In order to address the difficulties faced by the people and businesses affected by Typhoon Yagi (Typhoon No. 3) and its aftermath impacts, based on a proposal from the State Bank of Vietnam (SBV), the Prime Minister has issued Decision No. 1510/QD-TTg dated 4 December 2024 allowing the credit institutions and the foreign bank branches to remain the debt categories as already categorised in alignment with the legal regulations prior to the natural disasters. This is applicable to the debts that are eligible for debt service restructuring belonging to the customers in difficulties caused by Typhoon Yagi.
Following the Government's directions in Resolution No. 143/NQ-CP dated 17 September 2024, and based on the Prime Minister's Decision No. 1510/QD-TTg, the SBV has issued Circular No. 53/2024/TT-NHNN regulating the restructuring of the debt service by the credit institutions and the foreign bank branches for those customers affected by Typhoon Yagi, as well as its aftermath floods and inundation, landslides, and other disasters.
The new Circular is composed of nine (09) Articles, which regulate: (i) the subjects of application, which are the banks’ customers affected by Typhoon Yagi and its aftermaths in 26 cities and provinces; (ii) the credit institutions and the foreign bank branches may consider restructuring the principal and the interest of the loans, or the financial leases, that had outstanding principal balances before 7 September 2024, with incurred debt service obligations between 7 September 2024 and 31 December 2025; (iii) the debt balances that are eligible for the restructuring considerations must not yet be overdue, or be overdue by no more than 10 days from the original agreed due date. Exceptionally, in order to support the customers to recover from the consequences caused by the Typhoon, the Circular also allows the credit institutions and the foreign bank branches to consider to restructure the debts which are overdue for the first time for more than 10 days, within the period from 7 September 2024 to the end of the 10th day after the Circular's effective date; (iv) the debt service restructuring will be allowed until 31 December 2025, with no limitation on the numbers of restructuring; (v) the final repayment date for the restructured debts may be determined according to the customers' difficulties, but shall not exceed 31 December 2027.
The issuance of this Circular by the SBV, along with the Prime Minister's Decision allowing the maintenance of the debt categories, and the requirement for risk provisioning regarding the debts of those customers affected by Typhoon Yagi are expected to help reducing the financial pressures on the businesses and the people, enabling customers to access new loans, providing them with the needed resources to restore their production and business activities, and to stabilise their lives after the natural disasters.
HP