Thông tư 43/2014/TT-NHNN

CIRCULAR

ON FOREIGN CURRENCY LOANS PROVIDED BY CREDIT INSTITUTIONS AND BRANCHES OF FOREIGN BANKS FOR CLIENTS BEING RESIDENTS

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Ordinance on Foreign exchange No. 28/2005/PL-UBTVQH11 dated December 13, 2005 and the Ordinance on the Amendment to the Ordinance on Foreign Exchange No. 06/2013/PL-UBTVQH13 dated March 18, 2013;

Pursuant to the Government’s Decree No. 70/2014/NĐ-CP dated July 17, 2014 detailing the implementation of a number of articles of the Ordinance on foreign exchange and the Ordinance on the amendments to a number of articles of the Ordinance on foreign exchange;

Pursuant to the Government's Decree No. 156/2013/NĐ-CP dated November 11, 2013 defining the functions, tasks, entitlements and organizational structures of the State Bank of Vietnam;

At the request of the Director of the Financial Policy Department;

The Governor of the State Bank of Vietnam promulgates the Circular providing foreign currency loans of the credit institutions for clients being residents.

Article 1. Governing scope

This Circular shall provide foreign currency loans of the credit institutions and branches of foreign banks (hereafter referred to as credit institutions) for clients being residents.

Article 2. Regulated entities

1. Credit institutions shall be licensed to conduct foreign exchange operations and provide foreign currency loans for clients.

2. Clients being residents applying for loans at credit institutions as prescribed in the law on lending activities.

Article 3. Demands for foreign currency loans

1. Provision of foreign currency loans for credit institutions shall be considered in order to meet the following capital demands:

Short-term, mid-term and long-term loans used as outward remittance for payments on imported goods or services, in case borrowers’ foreign currency derived from their operating revenues is sufficient to repay such loans;

b) Short-term loans granted to key petroleum importers who are given quotas on petroleum import in 2015 by the Ministry of Industry and Trade to serve the purpose of repaying foreign debts incurred from such import, in case borrowers lack foreign-currency operating revenues required to repay such loans. The regulation laid down at this point shall be implemented till the end of December 31, 2015;

c) Short-term loans used to meet the domestic enterprises’ demands for capital to serve the purpose of implementing their plans to manufacture and trade goods exported through Vietnam’s border gates, which borrowers’ foreign currency derived from the export turnover is sufficient to repay; On receipt of loans disbursed by credit institutions, borrowers shall sell such borrowed foreign currency to credit institutions being lenders in the form of a foreign-exchange spot transaction, except when loans demanded by clients are used to carry out payment transactions in which the currency of transaction must be a specified foreign currency as stipulated by laws. The regulation laid down at this point shall be implemented till the end of December 31, 2015;

d) Loans used as direct outward investments regarding important national projects which are subject to investment decisions made by the National Assembly, the Government or the Prime Minister, and the Outward Investment Certificate granted by the Ministry of Planning and Investment.

2. After obtaining the written consent from the State Bank of Vietnam according to the procedures stipulated in Article 4 hereof with respect to specific cases, credit institutions shall be permitted to consider their lending decisions on the foreign currency loans with regard to demands for capital that is not included in the Clause 1 of this Article but is classified as the one given priority and incentives to develop the production and business as prescribed in Resolutions, Decrees, Decisions, Directives and other documents of the Government and the Prime Minister.

Article 4. Procedures for approving application for foreign currency loans

1. If there is any demand for foreign currency loans prescribed in Clause 2, Article 3 hereof, the credit institution shall send a written request to the State Bank of Vietnam to apply for their approval for grant of foreign currency loans, including main contents as follows:

The credit institution’s commitment that the plan to use the loan capital is evaluated and feasible, to the borrower satisfies loan requirements prescribed in the Law on lending activities, and lender’s possibility of collecting debts in the agreed-upon term (principal and interest);

b) The credit institution’s detailed report on the specific contents they have evaluated and approved to grant loans to clients: client’s demand for foreign currency loans used for implementing projects or plans given priority and incentives for development of the production and business activities as prescribed in Resolutions, Decrees, Decisions, Directives and other documents of the Government and the Prime Minister; the loan limit approved by credit institutions; the report on production and business activities, financial health, monetary sources used for debt repayment made by clients, and other contents, with the purpose of ensuring plans to use such loan capital is feasible, client’s eligibility for such loans as stipulated by laws;

c) The credit institution’s detailed report on foreign currency capital used as loans as well as shall be committed to balancing their foreign currency capital in conformity with the loan term and limit; the loan approval required to comply with applicable laws on lending activities, foreign exchange management, credit limit, safety ratios in terms of banking transactions performed by credit institutions and other relevant laws.

d) The credit institution’s commitment to taking responsibility for the evaluation results, decisions on foreign currency loans granted to clients as well as any content and information provided in the written request.

2. Procedures for approving application for foreign currency loans:

Credit institutions shall submit directly or by post the written request for approval for foreign currency loans to the State Bank of Vietnam (the Financial Policy Department).

b) The State Bank of Vietnam shall consider approving grant of foreign currency loans from credit institutions and in accordance with the regulations laid down in Resolutions, Decrees, Decisions, Directives and other documents of the Government, the Prime Minister on sectors given the priority and incentive for development of production and business activities, changes in foreign exchange market, targets of currency policies, regulations enshrined in this Circular, and contents of the written request submitted by these credit institutions;

c) Within 30 working days from the receipt of the written request for approving foreign currency loans submitted by credit institutions with sufficient information prescribed in Clause 1, Article 4 hereof, the State Bank of Vietnam shall send a written notification of their acceptance or refusal of their application for the foreign currency in which apparent reasons in case of refusal must be clearly stated.

Article 5. Currency used for loan repayment

1. With regard to foreign currency loans, prescribed in Point a, Point c, Point d Clause 1 and Clause 2 Article 3 hereof, which borrowers have sufficient foreign currency revenues to repay,: clients shall pay the loan principal and interest by the currency that they borrow; in case clients repay debts by another foreign currency, they shall be bound to the agreement between the credit institutions and clients in conformity with relevant laws.

On the due date of foreign currency loan repayment, if borrower’s late loan repayment in foreign currency is caused by unexpected events such as borrower’s deferred collection of foreign-currency operating revenues, borrower’s inadequacy of foreign currency earned from production and business activities or other legal revenues to repay loans after being inspected and confirmed in writing by credit institutions , these credit institutions shall ensure their legal foreign currency capital is balanced in order to be sold to clients to repay their loans and clients shall be committed to selling their foreign currency earned from their production and business activities to credit institutions on receipt of it..

2. With regard to foreign currency loans, prescribed in Point b Clause 1 and Clause 2 Article 3 hereof, which borrowers lack legal foreign currency revenues to repay, credit institutions shall ensure that their legal foreign currency capital is balanced to be sold to clients to repay their loan principal and interest.

Article 6. Responsibilities of credit institutions

1. Credit institutions shall grant loans in foreign currency in accordance with regulations laid down in this Circular, regulations on lending, foreign exchange management activities, and safety ratio that banking transactions performed by credit institutions must achieve as well as other relevant laws. If there exist any difference in regulations between this Circular and other documents of the State Bank of Vietnam on foreign currency lending, regulations enshrined in this Circular shall be applied.

2. Credit institutions shall ensure that foreign currency capital is balanced to conform to the loan duration and limit when approving foreign currency loans.

3. In case clients lack foreign currency earned from their legal foreign currency revenues to make their loan repayment as prescribed in Article 5 hereof, credit institutions shall ensure that their legal foreign currency capital is balanced to be sold to clients for the purpose of repaying their loan principal and interest.

4. Not later than every 12^th of the preceding month of the reporting month, credit institutions shall file a report on foreign-currency lending activities by filling out Form 01 and Form 02 issued together with this Circular to the State Bank of Vietnam.

Article 7. Implementation

1. This Circular shall take effect from January 01, 2015;

2. The Circular No. 29/2013/TT-NHNN of the Governor of the State Bank of Vietnam dated December 06, 2013 on providing regulations on granting the foreign-currency loans of credit institutions to clients being residents shall be annulled.

3. With regard to loans that apply the methods of one loan at a time, loan for investment project, syndication loan according to credit contract signed by the day this Circular taking effect on, credit institutions and clients shall perform the contents in the credit contract signed in accordance with regulations of applicable laws at the time the credit contract signed or agree to amend the credit contract in conformity with regulations in this Circular. In regard to loans that follow the lending models of credit limit and revolving credit as agreed upon in credit contract signed before the effective date of this Circular, and that are disbursed from January 01, 2015, credit institutions and borrowers shall implement the regulations laid down in this Circular.

4. The Chief Officers, the Director of the Financial Policy Department and Heads of affiliates of the State Bank of Vietnam, Director of Provincial Branches of the State Bank of Vietnam; President of the Board of Directors, President of the Member Assembly and General Director (Director) of credit institutions shall be responsible for implementing this Circular./.