Decree 31/2022/ND-CP on interest rate support from the State budget for loans of enterprises, cooperatives and business households

DECREE

On interest rate support from the State budget for loans of enterprises, cooperatives and business households

Pursuant to the Law on Organization of the Government dated June 19, 2015 and the Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Law on the State Budget dated June 25, 2015;

Pursuant to the Law on Public Investment dated June 13, 2019;

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

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

Pursuant to the National Assembly’s Resolution No. 43/2022/QH15 dated January 11, 2022, on fiscal and monetary policies supporting socio-economic recovery and development program;

At the proposal of the Governor of the State Bank of Vietnam;

The Government hereby promulgates the Decree on interest rate support from the State budget for loans of enterprises, cooperatives and business households.

Article 1. Scope of regulation

 This Decree provides regulations on interest rate support for loans in Vietnam dong that arise from the lending activities of commercial banks of customers being enterprises, cooperatives and business households as prescribed by the National Assembly’s Resolution No. 43/2022/NQ15 dated January 11, 2022 and the Government's Resolution No. 11/NQ-CP dated January 30, 2022.

Article 2. Subjects of application

1. Commercial banks established and operating under the Law on Credit Institutions.

2. Enterprises, cooperatives and business households supported with interest rate (hereinafter referred to as customers) that fall into one of the following cases:

a) Having a purpose of using loans belonging to one of the sectors registered for trading as prescribed in the Prime Minister’s Decision No. 27/2018/QD-TTg dated July 06, 2018, on promulgating Vietnam Standard Industrial Classification, including: Aviation, transportation and storage (H), tourism (N79), accommodation and food service (I), education and training (P), agriculture, forestry and aquaculture (A), processing and manufacturing industry (C), software publishing (J582), computer programming and related activities (J-62), information service activities (J-63); including construction activities directly serving the above-mentioned economic sectors but excluding construction activities for the purpose of real estate business specified in the economic sector (L) under the Decision No. 27/2018/QD-TTg.

b) Having a purpose of using loans to perform social housing projects or projects of building houses for workers, or renovation of old condominiums in the lists synthesized and announced by the Ministry of Construction.

3. Other related organizations and individuals.

Article 3. Interest rate support principles

1. The interest rate support must be given properly to the right beneficiaries according to the purposes, ensuring publicity and transparency, avoiding profiteering.

2. The State budget shall fully and timely allocate funding for interest rate support for commercial banks to provide interest rate support for customers.

3. Commercial banks shall provide interest rate support, create favorable conditions for customers according to regulations.

4. Customers must have the ability to repay and the ability to recover according to the internal assessment of the commercial banks, use the loan with interest rate support for the right purposes, have the responsibility to coordinate with the commercial banks in providing interest rate support.

5. The interest rate support shall be applied to the interest payment obligations at interest payment terms that arise during the period from the effective date of this Decree to December 31, 2023.

6. Commercial banks shall stop providing interest rate support after December 31, 2023, or when the funding source (interest rate support limit) runs out, whichever comes first.

Article 4. Conditions for eligible for interest rate support

1. Customers may request for interest rate support, provided that they satisfy borrowing conditions in accordance with current laws on lending operations of credit institutions and foreign bank branches for customers.

2. Loan amounts eligible for interest rate support means loan amounts in Vietnam dong, that have not yet been provided with interest rate support from the State budget under other policies; have already been included in the lending agreement and shall be disbursed within the period from January 01, 2022 to December 31, 2023, with the use purpose specified in Clause 2 Article 2 of this Decree.

3. Loan amounts shall be ineligible for interest rate support in the following cases:

a) Loan amounts with overdue principal balance and/or late-payment interest balance are ineligible for interest rate support for the interest payment obligation at the interest payment term but the time of repayment is within the period of overdue principal balance and/or the balance of late payment interest. Loan amounts shall only be provided with interest rate support for the next interest payment terms after customers fully pays overdue principal balance and/or late-payment interest balance.

b) Loan amounts eligible for payment deadline extension shall not be provided with interest rate support for the extended payment period.

Article 5. Support terms and interest rate

1. The support duration shall be counted from the date of disbursement of the loan amounts to the time the customer fully pays the loan principal and/or interest as agreed between the commercial bank and the customer, in line with the announced funding source for interest rate support, but no later than December 31, 2023.

2. The support interest rate for customers is 2%/year, calculated on the loan balance and the actual interest rate support loan term within the period specified in Clause 1 of this Article.

Article 6. Interest rate support methods

By the payment deadline of each interest payment term, the commercial bank shall reduce the customer's loan interest amount that is equal to the loan interest amount provided with interest rate support in the period under the instructions of the State Bank of Vietnam.

Article 7. Estimating and implementing estimates and settlement of interest rate support

1. Estimating state budget for interest rate support

a) The estimating state budget for interest rate support shall comply with the Law on the State Budget, Law on Public Investment, this Decree and relevant legal documents.

b) Within 15 days after the effective date of this Decree, commercial banks shall register their plans on supporting interest rates from the state budget for two years of 2022 and 2023, and detailed plans for each year according to Form No. 01 provided in Appendix to this Decree, and send them to the State Bank of Vietnam.

c) Within 20 days from the effective date of this Decree, the State Bank of Vietnam shall synthesize commercial banks’ support plans, that are not more than 40,000 billion VND, detailing to each commercial bank and each year, and send them to the Ministry of Planning and Investment and the Ministry of Finance.

d) Based on the synthesized plans of the State Bank of Vietnam, the Ministry of Planning and Investment shall assume the prime responsibility for reporting the Government for submission to the National Assembly Standing Committee for permission to supplement the state budget investment and development expenditure estimates to implement the interest rate support in 2022, and summarize, allocate in the 2023 state budget estimate and submit to the National Assembly for decision.

2. Implementing state budget estimates for interest rate support

a) Based on the National Assembly Standing Committee's Resolutions on supplementing the 2022 estimates, the Prime Minister shall decide on allocating central budget funding for supplementing the 2022 public investment plan for the State Bank of Vietnam. The allocation of the 2023 public investment plan shall comply with current regulations.

The State Bank of Vietnam shall notify the limits for interest rate support for commercial banks and send them to the Ministry of Finance and the Ministry of Planning and Investment for coordination in implementation.

b) Before the 20^th of the first month of every quarter, commercial banks shall send the dossiers of request for prepayment of the amounts already provided with interest rate support of the preceding quarter under this Decree to the State Bank of Vietnam and the Ministry of Finance; dossiers of quarter IV of every year must be sent before January 05 of the following year. Such a dossier must comprise:

- A written request for prepayment of the amounts already provided with interest rate support, clearly specifying the amount provided with interest rate support in the quarter by the commercial bank, the amount requested for prepayment that is equal to 85% of the amount already provided with interest rate support in the quarter by the commercial bank, receiving amount of the commercial bank;

- A report on the provision of interest rate support for customer of the commercial bank, made according to Form No. 02 provided in Appendix to this Decree;

- A list of vouchers proving that the customer has been provided with interest rate support in the quarter, made according to Form No. 03 provided in Appendix to this Decree.

c) Within 10 working days after receiving the dossiers of request for prepayment of amounts already provided with interest rate support of every quarter by the commercial bank, the State Bank of Vietnam shall give opinions on the list of dossiers, amounts requested for prepayment of the commercial bank, that does not exceed the announced interest rate support limit, send them to the Ministry of Finance for request for prepayment for the commercial bank. Particularly for dossiers of quarter IV of every year, the State Bank of Vietnam shall send opinions to the Ministry of Finance within 5 working days after receiving the commercial bank's dossiers.

d) Within 15 working days after receiving the State Bank of Vietnam's request, the Ministry of Finance shall make prepayment of the amounts already provided with interest rate support for the commercial bank under this Decree in the form of payment order, and notify the State Bank of Vietnam for coordination in implementation.

dd) The total amount prepaid to the commercial bank in the budget year as prescribed at Point d of this Clause must not exceed the interest rate support limit announced in the year. By January 31, 2023, if the 2022 interest rate support estimate amount is not fully used, it shall be transferred to the year 2023 for further support in accordance with law provisions.

e) During the course of implementation, the State Bank of Vietnam shall consider adjusting the interest rate support limits among commercial banks in case of necessity, send the Ministry of Planning and Investment and the Ministry of Finance for coordination implementation.

3. Settlement of interest rate support

a) The commercial bank shall be responsible for settling annual interest rate support amounts, and make dossiers of settlement of interest rate support, in which loan amounts provided with interest rate support must be given to the right beneficiaries and fully meet conditions for interest rate support under this Decree, determine the supported amounts for each customer, and generally summarize the amounts of the whole commercial bank, customers’ amounts provided with interest rate support with sufficient lawful documents.

b) The settled amounts that have been provided with interest rate support shall be determined as follows:

- The support amount actually paid for a disbursement amount shall be calculated according to the following formula:

In which:   - I means the supported amount actually paid for the disbursement amount;

                        -  means the sum of the products between the debit balance and the actual number of days the loan balance is provided with interest rate support of the disbursement amount.

- The supported amount actually paid for a loan amount is the total interest sum actually paid to all disbursement amounts of that loan amount.

- The actual interest rate support amount requested to be paid by the state budget is the total amount of interest actually paid for all loans subject to the provisions of this Decree. The total amount of interest rate support requested for payment by the state budget of commercial banks must not exceed 40,000 billion VND.

4. Summary of the annual interest rate support settlement reports

a) Before February 10, 2023 (for amounts provided with interest rate support in 2022) and before February 10, 2024 (for amounts provided with interest rate support in 2023), the commercial bank shall send the dossiers of settlement of annual interest rate support to the State Bank of Vietnam (3 sets of dossiers). Such a dossier must comprise: An official dispatch on the settlement of annual interest rate support, clearly specifying an amount the commercial bank already provided interest rate support to the customer, the amount provided with interest rate support that has been withdrawn, the amount prepaid quarterly by the state budget, the remaining amount requested for payment by the state budget; A report on data requested for summary of interest rate support settlement, made according to Form No. 04 provided in Appendix to this Decree; A list of documents proving that the customer has been provided with interest rate support in the settlement year, made according to Form No. 05 provided in Appendix to this Decree.

The commercial bank shall be responsible for the validity and accuracy of dossiers, and interest rate support settlement data.

b) Within 20 working days after receiving complete dossiers of annual interest rate support settlement from commercial banks, the State Bank of Vietnam shall summarize reports on interest rate support settlement, detailing to each commercial bank according to Form No. 06 to this Decree, and send them to the State Audit Office of Vietnam for auditing in accordance with the Law on State Audit and relevant legal documents.

c) Within 20 working days after receiving the audit result from the State Audit Office of Vietnam under Point b of this Clause, the State Bank of Vietnam shall, based on the commercial banks’ dossiers of interest rate support settlement, the State Audit Office of Vietnam’s audit result and the result of checking dossiers under Point d of this Clause (if any), summarize interest rate support settlement reports detailed to each commercial bank (according to the audited data), and send them to the Ministry of Finance for appraisal, and at the same time, send to commercial banks. Contents of the summary of the annual interest rate support settlement reports must include:

- Comparison of data when synthesizing the final settlement reports, including the amount already provided with interest rate support in the year by the commercial bank compared with the announced interest rate support limit, the withdrawn interest rate support amount, the amount already prepaid by the state budget during the year; ensuring conformity with the audit results of the State Audit Office of Vietnam.

- The amount paid by the state budget to support the interest rate support that is insufficient or excess (if any); in case the prepaid amount in the year is lower than the total settlement amount, the difference will be further paid; in case the amount prepaid in the year is higher than the total settlement amount, the difference will be withdrawn, or deducted from the interest support payment amount of the following year;

- Problems discovered through the process of synthesizing the final settlement reports, inspection, examination and supervision (if any);

- Other contents or comments (if any).

d) In case of necessity, the inter-sectoral interest rate support working group as prescribed at Point dd Clause 1 Article 10 of this Decree shall examine the dossiers of loans eligible for interest rate support in accordance with the operation regulations of the inter-sectoral interest rate support working group and regulations in this Decree.

5. The State Audit Office of Vietnam shall organize the audit of the provision of interest rate support under Clause 3 Article 7 of the National Assembly’s Resolution No. 43/2022/QH15 and relevant legal documents.

6. Appraisal of the general report on annual interest rate support settlement

a) Before October 01 of the year following the settlement year, the State Bank of Vietnam shall send a written request to the Ministry of Finance to appraise the general report on the settlement of interest rate support according to Form No. 06 provided in Appendix to this Decree, together with the State Audit Office of Vietnam’s document on the audit results of the implementation of interest rate support for the settlement year as prescribed in Clauses 4 and 5 of this Article, and send it to the commercial banks.

b) Within 15 working days from the date of receiving the written request for appraisal of the general report on annual interest rate support settlement from the State Bank of Vietnam, the Ministry of Finance shall appraise the general report on annual interest rate support settlement according to the following contents:

- Checking the amount prepaid by the state budget;

- Checking the number of requests for appraisal of the general settlement report that is within the level of capital supplemented for the public investment plan allocated to the State Bank of Vietnam from the central budget and the announced interest rate support limit for each commercial bank as prescribed at Point a Clause 2 of this Article;

- The amount prepaid by the state budget to the commercial banks that is insufficient or excess (if any) compared to the appraised amount; in case the prepaid amount in the year is lower than the appraised amount, the difference will be further paid; in case the amount prepaid in the year is higher than the appraised amount, the difference will be withdrawn, or deducted from the interest support payment amount of the following year;

- Other contents or comments (if any).

c) The Ministry of Finance shall, based on the appraisal results specified at Point b of this Clause, send an appraisal notice to the State Bank of Vietnam and commercial banks to notify data as follows:

- The amount provided with the interest rate support by the commercial bank according to the appraisal results, in which the data included in the state budget settlement according to the budget year is the amount already paid to commercial banks by the state budget from January 01 of the budget year to the end of January 31, 2023 for interest rate supports in 2022 and until the end of January 31, 2024 for annual interest rate supports in 2023;

- The remaining amount the state budget has to pay to commercial banks, either withdraw or deduct from the following year’s payment amount.

Article 8. Report on the implementation of interest rate support for the whole program

1. Within 30 working days from the date of receiving the Ministry of Finance’s written notice of appraisal data for the year 2023 as prescribed at Point c Clause 6 Article 7 of this Decree, the commercial bank shall send the report on the implementation of interest rate support for the whole program (summarizing data for 2022 and 2023, which has been appraised by the Ministry of Finance) to the State Bank of Vietnam, including: Reports on evaluation of the implementation of interest rate support for customers by each industry and field; Reports on the implementation of interest rate support for the whole program in the two years 2022 and 2023, made according to Form No. 07 provided in Appendix to this Decree.

2. The State Bank of Vietnam shall summarize reports on the implementation of interest rate support for the whole program, including the use of funding for interest rate support, report to the Government for submission to the National Assembly.

Article 9. Handling and withdrawal of supported amount

1. In the course of implementation, in case it is discovered that a customer's loan is ineligible, or used for the wrong purpose or does not meet the conditions for interest rate support, the commercial bank shall notify the customer and convert the loan that is provided with interest rate support into a regular loan, and at the same time withdraw the entire amount already provided with interest rate support by the commercial bank within 30 days from the date of notification.

2. In case the state budget has paid the amount already provided with interest rate support or already settled the interest rate support for the loan amount specified in Clause 1 of this Article, the commercial bank shall refund it to the state budget report to deduct into the amount the state budget has paid for interest rate support.

3. In case the customer fails to refund the supported amount as prescribed in Clause 1 of this Article, the commercial bank shall send a written request to the State Bank branch in the province or centrally-run city (where the customer’s head office is located)) to report to the People's Committee of the province or city to direct the local competent agencies to coordinate with the commercial bank to recover the amount already provided with interest rate support.

Article 10. Implementation organization

1. Responsibility of the State Bank of Vietnam

a) The Governor of the State Bank of Vietnam shall issue the Circular guiding commercial banks to provide interest rate support in accordance with this Decree, specifying management methods to ensure the total supported amount not exceeding 40,000 billion VND.

b) To summarize the plans on interest rate support, notify and adjust the interest rate support limits for commercial banks in accordance with this Decree.

c) To examine and supervise the lending with interest rate support by commercial banks.

d) To summarize reports on interest rate support settlement in 2022 and 2023 of commercial banks; to notify results of implementation of interest rate support for the whole program in accordance with this Decree.

dd) In case of necessity, the State Bank of Vietnam shall assume the prime responsibility for establishing an inter-sectoral interest rate support working group comprising the State Bank of Vietnam, the Ministry of Finance, the Ministry of Planning and Investment, and the Ministry of Construction to examine the dossiers of loans eligible for interest rate support as prescribed at Point d Clause 4 Article 7 of this Decree; promulgate regulations on the operation of the inter-sectoral interest rate support working group, which stipulates the principles and methods for checking the dossiers of loans eligible for interest rate support, tasks of the group members and other contents.

e) To assume the prime responsibility for, and coordinate with relevant agencies in, removing difficulties arising in the course of implementation of the policy of lending with interest rate support as prescribed in this Decree.

2. Responsibility of the Ministry of Finance

a) To ensure sufficiency and timeliness of the funding for interest rate support in order to pay the interest rate support for commercial banks in accordance with this Decree and relevant legal documents.

b) To appraise general reports on interest rate support settlement in 2022 and 2023 in accordance with this Decree.

c) To coordinate with the State Bank of Vietnam in removing difficulties arising in the course of implementation of the policy of lending with interest rate support as prescribed in this Decree.

3. Responsibility of the Ministry of Planning and Investment

a) To remove difficulties related to subjects eligible for interest rate support as prescribed at Point a Clause 2 Article 2 of this Decree; in case of beyond the competence, report the Prime Minister for consideration and decision.

b) To coordinate with the State Bank of Vietnam in removing difficulties arising in the course of implementation of the policy of lending with interest rate support as prescribed in this Decree.

4. Responsibility of the Ministry of Construction

a) To summarize the list of projects on construction of social housing, housing for workers, renovation of old condominiums of the People's Committees of provinces and centrally-run cities; publish in writing and on the website of the Ministry of Construction within 30 days from the effective date of this Decree and make adjustments and supplements to the list at the proposal of the People's Committees of provinces and centrally-run cities.

b) To remove difficulties related to subjects eligible for interest rate support as prescribed at Point b Clause 2 Article 2 of this Decree.

c) To coordinate with the State Bank of Vietnam in removing difficulties arising in the course of implementation of the policy of lending with interest rate support as prescribed in this Decree.

5. Responsibility of People’s Committees of provinces and centrally-run cities

a) To make the list of projects on construction of social housing, housing for workers, renovation of old condominiums and send it to the Ministry of Construction within 15 days from the effective date of this Decree, make adjustments and supplements to the list and send to the Ministry of Construction in case of necessity, in which the following information must be announced: Project owners; for projects on construction of social housing and housing for workers, approval of the competent authorities in accordance with law provisions, land allocation or lease decision are required and the ground clearance must be completed, construction permits have been granted or exempted in accordance with the construction law; for projects of renovation of old condominiums, investment policy must be approved by the competent state agency in accordance with law provisions; other information as required by relevant laws.

b) To direct local competent agencies to coordinate with commercial banks to recover the amount already provided with interest rate support under Clause 3 Article 9 of this Decree from customers.

e) To coordinate with ministries and relevant agencies in removing difficulties arising in the course of implementing the policy of lending with interest rate support in localities in accordance with this Decree.

6. Responsibility of commercial banks

a) To take full responsibility for the lending and determining customers eligible for interest rate support, making payment and settlement of interest rate support in accordance with this Decree.

b) To send sufficient and timely reports to the State Bank of Vietnam and the Ministry of Finance, and take responsibility for the validity and accuracy of dossiers and data of request for payment and settlement of interest rate support in accordance with this Decree.

c) To provide relevant competent agencies documents relating to the interest rate support upon request (copies or those certified by commercial banks), including loan agreements, debt receipt documents or equivalent documents to identify borrowers, loan performance, outstanding balance, debt collection, cumulative statement to determine the amount of interest rate support, documents proving that the customer has received interest rate support (the customer's current account statement for determination of the interest rate support amount or the accounting slip of transferring the supported amount to the customer or other proofs).

d) To refund to the state budget and recover the amount already provided with interest rate support for loans of customers who are determined not to be eligible, or those who are determined to use loans for wrong purposes or do not meet the conditions for interest rate support as prescribed in Article 9 of this Decree.

dd) To publicly announced the time to stop providing interest rate support in accordance with Clause 6 Article 3 of this Decree.

7. Responsibility of customers

a) To send a request for interest rate support; provide the necessary information, documents and vouchers at the request of commercial banks in the process of interest rate support, settlement of interest rate support; take responsibility for the accuracy, truthfulness and completeness of information, documents and vouchers provided to the commercial banks.

b) To properly use loans according to the interest rate support purpose as agreed with commercial banks.

c) To refund the amount already provided with interest rate support for loans of customers who are determined not to be eligible, or those who are determined to use loans for wrong purposes or do not meet the conditions for interest rate support as prescribed in Article 9 of this Decree. In case customers refuse to refund the supported amounts, they shall take responsibility before the law.

8. Responsibility of the Ministry of Information and Communications, Vietnam Television, Radio - The Voice of Vietnam and Vietnam News Agency

To propagandize information about the interest rate support policy in accordance with this Decree.

Article 11. Implementation provisions

1. This Decree takes effect on the date of its signing.

2. The Governor of the State Bank of Vietnam, the Minister of Planning and Investment, the Minister of Finance, the Minister of Construction, the Minister of Information and Communications, Chairpersons of People's Committees of provinces and centrally-run cities, Chairpersons of Boards of Directors/Members’ Councils, General Directors/Directors of commercial banks, and related organizations and individuals shall implement this Decree.

* All Appendices are not translated herein.