Press Release on issuance of Circular No.61/2024/TT-NHNN
Hanoi, December 31, 2024 – The Governor of the State Bank of Vietnam (SBV) has issued Circular No. 61/2024/TT-NHNN replacing Circular No.11/2022/TT-NHNN dated September 30, 2022 regulating the bank guarantees.
The new Circular is composed of 3 Chapters with 36 Articles, specifically as follows:
- Chapter I: General provisions, comprising of 9 Articles (from Article 1 to Article 9);
- Chapter II: Specific provisions, comprising of 23 Articles (from Article 10 to Article 32);
- Chapter III: Reporting and implementation arrangements, comprising of 4 Articles (from Article 33 to Article 36).
The new Circular contains a number of changes as compared with Circular No.11/2022/TT-NHNN, specifically as follows:
- Revising and replacing the definitions as stipulated in Article 3 in order to be consistent with the definition of bank guarantees as stipulated in Paragraph 2 of Article 4 of the 2024 Law on Credit Institutions, i.e.: (i) Definition of bank guarantees as stipulated in Paragraph 1, (ii) Definition of counter-guarantees as stipulated in Paragraph 2, (iii) Definition of a bank guarantee confirmation as stipulated in Paragraph 3, (iv) Definition of a guarantee beneficiary as stipulated in Paragraph 7, (v) Definition of a client as stipulated in Paragraph 11, (vi) Definition of the financial obligations of an investor over the buyers/lessees in a future housing guarantee as stipulated in Paragraph 15.
- Revising Article 9 about electronic transactions to be consistent with the 2023 Law on Identification, and other applicable legal regulations on electronic transactions.
- Adding a new regulation in Article 14 requiring that a customer must provide information about his/her related persons when applying for a bank guarantee to be in alignment with the 2024 Law on Credit Institutions.
- Revising Article 12 to stipulate that a foreign bank branch is allowed to provide guarantee services in foreign currencies to non-resident clients in case the guarantee beneficiary is a resident, without requiring a counter-guarantee, or a guarantee confirmation of an overseas credit institution, to be in alignment with Paragraph 2 of Article 131 of the 2024 Law on Credit Institutions.
- Adding a new regulation in Paragraph 1 of Article 15, stipulating that in case of a guarantee confirmation, the guarantor is not required to make a written agreement on guarantee with the provider of the guarantee confirmation in order to be in line with the practical situations and the international practices.
- Adding a new regulation in Paragraph 6 of Article 22 stipulating that in case a client pays their debt in a foreign currency, that amount can be converted into VND or another foreign currency based on the agreed exchange rate, in order to be in line with the practical situations and the applicable laws.
- Abolishing Article 34 regulating the responsibilities of the SBV entities, since it is unnecessary to stipulate the substances related to the functions and tasks of these entities, and to ensure alignment with the orientations of changing the SBV’s organizational structure.
The issuance of Circular No. 61/2024/TT-NHNN dated December 31, 2024 is aimed to improve the legal framework and ensure compliance with the applicable laws on bank guarantees (the 2024 Law on Credit Institutions, the 2023 Law on Real Estate Business), meeting the practical requirements, while still ensuring the effectiveness, safety and smooth operations of the bank guarantees performed by the credit institutions and the foreign bank branches.
The new Circular will take effect on April 1, 2025.
Translated by LH