CIRCULAR

PROVIDING GUIDANCE ON LENDING IN VIETNAMESE DONG AT THE AGREEMENT INTEREST RATE BY CREDIT INSTITUTIONS TO THEIR CUSTOMERS

- Pursuant to the Law on the State Bank of Vietnam issued in 1997; the Law on the amendment, supplement of several articles of the Law on the State Bank of Vietnam issued in 2003;
- Pursuant to the Law on Credit Institutions issued in 1997; the Law on the amendment, supplement of several articles of the Law on Credit Institutions issued in 2004;
- Pursuant to the Resolution No.23/2008/NQ-QH12 dated 06 November 2008 of the National Assembly on the 2009 socio-economic development plan;
- Pursuant to the Decree No.96/2008/ND-CP dated 26 August 2008 of the Government providing for the functions, duties, authorities and organizational structure of the State Bank of Vietnam;
- Pursuant to the Resolution No. 12/NQ-CP dated 7 March 2010 of the Government on regular meeting session of the Government in February 2010;
- Pursuant to the Resolution No. 18/NQ-CP dated 6 April 2010 of the Government on solutions to ensure macro-economic stability, not allow high rate of inflation and achieve economic growth rate of about 6.5% in the year 2010;
- Upon direction of the Prime Minister at the dispatch No.627/VPCP-KTTH dated 23 January 2009 of the Government’s Office on the application of agreement lending interest rate by credit institutions;
The State Bank of Vietnam hereby provides guidance on lending in Vietnamese dong at the agreement interest rate by credit institutions to their customers as follows:

Article 1. The credit institutions shall provide loan in Vietnamese dong at the agreement interest rate to their borrowers in order to meet capital demand of project, plan of production, business, service, development investment and for efficient life.

Article 2. Credit institutions shall publicly post reasonable lending interest rates on the basis of the capital supply – demand in the market, demand for loan funds and creditworthiness of the borrowers, saving operating expenses, facilitating borrowers to access loan funds for development of production – business, especially agricultural and rural area, export enterprises, small and medium enterprises; adjust lending interest rates in conformity with fluctuating level of interest rate applicable to capital mobilization in Vietnamese dong and management objectives, solutions of monetary policy of State Bank of Vietnam.

Article 3. Credit institutions shall make report to the State Bank of Vietnam about interest rates applicable to Vietnamese Dong loans in accordance with the Appendix attached hereto and documents of credit institutions providing for lending interest rates right after the issuance.

Article 4. This Circular shall be effective from the date of signing. Provisions of the State Bank of Vietnam on interest rates applicable to Vietnamese dong loans by credit institutions to borrowers shall cease their effectiveness, including: Circular No. 07/2010/TT-NHNN dated 26 February 2010 providing for the lending in Vietnamese dong at the agreement interest rate by credit institutions to their customers and its guiding documents; provisions on lending interest rate under the Decision No. 16/2008/QD-NHNN dated 16 May 2008 on management mechanism of base interest rate in Vietnamese Dong; Decision No. 33/2008/QD-NHNN dated 3 December 2008 on interest rates applicable to Vietnamese Dong loans by local People’s Credit Funds to customers. For credit contracts entered into prior to the effective date of this Circular, credit institutions and borrowers shall continue implementing the signed credit contracts; or credit institutions and borrowers shall make agreement on the amendment, supplement of credit contracts in line with provisions of this Circular and of other related laws.

Article 5. The Director of Administrative Department, Director of Monetary Policy Department and Heads of units of the State Bank of Vietnam, Managers of State Bank branches in provinces, cities under the central Government’s management; Chairman of Board of Directors and General Director (Directors) of credit institutions, borrowers of credit institutions shall be responsible for implementation of this Circular.

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THE GOVERNOR OF THE STATE BANK OF VIETNAM




Nguyen Van Giau

Name of the credit institution:……………….

APPENDIX

REPORT ON LENDING IN VIETNAMESE DONG AT AGREEMENT INTEREST RATE

Month…. Year….

Lending demand

Loan outstanding (VND billion)

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Common rate

Lowest rate

Highest rate

I. Short, medium and long term loan to capital demands of production, business, service and development investment

1. Short term loan

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Of which

1.1. Lending for expense payment of agricultural, forestry, aquaculture production

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1.2. Lending for expense payment of processing industry production

1.3. Lending for export industry

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2. Medium term loan

Of which

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2.1. Lending for agricultural, forestry, aquaculture production

2.2. Lending for processing industry production

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2.3. Lending for export industry

3. Long term loan

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Of which

3.1. Lending for agricultural, forestry, aquaculture production

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3.2. Lending for processing industry production

3.3. Lending for export industry

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II. Short term, medium and long term loan to capital demands of life, loan through the operation of issuance and use of credit cards

1. Loan to capital demands of life:

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- Lending for house repair and house purchase, relating to which the source for debt repayment is from the borrowers’ salary

- Lending for the purchase of means of transport

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- Lending for covering the costs of study and disease treatment

- Lending for the purchase of family utensils and appliances

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- Lending for covering the costs of cultural, sport, tourism activities

- Lending in the mode of personal account overdraft

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2. Loan through the operation of issuance and use of credit card

3. The ratio of bad debt of loans in VND to capital demands of life, loan through the operation of issuance and use of credit cards

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Drawer

Controller

…. date, …….
General Director

Drawing instructions:

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2. For the norm of loan outstanding: To totalize the loan outstanding at agreement interest rate of the credit institution’s entire system as of the ending of the reporting month.

3. For the norm of interest rate: To totalize interest rates of loans arising in the reporting month of the credit institution’s entire system.

4. Reporting time: On the 5th of the consecutive month following the reporting month at the latest.

5. Report recipient: Commercial banks, branches of foreign banks operating in Vietnam, Central People’s credit fund, finance companies, finance leasing companies shall send report to Monetary Policy Department – State Bank of Vietnam – 49 Ly Thai To, Hanoi (email: phongcstd@sbv.gov.vn; fax: 04 38246953/38240132); local People’s Credit Funds shall send report to State Bank’s branches in provinces, cities.

6. Any query that may arise during the reporting process should be informed via the following numbers: 04 38246955/38259158.