Quyết định 1310/2001/QD-NHNN

DECISION

ON THE ISSUANCE OF THE REGULATION ON THE BORROWING BETWEEN CREDIT INSTITUTIONS

THE GOVERNOR OF THE STATE BANK

Pursuant to the Law on Credit Institutions No. 02/1997/QH10 dated 12 December, 1997;
Pursuant to the Decree No. 15/CP dated 02 March, 1993 of the Government on the assignment, authority and responsibility for the State management of the ministries and ministry-level agencies;
Upon the proposal of the Director of the Credit Department,

DECIDES

Article 1. To issue in conjunction with this Decision the Regulation on the borrowing between credit institutions.

Article 2. This Decision shall be effective after 15 days from the date of signing and replace the Decision No. 114/QD-NH14 dated 21 June, 1993 of the Governor of the State Bank on the issuance of "The Regulation on organization and operation of the Inter-bank Market and the Rule on operation of the Inter-bank Market", Decision No. 190/QD-NH14 dated 6 October, 1993 of the Governor of the State Bank on the supplement, amendment several Articles of the Regulation and the Rule on operation of the Inter-bank Market; Directive No. 07/CT-NH dated 7 October, 1992 of the State Bank on the credit relations between credit institutions; Decision No. 130/QD-NH1 dated 7 July, 1993 of the Governor of the State Bank on the lending interest rate in the Inter-bank Market; Decision No. 132/QD-NH14 dated 10 July, 1993 of the Governor of the State Bank on the establishment of the Inter-bank Market; Decision No. 134/QD-NH14 dated 14 July, 1993 of the Governor of the State Bank on the acceptance of members of the Inter-bank Market; Decision No. 136/QD-NH2 dated 20 July, 1993 of the Governor of the State Bank on the level of expenses contributed for the participation in the Inter-bank Market; Decision No. 189/QD-NH14 dated 6 October, 1993 of the Governor of the State Bank on the issuance of the Regulation on the guarantee for borrowing in the Inter-bank Market.

Article 3. The Director of the Administration Department, the Director of the Credit Department, Directors of related units in the State Bank, the Managers of the State Bank branches in provinces, cities, the Chairpersons, General Directors (Directors) of credit institutions shall be responsible for the implementation of this Decision.

REGULATION

ON THE BORROWING BETWEEN CREDIT INSTITUTIONS
(issued in conjunction with Decision No. 1310/2001/QD-NHNN dated 15 October, 2001 of the Governor of the State Bank)

Article 1. Governing scope

This Regulation shall provide for lending, borrowing relations between credit institutions operating in Vietnam, in order to secure payment capacity and effective use of funds resource of credit institutions.

Article 2. Interpretation

In this Regulation, following terms shall be construed as follows:

1. "Borrowing between credit institutions" shall be the credit extension in form of lending by an credit institution (lending party) to another credit institution (borrowing party) in accordance with provisions of Article 47 of the Law on Credit Institutions.

2. "Lending term" is the time period calculated from the time where the borrowing party receives the lending funds until the time of its full repayment of the principal and interest and all types of fee (if any) to the lending party. Parties shall agree to split the lending term into different repayment periods.

3. "Credit line" is the maximum amount of outstanding loans to be maintained for a certain period as agreed upon between the borrowing party and the lending party.

Article 3. Subjects of application

Credit institutions, which are established and operating in Vietnam in accordance with provisions of the Law on Credit Institutions, including:

1. Commercial banks, development banks, investment banks, policy banks, cooperative banks.

2. Foreign bank branches in Vietnam; joint-venture banks.

3. Non-bank credit institutions.

4. People credit Funds.

Article 4. Lending and borrowing principles

Parties shall comply with following principles upon their lending, borrowing:

1. The borrowing party shall repay on time the principal and interests and all types of fee (if any) to the lending party.

2. The lending, borrowing between parties must secure the safety in accordance with provisions of the law of Vietnam and international rule.

Article 5. Lending term

1. Short-term lending: maximum up to 12 months

2. Medium-term lending: from over 12 months to 60 months.

3. Long-term lending: from over 60 months.

Article 6. Lending interest rate

1. Lending interest rate shall be agreed upon by parties in accordance with provisions of applicable laws.

2. Parties may agree to apply overdue interest rate to the loan amount which is not repaid on time and not extended by the lending party. The overdue maximum interest rate shall be 150% of the lending interest rate.

Article 7. Loan security

Parties shall agree to apply or not to apply the loan security for each specific case. Forms of loan security shall include the guarantee by assets, guarantee of other credit institutions. The application of the loan security and the disposal of security assets shall be performed in accordance with provisions of applicable laws.

Article 8. Modes of lending

Parties shall agree to apply the lending for each time, the credit ceiling or other modes of lending in accordance with provisions of applicable laws.

Article 9. Transaction currency

1. Credit institutions shall be entitled to lend, borrow in Vietnam Dong;

2. Credit institutions shall be entitled to lend in foreign currency or borrow in foreign currency or both, depending on their scope of foreign exchange activities which is permitted by the State Bank.

Article 10. Rights and obligations of parties

1. Rights and obligations of the lending party

a. To request the borrowing party to provide necessary documents relating to the loan; to refuse borrowing request by the borrowing party if the borrowing party is considered not to satisfy lending conditions;

b. To request the borrowing party to use its assets to secure the loan;

c. To extend the lending term, adjust repayment periods, reduce the lending interest rate, classify a loan as overdue;

d. To request the borrowing party to accelerate its repayment if parties have agreed on the early repayment, conditions for the occurrence of the obligation of the early repayment by the borrowing party and the borrowing party violates one of those conditions;

dd. At the repayment date, if the borrowing party, the guarantee party fails to perform in full their obligations, the lending party shall have the right to dispose the loan security assets or initiate a law suit against the borrowing party, the guarantee party in accordance with provisions of applicable laws, unless otherwise agreed upon by related parties;

e. To perform commitments as agreed with the borrowing party.

2. Rights and obligations of the borrowing party:

a. To repay in full and on time the principal and interests and all types of fee (if any) as agreed upon in the credit contract;

b. To provide truthfully information and related documents upon the request of the borrowing party.

c. To repay prior to the repayment date if both parties have so agreed or when it is accepted by the lending party;

d. To perform commitments as agreed with the lending party.

dd. To initiate a law suit against the lending party in accordance with provisions of the applicable laws if the lending party violates commitments as agreed upon in the credit contract;

Article 11. Information, reporting regime

Credit institutions shall collect, report to the State Bank on the performance of lending, borrowing with other credit institutions in accordance with provisions of the State Bank.

Article 12. Organization of the implementation

Credit institutions shall base on this Regulation and other relevant legal documents to provide guidance on the lending to and borrowing from other credit institutions, in line with their organizational characteristics and model.

Article 13. The supplement, amendment of this Regulation shall be decided upon by the Governor of the State Bank.