THE STATE BANK OF VIETNAM
Circular No.42/2018/TT-NHNN dated December 28, 2018 of the State Bank of Vietnam on amending and supplementing a number of article of the Circular No. 24/2015/TT-NHNN dated December 08, 2015 of the State Bank of Vietnam on foreign currency loans granted to residents by credit institutions and branches of foreign banks
Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;
Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010;
Pursuant to the Ordinance on Foreign exchange No. 28/2005/PL-UBTVQH11 dated December 13, 2005 and the Ordinance on amendments to the Ordinance on Foreign Exchange No. 06/2013/PL-UBTVQH13 dated March 18, 2013;
Pursuant to the Government’s Decree No. 70/2014/ND-CP dated July 17, 2014 on guidelines for the Ordinance on foreign exchange and the Ordinance on the amendments to a number of articles of the Ordinance on foreign exchange;
Pursuant to the Government
s Decree No. 16/2017/ND-CP dated February 17, 2017 defining the functions, tasks, entitlements and organizational structures of the State Bank of Vietnam;
At the request of the Director of the Financial Policy Department;
The Governor of the State Bank of Vietnam promulgates a Circular amending and supplementing a number of article of the Circular No. 24/2015/TT-NHNN dated December 08, 2015 of the State Bank of Vietnam on foreign currency loans granted to residents by credit institutions and branches of foreign banks (herein after refer to as Circular No. 24/2015/TT-NHNN).
Article 1. To amend and supplement a number of the Circular No. 24/2015/TT-NHNN
1. To amend and supplement Clause 1 Article 3 as follow:
“1. Credit institutions shall consider granting the foreign currency loans serving certain purposes as specified below:
a) Short-term loans used as outward remittance for imported goods or services for domestic demand when the borrowers’ foreign currency derived from their business operation is sufficient to repay such loans. This regulation shall be effective till the end of March 31, 2019;
b) Short-term loans used as outward remittance for imported goods or services in order to implement the plan of producing and trading export goods through Vietnamese border gates when the borrowers’ foreign currency derived from their business operation is sufficient to repay such loans;
c) Mid-term and long-term loans as outward remittance for imported goods or services when the borrowers’ foreign currency derived from their business operation is sufficient to repay such loans. This regulation shall be effective till the end of September 09, 2019;
d) Short-term loans granted to central petroleum importers who are given annual quotas on petroleum import by the Ministry of Industry and Trade to pay for such import when the borrowers’ foreign currency derived from their business operation is not sufficient to repay such loans;
dd) Short-term loans granted to meet domestic enterprises’ demands for short-term capital to serve the purpose of implementing their plans to manufacture and/or trade goods exported through Vietnam’s border checkpoints when borrowers’ foreign currency derived from the export turnover is sufficient to repay such loans; on receipt of loans disbursed by credit institutions, borrowers shall sell such borrowed foreign currency to the lending credit institutions in the form of a foreign-exchange spot transaction, unless the loans borrowers are used by the borrowers to make payments in which foreign currency is compulsory as stipulated by laws.
e) Loans used as direct outward investments in important national projects which are subject to investment decisions made by the National Assembly, the Government or the Prime Minister, and have been granted the Outward Investment Certificate by the Ministry of Planning and Investment.”
2. To amend and supplement Article 5 as follow:
“Article 5. Currency used for loan repayment
1. With regard to foreign currency loans whichbefore the signing of the credit contract or loan agreement, the credit institutions and foreign bank branches shall appraise borrowers’ sources of revenue in foreign currencies to pay the debt:
a) Borrowers shall pay the loan principal and interest by the currency that they borrow; in case borrowers repay debts by another foreign currency, they shall be bound to the agreement between the credit institutions and borrowers in conformity with relevant laws.
b) On the due date of the foreign currency loan, if borrower’s late repayment in foreign currency is caused by unexpected events such as borrower’s deferred collection of foreign-currency operating revenues, borrower’s inadequacy of foreign currency earned from production and business activities or other legal revenues to repay loans, the borrower shall buy foreign currency from the lending credit institution or other lending credit institution to repay the loan.
The lending credit institution shall sell the foreign currency to the borrower as the borrower need. If the borrower buy the foreign currency from other credit institution, such credit institution shall transfer those foreign currency to the lending credit institution.
The borrower shall have to sell the foreign currency to the credit institution in case he/she receive foreign currency from business activities.
2. With regard to foreign currency loans whichbefore the signing of the credit contract or loan agreement, the credit institutions and foreign bank branches appraise borrowers’ sources of revenue in foreign currencies to pay the debt, which borrowers lack legal foreign currency revenues to repay, the borrower shall buy foreign currency from the lending credit institution or other lending credit institution to repay the loan.
The lending credit institution shall sell the foreign currency to the borrower as the borrower need. If the borrower buy the foreign currency from other credit institution, such credit institution shall transfer those foreign currency to the lending credit institution.”
Article 2.
To replace the Appendix No. 1 and Appendix No. 2y enclosed with the Circular No. 24/2015/TT-NHNN by the Appendix No. 1 and Appendix No. 2y enclosed with this Circular.
Article 3. Transitional provision
1. For contracts that apply the lending method of credit limit or loan agreement is to apply the credit limit lending method signed before the effective date of this Circular but the each individual loan agreements signed since the effective date of this Circular, credit institutions, foreign bank branches and borrowers shall comply with the provisions of this Circular.
2. Except for cases mentioned in Clause 1 this Article, credit contracts or loan agreements signed before the effective date of this Circular shall continue their efficiency, credit institutions and borrowers continue to implement such contracts and agreements in accordance with the provisions of law at the time of signing. If the credit contracts or loan agreements needed to be amend and supplement, the amended and supplemented contents shall have to be comply with provision of this Circular.
Article 4. Implementation responsibility
The Chief Officers, the Director of the Financial Policy Department and Heads of affiliates of the State Bank of Vietnam, Director of Provincial Branches of the State Bank of Vietnam; President of the Board of Directors, President of the Member Assembly and General Director (Director) of credit institutions shall be responsible for implementing this Circular.
Article 5. Effect
1. This Circular takes effect on January 01, 2019;
2. The Circular repeal the Circular No. 18/2017/TT-NHNN dated December 27, 2017 of the Governor of the State Bank of Vietnam on amending and supplementing a number of the Circular No. 24/2015/TT-NHNN dated December 08, 2015 of the State Bank of Vietnam on foreign currency loans granted to residents by credit institutions and branches of foreign banks. /
For the Governor
The Deputy Governor
Nguyen Thi Hong
*The Appendixes enclosed with this Circular are not yet translated*