Legal Document Updates in English (28/2016)

NEW REGULATIONS ON THE PURCHASE OF CORPORATE BONDS
 

The Circular No. 22/2016/T-NHNN dated June 30, 2016 of the State Bank of Vietnam on the purchase of corporate bonds by credit institutions and branches of foreign banks with many important contents.

Accordingly, the eligible credit institution must have a system of internal credit rating, including the credit rating of corporate bond issuers and issue an internal regulation on purchase of corporate bonds in accordance with this Circular and relevant law provisions, at least including process and procedures for assessment and decision on the purchase of corporate bonds; rules, assessment criteria of risk levels of buying corporate bonds pertaining to types of enterprises and corporate bonds; policies and limit for credit management, risk measurement and management system, conditions, measures and processes of risk settlement; internal control of the purchase of corporate bonds.

The Circular also prescribes that credit institutions, foreign bank's branches shall monitor or through an agent of bond

BANKS MUST REGULATIONS ON DISCOUNT OF NEGOTIABLE INSTRUMENTS
AND OTHER VALUABLE PAPERS

On June 30, 2016, the State Bank of Vietnam issued the Circular 21/2016/TT-NHNN on amending a number of Articles of the Circular No. 04/2013/TT-NHNN dated March 1, 2013 of the State Bank of Vietnam providing the discount of negotiable instruments and other valuable papers by credit institutions and foreign bank branches for clients.

According to the regulations in this Circular, commercial banks, financial companies, financial leasing companies, cooperatives banks, and branches of foreign banks are permitted to conduct discounted transfer of negotiable

INCREASE WITHDRAWAL LIMIT EACH AN ATM OF BELOW 3 MILLION VND FOR INTER-BANK TRANSACTIONS
 

This important content is prescribed at the Circular No. 20/2016/TT-NHNN issued by the State Bank of Vietnam on June 30, 2016 on amending a number of Articles of the Circular 36/2012/TT-NHNN on the installation, management, operation and security of automated teller machines and of the circular no. 39/2014/TT-NHNN dated December 11,2014 on guidelines for intermediary payment services.

In particular, Providers of payment services shall not limit each withdrawal  at an ATM of below 5 million Vietnam dongs for internal transactions and below 3 million Vietnam dongs for inter-bank transactions.

This Circular has specific requirements for ATMs. Accordingly, The phone number and contact address of the operator of an ATM must be displayed publicly at the site of

AN PERSON AGED 6 ALLOWED TO USE DEBIT CARDS
 

This is the new content prescribed at the Circular No. 19/2016/TT-NHNN on bank card operation and takes effect on August 15, 2016.

Accordingly, the Circular prescribes that a person aged 6 to less than 15 years who does not have lack of legal capacity or limited legal capacity and obtain an authorization in writing made by his/her legal representative to permit him/her to use debit cards without overdraft facility and prepaid cards; ) an person aged 15 to less than 18 years who does not have lack of legal capacity or limited legal capacity and obtain an authorization in writing made by his/her legal representative to permit him/her to use debit cards without overdraft facility and prepaid cards; an person who is 18 years of age or older and has full legal capacity as prescribed by law is permitted to use debit cards, credit cards and/or prepaid cards.

HE RATE OF LATE PAYMENT INTEREST BETWEEN BANKS SHALL NOT EXCEED 10%/YEAR
 

The State Bank of Vietnam issued Circular No. 18/2016/TT-NHNN on June 30, 2016 which takes effect on August 22, 2016, amending a number of Articles of the Circular No. 21/2012/TT-NHNN dated June 18, 2012, regulation on operation of lending, borrowing; term purchase and sale of valuable papers with term among foreign credit institutions and bank branches.

Within that, the most importance content is the provision about the rate of lending interest between credit institutions or foreign banks' branches. In accordance with this Circular, lending interest rate shall be subject to negotiation of credit institutions or foreign banks' branches. The rate of interest on overdue principal balance shall be subject to negotiation of credit institutions or foreign banks' branches in the loan agreement; however, the rate cannot exceed 150% of the interest rate on the loan prior to its maturity; the rate of late payment interest shall be subject to negotiation of credit institutions or foreign banks' branches in the loan agreement but shall not exceed 10% per annum.

Besides, this Circular also prescribed some case that credit institutions or foreign banks’ branches are allowed to incur