On August 14, 2023, the State Bank of Vietnam (SBV) organized a virtual Training Conference on the implementation of Circular No. 08/2023/TT-NHNN (Circular 08) regulating the conditions for overseas borrowings by enterprises without the Government’s guarantee, which takes effect from August 15, 2023.
Mr. Dao Xuan Tuan, Director General of the Foreign Exchange Management Department, speaks at the Conference
In his opening speech, Mr. Dao Xuan Tuan, Director General of the SBV Foreign Exchange Management Department, informed that, on June 30, 2023, the SBV issued Circular No. 08/2023/TT-NHNN regulating the conditions for overseas borrowings by enterprises without the Government’s guarantee. Circular 08 is not the first legal document regulating the conditions for overseas borrowings by enterprises. In fact, these conditions had previously been mentioned in Circular No.12/2014/TT-NHNN dated March 31, 2014 (Circular 12) issued by the SBV. However, in the context of unprecedented developments in the international and domestic markets, it is necessary to revise the regulations on the conditions for overseas borrowings. Therefore, Circular 08 had been formulated in the direction of resolving a number of substances which are no longer appropriate in Circular 12, creating favorable conditions for overseas borrowings by enterprises.
The Training Conference was aimed to provide guidance for the SBV branches and the credit institutions providing account services for overseas borrowings so that they understand correctly about the regulations of the Circular; disseminate widely the provisions of Circular 08 to enterprises seeking overseas borrowings to ensure that they implement the relevant regulations in strict compliance with the laws.
The representative from the Foreign Exchange Management Department briefs of a number of the main substances
in Circular 08
Briefing of a number of the main substances in Circular 08, the representative from the Foreign Exchange Management Department emphasized that in comparison with Circular 12, Circular 08 provides more favorable conditions for enterprises seeking overseas borrowings, for example, it does not require a comparison of the borrowing costs when structuring overseas debts. The new Circular also supplements specific requirements for the loan use plans, etc. Moreover, Circular 08 does not change the methods of managing short or long terms overseas debts; reduces one administrative procedure for approving an overseas borrowing in VND, etc. Circular 08 will help to enable enterprises to seek oversea borrowings for their production and business operations, ensuring the prudent ratios of the national foreign debts.
The representative from the Foreign Exchange Management Department discussed with the participants
At the Conference, Ms. Nguyen Thi Minh Nguyet, Deputy Director General of the SBV’s Foreign Exchange Management Department, discussed with the participants and clarified several specific provisions in Circular 08. All the entities in the banking sector were also requested to formulate consistent procedures for the implementation of the Circular in their entire systems, and promptly report to the SBV on any arising difficulties and obstacles during the implementation.
Le Hang