Circular No. 37/2012/TT-NHNN dated December 28, 2012 of the State Bank of Vietnam stipulating the provision of foreign-currency loans by credit institutions and foreign bank branches to resident borrowers

THE STATE BANK OF VIETNAM

Circular No. 37/2012/TT-NHNN of December 28, 2012, stipulating the provision of foreign-currency loans by credit institutions and foreign bank branches to resident borrowers

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

Pursuant to June 16, 2010 Law No. 47/2010/QH12 on Credit Institutions;

Pursuant to December 13, 2005 Ordinance No. 28/2005/PL-UBTVQH11 on Foreign Exchange;

Pursuant to the Government’s Decree No. 160/2006/ND-CP of December 28, 2006, detailing the implementation of the Foreign Exchange Ordinance;

Pursuant to the Government’s Decree No. 96/2008/ND-CP of August 26, 2008 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 stipulating the provision of foreign-currency loans by credit institutions and foreign bank branches to resident borrowers.

Article 1. Scope of regulation

This Circular stipulates the provision of foreign-currency loans by credit institutions and foreign bank branches to resident borrowers.

Article 2. Subjects of application

1. Credit institutions and foreign bank branches that are licensed to carry out foreign-exchange operations and provide foreign-currency loans to borrowers.

2. Resident customers who borrow loans at credit institutions and foreign bank branches in accordance with the law on loaning activities.

Article 3. Demands for foreign-currency loans

1. Credit institutions and foreign bank branches may consider and decide on the provision of foreign-currency loans for the following demands for loans:

a/ Short-term, medium-term and long-term loans for overseas payment for imported goods and services when borrowers have sufficient foreign-currency revenues from production and business activities for paying loans.

b/ Short-term loans for wholesale importers of petrol and oil that have been allocated the 2013 petrol and oil import quotas by the Ministry of Industry and Trade and need to borrow foreign-currency loans for overseas payment for imported petrol and oil when the borrowers have no or insufficient foreign-currency revenues from production and business activities for repaying loans. The provision of this Clause will be implemented through December 31, 2013.

c/ Short-term loans in order to meet domestic capital demands aiming to implement plans on production and trading of exports through Vietnam’s border gates when borrowers have sufficient foreign-currency export revenues for repaying loans. When receiving a loan from a credit institution or foreign bank branch, the borrower shall sell this foreign-currency amount to the loaning credit institution or foreign bank branch in the form of foreign exchange spot transaction, except cases in which customers borrow loans for payment transactions in which the transaction currency must be a foreign currency as prescribed by law. The provision of this Clause will be implemented through December 31, 2013.

d/ Loans for offshore direct investment for national important projects and works already decided by the National Assembly, the Government or the Prime Minister and having an offshore investment certificate granted by the Ministry of Planning and Investment.

2. Credit institutions and foreign bank branches may consider and decide on the provision of foreign-currency loans other than those specified in Clause 1 of this Article but in a field prioritized or promoted for production and business development according to the Government’s policy after the State Bank of Vietnam has accepted in writing according to the order and procedures specified in Article 4 of this Circular.

Article 4. Order and procedures for acceptance of provision of foreign-currency loans

1. When wishing to provide foreign-currency loans, credit institutions or foreign bank branches shall send a written request to the State Bank of Vietnam for acceptance of provision of foreign-currency loans.

A written request for acceptance of provision of foreign-currency loans has the following principal details: The credit institution or foreign bank branch has appraised and ensures that the borrower’s production and business project or plan is feasible and effective; the borrower meets all borrowing conditions as prescribed by the law on loaning activities, and is able to recover the debt (principal and interest) on schedule; the credit institution or foreign bank branch ensures to balance its foreign-currency capital source for loaning and the provision of foreign-currency loans does not affect the credit limit and prudential ratio in its operation as prescribed by the State Bank of Vietnam; the borrower needs foreign-currency loans for implementing a production and business plan or project in a field prioritized or encouraged for production and business development according to the Government’s policy; the credit institution or foreign bank branch commits to take responsibility for results of the appraisal and information provided in the written request.

2. Order and procedures for acceptance of the provision of foreign-currency loans

a/ The credit institution or foreign bank branch sends directly or by post a written request for acceptance of provision of foreign-currency loans to the State Bank of Vietnam (the Monetary Policy Department).

b/ Based on the Government’s policy on the fields prioritized and promoted for production and business development, the situation of the foreign exchange market, the provisions of this Circular and the content of the written request of the credit institution or foreign bank branch, the State Bank of Vietnam shall consider and accept the provision of foreign-currency loans by the credit institution or foreign bank branch.

c/ Within 30 (thirty) working days after receiving the credit institution’s or foreign bank branch’s written request for acceptance of the provision of foreign-currency loans, the State Bank of Vietnam shall send to the credit institution or foreign bank branch a written notice of its acceptance or refusal of the provision of foreign-currency loans .

Article 5. Responsibilities of credit institutions and foreign bank branches

1. Credit institutions and foreign bank branches that provide foreign-currency loans in accordance with this Circular, regulations on loans, foreign exchange management and prudential ratios in the operation of credit institutions and foreign bank branches, and other relevant regulations.

2. Monthly, not later than the 12th day of the month following the reporting month, a credit institution or foreign bank branch shall send to the State Bank of Vietnam a report on the provision of foreign-currency loans, made according to the form enclosed with this Circular.

Article 6. Organization of implementation

1. This Circular takes effect on January 1, 2013, and replaces Circular No. 03/2012/TT-NHNN of March 8, 2012, of the Governor of the State Bank of Vietnam, stipulating the provision of foreign-currency loans by credit institutions and foreign bank branches for resident borrowers.

2. For loans provided in lump sum or by investment project or syndicated loans provided under credit contracts signed before the effective day of this Circular, credit institutions, foreign bank branches and the borrowers may implement the contents in the signed credit contracts in accordance with regulations that are effective at the time of signing such credit contracts or reach agreement to revise these credit contracts to be compliant with the provisions of this Circular. For loans provided based on a credit limit or rotational credit under credit contracts signed before the effective day of this Circular, and disbursed from January 1, 2013, credit institutions and foreign bank branches and borrowers shall comply with this Circular.

3. The chief of the Office, the director of the Monetary Policy Department and heads of units of the State Bank of Vietnam, directors of State Bank branches of provinces and centrally run cities, chairpersons of the Boards of Directors or of Members’ Councils and Directors General (Directors) of credit institutions and foreign bank branches, and other related organizations and individuals shall implement this Circular.-

For the Governor of the State Bank of Vietnam
Deputy Governor
NGUYEN DONG TIEN