Headlines 09/10/2017 15:42 CH

New regulations on bank guarantees

Minh Long

The State Bank has recently issued the Circular No. 13/2017/TT-NHNN to amend and revise the Circular No. 07/2015/TT-NHNN on bank guarantees.

This Circular prescribes that banks are not allowed to give any guarantee for bonds which are issued by issuing companies for debt restructuring purposes, and those which are issued by subsidiaries or related companies of credit institutions.

Additionally, it also sets regulations on determination of the guarantee balance that commercial banks give investors for their sale or hire-purchase of future-acquired property as follows:

- The guarantee balance is total amount that investors have already received in advance from buyers according to the progress agreed before handover of such property and gradually decreased after termination of guarantee obligations to buyers.  

- Commercial banks and investors enter into an agreement on the time of notification of buyers’ advance payments. Notwithstanding this regulation, such notification must be sent once at the end of each month as a basis for determination of the guarantee balance.

The Circular No. 13/2017/TT-NHNN is set to commence its effect from November 15, 2017.

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