CIRCULAR

Amending and supplementing a number of articles of the Circular No. 08/2021/TT-NHNN dated July 06, 2021 of the Governor of the State Bank of Vietnam on grant of special loans to credit institutions placed under special control

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

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

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 Monetary Policy Department;

The Governor of the State Bank of Vietnam promulgates the Circular amending and supplementing a number of articles of the Circular No. 08/2021/TT-NHNN dated July 06, 2021 of the Governor of the State Bank of Vietnam on grant of special loans to credit institutions placed under special control.

Article 1. Amending and supplementing a number of articles of the Circular No. 08/2021/TT-NHNN dated July 06, 2021 of the Governor of the State Bank of Vietnam on grant of special loans to credit institutions placed under special control

1. To amend and supplement Article 12 as follows:

a) To amend and supplement Point a Clause 2 as follows:

“a) The value of collateral specified in Clause 1 and Clause 6 of this Article shall be determined in accordance with the provisions of Appendix IV to this Circular;”

b) To amend and supplement Point c Clause 2 as follows:

“c) The collateral conversion ratio (TL) shall be determined as follows:

(i) With regard to the valuable papers specified at Point a Clause 1 of this Article, TL shall be equal to the minimum ratio of the value of valuable papers and the loan amount secured by the pledge of valuable papers granted by the State Bank to the credit institution in accordance with the State Bank’s regulations in each period; 

(ii) With regard to the types of collateral specified at Points b, c Clause 1 and Article 6 of this Article, TL shall be equal to 120%;”

c) To amend and supplement Clause 3 as follows:

“3. In cases where any type of collateral specified at Point c Clause 1 of this Article does not meet the requirements specified in Clause 2 Article 13 of this Circular resulting in that the total conversion value of eligible collateral is smaller than the outstanding principal of the special loan, the borrower shall be required to implement the provisions of Point a Clause 4, Point a Clause 5 of this Article so that the total conversion value of eligible collateral shall not be smaller than the outstanding principal of the special loan within 10 working days from the date on which the total conversion value of eligible collateral shall not be smaller than the outstanding principal of the special loan.”

d) To add Clause 6 as follows:

“6. In cases where the borrower has used up all the collateral specified in Clause 1 of this Article, the borrower may use the following assets as collateral for the special loan, or special loan extension, or for the implementation of Clause 2 Article 6 of this Circular and must not comply with Clauses 3, 4 and 5 of this Article or special loans with outstanding debts:

a) Mortgage of rights to claim credit extended by the borrower to its clients (except for credit institutions);

b) Mortgage of property rights being interest receivable from the credit extended by the borrower to its clients (except for credit institutions).”.

2. To amend and supplement Clause 3 Article 13 as follows:

“3. The extended credit specified at Clause 6 Article 12 of this Circular is secured by property.”.

3. To amend and supplement Article 15 as follows:

a) To amend and supplement Point a Clause 3 as follows:

“a) In cases where the borrower earns money from exercising the rights to claim debts, interest receivable which are provided as collateral for the special loan (hereinafter referred to as “collected debts”), within the first 05 working days of the month, the borrower must repay the principal amount of the special loan in the chronological order of the signed indebtedness contracts with outstanding debts, the repaid amount shall be equal to the total collected debts in the previous month;”

b) To amend and supplement Point dd Clause 5 as follows:

“dd) Collecting the special loan debts (including principal and interest) from the borrower’s proceeds from disposition of the collateral specified at Points b and c Clause 1, Clause 6 Article 12 of this Circular;”.

4. To amend and supplement Article 16 as follows:

a) To amend and supplement Point b Clause 2 as follows:

“b) Specific opinions about: the fact the credit institution is in danger of becoming insolvent or has become insolvent, threatening the stability of the system; the fact the credit institution has used up all the collateral specified in Clause 1 Article 12 of this Circular, in cases where the credit institution requests to use the collateral specified in Clause 6 Article 12 of this Circular;”

b) To amend and supplement Point d Clause 5 (amended and supplemented by Clause 4 Article 2 of Circular No. 02/2022/TT-NHNN dated March 31, 2022, on amending and supplementing a number of articles of the Circular No. 08/2021/TT-NHNN) as follows:

“d) Opinions about the observance of regulations specified in Article 13 of this Circular by the information about collateral in the list of collateral types (unless the credit institution requesting special loan is subject to micro-prudential inspection and supervision of the State Bank’s provincial branch) or opinions about the conformity of the information about collateral in the list of collateral types with the contents about the collateral of special loan to support liquidity included in the approved restructuring plan or transfer plan (if any) (unless the restructuring plan including such contents is subject to the approval of the State Bank’s provincial branch), based on the information in the list of collateral types provided by the credit institution as specified at Point dd, Clause 1 of this Article;”.

5. To amend and supplement Article 18 as follows:

a) To amend and supplement Point a Clause 2 as follows:

“a) The operating status and solvency of the credit institution; the fact the credit institution has used up all the collateral specified in Clause 1 Article 12 of this Circular, in cases where the credit institution requests to use the collateral specified in Clause 6 Article 12 of this Circular;”

b) To amend and supplement Point d Clause 5 as follows:

“d) Opinions about the observance of regulations specified in Article 13 of this Circular by the information about collateral in the list of collateral types (unless the credit institution requesting the special loan extension is subject to micro-prudential inspection and supervision of the State Bank’s provincial branch), based on the information in the list of collateral types provided by the credit institution as specified at Point d Clause 1 of this Article;”.

6. To amend and supplement Article 23 as follows:

a) To amend and supplement Clause 2 (amended and supplemented by Clause 3 Article 2 of Circular No. 02/2022/TT-NHNN dated March 31, 2022, on amending and supplementing a number of articles of the Circular No. 08/2021/TT-NHNN) as follows:

“2. To assume the responsibility for ensuring the following requirements:

a) The collateral for special loan must fully satisfy the eligibility requirements specified in Article 13 of this Circular or be conformable with contents about the collateral included in the approved restructuring plan or transfer plan (if any);

b) Only using the collateral specified in Clause 6 Article 12 as collateral for a special loan when the collateral specified in Clause 1 Article 12 of this Circular has been used up;

c) The credit extension specified in Clause 6 Article 12 of this Circular must comply with the law regulations on credit extension activities.”

b) To amend and supplement Clause 4 as follows:

“4. During the special loan term, the borrower shall be responsible for:

a) Separately keeping and retaining documents relating to the credit on which rights to claim debts, interest receivable are used as the collateral for special loan;

b) Not using the properties which are being used as the collateral for special loan for other purposes;

c) Monitoring and evaluating the satisfaction of eligibility requirements by the collateral for special loan; adding or replacing the collateral in accordance with regulations of this Circular;

d) Report to the Special control board when the collateral does not fully meet the conditions specified in Clause 3 Article 12 or when the collateral specified in Clause 1 Article 12 of this Circular has been used up;

dd) Submitting reports to the Special control board on total collected amounts of debts specified at Point a Clause 3 Article 15 of this Circular within 03 working days from the date of collecting debts.”.

7. To amend and supplement Point dd Clause 4 Article 26 as follows:

dd) To cooperate with the State Bank’s Operations Center to implement the provisions at Point d Clause 3 of this Article; to send written notification to the State Bank’s Operations Center of receipt of pledge of collateral which is the right to claim debts and interest receivable additionally provided by the borrower (unless the special loan is recorded at the State Bank’s provincial branch and the borrower does not replace the collateral which includes valuable papers); to send written notification to the credit institution of withdrawal of money from its account for debt recovery and implementation of the provisions at Points a, b, dd, e Clause 5, Clause 6 Article 15 of this Circular for the special loans recorded at the State Bank’s provincial branch;”.

8. To amend and supplement Point a (iv) Clause 4 Article 27 as follows:

(iv) The list of collateral types fully meeting the requirements specified in Article 13 of this Circular, made in accordance with Appendix VII issued together with this Circular, the collateral conversion ratio (TL) is equal to 100%; and of which the total conversion value of eligible collateral shall not be lower than the special loan to be extended;”.

Article 2. Adding, replacing and repealing a number of points, clauses, articles and appendices of Circular No. 08/2021/TT-NHNN

1. To repeal Point d Clause 1 Article 12.

2. To replace Appendix III, Appendix IV, Appendix VII issued together with Circular No. 08/2021/TT-NHNN with Appendix III, Appendix IV and Appendix VII issued together with this Circular.

Article 3. Responsibility of implementation organization

Chief of Office, Director of the Monetary Policy Department, heads of units of the State Bank of Vietnam; Deposit Insurance of Vietnam; and credit institutions shall be responsible for organizing the implementation of this Circular.

Article 4. Implementation provisions

1. This Circular takes effect on October 28, 2022.

2. From the effective date of this Circular, for special loans arising from October 27, 2021 and of which outstanding debts are not yet fully paid by the date this Circular takes effect, based on the collateral conversion ratio specified in this Circular, the credit institution may use the collateral that are being mortgaged in the State Bank of Vietnam for continuing to request the special loan, ensuring that the total conversion value of eligible collateral shall not be smaller than the total special loan./.

For the Governor

The Deputy Governor

Pham Thanh Ha

* All Appendices are not translated herein.