The State Bank of Vietnam (SBV) issued Circular No. 10/2015/TT-NHNN on July 22 to guide the implementation of several substances of Decree No.55/2015/NĐ-CP dated June 09, 2015 on credit policy serving for rural and agricultural development of the the Prime Minister (Degree 55).
The Circular focus on following substances:
1. The circular stipulates policy to support credit institutions in generating capital resources for lending to rural and agricultural sector; the regulations on restructuring of loan maturities and new lending; dossiers, proceed and precedures of freezing and disposal of loans; the maximum discounting ratio of the collaterals used to secure the loans in line with the regulaitons of Decree 55.
2. Governing scope and implementers:
- The lenders: the lenders are commercial banks, cooperative bank, non bank credit institutions (except financial leasing companies and financial factoring companies), micro finance institutions, people credit funds and foreign bank branhches (hereinafter called as credit institutions).
- Entities and individuals eligible to borrow are prescribed in iterm 2, Article 2 of Decree 55 (hereinafter called as clients).
3. The SBV’s policy used for supporting credit institutions to extend capital resources for lending is implemented via monetary policy tools such as refinancing, reducing the ratio of reserve requirements and other supportive policies.
4. The rescheduling loan maturities and new lending: The credit institutions will restructure payment maturities for clients who are unable to repay their loans due to objective and force majeure reasons, and maintain the loan group in line with their payment capacity. Loan group maintenance will be conducted one (01) time only for a loan. Credit institutions are allowed to extend new loans to support clients for restoring production and business with efficient and feasible plans.
Basing on credit institutions’ financial capacity and applicable regulations, credit institutions will take other supportive measures including reduction or waive of lending interest and interest of overdue loans; priotitize collection of principal loans in order to support clients to overcome difficulties and restore production and business.
5. The Circular stipulates dossiers, proceed and precedures of requesting for freezing and disposing off the loans for borrowers who are unable to repay their loans due to objective and force majeure reasons, natural disasters and deases.
6. The Circular stipulates the ratio that credit institutions discount the value of the collateral used to secure the loans. At maximum, this ratio is equivalent to 100% of loan to value ratio applied in lending for other economic sectors.
7. The Circular stipulates the responsibilities of the credit institutions and relevant entities of the SBV in the implementation of Degree 55 of the Government and Circular 10 of the SBV.
Circular No 10/2015/TT-NHNN takes effect from Jully 25, 2015 (the same date of effectiveness of Degree No. 55/2015/NĐ-CP).
The State Bank of Vietnam
Translated by MH