Văn bản hợp nhất 06/VBHN-NHNN

CIRCULAR

PROVIDING INSTRUCTIONS FOR CREDIT INSTITUTIONS AND FOREIGN BRANCH BANKS ON DEBT RESCHEDULING, EXEMPTION AND REDUCTION OF INTERESTS AND FEES, RETENTION OF DEBT CATEGORY TO ASSIST BORROWERS AFFECTED BY COVID-19 PANDEMIC

The Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic, which comes into force from March 13, 2020, is amended by:

The Circular No. 03/2021/TT-NHNN dated April 02, 2021 of the Governor of the State Bank of Vietnam providing amendments to the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic, which comes into force from May 17, 2021.

Pursuant to the Law on the State bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law dated November 20, 2017 on amendments the 2010 Law on Credit Institutions;

Pursuant to the Government's Decree No. 16/2017/ND-CP dated February 17, 2017 prescribing functions, tasks, powers and organizational structure of the State bank of Vietnam;

After reaching a consensus with the Ministry of Finance;

At the request of the Head of the SBV Banking Supervision Agency;

The Governor of the State bank of Vietnam promulgates a Circular providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic. [1]

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular provides instructions for credit institutions and foreign branch banks (FBBs) on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic.

Article 2. Regulated entities

1. Credit institutions (except policy banks) and foreign branch banks (FBBs).

2. Clients of credit institutions and FBBs (except clients that are credit institutions and FBBs themselves).

3. Other organizations and individuals relevant to debt rescheduling, exemption or reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-Covid-19 pandemic.

Article 3. Application of relevant legislative documents[2]

Regulations of this Circular shall apply to debt rescheduling, exemption or reduction of interest and fees, retention of debt category, making of loan loss provision to assist borrowers affected by Covid-19 pandemic; debt rescheduling, exemption or reduction of interest and fees, debt classification, making of and use of loan loss provision in other cases not mentioned in this Circular shall comply with relevant legislative documents.

Chapter II

SPECIFIC PROVISIONS

Article 4. Debt rescheduling[3]

Credit institutions and FBBs shall reschedule outstanding debt (including the debts regulated by the Government's Decree No. 55/2015/ND-CP dated June 09, 2015 on credit policies serving development of agriculture and rural areas (as amended)) when all of the following conditions are fulfilled:

1. The debt is a loan or finance lease granted before June 10, 2020.

2. The principal and/or interest is/or incurred during the period from January 23, 2020 to December 31, 2021.

3. The outstanding debt may be rescheduled in the following cases:

a) The outstanding debt is undue or up to 10 (ten) days overdue according to the loan/finance lease agreement, except in the cases specified in Point b and Point c of this Clause;

b) The outstanding debt is incurred before January 23, 2020 and becomes overdue during the period from January 23, 2020 to March 29, 2020;

c) The outstanding debt is incurred from January 23, 2020 and becomes overdue before May 17, 2021.

4. The credit institution or FBB determines that the borrower is unable to repay the principal and/or interest on schedule under the signed agreement due to decrease in revenue or income caused by Covid-19 pandemic.

5. The borrower applies for debt rescheduling and the credit institution or FBB has determined that the borrower is able to fully repay the principal and/or interest after the debt is rescheduled.

6. Debts that violate regulations of law shall not be rescheduled.

7. Rescheduling time (including repayment deadline extension) shall vary according to the impact of Covid-19 on the borrower and shall not exceed 12 months from the day on which the debt is rescheduled by the credit institution or FBB.

8. Debt rescheduling shall be carried out until December 31, 2021.

Article 5. Reduction and exemption of interest and/or fees [4]

1. Credit institutions and FBBs shall, according to their own rules and regulations, decide reduction and exemption of interest and/or fees on debts incurred before June 10, 2020 from credit extension (except purchases of corporate bonds) that are due during the period from January 23, 2020 to December 31, 2021 and the borrowers are not able to repay the principal and/or interest by the deadline specified in the signed agreements due to decrease in revenue or income caused by Covid-19.

2. Reduction and exemption of interest and/or fees prescribed by this Circular shall be carried out until December 31, 2021.

Article 6. Retention of debt category and debt classification[5]

1. Credit institutions and FBBs may retain the debt categories that have been assigned in accordance with SBV’s regulations on classification of debts by credit institutions and FBBs at the nearest time before January 23, 2020 for outstanding debts that occur before January 23, 2020 as follows:

a) The outstanding debts that are rescheduled as prescribed in Article 4 of this Circular;

b) The outstanding debts on which interest is exempted or reduced as prescribed in Article 5 of this Circular;

c) The outstanding debts mentioned in Point a and Point b of this Clause, including the debts that have been rescheduled, granted interest reduction or exemption, or re-categorized as prescribed by SBV during the period from January 23, 2020 to March 29, 2020.

2. Credit institutions and FBBs may retain the debt categories that have been assigned in accordance with SBV’s regulations on classification of debts by credit institutions and FBBs for the debts that are incurred from January 23, 2020 to before June 10, 2020 if the outstanding debts have been rescheduled, granted interest reduction or exemption as prescribed in Article 4 and Article 5 of this Circular. To be specific:

a) Retain debt categories that are assigned at the nearest time before the date of first rescheduling of the outstanding debts specified in Point a Clause 3 Article 4 of this Circular;

b) Retain debt categories that are assigned at the nearest time before the date the outstanding debts specified in Point c Clause 3 Article 4 of this Circular are categorized as overdue debts;

c) Retain debt categories that are assigned at the nearest time before the date of first exemption or reduction of interest on the outstanding debts specified Article 5 of this Circular.

3. After debt rescheduling and retention of debt categories are carried out as prescribed in Clause 1 and Clause 2 of this Article within the time limit for rescheduling, credit institutions and FBBs are not required to put these debts into a higher-risk category according to SBV’s regulations on debt classification by credit institutions and FBBs.

4. If the outstanding debts after rescheduling and retention of debt categories prescribed in Clause 1 and Clause 2 of this Article are not granted another debt rescheduling by the credit institution or FBB, the credit institution or FBB shall carry out debt classification in accordance with SBV’s regulations on debt classification by credit institutions and FBBs.

5. From the rescheduling date, credit institutions and FBBs shall not record the interests on the outstanding debts that are rescheduled, debts on which interest is reduced or exempted, debts that remain current non-performing loans (Group 1) as prescribed in this Circular as revenue (estimated). Instead, they shall be monitored off-balance sheet and recorded as revenue when they are collected in accordance with regulations of law.

6. From January 01, 2024, pursuant to SBV’s regulations on classification of debts by credit institutions and FBBs, credit institutions and FBBs shall classify all outstanding debts and OBS commitments of their customers, including the outstanding debts that are rescheduled, granted interest exemption, interest reduction or debt category retention prescribed by this Circular.

Article 6a. Making of loan loss provision[6]

Credit institutions and FBBs shall make loan loss provisions for borrowers whose debts are rescheduled or granted interest exemption or reduction as prescribed by this Circular as follows:

1. Pursuant to SBV’s regulations on making of loan loss provision by credit institutions and FBBs, provision shall be made for all the outstanding debts of borrowers according to the results of debt classification prescribed in Article 6 of this Circular for debts eligible for debt category retention and outstanding debts of borrowers in accordance with SBV’s regulations on debt classification by credit institutions and FBBs.

2. Credit institutions and FBBs shall determine the specific provision for all the outstanding debts of borrowers according to the results of debt classification in accordance with SBV’s regulations on debt classification by credit institutions and FBBs (without debt category retention mentioned in Article 6 of this Circular).

3. Specific provision shall be determined as follows:

Additional provision = A - B

Where:

- A: Specific provision to be made according to Clause 2 of this Article.

- B: Specific provision made according to Clause 1 of this Article.

4. If the provision determined according to Clause 3 of this Article is a positive number, the credit institution or FBB shall make additional provision as follows:

a) By December 31, 2021: At least 30% of the additional provision;

b) By December 31, 2022: At least 60% of the additional provision;

c) By December 31, 2023: 100% of the additional provision.

5. From January 01, 2024, pursuant to SBV’s regulations, credit institutions and FBBs shall make loan loss provision for all the outstanding debts and OBS commitments of their customers, including the outstanding debts that are rescheduled, granted interest exemption, interest reduction or debt category retention prescribed by this Circular.

Article 7. Responsibilities of credit institutions and FBBs

1. Credit institutions and FBBs shall decide debt rescheduling, exemption or reduction of interest and fees, retention of debt category in accordance with Article 4, Article 5 and Article 6 of this Circular; make sure this policy is not taken advantage of for profiteering or incorrectly reflect the credit quality.

2. Issue internal regulations on rescheduling, exemption or reduction of interest and fees, retention of debt category in accordance with this Circular and uniformly apply them throughout their systems. Such regulations shall include:

a) Criteria for identification of debts of borrowers affected by 19 pandemic;

b) Procedures, responsibility of each individual and department for debt rescheduling, exemption or reduction of interest and fees, retention of debt category. Make sure the individual or department that makes a decision on rescheduling, exemption or reduction of interest and fees, retention of debt category is different from the individual and department that approves the credit extension, except credit extensions approved by the Board of Directors, Board of Members, General Director/Director or parent bank (for FBBs). In case the credit extension and debt rescheduling are approved by a council, the chairperson of the council that approves the debt rescheduling must be different from the chairperson of the council that approves the credit extension, and at least two thirds (2/3) of the members of the former must not be members of the latter;

c) Frequently review borrowers’ solvency after debt rescheduling, exemption or reduction of interest and fees, retention of debt category as prescribed by law; control and supervise the process of debt rescheduling, exemption or reduction of interest and fees, retention of debt category.

3. Within the first 10 (ten) days of the month, the credit institutions (except people's credit funds) and FBBs shall submit reports to SBV (through Economic Sector Credit Department) on debt rescheduling, exemption or reduction of interest and fees, retention of debt category up to the last day of the previous month in accordance with the Appendix hereof.

4. Within the first 10 (ten) days of each month, the credit institutions that are people's credit funds shall submit reports to SBV’s branches of the provinces where they are headquartered (hereinafter referred to as “SBV’s branch”) on debt rescheduling, exemption or reduction of interest and fees, retention of debt category up to the last day of the previous month in accordance with the Appendix hereof.

Article 8. Responsibilities of SBV units

1. Economic Sector Credit Department shall:

a) Consolidate the reports mentioned in Clause 3 Article 7 of this Circular and Point a Clause 3 of this Article;

b) Take charge and cooperate with Financial Policy Department, SBV Banking Supervision Agency, SBV’s branches in advising SBV’s Governor in resolving issues that arise during the implementation of this Circular.

2. SBV Banking Supervision Agency shall:

Carry out inspection and supervision of implementation of this Circular by credit institutions and FBBs.

3. SBV’s branches shall:

a) Submit a consolidated report from reports submitted by people's credit funds in their provinces as prescribed in Clause 4 Article 7 of this Circular to the Economic Sector Credit Department within the first 15 (fifteen) days of each month;

b) Carry out inspection and supervision of implementation of this Circular by credit institutions and FBBs.

4. Credit Information Center (CIC) shall:

Adjust borrowers’ credit information in accordance with this Circular at the request of credit institutions and FBBs.

Chapter III

IMPLEMENTATION CLAUSE [7]

Article 9. Effect

This Circular comes into force from March 13, 2020.

Article 10. Organization of implementation

Chief of Office, Head of SBV Banking Supervision Agency, heads of SBV units, Directors of SBV’s branches, Chairpersons of Boards of Directors, Boards of Members, General Directors/Directors of credit institutions and FBBs are responsible for the implementation of this Circular./.

[1] The Circular No. 03/2021/TT-NHNN providing amendments to the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic is promulgated pursuant to:

 “The Law on the State Bank of Vietnam dated June 16, 2010;

The Law on Credit Institutions dated June 16, 2010 and the Law dated November 20, 2017 on amendments the 2010’s Law on Credit Institutions;

The Government's Decree No. 16/2017/ND-CP dated February 17, 2017 prescribing functions, tasks, powers and organizational structure of the State bank of Vietnam;

After reaching a consensus with the Ministry of Finance;

And at the request of the Head of the SBV Banking Supervision Agency;”

[2] This Article is amended according to Clause 1 Article 1 of the Circular No. 03/2021/TT-NHNN providing amendments to the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic, which comes into force from May 17, 2021.

[3] This Article is amended according to Clause 2 Article 1 of the Circular No. 03/2021/TT-NHNN providing amendments to the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic, which comes into force from May 17, 2021.

[4] This Article is amended according to Clause 3 Article 1 of the Circular No. 03/2021/TT-NHNN providing amendments to the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic, which comes into force from May 17, 2021.

[5] This Article is amended according to Clause 4 Article 1 of the Circular No. 03/2021/TT-NHNN providing amendments to the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic, which comes into force from May 17, 2021.

[6] This Article is amended according to Clause 5 Article 1 of the Circular No. 03/2021/TT-NHNN providing amendments to the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic, which comes into force from May 17, 2021.

[7] Articles 2, 3 and 4 of the Circular No. 03/2021/TT-NHNN providing amendments to the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic, which comes into force from May 17, 2021, stipulate as follows:

 “Article 2. Transition clauses

Credit institutions and FBBs shall keep executing the contracts and agreements on debt rescheduling that are concluded before the effective date of this Circular in accordance with Circular No. 01/2020/TT-NHNN. Revisions to these contracts and agreements (if any) shall comply with regulations of law and relevant regulations of this Circular.

Article 3. Organization of implementation

Chief of Office, head of SBV Banking Supervision Agency, heads of SBV units, Directors of SBV’s branches, credit institutions and FBBs are responsible for the implementation of this Circular.

Article 4. Implementation clause

This Circular comes into force from May 17, 2021./.”

8 This Appendix is replaced according to Clause 6 Article 1 of the Circular No. 03/2021/TT-NHNN providing amendments to the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of State Bank of Vietnam providing instructions for credit institutions and foreign branch banks on debt rescheduling, exemption and reduction of interests and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic, which comes into force from May 17, 2021.