THE STATE BANK
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SOCIALIST REPUBLIC OF
VIET NAM
Independence - Freedom – Happiness
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No. 324/1998/QD-NHNN1
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Hanoi, September 30,
1998
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DECISION
PROMULGATING THE REGULATION ON LOAN PROVISION TO CUSTOMERS
BY CREDIT INSTITUTIONS
THE GOVERNOR OF THE STATE BANK OF VIETNAM
Pursuant to the Law on the State Bank of
Vietnam and the Law on Credit Institutions of December 12, 1997;
Pursuant to Decree No. 15-CP of March 2, 1993 of the Government on the tasks,
powers and State management responsibility of the ministries and
ministerial-level agencies;
At the proposal of the Head of the Economics Study Department,
DECIDES:
Article 1.- To issue
together with this Decision the Regulation on loan provision to customers by
credit institutions.
Article 2.- This
Decision takes effect from October 15, 1998 and replaces the following legal
documents issued by the Governor of the State Bank:
1. Decision No.198/QD-NH1 of September 16, 1994
promulgating the Regulation on short-term credits for economic organizations;
Decision No.199/QD-NH1 of June 28, 1997 amending and supplementing a number of
Articles of the Regulation on short-term credits issued together with Decision
No.198/QD-NH1 of September 16, 1994; Decision No.367/QD-NH1 of December 21,
1995 promulgating the Regulation on medium- and long-term credits; Decision
No.200/QD-NH1 of June 28, 1997 amending and supplementing a number of Articles
of the Regulation on medium- and long-term credits issued together with
Decision No.367/QD-NH1 of December 21, 1995; Decision No.18/QD-NH5 of February
16, 1994 promulgating the Regulation on lending capital for development of
family household economy and consumption; Decision No.77-NH/QD of June 13, 1991
promulgating the Regulation on investment credit for capital construction
according to the State plans; Decision No.270-QD/NH1 of September 25, 1995
promulgating the Regulation on lending capital for scientific and technological
application to production; Decision No.185/QD-NH5 of September 6, 1994
promulgating the Regulation on pledge services.
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Article 3.- For credit
contracts which have been signed before this Decision takes effect but the
credit has not yet been disbursed or fully disbursed; and for credit contracts
with credit already granted and with debit balances available by the end of the
day before this Decision takes effect, the concerned credit institutions and
their customers shall continue complying with the signed contracts till the
full recovery of the loans. In the course of implementation, if any problems
arise, they should be reported by the concerned credit institutions to the
State Bank for additional guidance.
Article 4.- The heads of
units attached to the Central State Bank; the directors of the State Bank’s
branches in the provinces and cities; the chairmen of the managing boards and
general directors (directors) of credit institutions and the customers who
borrow capital from credit institutions shall have to implement this Decision.
THE
STATE BANK
DEPUTY GOVERNOR
Le Duc Thuy
REGULATION
ON LOAN PROVISION TO CUSTOMERS BY CREDIT INSTITUTIONS
(Issued
together with Decision No. 324/1998/QD-NHNN1 of September 30, 1998 of the
Governor of the State Bank)
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GENERAL PROVISIONS
Article 1.- Scope of
regulation
This Regulation stipulates the provision of
loans in Vietnam dong and foreign currencies by credit institutions to their
customers in order to meet the latter’s demand of capital for production,
business, services, development investment and people’s life.
Article 2.- Subjects
of application
1. Credit institutions established and engaged in
lending transaction under the Law on Credit Institutions.
2. Customers borrowing capital from credit
institutions, including:
a/ Legal persons being State enterprises,
cooperatives, limited liability companies, stock companies, foreign-invested
enterprises and other organizations that fully satisfy conditions stipulated in
Article 94 of the Civil Code;
b/ Individuals;
c/ Family households;
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e/ Private enterprises;
Article 3.-
Interpretation of terms:
In this Regulations the following terms shall be
construed as follows:
1. Loan provision means a form of granting
credit, under which a credit institution provides a customer with a sum of
money for use for a certain purpose in a certain period of time as agreed upon
on the principle of repayment of both principal and interest.
2. Loan term means a duration counted from the
time a customer begins to receive the loan capital till the time both principal
and interest are fully repaid, as agreed upon in the credit contract between
the concerned credit institution and such customer.
3. Debt-repayment schedule mean different time
periods within the loan term, by the end of each of which, as already agreed
upon by a credit institution and a customer, the customer shall have to repay
part or the whole of the loan to the credit institution.
4. Adjustment of debt-repayment schedule means a
credit institution and a customer agree on adjusting the debt-repayment
schedule which have earlier been agreed upon in the credit contract.
5. Loan extension means a credit institution
accepts the extension of the loan term agreed upon in a credit contract for a
certain period of time.
6. Investment project or business and/or
production plan means a set of proposals on investing capital in production,
business, services, development investment and improving people’s life within a
certain period of time.
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Article 4.-
Implementation of the provisions on foreign exchange management
For foreign currency loans, credit institutions
and their customers shall have to strictly abide by the Government’s regulations
and guidance of the State Bank on foreign exchange management.
Chapter II
SPECIFIC PROVISIONS
Article 5.- The right to
lending autonomy of credit institutions
Credit institutions shall take
self-responsibility for their loan decisions. Neither organization nor
individual is allowed to unlawfully interfere in the right to lending autonomy
of credit institutions.
Article 6.-
capital-borrowing principles
Customers borrowing capital from credit
institutions shall have to comply with the following principles:
1. To use the loan capital for the right
purpose(s) as agreed upon in the credit contracts;
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3. To ensure that the loan-security comply with
the regulations of the Government and the Governor of the State Bank.
Article 7.-
capital-borrowing conditions
A credit institution shall consider and decide
to provide a loan for a customer if the latter fully satisfies the following
conditions:
1. Having civil legal capacity and civil act
capacity and taking civil liability as prescribed by law. More concretely:
a/ A legal person must have civil legal
capacity;
b/ An individual or owner of a private
enterprise must have legal capacity and civil act capacity;
c/ A family household’s representative must have
legal capacity and civil act capacity;
d/ A cooperation group’s representative must
have legal capacity and civil act capacity;
2. Having financial capability to ensure the
full debt repayment within the committed time-limits;
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4. Having feasible/efficient investment project
or business and/or production plan;
5. Complying with the loan-security regulations
as provided for by the Government and guided by the State Bank.
Article 8.- Types of
loans
1. Short-term loans: Credit institutions shall
provide short-term loans to customers in order to meet the latter’s demand of
capital for production, business, services and people’s life.
2. Medium- and long-term loans: Credit institutions
shall provide medium- and long-term loans to customers so that the latter
implement investment projects for the development of production, business and
services and the improvement of people’s life.
Article 9.- Loan
objects:
1. A credit institution shall provide loans on
the following objects:
a/ The value of materials, goods, machinery,
equipment and expenditures for a customer to implement project(s) or plan(s) on
production, business, services, people’s life and development investment;
b/ The export tax amount to be paid by a
customer to complete the export procedures for a lot of export goods in which
the said credit institution is involved as a loan provider;
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2. A credit institution shall not be allowed to
provide loans on the following objects:
a/ The payable tax amount, except for the export
tax amount stipulated in Point b, Clause 1 of this Article;
b/ The sum of money to be paid for both loan
principal and interest to another credit institution;
c/ The loan interest amount payable to the
loan-providing credit institution itself, except for cases where such interest
amount is provided as loan in accordance with the provisions of Point c, Clause
1 of this Article.
Article 10.- Loan terms
Credit institutions and customers shall reach
agreement on loan terms, which may be either of the two following types:
1. Short-term loan: may be 12 months at most,
determined according to the production and/or business cycle as well as the
customer’s debt-repayment capability.
2. Medium- or long-term loans: shall be
determined according to the capital retrieval duration of the investment
project, the customer’s debt-repayment capability and the nature of the loan
capital source of the concerned credit institution:
a/ Medium term: From 12 months to 60 months (5
years);
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Article 11.- Lending
interest rates
1. The lending interest rates shall be agreed
upon by credit institutions and customers in accordance with the State Bank’s
stipulations on lending interest rates at the time their credit contracts are
signed. The credit institutions shall have to make public different lending
interest rates to the customers.
2. The preferential lending interest rates shall
apply to those customers who are entitled thereto under the regulations of the
Government and under the guidance of the State Bank.
3. In cases where a loan is transformed into an
overdue debt, the interest rates set for overdue debts shall apply as provided
for by the Governor of the State Bank at the time of signing the credit
contract.
Article 12.- Loan
amounts
Credit institutions shall, basing themselves on
the customers capital demand, the maximum loan ratio compared with the value of
the property used as loan security according to regulations of the Government
and guidance of the State Bank, on customers’ debt-repayment capability as well
as their respective capital sources, decide loan amounts, which must not exceed
the limit defined in Article 79 of the Law on Credit Institutions.
Article 13.- Repayment
of loan principals and interests
1. Basing themselves on the customers’
production, business and/or service characteristics as well as financial capabilities,
incomes and debt-repayment sources, credit institutions and their customers
shall reach agreement on the repayment of both loan principals and interests,
including the following:
a/ The loan-principal repayment deadlines;
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c/ The to be-used currency(ies) for debt
repayment and the guaranty of the loan principal’s value in appropriate forms
as prescribed by law.
2. When a debt is due or upon the expiry of a
loan term, if a customer fails to pay debt on schedule, is not entitled to the
adjustment of the debt-repayment schedule or to the loan extension, the due
debt must be transformed into an overdue debt and the customer shall have to
pay the interest rate set for the overdue debt and calculated on the delayed
amount.
3. In cases where the customer pays the debt
before it is due, the credit institution and the customer shall reach agreement
on the payable amount of loan interest, which must not exceed the amount
already agreed upon in the credit contract.
Article 14.-
capital-borrowing dossier
1. When having a demand for loan capital, a
customer shall have to send to a credit institution the following documents:
- A written request for loan capital with the
following main contents: the customer’s name and address; the capital amount to
be borrowed; the capital-borrowing purposes; the commitments on the use of loan
capital, repayment of both loan principal and interest and other commitments.
- The necessary documents proving that he/she/it
satisfies the capital-borrowing conditions as stipulated in Article 7 of this
Regulation;
The customer shall take responsibility before
law for the accuracy and validity of the documents sent to the credit
institution.
2. Credit institutions shall specify types of
documents required from customers, based on the characteristics of each
category of customers as well as each type of loans in accordance with the
provisions in Clause 1 of this Article.
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1. Credit institutions shall elaborate
procedures for considering and approving loans on the principle of ensuring the
autonomy and clearly determining the personal responsibility as well as the
joint-responsibility of the persons in charge of loan evaluation and decision.
2. Credit institutions shall examine the
customers’ documents and at the same time evaluate the feasibility and
efficiency of investment projects or production and/or business plans as well
as the customers’ debt-repayment capabilities.
Where necessary or prescribed by law, credit
institutions may set up a credit council or hire a relevant consulting agency
to evaluate customers’ investment projects or production and/or business plans.
3. Within 10 working days for short-term loans
and 45 working days for medium- and long-term loans, after receiving the full
and valid capital-borrowing dossier as well as necessary information provided
by a customer at its request, a credit institution shall have to decide and
notify the customer of the approval or non-approval of the loan. If refusing to
provide loan to the customer, the credit institution shall have to notify in
writing the customer thereof, clearly stating the reasons therefor.
Article 16.- Lending
modes
A credit institution shall reach agreement with
its customer on the lending mode, suited to the customer’s capital demand and
the institution’s capability to inspect and supervise the use of loan capital.
The lending mode may be one of the following:
1. Single loan: For each capital borrowing, a
customer and the concerned credit institution shall proceed with necessary
procedures and sign a credit contract.
2. Loan based on the limit of credit: A credit
institution and its customer shall define and agree on a limit of credit to be
maintained in a certain period of time or according to a production/business
cycle.
3. Loan based on investment project: A credit
institution shall provide loan to a customer for the latter’s implementation of
investment project(s) on developing production, business, services and
improving people’s life.
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5. Installment loan: When providing loan, a
credit institution and its customer shall determine and agree on the payable
sum of both loan principal and interest, which shall be divided for repayment
in different installments by the customer within the loan term. The property
purchased with loan capital shall belong to the borrower’s ownership only when
such borrower fully repays both loan principal and interest.
6. Loan based on the reserve credit limit: A
credit institution shall commit itself to get ready to lend capital to a
customer within a certain limit of credit. The credit institution and customer
shall reach an agreement on the effective time-limit of the reserve credit
limit as well as the level of fee to be paid therefor.
7. Loan through the issuance and use of credit
cards: A credit institution may allow its customer to use the loan capital
within the credit limit to pay for the purchased goods and services and
withdraw money from automatic telling machines or from cash-distributing agents
of such credit institution. When providing loan with the issuance and use of
credit cards, the credit institution and its customer shall have to abide by
the regulations of the Government and the State Bank on the issuance and use of
credit cards.
8. Other lending modes shall comply with the
provisions of this Regulations and other stipulations of the State Bank.
Article 17.- Foreign
currency loans
1. Borrowers: Credit institutions involved in
foreign exchange transactions shall be entitled to provide foreign currency
loans to customers for the latter’s payment to foreign parties for materials,
goods, machinery, equipment and services imported for the customers’ production
and/or business activities. The provision of foreign currency loans to
borrowers other than those defined above must be approved in writing by the
Governor of the State Bank.
2. Capital-borrowing dossier: In addition to the
documents stipulated in Article 14 of this Regulation, a customer shall also
have to send to the concerned credit institution the following: the import
permit or import quota (if any); the import or entrusted import contract and
other documents related to the use of loan capital.
3. Repayment of loan principal and interest: A
loan in foreign currency must be paid in such currency. In cases where the loan
is repaid in another currency or Vietnam dong, such repayment shall be effected
according to the agreement between the credit institution and the customer and
the currency conversion shall be based on the foreign exchange rate or on the
principle for determining foreign exchange rate as agreed upon in the credit
contract. Foreign-invested enterprises which have to balance their foreign
currency demands by themselves shall not be allowed to repay foreign currency
loans in Vietnam dong.
Article 18.- Credit
contracts
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Article 19.- Loan
limits
1. The total debit balance of outstanding loans
for a customer shall not exceed 15% of the own capital of a credit institution,
except for loans from the trust fund sources of the Government, organizations
and individuals. In cases where a customer’s capital demand exceeds 15% of the
own capital of a credit institution or the customer has the need to mobilize
capital from various sources, the credit institutions may jointly provide loans
in accordance with the regulations of the Governor of the State Bank.
2. In special cases, a credit institution’s loan
may exceed the loan limit stipulated in Clause 1 of this Article but only when
so permitted by the Prime Minister on a case-by-case basis.
3. The determination of a credit institution’s
own-capital amount to serve as basis for calculating the loan limit as
stipulated in Clauses 1 and 2 of this Article shall comply with the regulations
of the State Bank.
Article 20.- Cases
where loans are not provided
1. A credit institution shall not be allowed to
provide loans to the following subjects:
a/ Members of the Managing Board and Control
Commission, the General Director (Director), Deputy General Director (Deputy
Director) of the credit institution;
b/ The person who evaluates and approves loans;
c/ Father, mother, wife, husband or children of
a member of the Managing Board or Control Commission, the General Director
(Director), or the Deputy General Directors (Deputy Directors).
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Article 21.- Loan
restrictions
1. A credit institution shall not be allowed to
provide loans without security, or with preferential conditions on interest
rates or loan amounts to the following subjects:
a/ The auditing organizations and auditors that
are auditing such credit institution; the chief accountant and inspectors;
b/ Major shareholders of the credit institution;
c/ An enterprise where one of the subjects
specified in Clause 1, Article 77 of the Law on Credit Institutions owns more
than 10% of the enterprise’s statutory capital.
2. The total debit balance of outstanding loans
for the subjects prescribed in Clause 1 of this Article must not exceed 5% of
the own capital of the credit institution.
Article 22.- Inspection
and supervision of loan capital
1. A credit institution shall have to inspect
and supervise the borrowing, use and repayment of loan capital by its
customers.
2. A credit institution shall conduct the
inspection and supervision before, during and after the lending, suited to its
operation characteristics as well as the customer’s business characteristics
and his/her/its use of loan capital.
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1. If a debt is due but the customer fails to
fully repay it due to objective causes and there’s a written proposal for loan
extension, the concerned credit institution shall consider and decide the loan
extension in accordance with the following stipulations:
a/ The extended duration of a short-term loan
shall not be longer than the pre-extension loan term already agreed upon or
shall be equal to a production/business cycle but must not exceed 12 months.
b/ The extended duration of a medium- or
long-term loan shall not be longer than half of the pre-extension loan term
already agreed upon in the credit contract.
c/ If a due debt can neither be paid nor
extended, it must be transformed into an overdue debt and the overdue-debt
interest rate shall apply.
2. In cases where a customer fails, due to
objective causes, to repay the debt on schedule as agreed upon in the credit
contract and submits a written request for the adjustment of debt-repayment
time-limit(s), the concerned credit institution shall consider such adjustment.
If the debt-repayment schedule cannot be adjusted, the credit institution shall
transform the due debt into an overdue debt.
3. A customer’s request for loan extension
and/or debt-repayment schedule adjustment and the approval thereof by a credit
institution must be effected before the debt comes due and the involved parties
may agree on the supplements to the credit contract according to the new
debt-repayment schedule.
4. For extended loans and loans with adjusted
debt-repayment schedules, the interest rates already agreed upon in the credit
contracts for the undue debts shall still apply till the end of the extended
duration or of the adjusted schedule.
Article 24.- Exemption
or reduction of loan interest
A credit institution shall be entitled to decide
the exemption or reduction of the loan interest to be paid to it by a customer,
on the following principles:
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2. The level of loan interest exemption and/or
reduction shall depend on the financial capability of the credit institution;
3. A credit institution must not exempt or
reduce loan interests for customers being subjects prescribed in Clause 1,
Article 78 of the Law on Credit Institutions.
4. Credit institutions shall have to issue
regulations on loan interest exemption or reduction for customers, which must
be ratified by their respective Managing Boards. The loan interest exemption or
reduction for customers shall be effected only after the promulgation of the
regulation on loan interest exemption or reduction by the concerned credit
institution.
Article 25.- Rights and
obligations of customers
1. A customer-borrower shall have the right:
a/ To refuse to meet a credit institution’s
requirements which vary with the agreements in the credit contract;
b/ To complain or initiate a lawsuit about any
breach of the credit contract according to law.
2. A customer-borrower shall have the
obligation:
a/ To fully and honestly provide information and
documents related to the borrowing and take responsibility for the accuracy of
such information and documents;
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c/ To repay both debt principal and interest as
agreed upon in the credit contract;
d/ To take responsibility before law for
his/her/its failure to comply with the debt- repayment agreements and fulfill
the obligations on loan security as already committed in the credit contract.
Article 26.- Rights and
obligations of credit institutions
1. A credit institution shall have the right:
a/ To request customers to provide documents
proving the feasibility of their investment projects or production/business
plans as well as the financial capabilities of the customers and the guarantors
before deciding the loans;
b/ To reject a customer’s request for a loan if
such customer is deemed unqualified for the loan, or his/her/its project or
plan proves inefficient or contrary to the provisions of law or if the credit
institution itself does not have enough capital sources for loans;
c/ To inspect and supervise the process of
capital borrowing, using and debt repayment by customers;
d/ To terminate a loan and retrieve debt before
schedule if detecting that the customer has provided untrue information or has
breached the credit contract;
e/ To initiate a lawsuit against a customer if
the latter breaches the credit contract or against the guarantor in accordance
with the provisions of law;
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g/ To exempt or reduce the loan interest, extend
a loan, adjust the debt-repayment schedule, purchase or sell debts according to
the regulations of the State Bank and effect the debt roll-over, debt freezing
or debt cancellation in accordance with the regulations of the Government.
2. Credit institutions shall have the
obligation:
a/ To strictly abide by agreements in the credit
contracts;
b/ To keep the credit dossiers in accordance
with the provisions of law.
Article 27.- Provision
of soft loans and loans for investment and construction according to the
State’s plans
1. Credit institutions shall provide loans to
customers who are entitled to preferential credit policies according to the
regulations of the Government stipulations and the guidances of the State Bank
in each period.
2. State credit institutions shall provide loans
for investment and construction according to the State’s plans under the law
provisions on investment and construction as well as the Government’s
regulations on investment and construction credit according to annual State
plans.
3. For State credit institutions nominated by
the Government to provide loans for customers that are entitled to preferential
treatment and loans for investment and construction according to the State’s
plans, if there have appeared any interest rate differences or loss to the
loans due to objective causes, the handling thereof shall comply with the
Government’s regulations and the State Bank’s guidance as well as the
regulations of concerned ministries and branches.
4. Before providing a soft loan or loan for
investment and construction according to the State’s plan, a credit institution
shall evaluate the efficiency of the related project or plan and if such
project or plan is deemed inefficient and the borrower is unable to repay the
loan principal and interest, such credit institution shall report it to the
competent State agency(ies) and, if necessary, to the Prime Minister for
consideration and decision.
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1. Credit institutions shall provide loans as
entrusted by the Government, organizations or individuals inside and outside
the country under the trust loan contracts signed with the representative
agency(s) of the Government or of the concerned domestic or foreign
organizations or individuals. The trust loan provision must comply with the
provisions of the legislation on credit and banking and trust contracts.
2. Credit institutions providing trust loans
shall enjoy trust fee and other benefits as agreed upon in the trust loan
contracts, in accordance with the provisions of international law and
practices, so as to cover their expenses and risks and also to earn profits.
Chapter III
IMPLEMENTATION PROVISIONS
Article 29.- Credit
institutions and capital borrowers shall have to implement this Regulation.
Basing themselves on this Regulation and the relevant legal documents, credit
institutions shall issue documents providing detailed professional guidance in
accordance with their own conditions, characteristics and statutes.
Article 30.-
Organizations and/or individuals that violate this Regulation shall, depending
on the nature and seriousness of their violations, be disciplined,
administratively handled or examined for penal liability according to law.
Article 31.- Any
amendments or supplements to this Regulation must be decided by the Governor of
the State Bank.