Circular No. 05/2015/TT-NHNN dated May 04, 2015 guiding credit institutions to collaborate with credit guarantee fund in offering secured loan of credit guarantee fund as stipulated under Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister

THE STATE BANK OF VIETNAM

Circular No. 05/2015/TT-NHNN dated May 04, 2015 guiding credit institutions to collaborate with credit guarantee fund in offering secured loan of credit guarantee fund as stipulated under Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister

Pursuant to the Law No. 46/2010/QH12 dated June 16, 2010 of the National Assembly on the State Bank of Vietnam;

Pursuant to the Law No. 47/2010/QH12 dated June 16, 2010 of the National Assembly on Credit institutions;

Pursuant to the Decree No. 156/2013/ND-CP dated November 11, 2013 defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;

Pursuant to the Decree No. 56/2009/ND-CP dated June 30, 2009 on assistance to the development of small- and medium-sized enterprises;

Pursuant to the Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister on promulgating Regulations on establishment, organization and operation of Credit Guarantee for Small and Medium Enterprises;

At the proposal of the Director of the Department of Credit for all economic sectors;

The State Bank Governor promulgated the Circular guiding credit institutions to collaborate with credit guarantee fund in offering secured loan of credit guarantee fund as stipulated under Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister

Article 1. Scope of application

This Circular guides credit institutions in collaborating with credit guarantee fund in offering secured loan of credit guarantee fund in accordance the Regulations on establishment, organization and operation of Credit Guarantee for Small and Medium Enterprises as stipulated under the Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister (hereinafter referred to as the Regulations.

Article 2. Subjects of application

1. Credit Guarantee Fund is established and operated according to the Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister.

2. Credit institutions are established and operated according to the law on credit institutions (hereinafter referred to the lending party).

3. The medium and small enterprises are guaranteed to borrow by Credit Guarantee Fund in accordance with the Regulations (hereinafter referred as the customer).

4. Related organizations, individuals.

Article 3. Collaborating in offering secured loans of Credit Guarantee Fund

1. The lending party, Credit Guarantee Fund and customer shall agree in writing to guarantee that the lending party shall have right to receive and handle with guaranteed assets in the case that Credit Guarantee Fund refuses to perform its guarantee obligations in accordance with this Circular and other applicable regulations.

2. Before lending, the lending party and Credit Guarantee Fund shall:

a) Based on the regulations on operation as stipulated under Clause 1 Article 12 of the Regulations, agree contents in accordance with the regulations on the lending of credit institutions for the customers;

b) If each side wishes to amend, supplement agreements, amendments, supplements shall be made in writing and be a part of the contract;

Article 4. Contents of collaboration between the lending party and Credit Guarantee Fund

Agreement on collaboration between the lending party and Credit Guarantee Fund includes the following contents:

1. Orders of collaboration among parties in the receipt, appraisal of documents (independent appraisal, coordination of appraisal, establishment of appraisal team…) and handle with the demands on borrowing capital from customers.

2. Contents related to collaboration on providing disbursement documents; inspecting, supervising the process of using the capital, assets formed from the capital and payment as committed under the credit contract as stipulated under the Regulations and act as bases for credit guarantee fund to perform its obligations when arising.

3. Collaboration in considering the time for payment for customers; for cases of stopping disbursement, collecting the loan before due when customers violate agreements in the credit contract, violate credit guarantee contract or violate the laws.

4. Measures on collecting the loan that shall be applied when the loan is due but the customers can’t pay in accordance with Clause 2 Article 28 of the Regulations and other regulations.

5. Specific regulations on each case that credit guarantee fund can refuse to perform a part or whole part of guarantee obligations in accordance with the Regulations and the law related to the borrowing and risk management of the lending party.

6. Responsibilities on coordination among parties in the receipt and handle with guarantee assets in the case that credit guarantee fund refuse to perform its guarantee obligations.

7. Collaboration on providing information, documents related to regulations on organization and operation and competence to issue letter guarantee of credit guarantee fund when the lending party requests.

8. Other contents as agreed by parties in accordance with the laws.

Article 5. Principles of secured loan of credit guarantee fund

1. Investment projects, business production plan appraised and decided by credit guarantee fund as stipulated by the Regulations.

2. The lending party shall consider, decide on the borrowing in Vietnam dong for investment projects, business production plans guaranteed by credit guarantee fund as stipulated by the current laws on lending of credit institutions for customers, and regulations under this Circular and other related regulations.

3. The lending party shall classify debt, set up provision and use according to current regulations of the State Bank of Vietnam and other related regulations.

Article 6. Performing guarantee obligations

1. When the loan is due (mentioned in the credit contract) or specific schedule for payment for case of collecting the loan before deadline, customers fail to pay the loan, the lending party shall decide the causes and apply the measures to collect money as agreed by parties in the coordination agreements. Within 07 working days after applying the measures to collect money, the customers still fail to pay the loan, the lending party shall send documents attached with dossiers, legal documents (if any) to credit guarantee fund to perform its guarantee obligations.

2. Within 10 working days since the receipt of application from the lending party, the credit guarantee fund shall complete the guarantee obligation as committed. If refusal, the credit guarantee fund shall send the reasons of refusal in writing to the lending party. Within this time limit, if the credit guarantee fund doesn’t send any papers on its refusal, it is automatically considered as that the credit guarantee fund accepts its guarantee obligations as committed.

3. Within 07 working days since the receipt of the refusal from the credit guarantee fund, the lending party shall give feedback on approval or disapproval of the refusal of the credit guarantee fund. If it is over this time limit, the lending party is considered as approval if it doesn’t send any feedback documents to the credit guarantee fund.

Article 7. Transfer and handle with the guaranteed assets

When receiving documents of the lending party on approving the refusal of performing guarantee obligations or over the time limit as stipulated under Clause 3 Article 6 of this Circular, the lending party doesn’t have any feedback in writing on refusing to perform its guarantee obligation, the credit guarantee fund shall handle with the guaranteed assets of customers as follows:

1. If refusing to perform the whole part of guaranteed obligations: the credit guarantee fund shall transfer the rights of receipt and handling with the guaranteed assets of customers to the lending parties in accordance with contents as agreed under Clause 3 of this Circular. The lending party shall give the letter of guarantee back to the credit guarantee fund right after the credit guarantee fund fully transfers the guaranteed assets.

2. If refusing to perform a part of guarantee obligations:

a) For parts of guarantee obligation approved: the credit guarantee fund shall pay the loan on behalf of the customer (including the principal and interest);

b) For parts of guarantee obligation disapproved: the credit guarantee shall coordinate with the lending party to handle with the guaranteed assets. The collected amount of money after deducting expenses related to the process of handling with the guaranteed assets shall be paid for the loan (including the principal and interest) at the lending party, the remaining amount shall be paid for the outstanding balance of the customer at the guarantee party. After fully paying for the principal, interest and arising expenses related to the loan, the money collected from handling with the guaranteed assets still remains, the credit guarantee fund shall transfer it to the customer’s account.

Article 8. Responsibilities of the lending decision

1. To coordinate with the credit guarantee fund in lending customers as stipulated under this Circular and current laws.

2. Monthly (before the tenth of the next month), the lending party shall report on the lending situation for medium and small enterprises to the State Bank of Vietnam (Department of Credit for all economic sectors) according to the Appendix No. 01 promulgated together with this Circular.

3. In the course of implementation, any arising problems should be promptly reported to the State Bank of Vietnam (Department of Credit for all economic sectors).

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

1. Department of Credit for all economic sectors

a) To act as focal point to supervise, summarize the situation of lending activities of the lending party for medium and small enterprises having guarantee from the credit guarantee fund;

b) To take the prime responsibility of, and coordinate with related units to handle with arising problems in the course of implementing this Circular.

2. Banking supervision and inspection agency, inspectors and supervisors of the State Bank’s branches shall inspect, supervise and handle with the situation under its competence for violations of the lending parting in complying with regulations under the Regulations and this Circular.

3. The State Bank’s branches in provinces, cities under the central management shall:

a) Monthly (no later than the 15^thof the next month), the State Bank’s branches in provinces, cities under the central management shall report secured loans for medium and small enterprises to the State Bank of Vietnam (through the Department of Credit for all economic sectors) according to Appendix 2 promulgated together with this Circular;

b) To coordinate with departments, sectors to handle with arising problems in the course of lending. If it is over its competence, it should promptly report to the People’s Committees of provinces, cities under the central management, Ministry of Finance and the State Bank of Vietnam (Department of credit for all economic sectors) for consideration and settlement.

Article 10. Effect

1. This Circular takes effect on June 18, 2015.

2. The Circular No. 01/2006/TT-NHNN dated February 20, 2006 guiding several contents concerning the capital contribution for the establishment of a credit guarantee fund for small and medium sized enterprises shall be ceased to effect since the effective day of this Circular.

3. Credit contracts signed before the effective day of this Circular shall continue to implement agreements as stipulated under the contract till the expiration day.

Article 11. Organization of implementation

The head of the Offices, Director of the Credit for all economic sectors, chairman of units under the State Bank; Director of the State Bank’s branches of provinces and cities under the central management; chairman of the Board of Management; chairman of the Board of Members and General Directors (Directors) of Credit institutions, Credit Guarantee for Small and Medium Enterprises Fund shall implement this Circular.

For the Governor

Deputy Governor

Nguyen Dong Tien