Circular 03/2022/TT-NHNN guiding Decree No. 31/2022/ND-CP on interest rate support from the State budget for loans of enterprises, cooperatives, business households

CIRCULAR

Guiding commercial banks to implement interest rate support according to the Government's Decree No. 31/2022/ND-CP dated May 20, 2022 on interest rate support from the State budget for loans of enterprises, cooperatives, business households

___________

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the National Assembly's Resolution No. 43/2022/QH15 dated January 11, 2022, on fiscal and monetary policies in support of the socio-economic recovery and development program;

Pursuant to the Government's Decree No. 31/2022/ND-CP dated May 20, 2022, on interest rate support from the State budget for loans of enterprises, cooperatives and business households;

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 proposal of the Director of the Credit Department for Economic Sectors;

The Governor of the State Bank of Vietnam promulgates the Circular guiding commercial banks to implement interest rate support according to the Government's Decree No. 31/2022/ND-CP dated May 20, 2022, on interest rate support from the State budget for loans of enterprises, cooperatives and business households.

Article 1. Scope of regulation and subjects of application

1. Scope of regulation: This Circular provides guidance on commercial banks' interest rate support for customers according to the Government's Decree No. 31/2022/ND-CP dated May 20, 2022, on interest rate support from the State budget for loans of enterprises, cooperatives and business households.

2. Subjects of application: Commercial banks, customers as prescribed in Clauses 1 and 2, Article 2 of the Decree No. 31/2022/ND-CP; other relevant organizations and individuals.

Article 2. Principles of lending with interest rate support

Commercial banks shall provide loans with interest rate support in accordance with current laws on lending activities of credit institutions and foreign bank branches to customers, as prescribed in the Decree No. 31/2022/ND-CP, this Circular and relevant laws.

Article 3. Methods of interest rate support

By the payment deadline of each interest payment term, commercial banks may provide interest rate support to customers by one of the following methods:

1. Directly reducing the customer's loan interest amount that is equal to the loan interest amount provided with interest rate support.

2. Collecting the entire loan interest from the customer in the period and refund the customer the loan interest amount provided with interest rate support on the same day of interest collection. In cases where the collection of loan interest in the period is performed after working hours of commercial banks, the refund may be done on the next day.

Article 4. Determination and notification of interest rate support limits for each commercial bank

1. Commercial banks shall register their plans to support interest rates from the state budget for two years of 2022 and 2023, and detailed plans for each year in accordance with the provisions of Point b, Clause 1, Article 7 of Decree No. 31/2022/ND-CP.

2. In cases where the total amount of interest rate support stated in the registered plans in 2022 and 2023 of commercial banks is less than or equal to VND 40,000 billion, the State Bank of Vietnam shall determine the interest rate support limit for each commercial bank as registered.

3. In cases where the total amount of interest rate support stated in the registered plans in 2022 and 2023 of commercial banks is greater than VND 40,000 billion, the State Bank of Vietnam shall determine the interest rate support limit for each commercial bank as follows:

a) The limit for the 02 years of 2022 and 2023 is equal to the product between VND 40,000 billion and the proportion of outstanding loans as of December 31, 2021 of each commercial bank on the total loan balance of commercial banks registering their plans to support interest rates, but shall not exceed the amount of interest rate support stated in the registered plan of each commercial bank as determined following the formula prescribed in Appendix 01 to this Circular;

b) Based on the limit for the 02 years of 2022 and 2023 determined in accordance with the provisions at Point a of this Clause, the State Bank of Vietnam shall determine the interest rate support limit in 2022 for each commercial bank, which is equal to the amount of interest rate support stated in the 2022 registered plan. In cases where the amount of interest support stated in the 2022 registered plan is greater than or equal to the determined limit for the two years of 2022 and 2023, the limit of interest rate support in 2022 shall be equal to the limit determined for the 02 years of 2022 and 2023.

The limit determined for 2023 shall be equal to the limit determined for the 02 years of 2022 and 2023 minus the limit determined for 2022.

4. While there is no decision on allocation of central budget funding for supplementing the 2022 public investment plan of the Prime Minister in accordance with the provisions at Point a, Clause 2, Article 7 of the Decree No. 31/2022/ND-CP and Clause 5 of this Article, the State Bank of Vietnam shall notify the commercial banks of the expected interest rate support limit in 2022 in line with the limits specified in Clauses 2 and 3 of this Article.

5. Based on the Prime Minister's decisions on allocation of central budget funding for supplementing the 2022 public investment plan and allocation of the 2023 public investment plan, the State Bank of Vietnam Nam shall notify the interest rate support limits in 2022 and 2023 for each commercial bank, and at the same time send the notices to the Ministry of Finance, the Ministry of Planning and Investment for coordination in implementation.

6. Based on the written approval of the competent authority for the transfer of remaining State budget funding source of 2022 to 2023 in accordance with the provisions of Point dd, Clause 2, Article 7 of the Decree No. 31/2022/ND-CP, the State Bank Vietnam shall notify commercial banks that the interest rate support estimate amount in 2022 will be transferred to 2023, and at the same time send the notices the Ministry of Finance for coordination in implementation.

7. In the third quarter of 2023, in case of necessity, based on the reports of commercial banks in accordance with Appendix 04 to this Circular, the State Bank of Vietnam shall consider the adjustment of interest rate support amounts among commercial banks on the principle of transferring from the banks that do not need to fully use the support amount (if any) to the commercial banks that need an additional amount (if any). In cases where the demand for additional amount is larger than the amounts that are not fully used, the State Bank of Vietnam shall allocate the support amount to commercial banks that need an additional amount based on the results of such commercial banks' deployment of interest rate support until the end of June 2023.

Article 5. Management of commercial banks' interest rate support limits

1. The total amount of commercial banks providing interest rate support and requesting the state budget to cover interest rate support in each year must not exceed the interest rate support limit announced in such year.

2. Commercial banks provide interest rate support to clients in the order prioritizing the time the interest is paid within the announced interest rate support limit, whichever comes first. In case during the interest rate support process, the remaining interest rate support amount is not enough to support interest payment obligations at the same time of debt repayment, the commercial banks shall provide interest rate support in the order that the clients who have signed the loan agreements should be supported first, and officially announce that on the website of such commercial banks.

3. Based on the results of supporting clients with their interest rates, each commercial bank shall make a public announcement on its website and report to the State Bank of Vietnam the time to stop providing interest rate support in accordance with Clause 6, Article 3 of the Decree No. 3 1/2022/ND-CP.

4. In cases where the commercial bank is notified of the additional interest rate support amount as prescribed in Clause 7, Article 4 of this Circular, the commercial bank shall officially announce on its website and continue to provide interest rate support for clients from the date the State Bank of Vietnam sends a notice.

5. Commercial banks shall round off the amount of interest rate support in accordance with the provisions of the Decree No. 31/2022/ND-CP and this Circular.

Article 6. Accounting

1. Commercial banks shall make accounting entries for interest rate support loans and interest rate support payments in accordance with the provisions of the Decree No. 31/2022/ND-CP, this Circular, and relevant legal documents.

2. For the supported loan interest amount that must be withdrawn from the clients in accordance with Article 9 of the Decree No. 31/2022/ND-CP, commercial banks shall record the interest receivable from the clients. In cases where it is assessed that the amount cannot be withdrawn, commercial banks shall comply with the current law provisions on financial regime applicable to credit institutions and foreign bank branches.

Article 7. Information and reporting regime

1. Periodically on the 20^th of every month, commercial banks shall report to the State Bank of Vietnam (through the Credit Department for Economic Sectors) the results of interest rate support in accordance with Appendix 02 to this Circular, which must be consistent with the reported data made using the forms specified in the Decree No. 31/2022/ND-CP.

2. Before the 20^th of October, November, and December of 2022 (when the data of September, October and November 2022 respectively shall be reported), commercial banks shall report to the State Bank of Vietnam (through the Credit Department for Economic Sectors) the expected interest rate support amount to be transferred from 2022 to 2023 in accordance with Appendix 03 to this Circular.

3. Before July 20, 2023, commercial banks shall report in writing to the State Bank of Vietnam (through the Credit Department for Economic Sectors) their expected interest rate support until the end of 2023 in accordance with Appendix 04 to this Circular.

Article 8. Responsibilities of commercial banks

1. Issue documents guiding the implementation of interest rate support as prescribed in the Decree No. 31/2022/ND-CP and this Circular for uniform implementation throughout the system, which shall at least mention the following contents:

a) The contents of interest rate support in the loan agreement, amendments to the loan agreement, the written debt receipt between the commercial bank and the client;

b) The content of the agreement between the commercial bank and the client on measures to withdraw the supported amount in accordance with Article 9 of the Decree No. 31/2022/ND-CP.

2. Determining and clearly stating the purpose of using loans in accordance with the provisions of Clause 2, Article 2 of the Decree No. 31/2022/ND-CP in the loan agreement or the amendments to the loan agreement or the written debt receipt document between the commercial bank and the client.

3. Providing interest rate support in accordance with the provisions of the Decree No. 31/2022/ND-CP and this Circular. In cases of refusing to provide interest rate support, a written notice must be given to the client.

4. Inspecting and supervising the use of loans in line with the purpose of using interest-supported loans.

5. Monitoring, keeping records, making separate accounting entries and statistics of loans eligible for interest rate support in accordance with the provisions of the Decree No. 31/2022/ND-CP and this Circular.

6. Disseminating and popularizing interest rate support policies at commercial banks in accordance with the Decree No. 31/2022/ND-CP and this Circular.

7. Officially announcing on the websites of commercial banks the time to stop providing interest rate support.

Article 9. Responsibilities of units under the State Bank of Vietnam

1. The Credit Department for Economic Sectors shall:

a) Act as the focal point to monitor the results of commercial banks' interest rate support and advise the Governor of the State Bank of Vietnam to implement the contents specified at Points a, b, d, dd, e, Clause 1, Article 10 of the Decree No. 31/2022/ND-CP;

b) Join the inter-sectoral interest rate support working group as prescribed at Point dd, Clause 1, Article 10 of the Decree No. 31/2022/ND-CP.

2. The Monetary Policy Department shall:

a) Coordinate with the Credit Department for Economic Sectors to handle problems arising during the implementation of the Decree No. 31/2022/ND-CP and this Circular;

b) Join the inter-sectoral interest rate support working group as prescribed at Point dd, Clause 1, Article 10 of the Decree No. 31/2022/ND-CP.

3. The Department of Finance and Accounting shall:

a) Provide guidance on accounting issues related to providing, paying and settling interest-supported loans and withdrawing supported amounts as prescribed in the Decree No. No. 31/2022/ND-CP and this Circular;

b) Coordinate with the Credit Department for Economic Sectors to handle problems arising during the implementation of the Decree No. 31/2022/ND-CP and this Circular;

c) Join the inter-sectoral interest rate support working group as prescribed at Point dd, Clause 1, Article 10 of the Decree No. 31/2022/ND-CP.

4. The Monetary Forecasting and Statistics Department shall:

a) Coordinate with the Credit Department for Economic Sectors to handle problems arising during the implementation of the Decree No. 31/2022/ND-CP and this Circular;

b) Join the inter-sectoral interest rate support working group as prescribed at Point dd, Clause 1, Article 10 of the Decree the No. 31/2022/ND-CP.

5. The Banking Supervision Agency shall:

a) Inspect and supervise interest-supported loans provided by commercial banks in accordance with regulations;

b) Coordinate with the Credit Department for Economic Sectors to handle problems arising during the implementation of the Decree No. 31/2022/ND-CP and this Circular;

c) Join the inter-sectoral interest rate support working group as prescribed at Point dd, Clause 1, Article 10 of the Decree No. 31/2022/ND-CP.

6. The Department of Information and Communication shall:

a) Inform and disseminate interest rate support policies as prescribed in the Decree No. 31/2022/ND-CP and this Circular;

b) Coordinate with the Credit Department for Economic Sectors to handle problems arising during the implementation of the Decree No. 31/2022/ND-CP and this Circular;

7. Branches of the State Bank of Vietnam in provinces and centrally-run cities shall:

a) Monitor the situation and results of the implementation of interest rate support provided by branches of commercial banks in their respective localities, report arising problems and propose solutions thereto to the Governor of the State Bank of Vietnam, the Chairpersons of People's Committees of provinces and centrally-run cities;

b) Inspect and supervise interest-supported loans provided by commercial banks and branches of commercial banks in their respective localities in accordance with regulations, report arising problems and propose solutions thereto to the Governor of the State Bank of Vietnam;

c) Make reports to, and request the People's Committees of provinces and municipalities to direct local competent authorities to coordinate with the commercial banks to withdraw the supported amounts in accordance with Clause 3, Article 9 of the Decree No. 31/2022/ND-CP.

Article 10. Provisions of implementation

This Circular takes effect from May 20, 2022.

Article 11. Organization of implementation

The Chief of SBV Office, the Director of the Credit Department for Economic Sectors and the heads of units under the State Bank of Vietnam and commercial banks shall be responsible for the implementation of this Circular./.

For the Governor

The Deputy Governor

DAO MINH TU