Circular No. 01/2018/TT-NHNN dated January 26, 2018 of the State Bank of Vietnam providing the grant of loans to credit institutions placed under special control

THE STATE BANK OF VIETNAM

Circular No. 01/2018/TT-NHNN dated January 26, 2018 of the State Bank of Vietnam providing the grant of loans to credit institutions placed under special control

Pursuant to the Law on Credits Institutions dated June 16, 2010;

Pursuant to the Law on amendments to the Law on Credit Institutions dated November 20, 2017 (hereinafter referred to as the “Law No.17/2017/QH14”);

Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017 defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

At the request of the Director of the Monetary Policy Department;

The Governor of the State Bank of Vietnam promulgates a Circular providing for loans granted to credit institutions placed under special control.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of adjustment and subject of application

This Circular provides regulations on special loans granted by the State Bank of Vietnam (hereinafter referred to as “SBV”), the Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam and other credit institutions to the credit institutions placed under special control.

Article 2. Currency in special loans

Currency in special loans is Vietnamese dong (VND).

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1.“Restructuring plan” refers to either one of the plans prescribed in Clause 35 Article 4 of the Law on credit institutions No. 47/2010/QH12, as amended by the Law No. 17/2017/QH14.

2.“Transfer plan" refers to the one prescribed in Clause 3 Article 3 of the Law No. 17/2017/QH14.

3.“Borrower" refers to a credit institution placed under special control.

4.“Lender” refers to the SBV, the Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam or another credit institution.

5.“Preferential interest rate” refers to the interest rate which is lower than the interest rate on a refinancing loan as announced by the SBV in each period at the time the relevant special loan is disbursed or extended.

6.“SBV s local branch" refers to the branch of the State Bank of Vietnam in the province or central-affiliated city where the head office of the credit institution placed under special control is located.

Article 4. Rules for grant and settlement of special loans

1.Special loan limit; loan term; loan purposes; special loan interest rate; interest rate on extended term loan; interest rate on overdue principal; special loan interest exemption or reduction; settlement of special loans (including loan extension) shall be subject to the Prime Minister s decision as prescribed in Clause 2 Article 3 of the Law No. 17/2017/QH14, the approved restructuring and transfer plans. In case these contents are not provided for in the Prime Minister’s decision, the approved restructuring plan or the approved transfer plan, regulations herein shall prevail.

2.Special loans granted by the SBV with an interest rate of as low as 0% shall be subject to the Prime Minister’s decision.

Article 5. Cases of special loans

1.The SBV shall consider granting special loans to credit institutions placed under special control in the following cases:

a) The loan is used to assist the liquidation of the credit institution that is facing insolvency or has become insolvent and such insolvency threatens the stability of the system while the credit institution is placed under special control, even if the credit institution is implementing the approved restructuring plan;

b) The loan is granted with a preferential interest rate as low as 0% to a commercial bank, cooperative bank, finance company or microfinance institution to implement the recovery plan approved;

c) The loan is granted with a preferential interest rate as low as 0% to a commercial bank to implement the mandatory transfer plan approved;

d) The loan is granted with a preferential interest rate as low as 0% to a commercial bank acquired before the date of entry into force of the Law No. 17/2017/QH14 according to the Prime Minister’s Decision;

dd) The loan is granted with a preferential interest rate as low as 0% to a commercial bank acquired before the date of entry into force of the Law No. 17/2017/QH14 upon the completion of transfer according to the transfer plan approved.

2.The Deposit Insurance of Vietnam shall consider granting special loans to credit institutions placed under special control in the following cases:

a) The loan is used to assist the liquidation of the credit institution that is facing insolvency or has become insolvent and such insolvency threatens the stability of the system while the credit institution is placed under special control, even if the credit institution is implementing the approved restructuring plan;

b) The loan from its reserve fund is granted with a preferential interest rate as low as 0% according to the SBV s decision to assist the liquidation of a finance company, people s credit fund or microfinance institution that is facing insolvency or has become insolvent and such insolvency threatens the stability of the system before the restructuring plan is given approval;

c) The loan from its reserve fund is granted with a preferential interest rate as low as 0% to a finance company, people s credit fund or microfinance institution to implement the recovery plan approved.

3.The Cooperative Bank of Vietnam shall consider granting special loans to credit institutions placed under special control in the following cases:

a) The loan is used to assist the liquidation of the credit institution that is facing insolvency or has become insolvent and such insolvency threatens the stability of the banking system while the credit institution is placed under special control, even if the credit institution is implementing the approved restructuring plan;

b) The loan from the people s credit fund system safety assurance fund is granted with a preferential interest rate as low as 0% according to the SBV s decision to assist the liquidation of the people s credit fund that is facing insolvency or has become insolvent and such insolvency threatens the stability of the system before the restructuring plan is given approval;

c) The loan from the people s credit fund system safety assurance fund is granted with a preferential interest rate as low as 0% to the people s credit fund to implement the recovery plan approved.

4.Other credit institutions shall consider granting special loans to credit institutions placed under special control in the following cases:

a) The loan is used to assist the liquidation of the credit institution that is facing insolvency or has become insolvent and such insolvency threatens the stability of the banking system while the credit institution is placed under special control, even if the credit institution is implementing the approved restructuring plan;

b) The loan is granted to assist the recovery by a credit institution according to the recovery plan or mandatory transfer plan approved.

Article 6. Conversion of refinancing loans into special loans

1.Since the SBV places the credit institution under special control, refinancing loans granted to that credit institution may be converted into special loans as follows:

a) If the refinancing loan is not due, the principal and interest of such refinancing loan shall be converted into special loan; the due date and interest rate of the special loan shall be those of the refinancing loan;

b) If the refinancing loan is overdue, the overdue principal and the outstanding balance of late payment interest of such refinancing loan shall be converted into the special loan; the interest rate on the overdue principal of the special loan shall be that of the refinancing loan.

2.The conversion of refinancing loans into special loans is specified in the Decision of the SBV placing the credit institution under special control.

Article 7. The power to sign documents included in the special loan application, application for extension of special loan, and the special loan agreement

Legal representative of the borrower shall sign the documents included in the special loan application, application for extension of special loan, and the special loan agreement.

Chapter II

SPECIFIC PROVISIONS

Article 8. Special loan purposes

1.The credit institution placed under special loan shall use special loans granted as prescribed in Point a Clause 1, Point b Clause 2, and Point b Clause 3 Article 5 herein to make payments to individuals who deposit money at the credit institution. The use of special loan to make payments to depositors other than individuals shall be subject to the decision of the SBV s Governor in each specific case.

2.The receivers of payments prescribed in Clause 1 of this Article exclude:

a) Related persons of the credit institution as defined in Clause 28 Article 4 of the Law on credit institutions and relevant laws;

b) Executives of the credit institution;

c) Related persons of a manager, executive, capital contributor or shareholder who owns stakes or shares worth 5% or more of charter capital or voting share capital of the credit institution as prescribed in Clause 28 Article 4 of the Law on credit institutions and relevant laws.

3.A credit institution placed under special control may use special loans prescribed in Point a Clause 2, Point a Clause 3, and Point a Clause 4 Article 5 herein under agreements between the lender and the borrower.

Article 9. Special loan limit

1.Limits on special loans prescribed in Point a Clause 1, Point b Clause 2, Point b Clause 3 Article 5 herein shall be subject to the consideration and decision of the SBV depending on the solvency of the credit institution placed under special control.

2.Limits on special loans prescribed in Point a Clause 2, Point a Clause 3, Point a Clause 4 Article 5 herein shall be subject to agreements between the lender and the borrower.

Article 10. Special loan term

1.The term of any of the special loans prescribed in Point a Clause 1, Point b Clause 2, Point b Clause 3 Article 5 herein shall be subject to the consideration and decision of the SBV provided that it shall not exceed 02 years.

2.Terms of special loans prescribed in Point a Clause 2, Point a Clause 3, Point a Clause 4 Article 5 herein shall be subject to agreements between the lender and the borrower.

Article 11. Interest

1.Interests on special loans granted by the SBV:

a) Special loan interest rate or interest rate on an extended term loan is the interest rate on a refinancing loan as announced by the SBV in each period at the time the relevant special loan is disbursed or extended;

b) The interest rate on the overdue principal of a special loan equals 130% of the undue loan interest rate applicable before the loan becomes delinquent, except the case specified in Point b Clause 1 Article 6 herein.

2.Interests on special loans granted by the Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam and other credit institutions:

a) Special loan interest rate, interest rate on extended term loan and interest rate on the overdue principal of the special loan prescribed in Point a Clause 2, Point a Clause 3, or Point a Clause 4 Article 5 herein shall be subject to agreements between the lender and the borrower;

b) Special loan interest rate and interest rate on extended term loan of the special loan prescribed in Point b Clause 2 or Point b Clause 3 Article 5 herein shall be the preferential interest rate as low as 0% and subject to the SBV’s decision. The interest rate on the overdue principal of a special loan equals 130% of the undue loan interest rate applicable before the loan becomes delinquent.

3.Exemption or reduction of interests on special loans granted by the Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam and other credit institutions shall be subject to agreements between the lender and the borrower.

Article 12. Extension of special loan term

1.In case a credit institution placed under special control requests for an extension of term of the special loan prescribed in Point a Clause 1, Point b Clause 2, or Point b Clause 3 Article 5, or Point a Clause 1 Article 6 herein when the restructuring plan or the transfer plan or adjustment thereto is not approved, the SBV shall consider granting extension of term of such special loan based on the solvency of the credit institution or guidelines for restructuring decided or submitted by the SBV to the Government or the Prime Minister for decision; Each extended term shall not exceed 02 years.

2.In case a credit institution placed under special control requests for an extension of term of the special loan prescribed in Point a Clause 2, Point a Clause 3, or Point a Clause 4 Article 5 herein when the restructuring plan or adjustment thereto is not approved, the Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam or the lending credit institution shall consider and make decision on extension of term of such special loan.

Article 13. Repayment of special loan debts

1.When the special loan is due, the borrower must immediately and fully repay both principal and interest of such special loan to the lender. The borrower may also repay the special loan debts before its maturity date.

2.The SBV shall adopt the following measures for dealing with the cases where a borrower fails to repay the special loan debt in full on the agreed schedule but is not given an extension:

a) Mark and manage the special loan as overdue debt in accordance with the SBV’s regulations on methods of calculating and accounting of revenues and payment of interests in depositing and lending operations between SBV and credit institutions; charge interests on overdue principal in accordance with regulations in Point b Clause 1 Article 11 herein;

b) Withdraw money from deposit account of the credit institution opened at the SBV after receiving the notice from the credit institution of withdrawing money from its deposit account for debt recovery;

c) Collect debts from other sources of funding of the credit institution.

3.The Deposit Insurance of Vietnam, Cooperative Bank of Vietnam and other credit institutions shall adopt the following measures dealing with the cases where a borrower fails to repay the special loan debt in full on the agreed schedule but is not given an extension:

a) Mark and manage the loan principal and interest which are not yet paid by the credit institution by the due date as overdue principal and interest, and charge interest on overdue principal at the rate prescribed in Clause 2 Article 11 herein;

b) Collect debts as agreed and prescribed by law.

4.The special loan must be repaid before every other debt, including debts secured by collateral of the credit institution in the following cases:

a) When the loan is due, unless the restructuring plan or adjustment thereto is not approved;

b) The credit institution is dissolved or goes bankrupt.

5.If a borrower is not financially capable of paying all special loans to all lenders in the case prescribed in Clause 4 of this Article, repayments are made on a percentage basis in proportion to debt amounts.

Article 14. SBV’s consideration of application for special loan for liquidation

1.Where the credit institution placed under special control is facing insolvency or has become insolvent and makes demand for a special loan, it shall send 04 sets of loan application to the special control board to apply for a loan from the SBV.

The special loan application includes:

a) The application form for a special loan, which specifies the name of credit institution, number of deposit account in VND opened at the SBV s local branch, loan reasons, amounts, term and interest rate requested, loan purposes and commitments on use of borrowed fund for stated purposes and compliance with law regulations on special loans;

b) The report on the situation where it has lost or is likely to lose solvency, measures that have been taken and will be taken and proposed loan amounts;

c) The statement of deposit balance in VND, made according to the Appendix 01 enclosed herewith;

d) The statement of funding sources and use of funding in VND, made according to the Appendix 02 enclosed herewith;

dd) Other documents and papers as requested by the SBV (if any).

2.If accepting the credit institution’s request for special loan, within 02 working days from the receipt of the sufficient and valid application for special loan as prescribed in Clause 1 of this Article, the special control board shall send 02 sets of application to the SBV (via the Financial Policy Department) and the other to the SBV s local branch (if the SBV s local branch takes charge of inspection), accompanied by its written opinions about:

a) The operating status and solvency of the credit institution;

b) Specific opinions about the fact that the credit institution is facing insolvency or has become insolvent and such insolvency threatens the stability of the system;

c) Proposal for grant of special loan to the credit institution, which specifies special loan amount, purpose, term and interest rate.

3.Within 05 working days from the receipt of the valid application for special loan of the credit institution and written opinions of the special control board as prescribed in Clause 2 of this Article, the SBV s local branch shall give its opinions in writing to the Financial Policy Department about the following issues:

a) The operating status and solvency of the credit institution;

b) Specific opinions about whether the credit institution is facing insolvency or has become insolvent and such insolvency threatens the stability of the system or not;

c) Consent or dissent to the special loan application of the credit institution; special loan amount, purposes, terms, interest rate and other contents (if any); or reasons of dissent to the special loan application.

4.Within 02 working days from the receipt of the valid application for special loan of the credit institution and written opinions of the special control board as prescribed in Clause 2 of this Article, the Financial Policy Department shall ask for written opinions from the Bank Supervision and Inspection Agency.

5.Within 05 working days from the receipt of the written request for opinions from the Financial Policy Department as prescribed in Clause 4 of this Article, the Bank Supervision and Inspection Agency shall give written opinions to the Financial Policy Department about the following issues:

a) The operating status and solvency of the credit institution;

b) Specific opinions about whether the credit institution is facing insolvency or has become insolvent and such insolvency threatens the stability of the system or not;

c) Consent or dissent to the special loan application of the credit institution; special loan amount, purposes, terms, interest rate, proposal for grant of special loan by the SBV as prescribed in Point a Clause 1 Article 5 herein or the Deposit Insurance of Vietnam or the Cooperative Bank of Vietnam as prescribed in Point a Clause 2 or Point b Clause 3 Article 5 herein, and other contents (if any); or reasons of dissent to the special loan application.

6.Within 05 working days from the receipt of written opinions from relevant agencies as prescribed in Clause 3 and Clause 5 of this Article, the Financial Policy Department shall prepare and submit a consolidated report thereof to the SBV’s Governor for consideration and decision on grant of special loan by the SBV, the Cooperative Bank of Vietnam or Deposit Insurance of Vietnam, special loan amount, purposes, term and interest rate. If a special loan application is refused, the SBV shall state reasons for refusal in writing to the credit institution.

7.Based on the SBV s decision on grant of special loan to the credit institution and relevant law regulations, the Director of SBV’s local branch, or legal representative of the Deposit Insurance of Vietnam or the Cooperative Bank of Vietnam shall enter into a special loan agreement with the credit institution.

Article 15. SBV’s grant of special loan according to the Prime Minister’s decision, the recovery plan, mandatory transfer plan or transfer plan approved

1.When there is a demand for special loan as prescribed in Point b, c, d or dd Clause 1 Article 5 herein, the credit institution placed under special control shall submit 03 sets of application for grant of special loan by the SBV to the special control board.

The special loan application includes:

a) The application form for special loan, which specifies the loan amount, purposes, term and expected interest rate according to the Prime Minister’s decision, the recovery plan, mandatory transfer plan or transfer plan approved, and commitments on use of borrowed fund for stated purposes and compliance with law regulations on special loans;

b) Other documents and papers as requested by the SBV (if any).

2.If accepting the credit institution’s request for special loan, within 03 working days from the receipt of the valid application for special loan, the special control board shall send 02 sets of application to the SBV (via the Financial Policy Department), accompanied by its written opinions about the special loan amount, purpose, term and interest rate.

3.Within 02 working days from the receipt of the valid application for special loan of the credit institution and written opinions of the special control board as prescribed in Clause 2 of this Article, the Financial Policy Department shall ask for written opinions from the Bank Supervision and Inspection Agency.

4.Within 05 working days from the receipt of the written request for opinions from the Financial Policy Department as prescribed in Clause 3 of this Article, the Bank Supervision and Inspection Agency shall give written opinions to the Financial Policy Department about the following issues:

a) Opinions about grant of special loan to the credit institution according to the Prime Minister’s decision, the recovery plan, mandatory transfer plan or transfer plan approved;

b) Consent or dissent to the special loan application of the credit institution; special loan amount, purposes, terms, interest rate and other contents (if any); or reasons of dissent to the special loan application.

5.Within 05 working days from the receipt of written opinions from the Bank Supervision and Inspection Agency as prescribed in Clause 4 of this Article, the Financial Policy Department shall prepare and submit consolidated report thereof to the SBV s Governor for consideration and decision on grant of special loan to the credit institution.

6.Based on the SBV s decision on grant of special loan to the credit institution and relevant law regulations, the Director of SBV’s local branch shall enter into a special loan agreement with the credit institution.

Article 16. SBV’s consideration of application for extension of special loan term for liquidation

1.When there is a demand for extension of a special loan term as prescribed in Point a Clause 1, Point b Clause 2, Point b Clause 3 Article 5, or Point a Clause 1 Article 6 herein, the credit institution must submit an application for grant of extension of special loan term by the SBV to the special control board at least 40 working days before the due date.

The application for extension of special loan term includes:

a) The application form for extension of special loan term, which specifies the name of the credit institution, number of deposit account in VND opened at the lender, reasons, amount, term and expected interest rate on the extended term loan, and commitments on compliance with law regulations on special loans;

b) The report on solvency of the credit institution;

c) The statement of funding sources and use of funding in VND, made according to the Appendix 02 enclosed herewith;

d) Other documents and papers as requested by the SBV (if any).

2.If accepting the request for extension of special loan term submitted by the credit institution, within 03 working days from the receipt of the valid application for extension of special loan term as prescribed in Clause 1 of this Article, the special control board shall send 02 sets of application to the SBV (via the Financial Policy Department) and the other to the SBV s local branch (if the SBV s local branch takes charge of inspection), accompanied by its written opinions about the following issues:

a) The operating status and solvency of the credit institution;

b) Proposal for grant of extension of special loan term to the credit institution, specifying loan amount, extended term and interest rate.

3.Within 07 working days from the receipt of the valid application for extension of special loan term of the credit institution and written opinions of the special control board as prescribed in Clause 2 of this Article, the SBV s local branch shall give its opinions in writing to the Financial Policy Department about the following issues:

a) The operating status and solvency of the credit institution;

b) Consent or dissent to the application for extension of special loan term of the credit institution; loan amount, extended term, interest rate and other contents (if any); or reasons of dissent to the application for extension of special loan term.

4.Within 03 working days from the receipt of the valid application for extension of special loan term of the credit institution and written opinions of the special control board as prescribed in Clause 2 of this Article, the Financial Policy Department shall ask for written opinions from the Bank Supervision and Inspection Agency.

5.Within 07 working days from the receipt of the written request for opinions from the Financial Policy Department as prescribed in Clause 4 of this Article, the Bank Supervision and Inspection Agency shall give written opinions to the Financial Policy Department about the following issues:

a) The operating status and solvency of the credit institution;

b) Guidelines for restructuring of the credit institution as decided by the SBV; Guidelines for restructuring of the credit institution submitted by the SBV to the Government or the Prime Minister for decision; contents concerning the special loan of the credit institution in the restructuring guidelines, the Prime Minister’s decision, the restructuring plan or the transfer plan approved (if any);

c) Consent or dissent to the application for extension of special loan term of the credit institution; loan amount, extended term, interest rate and other contents (if any); or reasons of dissent to the application for extension of special loan term.

6.Within 07 working days from the receipt of written opinions from relevant agencies as prescribed in Clause 3 and Clause 5 of this Article, the Financial Policy Department shall prepare and submit a consolidated report thereof to the SBV’s Governor for consideration and decision on grant of extension of special loan term to the credit institution, loan amount, extended term and interest rate. If the application is refused, the SBV shall state reasons for refusal in writing to the credit institution.

7.Based on the SBV s decision on grant of extension of special loan term to the credit institution and relevant law regulations, the SBV’s local branch, the Cooperative Bank of Vietnam or the Deposit Insurance of Vietnam shall extend the special loan term to the credit institution.

Article 17. SBV’s grant of extension of special loan term according to the Prime Minister’s decision, the recovery plan, mandatory transfer plan or transfer plan approved

1.Based on contents about extension of term of the special loan prescribed in Point b, c, d or dd Clause 1 Article 5 herein in the Prime Minister’s decision, the restructuring plan or transfer plan approved, the credit institution shall submit 03 copies of the application for extension of special loan term to the special control board. The application for extension of special loan term must specify the loan amount, term and expected interest rate of the special loan for which term extension is requested according to the Prime Minister’s decision, the restructuring plan or transfer plan approved, and commitments on compliance with law regulations on special loans.

2.Within 02 working days from the receipt of the valid application as prescribed in Clause 1 of this Article, the special control board shall send 02 copies of the application to the SBV (via the Financial Policy Department), accompanied by its written opinions about the application.

3.Within 02 working days from the receipt of the valid application for extension of special loan term of the credit institution and written opinions of the special control board as prescribed in Clause 2 of this Article, the Financial Policy Department shall ask for written opinions from the Bank Supervision and Inspection Agency.

4.Within 05 working days from the receipt of the written request for opinions from the Financial Policy Department as prescribed in Clause 3 of this Article, the Bank Supervision and Inspection Agency shall give its opinions in writing to the Financial Policy Department about the contents concerning the extension of term of special loan granted to the credit institution in the Prime Minister’s decision, the restructuring plan or transfer plan approved, and the application for extension of special loan term submitted by the credit institution.

5.Within 05 working days from the receipt of written opinions from the Bank Supervision and Inspection Agency as prescribed in Clause 4 of this Article, the Financial Policy Department shall prepare and submit consolidated report thereof to the SBV s Governor for decision on grant of extension of special loan term to the credit institution.

6.Based on the SBV s decision on grant of extension of special loan term to the credit institution and relevant law regulations, the SBV’s local branch shall extend the term of the special loan granted to the credit institution.

Article 18. Consideration of applications for special loans or extension of special loan terms by the Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam and other credit institutions

1.The Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam and other credit institutions shall consider granting special loans or extension of special loan terms to assist liquidation by credit institutions as follows:

a) When there is a demand for special loan or extension of special loan term as prescribed in Point a Clause 2, Point a Clause 3 of Point a Clause 4 Article 5 herein, the credit institution placed under special control shall submit 04 sets of application to the Deposit Insurance of Vietnam, or the Cooperative Bank of Vietnam or the lending credit institution. An application for extension of special loan term must be submitted at least 20 working days before the due date.

The application for special loan or extension of special loan term includes:

i) Documents as prescribed by the Deposit Insurance of Vietnam, or the Cooperative Bank of Vietnam or the lending credit institution;

ii) Written proposal of the special control board for grant of special loan or extension of special loan term to the credit institution.

b) Within 02 working days from the receipt of the valid application submitted by the credit institution as prescribed in Point a of this Clause, if accepting the application, the Deposit Insurance of Vietnam, or the Cooperative Bank of Vietnam or the lending credit institution shall ask for opinions in writing from the Bank Supervision and Inspection Agency or the SBV’s local branch (if the SBV’s local branch takes charge of inspection) about the following issues:

i) The operating status and solvency of the credit institution;

ii) Specific opinions about whether the credit institution is facing insolvency or has become insolvent and such insolvency threatens the stability of the system or not (if the credit institution applies for a special loan);

iii) Contents concerning the special loan granted by the Deposit Insurance of Vietnam, or the Cooperative Bank of Vietnam or the lending credit institution specified in the restructuring plan approved (if any).

c) Based on written opinions given by the agencies prescribed in Point b of this Clause, the Deposit Insurance of Vietnam, or the Cooperative Bank of Vietnam or the lending credit institution shall consider granting the special loan or extension of special loan term to the credit institution.

2.The Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam and other credit institutions shall consider granting special loans or extension of special loan terms according to the recovery plan or mandatory transfer plan approved as follows:

The Deposit Insurance of Vietnam, or the Cooperative Bank of Vietnam or the lending credit institution shall consider granting special loan or extension of special loan term as prescribed in Point c Clause 2, Point c Clause 3 or Point b Clause 4 Article 5 herein in conformity with the recovery plan or compulsory transfer plan approved and their own internal regulations.

Article 19. Disbursement of special loan fund

1.With regard to special loans granted under the consideration and decision of the SBV or the Prime Minister’s decision, the recovery plan, mandatory transfer plan or transfer plan approved:

a) When there is a demand for disbursement of special loan fund, the credit institution shall send a request for disbursement to the special control board, in which amount and time of disbursement, and reasons thereof must be specified;

b) Based on the demand for use of borrowed fund of the credit institution, the special control board shall consider giving written opinions about the credit institution’s request for disbursement to the SBV’s local branch or the Deposit Insurance of Vietnam or the Cooperative Bank of Vietnam, accompanied by the credit institution’s request for disbursement;

c) The SBV’s local branch or the Deposit Insurance of Vietnam or the Cooperative Bank of Vietnam shall consider disbursing the special loan fund based on the special loan agreement, the credit institution’s request for disbursement and written opinions of the special control board.

2.The disbursement of special loans granted under the consideration and decision of the Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam and other lending credit institutions shall be subject to their own internal regulations and agreements made with the borrowers.

Chapter III

IMPLEMENTATION PROVISIONS

Article 20. Responsibility of borrowers

Every borrower shall:

1.Comply with regulations herein and relevant laws.

2.Sufficiently, timely and accurately provide the lender with documents and papers related to special loans. Assume responsibility before the law for the accuracy and legality of documents and papers provided.

3.Use the special loan fund for stated purposes and repay the special loan in accordance with regulations herein, the restructuring plan or transfer plan approved, the Prime Minister’s decision and the special loan agreement.

4.Send report on the use of borrowed fund to the lender on a monthly basis within the first 05 working days of the month following the reporting month or unscheduled report where necessary until the loan fund is used up.

5.Prepare and submit other reports at the request of the lender.

Article 21. Responsibility of the Deposit Insurance of Vietnam, the Cooperative Bank of Vietnam and other lending credit institutions

1.Comply with regulations herein and relevant laws.

2.Consider making decisions on grant of special loans or extension of special loan terms to qualified credit institutions in compliance with regulations herein; submit reports to the SBV (via the Bank Supervision and Inspection Agency) on acceptance or refusal of applications for special loans.

3.Promulgate internal regulations on grant of special loans, extension of special loan terms and disbursement.

4.Supervise the use of special loan fund by borrowers; expedite and request borrowers to repay special loan debts in accordance with regulations herein, restructuring plans or transfer plans approved, and special loan agreements.

5.Submit reports on special loans granted to the SBV’s Governor, the Bank Supervision and Inspection Agency and the Financial Policy Department according to the form stated in the Appendix 04 enclosed herewith within the first 07 working days of the month following the reporting month or unscheduled reports thereof when necessary.

Article 22. Responsibility of the special control board

1.Comply with regulations herein and relevant laws.

2.Supervise the use of borrowed fund; supervise revenues of the borrower so as to request for repayment of special loans, and expedite or request borrowers to repay special loan debts.

3.Make proposals to the SBV’s Governor concerning the following contents:

a) Debt recovery and methods for recovery of special loan debts;

b) Grant and settlement of special loans (including measures taken in case where a borrower fails to repay the loan debt in full on the agreed schedule), exemption and reduction of interests on special loans in the restructuring plan or the transfer plan submitted to competent authority for approval;

c) Grant and settlement of special loans (including measures taken in case where a borrower fails to repay the loan debt in full on the agreed schedule), exemption and reduction of interests on special loans for submission to the Prime Minister for making decision as prescribed in Clause 2 Article 3 of the Law No. 17/2017/QH14;

d) Adjustments to the restructuring plan or transfer plan in case where grant of special loan or repayment of special loan debts by a credit institution results in adjustments to the restructuring plan or transfer plan approved.

4.Timely submit reports to the SBV’s Government on any issues relating a special loan and recommended solutions.

Article 23. Responsibility of State Bank’s affiliates

1. The Financial Policy Department shall:

a) Take charge of requesting the SBV s Governor to consider and make decisions on grant of special loans or extension of special loan terms in accordance with regulations herein;

b) Aggregate amounts of special loans granted by each SBV’s local branch (for special loans granted as prescribed in Clause 1 Article 5 herein), the Deposit Insurance of Vietnam and the Cooperative Bank of Vietnam (for special loans granted as prescribed in Point b Clause 2 or Point b Clause 3 Article 5 herein) so as to submit monthly consolidated reports thereof to the SBV’s Governor.

2. Bank Supervision and Inspection Agency shall:

a) Give opinions about applications for grant of special loans or extension of special loan terms as prescribed herein;

b) Take charge of requesting the SBV’s Governor or competent authorities to consider and make decision on proposals of special control boards as prescribed in Clause 3 Article 22 herein;

c) Supervise and take actions against violations committed by credit institutions during the implementation of regulations herein.

3. SBV’s local branches shall:

a) Give opinions about applications for grant of special loans or extension of special loan terms as prescribed herein;

b) Carry out the conclusion of special loan agreements, which must include all contents as stated in the Appendix 03 enclosed herewith, disburse loan funds, extend loan terms and collect loan debts in accordance with regulations herein, the SBV’s decisions on grant of special loans or extension of special loan terms and relevant laws.

c) Based on the contents about conversion of a refinancing loan into a special loan in the Decision on special control of the credit institution, record the refinancing loans to be converted as special loans;

d) Comply with regulations in Point a, Point b Clause 2 Article 13 herein; cooperate with the special control board as prescribed in Clause 2 Article 22 herein;

dd) Supervise and take actions against violations committed by credit institutions during the implementation of regulations herein.

e) Submit reports on special loans made according to the Appendix 04 enclosed herewith to the Bank Supervision and Inspection Agency, and the Financial Policy Department on a monthly basis within the first 07 working days of the month following the reporting month or unscheduled reports when necessary.

4. SBV’s Operations Center shall:

a) Based on the contents about conversion of a refinancing loan into a special loan in the Decision on special control of the credit institution, record the refinancing loans to be converted as special loans;

b) Implement regulations in Point b Clause 2 Article 13 herein.

5.Department of Finance and Accounting shall instruct accounting relating special loans granted to credit institutions placed under special control, including conversion of principal and interest of refinancing loans to those of special loans.

Article 24. Transitional provisions

1.Special loans which are not yet used up by the entry into force of this Circular shall be subject to documents on grant of special loans or extension of special loan terms or the signed special loan agreements. Any adjustments to these documents on grant of special loans or extension of special loan terms or special loan agreements must be conformable with regulations herein.

2.Extension of a special loan granted to a credit institution before the date of entry into force of the Law on credit institutions No. 47/2010/QH12 shall be performed as follows:

a) The credit institution shall send an application for extension of loan term to the SBV’s local branch at least 20 working days before the due date;

b) Within 05 working days from the receipt of the valid application for extension of loan term submitted by the credit institution as prescribed in Point a of this Clause, the SBV’s local branch shall cooperate with the special control board (if any) to give opinions in writing to the Financial Policy Department about the contents specified in Clause 3 Article 16 herein, accompanied by the credit institution’s application for extension of loan term;

c) After receiving written opinions as prescribed in Point b of this Clause, the Financial Policy Department shall ask for written opinions from the Bank Supervision and Inspection Agency about the contents specified in Clause 5 Article 16 herein. Then, the Financial Policy Department shall prepare and submit consolidated reports thereof to the SBV’s Governor for making decision on grant of extension of special loan term to the requesting credit institution.

3.With regard to applications for extension of special loan terms submitted by credit institutions to the SBV before the date of entry into force of this Circular, the SBV shall consider granting extension based on the application submitted by the credit institution according to the following procedures: The Financial Policy Department shall ask for written opinions from the Bank Supervision and Inspection Agency about the contents specified in Clause 5 Article 16 herein. Then, the Financial Policy Department shall prepare and submit consolidated reports thereof to the SBV’s Governor for making decision on grant of extension of special loan term to the requesting credit institution.

Article 25.Effect

1.This Circular takes effect on January 29, 2018.

2. To annul theCircular No. 06/2012/TT-NHNN dated March 16, 2012 of the Governor of the State Bank of Vietnam on grant of special loans to credit institutions from the effect date of this Circular,

3.Chief of the Ministry’s Office, the Head of the Bank Supervision and Inspection Agency, the Director of the Monetary Policy Department, Heads of units affiliated to the State Bank of Vietnam, Directors of branches of the State Bank of Vietnam in provinces and central-affiliated cities, Chairpersons of the Boards of Directors, Chairpersons of the Boards of Members and General Directors (Directors) of credit institutions shall implement this Circular./.

For the Governor

The Deputy Governor

Nguyen Thi Hong

*All Appendices are not translated herein.