Circular 14/2021/TT-NHNN amending Circular 01/2020/TT-NHNN on debt rescheduling for clients affected by Covid

CIRCULAR

Amending and supplementing a number of articles of the State Bank Governor’s Circular No. 01/2020/TT-NHNN of March 13, 2020, on credit institutions and foreign bank branches carrying out debt rescheduling, giving exemption from or reduction of loan interests and charges, and maintaining classified loan groups in order to help their clients that are affected by the COVID-19 pandemic^[1]

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

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

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

After reaching agreement with the Ministry of Finance;

At the proposal of the Chief of the Banking Supervision Agency;

The Governor of the State Bank of Vietnam promulgates the Circular amending and supplementing a number of articles of the State Bank Governor’s Circular No. 01/2020/TT-NHNN of March 13, 2020, on credit institutions and foreign bank branches carrying out debt rescheduling, giving exemption from or reduction of loan interests and charges, and maintaining classified loan groups in order to help their clients that are affected by the COVID-19 pandemic (below referred to as Circular No. 01/2020/TT-NHNN).

Article 1. To amend and supplement a number of articles of Circular No. 01/2020/TT-NHNN

1. To amend and supplement Article 4 as follows:

“Article 4. Debt rescheduling

A credit institution or foreign bank branch shall carry out debt rescheduling for loan principals and/or interests (including also debts regulated by the Government’s Decree No. 55/2015/ND-CP of June 9, 2015, on credit policies to serve agricultural and rural development (which was amended ad supplemented), if debts fully meet the following conditions:

1. Arising before August 1, 2021, from lending and financial leasing activities;

2. Giving rise to obligations to pay loan principals and/or interests during the period from January 23, 2020, to June 30, 2022.

3. A debit balance shall be rescheduled in one of the following cases:

a/ Such debit balance is not due or falls overdue for up to 10 (ten) days from the due date under a contract or an agreement, except the cases specified at Points b, c and d of this Clause;

b/ Such debit balance arises before January 23, 2020, and falls overdue during the period from January 23, 2020, to March 29, 2020;

c/ Such debit balance arises during the period from January 23, 2020, to before June 10, 2020, and falls overdue before May 17, 2021;

d/ Such debit balance arises during the period from June 10, 2020, to before August 1, 2021, and falls overdue during the period from July 17, 2021, to before September 7, 2021.

4. Being owed by clients that are unable to make due payment of loan principals and/or interests under contracts or agreements due to reduction of their revenues or incomes as a consequence of the Covid-19 pandemic, as assessed by the credit institution or foreign bank branch.

5. Being owed by clients that request debt rescheduling and are able to pay off loan principals and/or interests on the rescheduled due date, as assessed by the credit institution or foreign bank branch.

6. Being refused to be rescheduled by the credit institution or foreign bank branch for the reason that such debts are in violation of law.

7. The rescheduled period (also in case of extension of debt payment deadlines) depends on severity of impacts of the COVID-19 pandemic on clients, and must not exceed 12 months from the date the credit institution or foreign bank branch reschedules debts or from the due date of each debit balance eligible for rescheduling.

8. Debt rescheduling for clients shall be carried out until June 30, 2022.”

2. To amend and supplement Article 5 as follows:

“Article 5. Loan interest and charge exemption or reduction 

1. Credit institutions and foreign bank branches shall decide on loan interest and charge exemption or reduction in accordance with their internal regulations for debit balances of debts arising before August 1, 2021, from the credit extension activities (except purchase of, and investment in, corporate bonds) for which due dates for payment of loan principals and/or interests fall into the period from January 23, 2020, to June 30, 2022, while their clients are unable to pay on time loan principals and/or interests under contracts or agreements due to reduction of their revenues and incomes as a consequence of the Covid-19 pandemic.

2. Loan interest and charge exemption or reduction for clients in accordance with this Circular shall be given until June 30, 2022.”

3. To amend and supplement Clause 2, Article 6 of Circular No. 01/2020/TT-NHNN (which was amended and supplemented under Clause 4, Article 1 of the State Bank Governor’s Circular No. 03/2021/TT-NHNN of April 2, 2021, amending and supplementing a number of articles of Circular No. 01/2020/TT-NHNN), as follows:

“2. Credit institutions and foreign bank branches may maintain classified loan groups in accordance with the State Bank of Vietnam’s regulations on classification of loans in operations of credit institutions and foreign bank branches for debit balances eligible for rescheduling and loan interest and charge exemption or reduction as specified in Articles 4 and 5 of this Circular for debts arising during the period from January 23, 2020, to before August 1, 2021, as follows:

a/ Maintaining loan groups classified at the latest time before carrying out the initial debt rescheduling for the debit balance specified at Point a, Clause 3, Article 4 of this Circular;

b/ Maintaining loan groups classified at the latest time before debts fall overdue for the debit balance specified at Points c and d, Clause 3, Article 4 of this Circular;

c/ Maintaining loan groups classified at the latest time before initial loan interest and charge exemption or reduction is given for the debit balance specified in Article 5 of this Circular.”

Article 2. To replace the Appendix to Circular No. 01/2020/TT-NHNN

To replace the Appendix to Circular No. 01/2020/TT-NHNN by the Appendix to this Circular.

Article 3. Organization of implementation

The Chief of the Office, Chief of the Banking Supervision Agency, and heads of the units of the State Bank of Vietnam, credit institutions and foreign bank branches shall organize the implementation of this Circular.

Article 4. Implementation provisions

1. This Circular takes effect on September 7, 2021.

2. This Circular annuls Clauses 2, 3, 6, Article 1 of the State Bank Governor’s Circular No. 03/2021/TT-NHNN of April 2, 2021, amending and supplementing a number of articles of Circular No. 01/2020/TT-NHNN.-

For the State Bank Governor
Deputy Governor
DOAN THAI SON

* The Appendix to this Circular is not translated.