changes are specified in Clause 1, Article 4 of Circular No. 50/2018/TT-NHNN.

Specifically, Clause 1 Article 1 of Circular No. 06/2022/TT-NHNN stipulates: “Article 1. Amending and supplementing a number of articles of Circular No. 50/2018/TT-NHNN

…

2. Amending and supplementing Clause 1, Article 4[2] as follows:

“1. The Governor of the State Bank shall approve the changes specified in Clause 1, Article 1 of this Circular for commercial banks and large-scale foreign bank branches under the decision of the Governor of the State Bank; content of changing the location of the head office of the foreign bank branch other than the province or city where the foreign bank branch is located.””

2. LEGAL DOCUMENTS ARE ISSUED IN 06/2022

Decision No. 1032/QD-NHNN on the announcement of new administrative procedures promulgating the field of credit activities performed at the One Door Department under the management function of the State Bank of Vietnam

  • Name of legal document: Decision No. 1032/QD-NHNN issued on 15/06/2022 by the State Bank of Vietnam on the announcement of new administrative procedures promulgating the field of credit activities performed at the One Door Department under the management function of the State Bank of Vietnam (referred to as the “Decision No. 1032/QD-NHNN”).
  • Effective date: 15/06/2022.

The content should be noted: Regulation on procedures for interest rate support from the state budget for loans of enterprises, cooperatives and business households according to Decree 31/2022/ND-CP dated May 20, 2022 of the Government.

Specifically, Part I Item NEW ADMINISTRATIVE PROCEDURES PROMULGATING THE FIELD OF CREDIT ACTIVITIES UNDER THE MANAGEMENT FUNCTION OF THE STATE BANK OF VIETNAM of Decision No. 1032/QD-NHNN stipulates:

“PART I.

LIST OF ADMINISTRATIVE PROCEDURES

No. Name of administrative procedure Field Implementing agencies
Administrative procedures are carried out at the State Bank of Vietnam  
1 Procedures for interest rate support from the state budget for loans of enterprises, cooperatives and business households according to Decree 31/2022/ND-CP dated May 20, 2022 of the Government. Credit activities State Bank of Vietnam (Department of Credit for Economic Sectors), Ministry of Planning and Investment, Ministry of Finance.

”

 

[1] Article 3. Rules for preparing and submitting applications for approval for changes

…

4. The application shall be submitted, directly or by post, to the State Bank of Vietnam (through the Banking Supervision Agency) or the authorized State Bank branch of a province or city (hereinafter referred to as “the State Bank”).

[2] Article 4. The power to grant approval for changes

1. The Governor of the State Bank shall grant approval for changes specified in Clause 1 Article 1 of this Circular, of large-scale commercial banks and FBBs under the decision of the Governor of the State Bank of Vietnam.