CIRCULAR

STIPULATING ON PROVISION OF FOREIGN CURRENCY LOANS OF THE CREDIT INSTITUTIONS AND FOREIGN BANKS’ BRANCHES WITH CUSTOMERS BEING RESIDENTS

Pursuant to the Law on 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;

Pursuant to the Government’s Decree 160/2006/ND-CP dated December 28, 2006 detailing the implementation of the Ordinance on Foreign Exchange;

Pursuant to the Government’s Decree No. 96/2008/ND-CP dated August 26, 2008 defining functions, duties, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Monetary Policy Department;

The Governor of the State bank of Vietnam promulgates Circular stipulating on provision of foreign currency loans of the credit institutions and foreign banks’ branches with customers being residents,

Article 1. Scope of regulation

This Circular stipulates on provision of foreign currency loans of the credit institutions and foreign banks’ branches with customers being residents.

Article 2. Subjects of application

1. The credit institutions and foreign banks’ branches that are permitted to operate foreign exchange and implement provision of foreign currency loans with customers.

2. The customers being residents who are loaning capital at the credit institutions and branches of foreign banks as prescribed by law on loan activities.

Article 3. Demands of borrowing foreign currency capital

1. Credit institutions, branches of foreign banks may consider deciding provision of foreign currency loans for demands of capital loan as follows:

a) The short-term, mid--term and long-term loans for the overseas payment for imported goods and services on condition that customers have sufficient foreign currency from the production and business revenues for paying of loan debt.

b) The short-term loans for wholesale enterprises importing petrol and oil have been assigned the 2014 petrol and oil import quota by the Ministry of Industry and Trade and have demand to borrow capital in foreign currency for overseas payment for import petrol and oil when the borrowers fail to have or have sufficient foreign currency revenues from production and business operation for paying of loan debt.  Provisions in this clause shall be implemented until the end of December 31, 2014.

c) The short-term loans in order to meet the domestic capital demands aiming to implement plan on production and business of export goods passing the border gates of Vietnam on condition that borrowers have sufficient foreign currency from export revenue for paying of  loan debt; when being disbursed the loan capital by credit institutions or branches of foreign bank, the borrowers must sell that loaning foreign currency amount for credit institutions or branches of foreign bank have provided loans in according to form of foreign exchange spot transaction, except for case whether demand of capital loan of customers for implementation of payment transactions which law stipulated that the transaction currency must be in foreign currency.  Provisions in this clause shall be implemented until the end of December 31, 2014.

d) Loans to perform overseas direct investment for national important projects, works that have been decided on investment guidelines by National Assembly, Government or the Prime Minister and have been issued certificate of overseas investment by the Ministry of Planning and Investment.

2. Credit institutions, branches of foreign banks may consider deciding provision of foreign currency loans for demands of capital loan, apart from provisions in clause 1 this Article, but in fields prioritized, encouraged for production and business development in according to guidelines of Government after the State bank of Vietnam has accepted in writing under the orders and procedures specified in Article 4 of this Circular for each specific case.

Article 4. The order of and procedures for acceptance of provision of foreign currency loans

1. When having demand of provision of foreign currency loans, credit institutions, branches of foreign banks must have written request to the State bank of Vietnam for acceptance of provision of foreign currency loans, including the following principal contents:

a) Credit institutions, branches of foreign bank have appraised and ensure that projects, plans on production and business of customers are feasible, effective; the borrowers meet sufficient conditions of capital loan as prescribed by law on loan activities, have ability to withdraw debt on schedule (principal and interest); in which, they must report specifically about financial situation, activities of production and business, sources to pay debt of customers, demand of foreign currency loans of customers for implementation of projects, plans on production and business in fields prioritized, encouraged for production and business development in according to guidelines of Government.

b) The credit institutions and foreign banks’ branches shall report specifically about  foreign exchange capital sources to provide loans, and commit that they ensure to balance foreign exchange capital sources in line with the term and capital level of loans; ensure that provision of loans complies with the current legislations on activities of loan provision, managing foreign exchange, limitation of credit extension, rates of safety assurance in banking activities of credit institutions and other provisions of relevant legislations.

c) The credit institutions and foreign banks’ branches must commit to take responsibility for the result of appraisal, decision on providing foreign currency loans to customers and contents, information already supplied in the written request.

2. The order of and procedures for acceptance of provision of foreign currency loans:

a) Credit institutions, branches of foreign banks shall send, directly or via post system, the written request for acceptance of provision of foreign currency loans, to the State bank of Vietnam (the Monetary Policy Department).

b) Basing on Government’s guidelines about fields prioritized, encouraged for production and business development, changes of foreign exchange market, provisions in this Circular and content of the written request of credit institutions, foreign banks’ branches, the State bank of Vietnam shall consider to accept the provision of foreign currency loans of credit institutions and foreign banks’ branches.

c) Within 30 (thirty) working days after receiving the written request for acceptance of the provision of foreign currency loans of credit institutions, branches of foreign banks, with full information as prescribed at Clause 1 Article 4 of this Circular, the State bank of Vietnam shall send a written notice on acceptance or refusal for credit institutions, branches of foreign banks in the provision of foreign currency loans.

Article 5. Responsibilities of credit institutions, branches of foreign banks

1. The credit institutions and foreign banks’ branches shall conduct provision of foreign currency loans in accordance with this Circular, the regulations on loans, management of foreign exchange, rate of safety assurance in operation of credit institutions, branches of foreign banks and other relevant regulations.

2. Monthly, not later than 12^th day of month next to the report month, credit institutions, branches of foreign banks shall report to the State bank of Vietnam on the provision of foreign currency loans in according to the report form enclosed to this Circular.

Article 6. Organization of implementation

1. This Circular takes effect on January 01, 2014 and replaces the Circular No. 37/2012/TT-NHNN dated December 28, 2012 of the Governor of the State bank of Vietnam, stipulating on provision of foreign currency loans of the credit institutions and foreign banks’ branches with customers being residents.

2. For loans applying methods of provision of loans for each time, provision of loans under investment project, provision of syndicated loans under credit contracts have been signed before the effective day of this Circular, credit institutions, branches of foreign banks and the borrowers may implement contents in the signed credit contracts in conformity with provisions of law that are effect at time of signing such credit contracts or make agreements to amend, supplement such credit contracts to be suitable with provisions in this Circular.  For loans applying methods of provision of loans based on credit limit, revolving credit (recirculation) under credit contracts have been signed before the effective day of this Circular, and disbursed from January 01, 2014, credit institutions, branches of foreign banks and the borrowers shall comply with provisions in this Circular.

3. The Chief of office, the Director of the Monetary policy department and heads of units of the State bank of Vietnam, Directors of the State bank of Vietnam’s branches of central-affiliated cities and provinces; presidents of Board of Directors or of Members' Council and Directors General (Directors) of credit institutions, branches of foreign banks shall implement this Circular.

Name of credit institution or branch of foreign bank:

REPORT OF LOAN OUTSTANDING BALANCE IN FOREIGN CURRENCY

Month ….. year……..

(Enclosed with the Circular No.          /2013/TT-NHNN dated          )

Note:

1. Outstanding loan balances at part I: (1) = (2) = (3).

2. Outstanding loan balance at point e item 2 part I excludes outstanding loan balances at points a, b, c, d item 2 part I.

3. Deadline for sending report: Monthly, not later than the 12^th day of the next month of the report month.

4. Recipient unit: The Monetary policy department – the State bank of Vietnam, 49 Ly Thai To – Hoan Kiem – Ha Noi (email:  phongcstd@sbv.gov.vn, facsimile: 04.38246953 - 04.38240132)

5. It is required to write full name and telephone number of the responsible person for answering the report in details at the State Bank of Vietnam’s requests.