Tiếng Việt

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

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

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

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

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

  • Effective date: 01/10/2020.

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

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

Clause 5 Article 16 is amended, supplemented as follow:

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

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

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

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

d) From October 1, 2023: 30%.””

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

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

  • Effective date: 01/10/2020.

Some contents should be noted:

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

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

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

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

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

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

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

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

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

  • Effective date: 01/10/2020.

Some contents should be noted:

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

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

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

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

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

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

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

Legal update relating to Finance and Credit (Monthly Legal Update – 09/2020)

by | Sep 8, 2020 | Banking, EN, Legal Update

1. LEGAL DOCUMENTS ARE ISSUED IN 08/2020

1.1. Decision No. 1349/QD-NHNN prescribing interest rates of required reserves and excess reserves of credit institutions and foreign bank branches at the State Bank of Vietnam

  • Name of legal document: Decision No. 1349/QD-NHNN issued on 06/08/2020 by the State Bank of Viet Nam prescribing interest rates of required reserves and excess reserves of credit institutions and foreign bank branches at the State Bank of Vietnam (referred to as the “Decision No. 1349/QD-NHNN”).

  • Effective date: 06/08/2020.

Some contents should be noted:

  • Firstly, providing interest rates of required reserves and excess reserves deposited by credit institutions and foreign bank branches at the State Bank of Vietnam.

Specifically, Article 1 of Decision No. 1349/QD-NHNN stipulates: “Article 1. Interest rates of required reserves and excess reserves deposited by credit institutions and foreign bank branches at the State Bank of Vietnam are as follows:

  1. The interest rate of required reserves deposited in Vietnam Dong: 0.5%/year.

  2. The interest rate of required reserves deposited in foreign currency: 0%/year.

  3. The interest rate of excess reserves deposited in Vietnam Dong: 0%/year.

  4. The interest rate of excess reserves deposited in foreign currency: 0.05%/year.”

  • Secondly, Decision No. 1349/QD-NHNN comes into force from August 06, 2020 and supersedes the Decision No. 421/QD-NHNNdated March 16, 2020 of the Governor of the State Bank of Vietnam.

Specifically, Article 2 of Decision No. 1349/QD-NHNN stipulates: “Article 2. This Decision comes into force from August 06, 2020 and supersedes the Decision No. 421/QD-NHNN dated March 16, 2020 of the Governor of the State Bank of Vietnam prescribing interest rates of required reserves and excess reserves deposited by credit institutions and foreign bank branches at the State Bank of Vietnam.”

1.2. Decision No. 1350/QD-NHNN prescribing interest rates of deposits in Vietnam dong made by Vietnam development bank, Vietnam bank for social policies, people’s credit funds and microfinance institutions at the State Bank of Vietnam

  • Name of legal document: Decision No. 1350/QD-NHNN issued on 06/08/2020 by the State Bank of Viet Nam prescribing interest rates of deposits in Vietnam dong made by Vietnam development bank, Vietnam bank for social policies, people’s credit funds and microfinance institutions at the State Bank of Vietnam (referred to as the “Decision No. 1350/QD-NHNN”).

  • Effective date: 06/08/2020.

Some contents should be noted:

  • Firstly, providing interest rates of deposits in Vietnam Dong made by Vietnam Development Bank, Vietnam Bank for Social Policies, people’s credit funds and microfinance institutions at the State Bank of Vietnam.

Specifically, Article 1 of Decision No. 1350/QD-NHNN stipulates: “Article 1. Interest rates of deposits in Vietnam Dong made by Vietnam Development Bank, Vietnam Bank for Social Policies, people’s credit funds and microfinance institutions at the State Bank of Vietnam are as follows:

  1. The interest rate of deposits made by Vietnam Development Bank: 0.8%/year.

  2. The interest rate of deposits made by Vietnam Bank for Social Policies: 0.8%/year.

  3. The interest rate of deposits made by people’s credit funds: 0.8%/year.

  4. The interest rate of deposits made by microfinance institutions: 0.8%/year.”

  • Secondly, Decision No. 1350/QD-NHNN comes into force from August 06, 2020 and supersedes the Decision No. 422/QD-NHNNdated March 16, 2020 of the Governor of the State Bank of Vietnam.

Specifically, Article 2 of Decision No. 1350/QD-NHNN stipulates: “Article 2. This Decision comes into force from August 06, 2020 and supersedes the Decision No. 422/QD-NHNN dated March 16, 2020 of the Governor of the State Bank of Vietnam prescribing interest rates of deposits in Vietnam Dong made by Vietnam Development Bank, Vietnam Bank for Social Policies, people’s credit funds and microfinance institutions at the State Bank of Vietnam.”

1.3.  Decision No. 1351/QD-NHNN prescribing interest rates of deposits made by state treasury and deposit insurance of Vietnam at the State Bank of Vietnam

  • Name of legal document: Decision No. 1351/QD-NHNN issued on 06/08/2020 by the State Bank of Viet Nam prescribing interest rates of deposits made by state treasury and deposit insurance of Vietnam at the State Bank of Vietnam (referred to as the “Decision No. 1351/QD-NHNN”).

  • Effective date: 06/08/2020.

Some contents should be noted:

·        Firstly, providing interest rates of deposits made by State Treasury and Deposit Insurance of Vietnam at the State Bank of Vietnam.

Specifically, Article 1 of Decision No. 1351/QD-NHNN stipulates: “Article 1. Interest rates of deposits made by State Treasury and Deposit Insurance of Vietnam at the State Bank of Vietnam are as follows:

  1. The interest rate of deposits in Vietnam Dong made by State Treasury: 0.8%/year.

  2. The interest rate of deposits in foreign currency made by the State Treasury: 0.05%/year.

  3. The interest rate of deposits in Vietnam Dong made by Deposit Insurance of Vietnam: 0.8%/year.”

  • Secondly, Decision 1351/QD-NHNN comes into force from August 06, 2020 and supersedes the Decision No. 423/QD-NHNN dated March 16, 2020 of the Governor of the State Bank of Vietnam.

Specifically, Article 2 of Decision No. 1351/QD-NHNN stipulates: “Article 2. This Decision comes into force from August 06, 2020 and supersedes the Decision No. 423/QD-NHNN dated March 16, 2020 of the Governor of the State Bank of Vietnam prescribing interest rates of deposits made by State Treasury and Deposit Insurance of Vietnam at the State Bank of Vietnam.”

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

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

  • Effective date: 01/10/2020.

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

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

Clause 5 Article 16 is amended, supplemented as follow:

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

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

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

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

d) From October 1, 2023: 30%.””

Legal update relating to Finance and Credit (Monthly Legal Update – 08/2020)

by | Aug 11, 2020 | Banking, EN, Legal Update

1. LEGAL DOCUMENTS ARE ISSUED IN 07/2020

Official Letter No. 4923/TCHQ-TXNK regarding the selection of a commercial bank to be VAT refund agents for foreigners

  • Name of legal document: Official Letter No. 4923/TCHQ-TXNK issued on 24/07/2020 by the General Department of Customs of the Ministry of Finance on regarding the selection of a commercial bank to be VAT refund agents for foreigners (referred to as the “Official Letter No. 4923/TCHQ-TXNK”).

  • Effective date: 24/07/2020.

Some contents should be noted:

  • Firstly, “General Department of Customs informs banks to know and request banks research to register as VAT refund agent for foreigners at Da Nang International Airport” and “Registration documents please send to the General Department of Customs before August 15, 2020”.

  • Secondly, issuing an Appendix on the list of banks cooperating to collect, specifically:

“APPENDIX

LIST OF BANKS COOPERATING TO COLLECT
(Issued together with Official Letter No. 4923/TCHQ-TXNK dated July 24, 2020 of the General Department of Customs)

No.

Name of commercial bank

1

Joint Stock Commercial Bank For Investment And Development Of Vietnam (BIDV)

2

Military Commercial Joint Stock Bank (MbBank)

3

Bank for Foreign Trade of Vietnam (Vietcombank)

4

Vietnam International Commercial Joint Stock Bank (VIB)

5

Vietnam Technological And Commercial Joint Stock Bank (Techcombank)

6

Vietnam Bank For Agriculture and Rural Development

7

VIETNAM MARITIME COMMERCIAL JOINT STOCK BANK (Maritimebank)

8

Vietnam Prosperity Bank (Vpbank)

9

HoChiMinh City Development Joint Stock Commercial Bank (HDBank)

10

Orient Commercial Joint Stock Bank (OCB)

11

Australia and New Zealand Banking

12

An Binh Commercial Joint Stock Bank (ABbank)

13

LIEN VIET POST JOINT STOCK COMMERCIAL BANK (LienVietPostBank)

14

PETROLIMEX GROUP COMMERCIAL JOINT STOCK BANK (PGbank)

15

Ngân hàng The Bank of Tokyo – Mitsubishi UFJ, Ltd (BTMU)

16

DongA Bank

17

Saigon Commercial Bank (SCB)

18

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank)

19

Tien Phong Commercial Joint Stock Bank (TPBank)

20

Saigon – Hanoi Commercial Joint Stock Bank (SHB)

21

Nam A Commercial Joint Stock Bank

22

Southeast Asia Commercial Joint Stock Bank (SeABank)

23

VIET CAPITAL JOINT STOCK BANK (VCCB)

24

MIZUHO BANK, LTD. 

25

Sumitomo Mitsui Banking Corporation (SMBC)

26

INDOVINA BANK LIMITED

27

SHINHAN BANK VIETNAM LIMITED

28

VietNam-Asia Commercial Joint Stock Bank

29

CITIBANK N.A.

30

Kien Long Commercial Joint Stock Bank KienLongBank)

31

HSBC Bank (Vietnam) Ltd

32

BANGKOK BANK PUBLIC COMPANY LIMITED

33

WOORI BANK VIETNAM LIMITED (Woori Bank)

34

VIETNAM THUONG TIN COMMERCIAL JOINT STOCK BANK

”

Legal update relating to Finance and Credit (Monthly Legal Update – 07/2020)

by | Jul 13, 2020 | Banking, EN, Legal Update

1. LEGAL DOCUMENTS ARE ISSUED IN 06/2020

Decision No. 1121/QD-NHNN on the amendment of the Circular No. 52/2018/TT-NHNN dated December 31, 2018 of the Governor of the State Bank of Vietnam prescribing credit rating of credit institutions and foreign bank branches

  • Name of legal document: Decision No. 1121/QD-NHNN issued on 22/06/2020 by the State Bank of Viet Nam on the amendment of the Circular No. 52/2018/TT-NHNN dated December 31, 2018 of the Governor of the State Bank of Vietnam prescribing credit rating of credit institutions and foreign bank branches (referred to as the “Decision No. 1121/QD-NHNN”).

  • Effective date: 22/06/2020.

Some contents should be noted:

  • Firstly, correcting the phrase “The higher the value of a quantitative indicator, the higher the risk level”.

Specifically, Clause 2 Article 1 of Circular No. 52/2018/TT-NHNN stipulates: “Article 1. Correction of a number of technical errors prescribed in the Circular No. 52/2018/TT-NHNN dated December 31, 2018 of the Governor of the State Bank of Vietnam regulating the classification of credit institutions and bank branches are as follows:

…

2. Article 14:

At ordinal number 2.5 The Table of Scoring benchmarks for specific quantitative indicators, correcting the phrase “The higher the value of a quantitative indicator, the higher the risk level” to “The higher the value of a quantitative indicator, the lower the risk level”.”

  • Secondly, correcting technical errors in Article 16 of Circular No. 52/2018/TT-NHNN.

Specifically, Clause 2 Article 1 of Circular No. 52/2018/TT-NHNN stipulates: “Article 1. Correction of a number of technical errors prescribed in the Circular No. 52/2018/TT-NHNN dated December 31, 2018 of the Governor of the State Bank of Vietnam regulating the classification of credit institutions and bank branches are as follows:

…

3. In Article 16 of Circular 52 printed:

“3. In case where credit institutions or foreign bank branches have yet to be or are not subject to…”

Now revised to: “4. In case where credit institutions or foreign bank branches have yet to be or are not subject to…””

Covid-19 and Legal Perspective on Force Majeure

Covid-19 and Legal Perspective on Force Majeure

by | Jul 1, 2020 | Contract, EN, Legal Guidance

Covid 19 and Force Majeure

On 1st Feb 2020 in Vietnam, the Prime Minister issued Decision No. 173/QD-TTg about the Declaration of Covid-19 epidemic – novel coronavirus acute respiratory disease[1] (“Covid-19”). On that basis, recently the State authorities have issued a number of documents to prevent and control this Covid-19, which may have affected company’s production, business and human resources activities, as well as the ability to perform contractual obligations previously concluded.

Therefore, QNT Law Firm would like to send this Legal Update to you in order to help you get a basic view on some of legal issues related to Covid-19, namely: Force Majeure and Basic Change of Circumstances under laws of Vietnam. Hopefully this document will be useful to you in the meantime.

1.       Force Majeure

Under the provisions of laws of Vietnam, where an obligor is not able to perform a civil obligation due to an event of force majeure, it shall not have civil liability[2], commercial liability[3] unless otherwise agreed or otherwise provided by law.

In particular, a force majeure event (“Force Majeure”) is understood to be an event which occurs in an objective manner which is not able to be foreseen and which is not able to be remedied by all possible necessary and admissible measures being taken[4]. Accordingly, to an event is called Force Majeure when:

  • An event occurs in an objective manner which is not able to be foreseen; and
  • (Consequences of the event/Liability) which is not able to be remedied (by the exempt Party) by all possible necessary and admissible measures being taken.

In connection with the Covid-19, we understand that:

  • Firstly, emphasize that, the Prime Minister’s Decision on the declaration of Covid-19 above is not a sufficient legal basis so that you do not have to bear civil and commercial liability due to the Force Majeure.
  • Secondly, the Prime Minister’s Decision on the declaration of Covid-19 above is the legal basis for determining that the Covid-19 is an objective manner occurrence[5] – only one of the conditions for obtaining the Covid-19 could be considered a Force Majeure to waive liability for the exempt Party.
  • Thirdly, when the Covid-19 may referred to as an force majeure event to waive liability for its failed obligations, the obligor must prove[6] that it failed to remedy the consequences of the event (cause of failure to comply with the obligations), although he/his has taken all necessary measures in its permissible capacity to remedy them.

In addition, from 18 December 2015, Vietnam officially ratified the accession to the Vienna Convention on the Contract of International Sales of Goods of the United Nations (CISG). In particular, Clause 1, Article 79 of the CISG also provides for exemption of liability, specifically: “A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences.”.

The exemption of liability due to a Force Majeure shall be determined on a case-by-case basis, on the basis of consideration of the Parties’ lawful terms of agreement on definitions, conditions of application and legal consequences, etc. of the Force Majeure stipulated in the signed Contract.

2.       Basic Change of Circumstances

Under the provisions of laws of Vietnam, in the case of basic circumstances change, the affected party may request the other party to the re-negotiate the contract in a reasonable period of time[7].

In particular, the basic change of circumstances (“BCC”) is construed as having fully met the following conditions:

  • The circumstances change due to objective reasons occurred after the conclusion of the contract;
  • At the time of concluding the contract, the parties could not foresee a change in circumstances;
  • The circumstances change such greatly that if the parties know in advance, the contract has not been concluded or are concluded, but with completely different content;
  • The continuation of the contract without the change in the contract would cause serious damage to one party;
  • The party having interests adversely affected has adopted all the necessary measures in its ability, in accordance with the nature of the contract, cannot prevent or minimize the extent of effect. [8]

The BBC and Force Majeure are mainly different in the following:

CriteriaForce MajeureBasic Change of Circumstances
DesireThe obligor wishes to be exempt from liability.The affected party wishes to renegotiate the Contract.
ConditionsRequests cannot overcome the consequences of an event even though all necessary measures have been taken in its ability (they cannot fulfill their obligations).Requests has taken all necessary measures in its ability, in accordance with the nature of the contract, cannot prevent or minimize the extent of effect (they cannot prevent, minimize damage).

In connection with the Covid-19, we understand that:

  • Firstly, the Prime Minister’s Decision on the declaration of Covid-19 above is the legal basis for determining the condition of “objective reasons occurred”.
  • Secondly, the affected Party must basically demonstrate the following issues:
  • There is a great change in the circumstances of Contract performance compared to the signed time.
  • Serious damage to them if the content of the Contract is not changed.
  • It has taken all necessary measures in its ability, consistent with the nature of the Contract but could not prevent, minimize the extent of effect.

Therefore, if the consequences of the Covid-19 cause serious damage when performing the Contract, you can consider applying this BCC provision. If the Parties cannot reach an agreement on amending the Contract within a reasonable period of time, any of the Parties may request a Court to handle. Note that, in the process of negotiating amendments and termination of the Contract and the Court handling the case, the Parties must continue to perform its obligations under the Contract, unless otherwise agreed.

[1] Replaced by the Prime Minister’s Decision No. 447/QD-TTg dated April 1, 2020

[2] Clause 2 Article 351 Civil Code No. 91/2015/QH13

[3] Point (b) Clause 1 Article 294 Law on Commercial No. 36/2005/QH11

[4] Clause 1 Article 156 Civil Code No. 91/2015/QH13

[5] This issue is based on information officially published in Vietnam.

[6] Clause 2 Article 294 of Law on Commercial stipulates: “The contract-breaching party shall bear the burden of proof of cases of liability exemption”

[7] Clause 2 Article 420 Civil Code No. 91/2015/QH13

[8] Clause 1 Article 420 Civil Code No. 91/2015/QH13

Legal update relating to Finance and Credit (Monthly Legal Update – 06/2020)

by | Jun 12, 2020 | Banking, EN, Legal Update

1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/06/2020

Circular No. 28/2020/TT-BTC annulling a number of legal documents issued by the Minister of Finance in the fields of securities, insurance business and banking finance

  • Name of legal document: Circular No. 28/2020/TT-BTC issued on 17/04/2020 by the Minister of Finance annulling a number of legal documents issued by the Minister of Finance in the fields of securities, insurance business and banking finance (referred to as the “Circular No. 33/2020/TT-BTC”).

  • Effective date: 02/06/2020.

The content should be noted: Annulling a number of legal documents promulgated by the Minister of Finance in the field of banking finance.

Specifically, Article 3 of Circular No. 28/2020/TT-BTC stipulates: “Article 3. Annulling all contents of 02 legal documents issued by the Minister of Finance in the field of banking and finance, as follow:

  1. Circular No. 105/2007/TT-BTC on August 30, 2007 of the Ministry of Finance guiding on handling of risk for investment credit capital and export credit of the State.

  2. Circular No. 35/2012/TT-BTC on March 2, 2012 of the Ministry of Finance guiding a number of articles of Decree No. 75/2011/ND-CP on August 30, 2011 of the Government on the investment credit and export credit of State.”

2. LEGAL DOCUMENTS ARE ISSUED IN 05/2020

2.1. Decision No. 918/QD-NHNN refinancing interest rate, re-discount interest rate, interest rate on overnight loans in interbank electronic payment and loans for making up fund deficits in clearing payment given to banks by the Sate Bank of Vietnam 

  • Name of legal document: Decision No. 918/QD-NHNN issued on 12/05/2020 by the State Bank of Viet Nam refinancing interest rate, re-discount interest rate, interest rate on overnight loans in interbank electronic payment and loans for making up fund deficits in clearing payment given to banks by the Sate Bank of Vietnam  (referred to as the “Decision No. 918/QD-NHNN”).

  • Effective date: 13/05/2020.

Some contents should be noted:

  • Firstly, stipulating the interest rates are adopted by the State Bank of Vietnam.

Specifically, Article 1 of Decision No. 918/QD-NHNN stipulates: “Article 1. The following interest rates are adopted by the State Bank of Vietnam, including:

  1. Refinancing interest rate:  4.5%/year.

  2. Re-discount interest rate: 3.0%/year.

  3. Interest rate on overnight loans in interbank electronic payment and loans for making up fund deficits in clearing payment given to banks by the state bank of Vietnam: 5.5%/year.”

  • Secondly, Decision No. 918/QD-NHNN supersedes the Decision No. 418/QD-NHNNdated March 16, 2020 by of the Governor of the State Bank of Vietnam.

Specifically, Article 2 of Decision No. 918/QD-NHNN stipulates: “Article 2. This Decision comes into force from May 13, 2020 and supersedes the Decision No. 418/QD-NHNN dated March 16, 2020 by of the Governor of the State Bank of Vietnam on refinancing interest rate, re-discount interest rate, interest rate on overnight loans in interbank electronic payment and loans for making up fund deficits in clearing payment given to banks by the State Bank of Vietnam.”

2.2. Decision No. 919/QD-NHNN maximum interest rates of deposits in Vietnam dong of organizations and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNN dated March 17, 2014

  • Name of legal document: Decision No. 919/QD-NHNN issued on 12/05/2020 by the State Bank of Viet Nam maximum interest rates of deposits in Vietnam dong of organizations and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNN dated March 17, 2014  (referred to as the “Decision No. 919/QD-NHNN”).

  • Effective date: 13/05/2020.

Some contents should be noted:

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

Specifically, Article 1 Decision No. 919/QD-NHNN stipulates: “Article 1. Maximum interest rates of deposits in Vietnam Dong of organizations (except credit institutions and foreign bank branches) and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNN dated March 17, 2014 are as follows:

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

  2. The maximum interest rate of deposits with a term from 1 month to less than 6 months is 4.25%/year; in particular, people’s credit funds and microfinance institutions shall adopt the maximum interest rate of 4.75%/year with respect to deposits with a term from 1 month to less than 6 months.”

  • Secondly, Decision No. 919/QD-NHNN supersedes the Decision No. 419/QD-NHNNdated March 16, 2020 of the Governor of the State Bank of Vietnam.

Specifically, Clause 1 Article 2 of Decision No. 919/QD-NHNN stipulates: “Article 2. 

  1. This Decision comes into force from May 13, 2020 and supersedes Decision No. 419/QD-NHNNdated March 16, 2020 of the Governor of the State Bank of Vietnam prescribing maximum interest rates of deposits in Vietnam Dong of organizations and individuals at credit institutions and foreign bank branches according to Circular No. 07/2014/TT-NHNN dated March 17, 2014.”

2.3. Decision No. 920/QD-NHNN prescribing maximum interest rates of short-term loans in vietnam dong offered by credit institutions and foreign bank branches to customers to meet their demand of fund in certain economic sectors according to Circular No. 39/2016/TT-NHNN dated December 30, 2016

  • Name of legal document: Decision No. 920/QD-NHNN issued on 12/05/2020 by the State Bank of Viet Nam prescribing maximum interest rates of short-term loans in vietnam dong offered by credit institutions and foreign bank branches to customers to meet their demand of fund in certain economic sectors according to Circular No. 39/2016/TT-NHNNdated december 30, 2016  (referred to as the “Decision No. 920/QD-NHNN”).

  • Effective date: 13/05/2020.

Some contents should be noted:

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

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

  1. Credit institutions and foreign bank branches (except people’s credit funds and microfinance institutions) shall offer short-term loans in Vietnam Dong with the maximum interest rate of 5.0%/year.

  2. People’s credit funds and microfinance institutions shall offer short-term loans in Vietnam Dong with the maximum interest rate of 6.0%/year.”

  • Secondly, Decision No. 920/QD-NHNN supersedes Decision No. 420/QD-NHNNdated March 16, 2020 of the Governor of the State Bank of Vietnam.

Specifically, Clause 1 Article 2 of Decision No. 920/QD-NHNN stipulates: “Article 2. 

1. This Decision comes into force from May 13, 2020 and supersedes Decision No. 420/QD-NHNN dated March 16, 2020 of the Governor of the State Bank of Vietnam prescribing maximum interest rates of short-term loans in Vietnam Dong offered by credit institutions and foreign bank branches to customers to meet their demand of fund in certain economic sectors according to Circular No. 39/2016/TT-NHNN dated December 30, 2016.”