Press Release on issuance of Circular No.24/2015/TT-NHNN
Pursuant to Law on the State Bank of Vietnam, Law on Credit Institutions, Ordinance on Foreign Exchange, Decree No.70/2014/ND-CP dated July 17, 2014 and the Government’s directive on resolving difficulties in production and business, supporting for the market, the State Bank of Vietnam (SBV) issued Circular No. 24/2015/TT-NHNN on December 8 on providing foreign currency loans by credit institutions and foreign bank branches to borrowers as residents. Several main substances of Circular No. 24/2015/TT-NHNN are as follows:
1. Credit institutions and foreign bank branches (hereinafter called as credit institutions) are allowed to consider the provision of foreign currency loans to borrowers in following situations:
a) Providing long, medium and short –term loans for overseas payment for import of goods and services when borrowers have enough revenue in foreign currencies to pay the loans;
b) Providing short-term loans for enterprises as leading petrol importers which are allocated annual quota of importing petrol by the Ministry of Industry and Commerce for serving overseas settlement for imported petrol when borrowers have not or do not have enough foreign currencies from revenue of production and business to pay the debts;
c) Providing short-term loan for meeting the demand for short –term capital in the domestic market in order to implement plan on production and business of exported goods via Vietnam’s border gate when borrowers have enough foreign currencies from revenue of production and business for debt payment; when credit institutions and foreign bank branches disburse the loans, the borrowers must sell their foreign currencies to those credit institutions and foreign bank branches in the form of spot transactions, excluding the case that customers’ loans used for payment transaction must be in foreign currencies in line with law. This regulation will be implemented until March 31, 2016.
d) Providing loans for overseas investment in national key projects and programs approved by the National Assembly, the Government or the Prime Minister and licensed by the Ministry of Planning and Investment.
2. Credit institutions consider to provide loans in foreign currencies for priority fields stipulated in resolutions, decrees, decisions, instructions and other documents of the Government, the Prime Minister after the SBV approves in writing for each situation in accordance with orders and procedures as stipulated in this Circular.
3. When having demand for lending in foreign currencies, credit institutions are required to send requesting document to the SBV for approval, including following main substances:
a) Credit institutions commit to appraise and ensure the feasible plan and that their borrowers meet all requirements in line with regulations on lending and they can recover debts (both principle and interest);
b) Credit institutions report all substances being appraised by them and approve loans to their customers: the demand for loans in foreign currencies to implement plans on business and production belonging to the priority fields stipulated in resolutions, decrees, decisions, instructions and other documents of the Government, the Prime Minister; the amount of approved loans; situations of production and business, financial situation and resource for debt payment of customers and other substances in order to ensure the feasible plan and that their borrowers meet all requirements in line with regulations on lending;
c) Credit institutions report in detail on foreign currency resource for lending, at the same time, commit to ensure the balance of foreign currency resource and maturity and the amount of loans; their lending is in compliance with applicable law on lending, forex management, credit extending, prudent ratios and other relevant regulations.
d) Credit institutions commits to be responsible for appraising results, their decision on lending in foreign currencies and substances, information as providing in requesting document.
This Circular will take effect from January 1, 2016 and replace Circular No.43/2014/TT-NHNN dated December 25, 2014 on providing foreign currency loans to borrowers as residents.
Translated by LH