Prominent regulations that take effect in late August 2016

1. Overdue principal to incur interest rate at most 150% of the interest prior to loan maturity

Circular No. 18/2016/TT-NHNN, in effect as of August 22, 2016, amends the Circular No. 21/2012/TT-NHNN on the lending, borrowing, sale and repurchase of financial instruments by credit institutions and branches of foreign banks.

Prominent amendments include:

- Lending and borrowing:

+ The rate of interest on overdue principal shall be defined by credit institutions and foreign banks’ branches in loan contracts; however, it shall not exceed 150% of the rate of interest within the term of the loan.

+ The rate of interest on deferred loan interest shall be defined by credit institutions and foreign banks’ branches in loan contracts; however, it shall not exceed 10% per year.

- With regard to the reverse repurchase of financial instruments, the buyback price is determined as follows:

Buyback price = Purchase price x (1 + Repo rate x Length of reverse repurchase time/ Number of actual days in the year that the purchase occurs).

2. New regulation on currency trading brokerage

On June 30, 2016, the State Bank promulgated the Circular No. 17/2016/TT-NHNN on the brokerage by commercial banks and foreign banks’ branches of currency trading.

A broker and its client shall be given discretion in the fee for currency trading brokerage, over which the currently regulated ceiling (0.02% of the value of each item traded) is no longer imposed.

Furthermore, banks shall pay attention to the following principles regarding their brokerage of currency trading:

- At least one trading client being brokered is a credit institution or branch of a foreign bank, which is incorporated and operated according to the Law on credit institutions.

- No information on the currency transaction brokered and the clients is disclosed to a third party unless otherwise demanded by a competent government authority or authorized by the clients.

- A commercial bank or foreign bank's branch, which is acting as the broker, cannot simultaneously trade currencies with the clients.

 Circular No. 17/2016/TT-NHNN shall take effect as of August 22, 2016 and replace the Decision No. 351/2004/QD-NHNN. />
3. Principles for management and purchase of coal adrift

As of August 25, 2016, the Circular No. 13/2016/TT-BCT on the management of coal adrift shall take effect. As follows:

- Coal adrift, apart from being consumed by direct gatherers (if applicable), can only be sold directly to regulated buyers.

- Buyers of coal adrift shall be affiliates and subsidiaries of Vietnam National Coal - Mineral Industries Holding Corporation Limited (Vinacomin) and North - Eastern Company. Such buyers must fully capable of and assigned to transact such purchases.

- The said purchases by Vinacomin and North - Eastern Company shall be not for profit with the aim of reducing the loss and illegal trading of coal.

Circular No. 13/2016/TT-BCT shall replace the Decision No. 29/2008/QD-BCT. />
4. Supplement to the list of teaching equipment for nationally focused occupations

Circular No. 10/2016/TT-BLDTBXH, in effect as of August 30, 2016, supplements the list of teaching equipment for nationally focused occupations taught in trade schools and vocational colleges.

Nationally focused occupations added to the list of vocational training equipment include:

+ Hospitality management, plan protection;

+ Computer programming, mechanical and electrical engineering for mining; 

+ Biotechnology, mechanical engineering technology, etc.