Công văn 147/HCM-PTH

To: Branches of foreign banks in Ho Chi Minh City

In response to the Official Dispatch No. 241/NHNN-TD dated January 15, 2016 by the Credit Department of Economic Sectors regarding guarantee balance, Office of the State Bank in Ho Chi Minh City (hereinafter referred to as “HCMC Office of SB”) hereby responds as follows:

1. Branches of foreign banks have made enquiries  about the calculation of guarantee balance stipulated in point 1, Section I of the Explanation for the Circular No. 07/2015/TT-NHNN dated June 25, 2015 published on the website of the State bank as follows:” Pursuant to clause 3, Article 13 of the Circular No. 36/2014/TT-NHNN dated  November 20, 2014 providing regulations on safety limits and ratios for transaction conducted by credit institutions, branches of foreign banks are not allowed to exclude the guarantee balance if the counter guarantors are overseas banks or other overseas  branches within the same banking system. The guarantee balance may be excluded only if the counter guarantors are credit institutions or branches of foreign banks” The foregoing provision is provided with the aim of ensuring the safety of every credit institution and branch of foreign banks operating within the territory of Vietnam and stability the whole banking system.

2. Pursuant to clause 4, article 3 of the Circular No. 07/2015/TT-NHNN branches of foreign banks are allowed to provide joint guarantees for large-scale projects. Branches of foreign banks may cooperate with credit institutions or other branches of foreign banks in providing guarantees; or their parent bank has to increase the capital of its branches in Vietnam in order to expand their scale and financial capacity.

HCMC Office of SB requests that branches of foreign banks follow instructions provide above by the Credit Department of Economic Sectors./.