Circular No. 01/2018/TT-NHNN on special loans for credit institutions under special control

CIRCULAR

Provisions on special loans for credit institutions

subject to special control

Pursuant to the Law on Credit Organizations dated June 16, 2010;

Based on the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017 (hereinafter referred to as Law No. 17/2017/QH14);

Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Article 1.

The Governor of the State Bank of Vietnam issues the Circular stipulating provisions on special loans for credit institutions under special control.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

This Circular stipulates the provisions on special loans granted by the State Bank of Vietnam (hereinafter referred to as the State Bank), the Deposit Insurance Corporation of Vietnam, the Vietnam Rural Credit Bank, and other credit institutions to credit institutions under special control.

Article 2. Currency for Special Loans

The currency for special loans is the Vietnamese Dong.

Article 3. Explanation of Terms

In this Circular, the following terms are understood as follows:

1. A restructuring plan is one of the plans prescribed in Clause 35, Article 4 of the Law on Credit Institutions No. 47/2010/QH12, which has been amended and supplemented according to Law No. 17/2017/QH14.

2. A transfer plan is the plan prescribed in Clause 3, Article 3 of Law No. 17/2017/QH14.

3. The borrower of special loans (hereinafter referred to as the borrower) is a credit institution under special control.

4. The lender of special loans (hereinafter referred to as the lender) is the State Bank, the Deposit Insurance Corporation of Vietnam, the Vietnam Rural Credit Bank, and other credit institutions.

5. Preferential interest rate for special loans (hereinafter referred to as preferential interest rate) is a lower interest rate than the rediscount rate announced by the State Bank during each period at the time when the special loan is disbursed or extended.

6. Branch of the State Bank in province/city is the branch of the State Bank in the province/city where the credit institution under special control has its main office.

Article 4. Principles of Special Loans and Handling of Special Loans

1. The amount of special loans; the term of special loans; the purpose of using special loans; the interest rate for special loans; the interest rate for extending special loans; the interest rate for overdue principal of special loans; the reduction or exemption of interest on special loans; the handling of special loans (including the extension of special loans) shall be carried out in accordance with the Prime Minister's decision prescribed in Clause 2, Article 3 of Law No. 17/2017/QH14 (hereinafter referred to as the Prime Minister's decision), the approved restructuring plan, and the approved transfer plan. In cases where the Prime Minister's decision, the approved restructuring plan, and the approved transfer plan do not provide for such matters, they shall be implemented in accordance with this Circular.

2. The State Bank's special loans with preferential interest rates down to 0% shall be decided by the Prime Minister.

Article 5. Cases of Special Loans

1. The State Bank grants special loans to credit institutions under special control in the following cases:

a) Granting special loans to support liquidity for credit institutions when there is a risk that the credit institution may lose its ability to pay or has already lost its ability to pay, threatening the stability of the system during the period of special control of the credit institution, including cases where the credit institution is implementing an approved restructuring plan;

b) Granting special loans with preferential interest rates down to 0% to support recovery for commercial banks, rural credit cooperatives, finance companies, and microfinance organizations according to an approved recovery plan;

c) Providing special loans with preferential interest rates up to 0% to support recovery for commercial banks according to approved mandatory transfer plans;

d) Granting special loans with preferential interest rates down to 0% to commercial banks that were compulsorily purchased before the effective date of Law No. 17/2017/QH14, as decided by the Prime Minister;

đ) Granting special loans with preferential interest rates down to 0% to commercial banks that were compulsorily purchased before the effective date of Law No. 17/2017/QH14 after the transfer according to an approved transfer plan.

2. The Deposit Insurance Corporation of Vietnam provides special loans to credit institutions under special control in the following cases:

a) Granting special loans to support liquidity for credit institutions when there is a risk that the credit institution may lose its ability to pay or has already lost its ability to pay, threatening the stability of the system during the period of special control of the credit institution, including cases where the credit institution is implementing an approved restructuring plan;

b) Granting special loans with preferential interest rates down to 0%, as decided by the State Bank, to support liquidity for finance companies, people's credit funds, and microfinance organizations from the Business Risk Reserve Fund when there is a risk that the finance company, people's credit fund, or microfinance organization may lose its ability to pay or has already lost its ability to pay, threatening the stability of the system before the approval of a restructuring plan;

c) Granting special loans with preferential interest rates down to 0% to support recovery for finance companies, people's credit funds, and microfinance organizations from the Business Risk Reserve Fund according to an approved recovery plan.

3. The Vietnam Rural Credit Bank provides special loans to credit institutions under special control in the following cases:

a) Granting special loans to support liquidity for credit institutions when there is a risk that the credit institution may lose its ability to pay or has already lost its ability to pay, threatening the stability of the system during the period of special control of the credit institution, including cases where the credit institution is implementing an approved restructuring plan;

b) Granting special loans with preferential interest rates down to 0%, as decided by the State Bank, to support liquidity for people's credit funds from the People's Credit Fund System Safety Guarantee Fund when there is a risk that the people's credit fund may lose its ability to pay or has already lost its ability to pay, threatening the stability of the system before the approval of a restructuring plan;

c) Providing special loans with preferential interest rates up to 0% to support recovery for people's credit funds from the System Safety Guarantee Fund according to approved recovery plans.

4. Other credit institutions provide special loans to credit institutions under special control in the following cases:

a) Granting special loans to support liquidity for credit institutions when there is a risk that the credit institution may lose its ability to pay or has already lost its ability to pay, threatening the stability of the system during the period of special control of the credit institution, including cases where the credit institution is implementing an approved restructuring plan;

b) Providing special loans to support recovery for credit institutions according to approved recovery plans and mandatory transfer plans.

Article 6. Conversion of refinancing loans to special loans

1. From the date the State Bank places a credit institution under special supervision, rediscount loans to that credit institution shall be converted into special loans as follows:

a) In cases where refinancing loans are still within their term, the principal balance of the refinancing loan shall be converted into the principal balance of the special loan, the interest arrears of the refinancing loan shall be converted into the interest arrears of the special loan, the due date for the special loan shall be the due date of the refinancing loan, and the interest rate on the special loan shall be the interest rate on the refinancing loan;

b) In cases where refinancing loans have exceeded their term, the overdue principal balance of the refinancing loan shall be converted into the overdue principal balance of the special loan, the overdue interest arrears of the refinancing loan shall be converted into the overdue interest arrears of the special loan, and the interest rate on the overdue principal balance of the special loan shall be the interest rate on the overdue principal balance of the refinancing loan.

2. The conversion of refinancing loans to special loans shall be regulated by the Decision of the State Bank placing credit organizations under special supervision.

Article 7. Authority to sign documents in the application for special loans, the application for extension of special loans, and the special loan agreement

The authority to sign documents in special loan application files, special loan extension application files, and special loan contracts on the part of the borrower shall be exercised by the legal representative of the borrower.

Chapter II

SPECIFIC PROVISIONS

Article 8. Purpose of using special loans

1. Credit organizations under special supervision may only use special loans prescribed in point a, Clause 1, point b, Clause 2, and point b, Clause 3, Article 5 of this Circular to pay out deposits of individual depositors at credit organizations; the use of special loans to pay out deposits of other entities shall be decided by the Governor of the State Bank in each specific case.

2. The entities eligible for payment as stipulated in Clause 1 of this Article do not include:

a) Related parties of credit organizations as stipulated in Clause 28, Article 4 of the Law on Credit Institutions and other relevant laws;

b) Managers of credit institutions;

c) Related parties of managers, directors, shareholders, or shareholders with voting rights of 5% or more of the charter capital or share capital of credit organizations as stipulated in Clause 28, Article 4 of the Law on Credit Institutions and other relevant laws.

3. Credit organizations under special supervision may use special loans prescribed in point a, Clause 2, point a, Clause 3, and point a, Clause 4, Article 5 of this Circular according to the agreement between the lender and borrower.

Article 9. Amount of Special Loans

1. The amount of special loans prescribed in point a, Clause 1, point b, Clause 2, and point b, Clause 3, Article 5 of this Circular shall be examined and decided by the State Bank based on the ability to pay of credit organizations under special supervision.

2. The amount of special loans prescribed in point a, Clause 2, point a, Clause 3, and point a, Clause 4, Article 5 of this Circular shall be implemented according to the agreement between the lender and borrower.

Article 10. Term of Special Loans

1. The term of special loans prescribed in point a, Clause 1, point b, Clause 2, and point b, Clause 3, Article 5 of this Circular shall be examined and decided by the State Bank but shall not exceed two years.

2. The term of special loans prescribed in point a, Clause 2, point a, Clause 3, and point a, Clause 4, Article 5 of this Circular shall be implemented according to the agreement between the lender and borrower.

Article 11. Interest Rates

1. For special loans from the State Bank:

a) The interest rate on special loans and the interest rate on extended special loans shall be the rediscount rate published by the State Bank during the period when the special loan is disbursed or extended;

b) The interest rate on overdue principal balances of special loans shall be 130% of the interest rate on non-overdue special loans immediately before the overdue period, except as provided in point b, Clause 1, Article 6 of this Circular.

2. For special loans from the Deposit Insurance Corporation of Vietnam, the Vietnam Joint Stock Commercial Bank, and other credit institutions:

a) For special loans prescribed in point a, Clause 2, point a, Clause 3, and point a, Clause 4, Article 5 of this Circular, the interest rate on special loans, the interest rate on extended special loans, and the interest rate on overdue principal balances of special loans shall be implemented according to the agreement between the lender and borrower;

b) For special loans prescribed in point b, Clause 2, and point b, Clause 3, Article 5 of this Circular, the interest rate on special loans and the interest rate on extended special loans shall be a preferential rate up to 0% decided by the State Bank. The interest rate on overdue principal balances of special loans shall be 130% of the interest rate on non-overdue special loans immediately before the overdue period.

3. The waiver or reduction of interest on special loans from the Deposit Insurance Corporation of Vietnam, the Vietnam Joint Stock Commercial Bank, and other credit institutions shall be implemented according to the agreement between the lender and borrower.

Article 12. Extension of Special Loans

1. In cases where a supervised credit institution requests an extension of special loans as stipulated in point a, Clause 1, point b, Clause 2, and point b, Clause 3, Article 5, and point a, Clause 1, Article 6 of this Circular when restructuring plans or transfer plans have not been approved or when such plans have been changed but not yet approved, the State Bank shall consider extending the special loan based on the credit institution's payment capacity or the restructuring plan for the credit institution decided by the State Bank or the restructuring plan for the credit institution proposed by the State Bank to the Government and the Prime Minister; each extension period shall not exceed two years.

2. In cases where a supervised credit institution requests an extension of special loans as stipulated in point a, Clause 2, point a, Clause 3, and point a, Clause 4, Article 5 of this Circular when restructuring plans have not been approved or when such plans have been changed but not yet approved, the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, and other lending institutions shall consider and decide on the extension of the special loan.

Article 13. Repayment of Special Loans

1. When a special loan becomes due, the borrower must repay the principal and interest of the special loan to the lender. The borrower may repay the special loan ahead of schedule.

2. Measures taken by the State Bank in cases where the borrower fails to fully repay the special loan on time and does not receive an extension:

a) Transfer the special loan to overdue monitoring according to the State Bank's regulations on methods of calculating and accounting for interest income and expenditure in the activities of receiving deposits and lending between the State Bank and credit institutions; apply the interest rate for overdue principal debt as prescribed in point b, Clause 1, Article 11 of this Circular;

b) Deduct from the credit institution's deposit account at the State Bank after notifying the credit institution in writing about the deduction from the deposit account to recover the debt;

c) Recover the debt from other sources of the credit institution.

3. Measures taken by the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, and other credit institutions in cases where the borrower fails to fully repay the special loan on time and does not receive an extension:

a) Transfer overdue principal and interest of special loans that the credit institution has not repaid to overdue monitoring, applying the interest rate for overdue principal debt as prescribed in Clause 2, Article 11 of this Circular;

b) Recover the debt according to agreements and legal provisions.

4. Special loans shall be prioritized for repayment before all other debts, including secured debts of credit institutions, in the following cases:

a) Upon maturity of the debt, except during the period when the restructuring plan for the credit institution has not been approved or when the restructuring plan has been changed but not yet approved;

b) When the credit institution is dissolved or declared bankrupt.

5. In cases where there are multiple lenders and the special loan falls under the circumstances prescribed in Clause 4 of this Article, if the borrower does not have sufficient funds to fully repay the special loan to multiple lenders, the repayment shall be made in proportion to the amount of debt.

Article 14. Procedure for the State Bank to consider and decide on special loans to support liquidity

1. When there is a risk of losing payment capability or has fallen into a state of losing payment capability and has a need for a special loan, the credit institution under special supervision shall submit four sets of application files requesting the State Bank to grant a special loan to the Special Supervision Board.

The application documents include:

a) A special loan request letter, specifying: name of the credit institution, account number for deposit in Vietnamese dong opened at the State Bank branch in province/city, reason, amount, term, interest rate requested for the loan, purpose of using the loan funds, commitment to use the loan funds for the intended purpose and compliance with the legal regulations on special loans;

b) Report on the risk of losing payment capability or situation of losing payment capability, measures already applied and planned to be applied to overcome it, estimated special loan needs;

c) Data on deposits in Vietnamese dong according to Appendix No. 01 issued together with this Circular;

d) Data on sources of capital and usage of capital in Vietnamese dong according to Appendix No. 02 issued together with this Circular;

đ) Other documents and materials as requested by the State Bank (if any).

2. In case of agreement with the credit institution's special loan request, within a maximum period of two working days from the date of receiving the complete application file of the credit institution as stipulated in Clause 1 of this Article, the Special Supervision Board shall send two sets of application files to the State Bank (Monetary Policy Department), one set of application files to the State Bank branch in province/city (in case the State Bank branch in province/city has the responsibility to conduct inspection and supervision), along with a document from the Special Supervision Board containing opinions on the following contents:

a) The operating situation and payment capacity of the credit institution;

b) Specific opinion on the credit institution at risk of losing payment capability or having fallen into a state of losing payment capability, threatening the stability of the system;

c) Recommendation for granting a special loan to the credit institution, specific opinion on the amount of special loan, purpose, term, interest rate for the special loan.

3. Within a maximum period of five working days from the date of receiving the complete application file of the credit institution and the document with opinions of the Special Supervision Board as stipulated in Clause 2 of this Article, the State Bank branch in province/city shall provide written comments to the Monetary Policy Department on the following contents:

a) The operating situation and payment capacity of the credit institution;

b) Specific opinion on whether the credit institution falls under the circumstances of being at risk of losing the ability to pay or is in a state of losing the ability to pay, threatening the stability of the system;

c) Opinion on agreeing or disagreeing to grant a special loan to the credit institution; specific opinion on the amount of special loan, purpose, term, interest rate for the special loan, other contents (if any); in case of disagreement to grant a special loan, the reason must be clearly stated.

4. Within a maximum period of two working days from the date of receiving the complete application file of the credit institution and the document with opinions of the Special Supervision Board as stipulated in Clause 2 of this Article, the Monetary Policy Department shall send the file for comments to the Banking Inspection and Supervision Authority.

5. Within a maximum period of five working days from the date of receiving the document with comments of the Monetary Policy Department as stipulated in Clause 4 of this Article, the Banking Inspection and Supervision Authority shall provide written comments to the Monetary Policy Department on the following contents:

a) The operating situation and payment capacity of the credit institution;

b) Specific opinion on whether the credit institution falls under the circumstances of being at risk of losing the ability to pay or is in a state of losing the ability to pay, threatening the stability of the system;

c) Opinion on agreeing or disagreeing to grant a special loan to the credit institution; specific opinion on the amount of special loan, purpose, term, interest rate for the special loan, proposal for the State Bank to grant a special loan according to point a, Clause 1, Article 5 of this Circular or the Vietnam Deposit Insurance Corporation, the Vietnam Cooperative Bank to grant a special loan according to point b, Clause 2, point b, Clause 3, Article 5 of this Circular, other contents (if any); in case of disagreement to grant a special loan, the reason must be clearly stated.

6. Within a maximum period of five working days from the date of receiving the complete opinions of the units as stipulated in Clauses 3 and 5 of this Article, the Monetary Policy Department shall compile and present to the Governor of the State Bank for consideration and decision on whether the State Bank or the Vietnam Cooperative Bank or the Vietnam Deposit Insurance Corporation will grant a special loan, the amount of special loan, purpose, term, interest rate for the special loan; in case of disagreement to grant a special loan, the State Bank shall issue a document to the credit institution.

7. Based on the document of the State Bank regarding the special loan granted to the credit institution and relevant legal provisions, the Director of the State Bank branch in province/city, the legal representative of the Vietnam Deposit Insurance Corporation, the legal representative of the Vietnam Cooperative Bank shall sign the special loan contract with the credit institution.

Article 15. Procedure for the State Bank to grant special loans according to the Prime Minister's decision, recovery plans, mandatory transfer plans, and transfer plans that have been approved.

1. When there is a need for a special loan as stipulated at points b, c, d, đ Clause 1 Article 5 of this Circular, the credit institution under special control shall submit three sets of loan application files to the Special Control Board requesting the State Bank to grant a special loan.

The application documents include:

a) A special loan request letter clearly stating the amount, purpose, term, and interest rate of the special loan requested according to the Prime Minister's decision, recovery plan, mandatory transfer plan, and transfer plan that have been approved, along with a commitment to use the borrowed funds for the intended purpose and comply with the special loan regulations.

b) Other documents and materials as requested by the State Bank (if any).

2. In case the Special Control Board agrees with the credit institution's special loan request, within a maximum of three working days from the date of receiving the credit institution's loan application file, the Special Control Board shall submit two sets of loan application files to the State Bank (Department of Monetary Policy), accompanied by a specific recommendation on the amount, purpose, term, and interest rate of the special loan.

3. Within a maximum of two working days from the date of receiving the complete loan application file from the credit institution and the opinion document of the Special Control Board as stipulated in Clause 2 of this Article, the Department of Monetary Policy shall send the application file for comments to the Banking Inspection and Supervision Authority.

4. Within a maximum of five working days from the date of receiving the loan request document with the opinion of the Department of Monetary Policy as stipulated in Clause 3 of this Article, the Banking Inspection and Supervision Authority shall provide its opinion in writing to the Department of Monetary Policy on the following contents:

a) Contents regarding the provision of special loans to credit institutions according to the Prime Minister's decision, recovery plan, mandatory transfer plan, and approved transfer plan;

b) An opinion agreeing or disagreeing with granting a special loan to the credit institution; a specific opinion on the amount, purpose, term, and interest rate of the special loan, other contents (if any); in case of disagreement with granting a special loan, the reasons must be clearly stated.

5. Within a maximum of five working days from the date of receiving the opinion of the Banking Inspection and Supervision Authority as stipulated in Clause 4 of this Article, the Department of Monetary Policy shall compile and submit to the Governor of the State Bank for a decision on granting a special loan to the credit institution.

6. Based on the State Bank's document regarding the granting of a special loan to the credit institution and relevant laws, the Governor of the State Bank branch in the province/city shall sign the special loan agreement with the credit institution.

Article 16. Procedure for the State Bank to consider and decide on extending special loans to support liquidity.

1. When there is a need to extend a special loan as stipulated at point a Clause 1, point b Clause 2, point b Clause 3 Article 5, and point a Clause 1 Article 6 of this Circular, at least 40 working days before the due date for repayment, the credit institution must submit an extension application file to the Special Control Board.

The application documents include:

a) An extension request letter for a special loan clearly stating: the name of the credit institution, the account number for deposit in Vietnamese dong opened at the lending bank, the reason, the amount, the term, the interest rate requested for extension, and a commitment to comply with the special loan regulations.

b) A report on the credit institution's ability to pay.

c) Data on sources and usage of Vietnamese dong capital according to Appendix No. 02 issued together with this Circular.

d) Other documents and materials as requested by the State Bank (if any).

2. If the Special Control Board agrees with the credit institution's request to extend the special loan, within a maximum of three working days from the date of receiving the complete application file from the credit institution as stipulated in Clause 1 of this Article, the Special Control Board shall submit two sets of application files to the State Bank (Department of Monetary Policy), and one set of application files to the State Bank branch in the province/city (in cases where the State Bank branch in the province/city has the responsibility to conduct inspections and supervision), accompanied by a document containing opinions on the following contents:

a) The operating situation and payment capacity of the credit institution;

b) A recommendation to extend the special loan to the credit institution, including a specific opinion on the amount, term, and interest rate of the extension.

3. Within a maximum of seven working days from the date of receiving the complete application file from the credit institution and the opinion document of the Special Control Board as stipulated in Clause 2 of this Article, the State Bank branch in the province/city shall provide its opinion in writing to the Department of Monetary Policy on the following contents:

a) The operating situation and payment capacity of the credit institution;

b) An opinion agreeing or disagreeing with extending the special loan to the credit institution; a specific opinion on the amount, term, and interest rate of the extension, other contents (if any); in case of disagreement with extending the special loan to the credit institution, the reasons must be clearly stated.

4. Within a maximum of three working days from the date of receiving the complete application file from the credit institution and the opinion document of the Special Control Board as stipulated in Clause 2 of this Article, the Department of Monetary Policy shall send the application file for comments to the Banking Inspection and Supervision Authority.

5. Within a maximum of seven working days from the date of receiving the loan request document with the opinion of the Department of Monetary Policy as stipulated in Clause 4 of this Article, the Banking Inspection and Supervision Authority shall provide its opinion in writing to the Department of Monetary Policy on the following contents:

a) The operating situation and payment capacity of the credit institution;

b) The restructuring policy for credit institutions decided by the State Bank; the restructuring policy for credit institutions proposed by the State Bank to the Government and the Prime Minister; the content of the special loan of the credit institution in the restructuring policy, the Prime Minister's decision, restructuring plan, and transfer plan that have been approved (if any);

c) An opinion agreeing or disagreeing with extending the special loan to the credit institution; a specific opinion on the amount, term, and interest rate of the extension, other contents (if any); in case of disagreement with extending the special loan to the credit institution, the reasons must be clearly stated.

6. Within a maximum period of seven working days from the date of receiving complete opinions of relevant units as stipulated in Clauses 3 and 5 of this Article, the Monetary Policy Department shall compile and submit to the Governor of the State Bank for consideration and decision on the extension of special loans to credit institutions, including the amount, term, and interest rate of the extension; in case of disagreement with the extension of special loans, the State Bank shall issue a document to the credit institution.

7. Based on the document of the State Bank regarding the extension of special loans to credit institutions and related laws, the State Bank branch in provinces and cities, the Vietnam Rural Credit Bank, and the Vietnam Deposit Insurance Corporation shall implement the extension of special loans to credit institutions.

Article 17. Procedures for the State Bank to extend special loans according to the Prime Minister's decision, restructuring plans, mandatory transfer plans, and approved sale plans.

1. For special loans as specified in points b, c, d, đ of Clause 1 of Article 5 of this Circular, based on the content of the extension of special loans of credit institutions in the Prime Minister's decision, restructuring plans, and approved sale plans, credit institutions shall submit a Request for Extension of Special Loan (three copies) to the Special Supervisory Board. The Request for Extension of Special Loan shall clearly state the amount, term, and interest rate proposed for extension according to the Prime Minister's decision, restructuring plans, and approved sale plans, along with a commitment to comply with the legal provisions on special loans.

2. Within a maximum period of two working days from the date of receipt of the Request from the credit institution as stipulated in Clause 1 of this Article, the Special Supervisory Board shall send two copies of the Request to the State Bank (Monetary Policy Department) together with a document containing its opinion on the request for extension of special loans from the credit institution.

3. Within a maximum period of two working days from the date of receipt of the Request for Extension of Special Loan from the credit institution and the document containing the opinion of the Special Supervisory Board as stipulated in Clause 2 of this Article, the Monetary Policy Department shall seek the opinion of the Banking Inspection and Supervision Authority.

4. Within a maximum period of five working days from the date of receipt of the document requesting the opinion of the Monetary Policy Department as stipulated in Clause 3 of this Article, the Banking Inspection and Supervision Authority shall provide its opinion in writing to the Monetary Policy Department regarding the content of the extension of special loans to credit institutions in the Prime Minister's decision, restructuring plans, and approved sale plans, as well as its opinion on the request for extension of special loans from the credit institution.

5. Within a maximum period of five working days from the date of receipt of the document containing the opinion of the Banking Inspection and Supervision Authority as stipulated in Clause 4 of this Article, the Monetary Policy Department shall compile and submit to the Governor of the State Bank for a decision on the extension of special loans to credit institutions.

6. Based on the document of the State Bank regarding the extension of special loans to credit institutions and related laws, the State Bank branch in provinces and cities shall implement the extension of special loans to credit institutions.

Article 18. Procedure for special loans and extensions of special loans by the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, and other credit institutions

1. Procedure for the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, and other credit institutions to consider granting special loans and extending special loans to support liquidity:

a) When there is a need for a special loan or extension of a special loan as stipulated in point a, clause 2, point a, clause 3, and point a, clause 4 of Article 5 of this Circular, the supervised credit institution shall submit four sets of application documents to the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, or another credit institution. In the case of an extension request, the credit institution must submit the application at least 20 working days before the debt repayment deadline.

The application documents include:

i) Documents as prescribed by the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, or another credit institution;

ii) A document from the Special Supervisory Board requesting a special loan or extension of a special loan for the credit institution.

b) Within a maximum period of two working days from the date of receipt of the complete application documents of the credit institution as provided in point a of this clause, if it is possible to grant a special loan or extend a special loan to the credit institution, the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, or another credit institution shall send the application documents to the Banking Inspection and Supervision Authority, the State Bank of Vietnam branch in the province/city (in cases where the State Bank of Vietnam branch in the province/city has the responsibility for inspection and supervision) for their opinions on the following matters:

i) The operational situation and payment capacity of the credit institution;

ii) Whether the credit institution falls under the category of having a risk of losing its payment capacity or being in a state of losing its payment capacity, threatening the stability of the system (applicable in cases where the credit institution requests a special loan);

iii) The content of the special loan by the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, or another credit institution in the restructuring plan that has been approved (if applicable).

c) Based on the opinions of the units specified in point b of this clause, the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, or another credit institution shall examine and decide on granting a special loan or extending a special loan to the credit institution.

2. Procedure for special loans and extensions of special loans according to recovery plans, mandatory transfer plans, or mandatory sale plans that have been approved:

The Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, and other credit institutions shall implement special loans and extensions of special loans as stipulated in point c, clause 2, point c, clause 3, and point b, clause 4 of Article 5 of this Circular according to the recovery plan, mandatory transfer plan, or mandatory sale plan that has been approved and internal regulations of the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, and other credit institutions.

Article 19. Disbursement of special loans

1. For special loans considered and decided upon by the State Bank of Vietnam or by the Prime Minister's decision, recovery plans, mandatory transfer plans, or mandatory sale plans that have been approved

a) When there is a need for disbursement of special loan funds, the credit institution shall submit a written request for disbursement of the special loan to the Special Supervisory Board, specifying the amount, time, and reasons for the disbursement request;

b) Based on the credit institution's need for loan funds, the Special Supervisory Board shall review and provide specific written opinions on the credit institution's disbursement request to the State Bank of Vietnam branch in the province/city or the Vietnam Deposit Insurance Corporation or the Vietnam Rural Credit Bank, along with the credit institution's disbursement request document;

c) The State Bank of Vietnam branch in the province/city or the Vietnam Deposit Insurance Corporation or the Vietnam Rural Credit Bank shall consider the disbursement of the special loan based on the special loan agreement, the credit institution's disbursement request, and the opinion of the Special Supervisory Board.

2. For special loans considered and decided upon by the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, or other credit institutions, the disbursement of the loan shall be carried out in accordance with the internal regulations of the Vietnam Rural Credit Bank, the Vietnam Deposit Insurance Corporation, or other credit institutions and agreements with the borrower.

Chapter III

IMPLEMENTING PROVISIONS

Article 20. Responsibilities of the Borrower

1. Implement responsibilities as prescribed in this Circular and relevant laws.

2. Provide to the Lender all necessary documents and files regarding special loans fully, promptly, and accurately. Bear legal responsibility for the accuracy and legality of the provided documents and files.

3. Use the special loan for its intended purpose and repay the special loan according to the provisions of this Circular, restructuring plans, transfer plans approved, decisions of the Prime Minister, and special loan contracts.

4. Send a written report to the State Bank branch in the province or city (in case of a special loan from the State Bank), the Vietnam Deposit Insurance Corporation (in case of a special loan from the Vietnam Deposit Insurance Corporation), the Vietnam Rural Credit Bank (in case of a special loan from the Vietnam Rural Credit Bank), or other lending credit institutions (in case of a special loan from other lending credit institutions) on the use of the special loan by the borrower within five working days at the beginning of the following month after the reporting month or when necessary, until the special loan is fully utilized.

5. Fulfill other reports as required by the Lender.

Article 21. Responsibilities of the Vietnam Deposit Insurance Corporation, the Vietnam Rural Credit Bank, and Other Lending Credit Institutions

1. Implement responsibilities as prescribed in this Circular and relevant laws.

2. Examine and decide on special loans and extensions of special loans to credit institutions as stipulated in this Circular; report to the Governor of the State Bank (through the Banking Supervision Agency) on the approval or non-approval of special loans and extensions of special loans.

3. Issue internal regulations on special loans, extensions of special loans, and disbursement of special loans.

4. Monitor the use of special loan capital by the borrower; urge and require the borrower to repay the special loan according to the provisions of this Circular, restructuring plans, transfer plans approved, and special loan contracts.

5. Send a written report to the Governor of the State Bank on special loan data within seven working days at the beginning of the following month after the reporting month or when necessary, simultaneously sending it to the Banking Supervision Agency and the Monetary Policy Department according to Appendix No. 04 issued together with this Circular.

Article 22. Responsibilities of the Special Supervisory Board

1. Implement responsibilities as prescribed in this Circular and relevant laws.

2. Monitor the use of special loan capital; monitor the revenues of the borrower to propose recovery of special loan debts and urge and require the borrower to repay the special loan debt.

3. Propose to the Governor of the State Bank the following contents:

a) Debt collection and debt collection measures for special loans;

b) Special loans, handling of special loans (including measures for handling in cases where the borrower does not repay the full debt on time), interest reduction for special loans within the restructuring plan, transfer plan to be submitted for approval by competent authorities;

c) Special loans, handling of special loans (including measures for handling in cases where the borrower does not repay the full debt on time), interest reduction for special loans to be submitted to the Prime Minister for decision under Clause 2 of Article 3 of Law No. 17/2017/QH14;

d) Amendments and supplements to the restructuring plan, transfer plan in cases where special loans and repayment of special loans by credit institutions lead to changes in the approved restructuring plan, transfer plan.

4. Timely report to the Governor of the State Bank on issues arising related to special loans and propose solutions.

Article 23. Responsibilities of units under the State Bank

1. Monetary Policy Department

a) Serve as the focal point to submit to the Governor of the State Bank of Vietnam for consideration and decision on granting special loans and extending the term of special loans as stipulated in this Circular;

b) Aggregate data on special loans arising at the State Bank branch in provinces and cities (for the case of special loans prescribed in Clause 1, Article 5 of this Circular), the Deposit Insurance Corporation of Vietnam, and the Vietnam Rural Credit Bank (for the case of special loans prescribed in Point b, Clause 2, and Point b, Clause 3, Article 5 of this Circular) to report periodically every month to the Governor of the State Bank.

2. Banking Inspection and Supervision Authority

a) Provide opinions on granting special loans and extending the term of special loans as stipulated in this Circular;

b) Serve as the focal point for presenting to the Governor of the State Bank for consideration and decision or presenting to the competent authority for consideration and decision regarding the recommendations of the Special Control Board as prescribed in Clause 3, Article 22 of this Circular;

c) Supervise, inspect, and handle violations within its authority concerning credit institutions in implementing the provisions of this Circular.

3. State Bank Branches in Provinces and Cities

a) Provide opinions on granting special loans and extending the term of special loans as stipulated in this Circular;

b) Implement loan contracts for special loans with basic contents according to Appendix No. 03 issued together with this Circular, disburse, extend, and collect special loans according to the provisions of this Circular, the State Bank's documents on special loans, extensions of special loans, and relevant laws;

c) Based on the contents transferring refinancing loans into special loans as prescribed in the Decision on Special Control of Credit Institutions, record the transfer of refinancing loans into special loans;

d) Implement the provisions of Point a, b, Clause 2, Article 13 of this Circular; Coordinate with the Special Control Board to implement the provisions of Clause 2, Article 22 of this Circular;

đ) Supervise, inspect, and handle violations within its authority concerning credit institutions in implementing the provisions of this Circular.

e) Periodically every month, within seven working days from the beginning of the following month immediately after the reporting month or when necessary, send a document to the Banking Inspection and Supervision Authority and the Monetary Policy Department about the data on special loans according to Appendix No. 04 issued together with this Circular.

4. State Bank of Vietnam Trading Center

a) Based on the contents transferring refinancing loans into special loans as prescribed in the Decision on Special Control of Credit Institutions, record the transfer of refinancing loans into special loans;

b) Implement the provisions of Point b, Clause 2, Article 13 of this Circular.

5. The Financial Accounting Department: Guide accounting related to special loans for credit institutions under special control, including the conversion of principal and interest of refinancing loans into special loan balances.

Article 24. Transitional Provisions

1. Special loans remaining balances until the date this Circular takes effect shall continue to be implemented according to special loan documents, special loan extension documents, or special loan contracts already signed. These special loan documents, special loan extension documents, and special loan contracts mentioned above shall be amended and supplemented if the amendments and supplements comply with the provisions of this Circular.

2. For special loans of credit institutions borrowed before the Law on Credit Institutions No. 47/2010/QH12 took effect, the review and extension process shall be carried out as follows:

a) Credit institutions must submit a written request for extension to the State Bank branch in provinces and cities at least 20 working days before the due date;

b) Within a maximum of five working days from the date of receiving the credit institution's written request for extension as prescribed in Point a of this Clause, the State Bank branch in provinces and cities shall coordinate with the Special Control Board (if applicable) to issue a written opinion sent to the Monetary Policy Department on the contents prescribed in Clause 3, Article 16 of this Circular, along with the credit institution's written request for extension;

c) After receiving the documents prescribed in Point b of this Clause, the Monetary Policy Department shall seek opinions from the Banking Inspection and Supervision Authority. The Banking Inspection and Supervision Authority shall provide opinions on the contents prescribed in Clause 5, Article 16 of this Circular. The Monetary Policy Department shall compile and present to the Governor of the State Bank for consideration and decision on extending special loans for credit institutions.

3. For loan extension requests submitted by credit institutions to the State Bank before this Circular takes effect, the State Bank shall consider the extension based on the application documents submitted by the credit institution according to the procedure where the Monetary Policy Department seeks opinions from the Banking Inspection and Supervision Authority. The Banking Inspection and Supervision Authority provides opinions on the contents prescribed in Clause 5, Article 16 of this Circular. The Monetary Policy Department compiles and presents to the Governor of the State Bank for consideration and decision on extending special loans for credit institutions.

Article 25. Effective Date

1. This Circular takes effect from January 29, 2018.

2. From the date this Circular takes effect, Circular No. 06/2012/TT-NHNN dated March 16, 2012, of the Governor of the State Bank prescribing special loans for credit institutions shall cease to be effective.

3. The Director of the Office, the Director of the Banking Inspection and Supervision Authority, the Head of the Monetary Policy Department, the Heads of units under the State Bank; the Governors of State Bank branches in provinces and cities; the Chairmen of the Boards of Directors, General Directors of the Deposit Insurance Corporation of Vietnam; the Chairmen of the Boards of Directors, Chairmen of the Boards of Members, General Directors (Directors) of credit institutions are responsible for organizing the implementation of this Circular./.