Circular No. 24/2016/TT-NHNN dated June 30, 2016 of the State Bank of Vietnam on amending and supplementing a number of Articles of the Circular No. 42/2011/TT-NHNN dated December 15, 2011 of the State Bank of Vietnam on grant of syndicated loans to clients by credit institutions

THE STATE BANK OF VIETNAM

Circular No. 24/2016/TT-NHNN dated June 30, 2016 of the State Bank of Vietnam on amending and supplementing a number of Articles of the Circular No. 42/2011/TT-NHNN dated December 15, 2011 of the State Bank of Vietnam on grant of syndicated loans to clients by credit institutions

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

Pursuant to the Law No. 47/2010/QH12 on credit institutions dated June 16, 2010;

Pursuant to the Government s Decree No. 156/2013/ND-CP dated November 11, 2013 defining the functions, rights, obligations and organizational structure of the State bank of Vietnam

Upon request by the Director of the Credit Departments for Economic Sector;

The Governor of the State bank of Vietnam hereby issues this Circular specifying amendment and supplement to a number of articles of Circular No.42/2011/TT-NHNN dated December 15, 2011 by the governor of the State bank of Vietnam on grant of syndicated loans to clients by credit institution.

Article 1. To amend and supplementa number of articles of Circular No.42/2011/TT-NHNN dated December 15, 2011 by the governor of the State bank of Vietnam on grant of syndicated loans to clients by credit institutions

1.To amend and supplement Article 1 as follows:

“Article 1. Scope and subject of application

1. This Circular specifies regulations on:

a) Grant of syndicated loans by credit institutions, branches of foreign banks and foreign credit institutions to investors in business projects or plans (hereinafter referred to as “project”) in Vietnam and resident investors in overseas projects;

b) Grant of syndicated loans to non-resident investors in overseas projects by those other than foreign credit institutions.

2. In case syndicated loans are granted to non-resident investors in overseas projects by a group of lenders including foreign credit institution(s), the Vietnamese and foreign credit institutions shall come to an agreement which is conformable to regulations on foreign exchange management.”.

2. To amend and supplement Clauses 2 and 3 of Article 2 as follows:

“2. Lenders of syndicated loans are commercial banks, cooperative banks, people’s credit funds, financial companies, finance lease companies, branches of foreign banks and foreign credit institutions (hereinafter referred to as “credit institution”) that undertake to grant syndicated loans to clients for implementation of whole or part of a project.

3. Entities participating in syndicated loans (Hereinafter referred to as “syndicate member”) refer to credit institutions participating in syndicated loans as specified herein.".

3.To amend and supplement Clauses 2 and 3 of Article 3 as follows:

“2. Syndicate members shall make capital (or obligations) contribution according to the proportion  set forth in the capital syndication contract, receive shared interests and fees and share expenses and risks incurred as stipulated in the capital syndication contract. Fees for granting syndicated loans shall be agreed upon between lenders and clients under current Vietnam’s regulations of laws.

3. A lead lender may play the role as the member taking charge of arrangement of syndicated loans, payment or custody of pledged assets. Such lead lenders shall be appointed  by other members in accordance with Vietnam’s regulations of laws. Foreign credit institutions participating in syndicated loans shall not be entitled to assume a role as the member taking charge of  payment activities.”.

4. To supplement Clause 6 Article 3 as follows:

“6. Syndicate members other than foreign credit institutions shall comply with prudential limits and ratios for syndicated loans prescribed by the State Bank”.

5. To amend and supplement Article 7 as follows:

“Article 7.Foreign exchange management in the presence of foreign elements

In either cases where a syndicated loan is granted by a group of lenders including foreign credit institution(s) or syndicated loan is granted for the purpose of outward investment, entities specified in clause 1 Article 1 hereof shall comply with regulations on foreign currency management, provisions hereof and other relevant regulations of laws.”.

6. To amend and supplement Clause 2 Article 8 as follows:

“2.Where it is necessary to offer syndicated loans, credit institutions shall send invitation to participate in syndicated loans and relevant documents attached thereto to those that are expected to participate in syndicated loans.".

7. To amend and supplement Clause 3 Article 16 as follows:

“3. Credit institutions other than foreign credit institutions shall submit a status report on grant of syndicated loans in accordance with the State Bank s regulations on the  reporting regime  applicable to credit institutions and branches of foreign banks.".

Article 2.To anuul the Appendix ofto the Circular No.42/2011/TT-NHNN dated December 15, 2011 by the governor of the State bank of Vietnam on grant of syndicated loans to clients by credit institutions shall be abrogated.

Article 3. Effect

This Circular takes effect on  June 30, 2016.

Article 4. Implementation organization

The Chief of Office, Directors of Credit Departments for Economic Sectors and Heads of affiliates of the State Bank, Directors of branches of the State Banks in provinces, Presidents of the Board of Directors, Presidents of member Councils, Directors General (Directors) of credit institutions granting syndicated loans and clients shall implement this Circular./.

For the Governor

The Deputy Governor

Nguyen Dong Tien