Headlines 07/08/2017 15:04 CH

New regulations on currency and banking coming into force from the middle of August, 2017

Văn Dũng

THƯ VIỆN PHÁP LUẬT would like to introduce the following 04 noticeable regulations on currency and banking which are coming into force from August 11-20, 2017.

1. Settlement of bad debts with collaterals being real estate projects

The Resolution No. 42/2017/QH14 on pilot settlement of bad debts of credit institutions is passed by the National Assembly on June 21, 2017.

According to this Resolution, the credit institution or the foreign bank branch or the bad debt purchaser or manager that wants to assign the collateral of a bad debt which is the real estate project must satisfy all of the following requirements:

- The project has been approved by competent authorities as per the law.

- A decision on land allocation or land lease has been issued by competent authority.

- The project is not in any dispute over the land use right in a case that has been accepted but remained unsolved or has been resolving at an authorized court; the project is not distrained for judgment enforcement or observance to administrative decisions made by competent authorities.

- No decision on revocation of project or land expropriation has been issued by competent authorities.

Additionally, the assignee of project must meet conditions for real estate trading; inherit rights and obligations of the investor and initiate procedures to resume the project as prescribed in law on investment and construction.

The Resolution No. 42/2017/QH14 is remained in force for duration of 5 years as of August 15, 2017.

2. Guidance on contents of a credit guarantee contract

Decision No. 23/2017/QD-TTg on amendments to Decision No. 246/2006/QD-TTg on establishment of the Cooperative Development Assistance Fund and promulgation of the Fund’s Regulations on credit guarantee and post-investment interest rate incentives is coming into force as from August 15, 2017.

According to this Decision, a credit guarantee contract involves 03 parties, the Cooperative Development Assistance Fund, the principal debtor and the credit institution granting loan, and includes the following contents:

- Name and address of the Cooperative Development Assistance Fund, the principal debtor and the credit institution granting loan.

- Location and time of signing the credit guarantee contract.

- Obligations to pay the principal and interest as defined in the credit facility agreement.

- Validity of the credit guarantee contract.

- Purposes and contents of credit guarantee.

- Conditions for fulfilling guarantee obligations.

- Guarantee methods and value of collateral.

- Rights and obligations of the parties.

- Agreement on settlement principles in case the Fund pays debt (including interest rate, duration and other related contents) on behalf of the principal debtor in conformity with the laws.

- Agreement on resolution of disputes that arisen between related parties.

- Other agreements as per the law.

3. Addition of form of business of the Borrower

The Circular No. 05/2017/TT-NHNN on amendments to the Circular No. 03/2016/TT-NHNN providing several instructions on foreign exchange administration in respect of enterprises’ foreign borrowing and foreign debt repayment is coming into force as of August 15, 2017.

According to this Circular, the form of business of the borrower that is a commercial bank of which more than 50% of the charter capital is held by the State (code: SOB) is added into the Group of banks at Point 5 in the Appendix 4A and the Appendix 4B enclosed with the Circular No. 03.

4. Annulment of 20 legislative documents on banking

The following 20 legislative documents on banking are repealed because of the Circular No. 04/2017/TT-NHNN (which is coming into force as of August 12, 2017).

- Decision No. 181/QD-NH dated October 10, 1991; Decision No. 394/1997/QD-NHNN1 dated November 28, 1997; Decision No. 218/1998/QD-NHNN1 dated July 01, 1998; Decision No. 134/2000/QD-NHNN2 dated April 18, 2000; Decision No. 1134/2001/QD-NHNN dated September 26, 2001; Decision No. 19/2006/QD-NHNN dated May 04, 2006; Decision No.47/2007/QD-NHNN dated December 25, 2007; Decision No. 17/2008/QD-NHNN dated May 16, 2008; Decision No. 19/2008/QD-NHNN dated July 01, 2008.

- Circular No. 11/2003/TT-NHNN dated December 11, 2003; Circular No.06/2004/TT-NHNN dated September 27, 2004; Circular No. 04/2007/TT-NHNN dated June 13, 2007; Circular No. 18/2009/TT-NHNN dated August 14, 2009.

- Directive No. 03/2004/CT-NHNN dated February 09, 2004; Directive No.05/2006/CT-NHNN dated December 21, 2006; Directive No.04/2007/CT-NHNN dated October 08, 2007; Directive No. 03/2008/CT-NHNN dated April 22, 2008; Directive No. 04/2008/CT-NHNN dated August 27, 2008; Directive No. 05/2008/CT-NHNN dated October 09, 2008.

- The Joint Circular No. 01/2008/TTLT-BCT-BTC-BGTVT-BNN&PTNT-BYT-NHNN dated January 31, 2008.

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