Circular No. 01/2020/TT-NHNN stipulates on the restructuring of debt repayment terms, waiver, reduction of interest and fees, and maintenance of the loan classification for credit institutions and foreign bank branches to support customers affected by the COVID-19 pandemic.

CIRCULAR

Regarding the restructuring of debt repayment terms, waiver, reduction of interest and fees, and maintenance of loan classification for credit institutions and foreign bank branches to support customers affected by the COVID-19 pandemic

extending the debt repayment deadline, waiving, reducing interest and fees, maintaining the loan classification to support

customers affected by the COVID-19 pandemic

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Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010; the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

Decree No. 16/2017/NĐ-CP dated Credit institutions, foreign bank branches restructure repayment terms for the principal balance and/or interest of a debt (including debts within the scope of adjustment under Decree No. 55/2015/NĐ-CP dated June 9, 2015 of the Government on credit policies to serve the development of agriculture and rural areas (as amended and supplemented)) when meeting all of the following conditions: of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

After reaching consensus with the Ministry of Finance;

At the proposal of the Director of Banking Inspection and Supervision;

The Governor of the State Bank of Vietnam issues this Circular to regulate the restructuring of debt repayment terms, waiver, reduction of interest and fees, and maintenance of loan classification for credit institutions and foreign bank branches to support customers affected by the novel coronavirus (COVID-19) pandemic.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular regulates the restructuring of debt repayment terms, waiver, reduction of interest and fees, and maintenance of loan classification for credit institutions and foreign bank branches to support customers affected by the COVID-19 pandemic.

Article 2. Applicability

1. Credit institutions (excluding policy banks), foreign bank branches.

2. Customers of credit institutions and foreign bank branches (excluding customers who are credit institutions and foreign bank branches).

3. Other organizations and individuals related to the restructuring of debt repayment terms, waiver, reduction of interest and fees, and maintenance of loan classification to support customers affected by the COVID-19 pandemic.

The restructuring of debt repayment terms, waiver, reduction of interest and fees, and maintenance of loan classification to support customers affected by the COVID-19 pandemic shall be carried out in accordance with the provisions of this Circular; matters related to the restructuring of debt repayment terms, waiver, reduction of interest and fees, and classification of loans not specified in this Circular shall be implemented in accordance with other relevant legal documents.

Chapter II

SPECIFIC PROVISIONS

1. Restructured debt is the outstanding principal and/or interest (including the outstanding balance of loans within the scope of Decree No. 55/2015/NĐ-CP dated June 9, 2015 of the Government on credit policies to serve the development of agriculture and rural areas (as amended and supplemented)) that fully meet the following conditions:

a) Arising from lending or financial leasing activities;

b) Arising from the obligation to repay principal and/or interest during the period from January 23, 2020 to the day immediately following three months from the date of

c) The customer is unable to repay the principal and/or interest on time according to the loan agreement or lease agreement due to reduced revenue and income caused by the impact of the COVID-19 pandemic.

2. The restructuring of debt repayment terms for the outstanding balance specified in Clause 1 of this Article shall be carried out in the following cases:

a) The outstanding balance is still within the term or overdue by up to 10 days from the due date of repayment according to the loan agreement or lease agreement;

b) The outstanding balance has been overdue (except for the case specified in point a of this clause) during the period from January 23, 2020 to the day immediately following 15 days from the date this Circular takes effect.

Credit institutions and foreign bank branches decide to restructure the debt repayment terms for the outstanding balance specified in Clauses 1 and 2 of this Article based on the customer's request and the assessment of the credit institution or foreign bank branch regarding the customer's ability to fully repay the principal and/or interest after the restructuring of debt repayment terms, taking into account the extent of the impact of the COVID-19 pandemic and ensuring the following requirements:

a) Credit institutions and foreign bank branches shall not restructure the debt repayment terms for debts that violate legal regulations.

b) The extended repayment period in the case of extending the repayment period shall not exceed 12 months from the last day of the loan term or financial lease term (the date when the customer must repay the entire principal and interest according to the loan agreement or lease agreement).

Credit institutions and foreign bank branches decide to waive or reduce interest and fees according to internal regulations for the outstanding balance arising from credit provision activities (excluding corporate bond purchase and investment activities) whose obligation to repay principal and/or interest is due for payment during the period from January 23, 2020 to the day immediately following three months from the date

1. Credit institutions and foreign bank branches may maintain the loan classification group assigned according to the regulations of the State Bank of Vietnam at the nearest point in time before January 23, 2020 for the following outstanding debts:

a) The outstanding balance subject to the restructuring of the debt repayment term as stipulated in Article 4 of this Circular;

b) The outstanding balance subject to the waiver or reduction of interest as stipulated in Article 5 of this Circular;

c) The outstanding debt specified in points a and b of this Clause includes the portion of debt that has been restructured in terms of repayment period, interest relief, and adjustment of the loan classification group according to the regulations of the State Bank of Vietnam during the period from January 23, 2020 to the day immediately following fifteen days from the date this Circular takes effect.

3. For the interest receivable of the outstanding debt that has been restructured in terms of repayment period, interest relief, and maintained in the standard classification group (Group 1) as prescribed in this Circular, starting from the restructuring date, credit institutions and foreign bank branches are not required to record income (provisional income) but must monitor the collection outside the balance sheet and record it as income when collected according to the financial regulations applicable to credit institutions and foreign bank branches.

Article 7. Responsibilities of credit institutions and foreign bank branches

1. Credit institutions and foreign bank branches shall decide and be responsible for restructuring the repayment period, interest relief, fee reduction, and maintaining the loan classification group as prescribed in Articles 4, 5, and 6 of this Circular, ensuring strict supervision, safety, prevention, and blocking the abuse of debt restructuring, interest relief, fee reduction, and maintenance of the loan classification group for profit and misrepresentation of credit quality.

2. Issue internal regulations on restructuring the repayment period, interest relief, fee reduction, and maintaining the loan classification group as prescribed in this Circular to implement uniformly throughout the system, including specific provisions on the following:

a) Criteria for determining the outstanding debt of customers affected by the COVID-19 pandemic;

b) Procedures, formalities, division of responsibilities among individuals and departments in implementing debt restructuring, interest relief, fee reduction, and maintaining the loan classification group, ensuring the principle that the individual or department deciding on debt restructuring, interest relief, fee reduction, and maintaining the loan classification group is not the same as the individual or department approving credit, except in cases where credit approval is made by the Board of Directors, Board of Members, General Director/Manager, or parent bank (for foreign bank branches). In cases where credit approval and debt restructuring approval are conducted through a committee mechanism, the Chairman of the Debt Restructuring Approval Committee shall not be the Chairman of the Credit Approval Committee, and at least two-thirds (2/3) of the members of the Debt Restructuring Approval Committee shall not be members of the Credit Approval Committee;

c) Frequency of reviewing and assessing the ability of customers to repay after debt restructuring, interest relief, fee reduction, and maintaining the loan classification group according to the law; monitoring, inspecting, controlling, and supervising the implementation of debt restructuring, interest relief, fee reduction, and the outstanding debt after debt restructuring, interest relief, and maintaining the loan classification group.

3. Within the first ten (10) days of each month, credit institutions (excluding people's credit funds), and foreign bank branches must report to the State Bank of Vietnam (through the Department of Credit Policies for Economic Sectors) on the implementation of debt restructuring, interest relief, and maintaining the loan classification group up to the end of the previous month according to the attached Appendix to this Circular.

4. Within the first ten (10) days of each month, credit institutions that are people's credit funds must report to the State Bank branch in the province or centrally-administered city (hereinafter referred to as the State Bank branch) where their headquarters is located on the implementation of debt restructuring, interest relief, and maintaining the loan classification group up to the end of the previous month according to the attached Appendix to this Circular.

Article 8. Responsibilities of Units under the State Bank of Vietnam

1. Responsibilities of the Credit Department for Economic Sectors

a) Aggregate the reports stipulated in Clause 3 of Article 7 of this Circular and point a of Clause 3 of this Article;

b) Take the lead and coordinate with the Department of Monetary Policy, Banking Supervision Agency, and State Bank branch in advising the Governor of the State Bank of Vietnam on handling issues arising during the implementation of this Circular.

2. Responsibilities of the Inspection and Supervision Agency

Conduct inspections and supervision of credit institutions and foreign bank branches' implementation of this Circular in accordance with their functions and responsibilities.

3. Responsibilities of the State Bank Branches

a) Within the first fifteen (15) days of each month, aggregate the reports of people's credit funds in the area according to Clause 4 of Article 7 of this Circular and send them to the Department of Credit Policies for Economic Sectors for aggregation;

b) Conduct inspections and supervision of credit institutions and foreign bank branches' implementation of this Circular in accordance with their functions and responsibilities.

4. Responsibilities of the National Credit Information Center

The National Credit Information Center shall adjust customer credit information according to this Circular based on the request of credit institutions and foreign bank branches.

Chapter III

IMPLEMENTING PROVISIONS

Article 9. Effective Date

This Circular takes effect from March 13, 2020.

Article 10. Implementation Organization

The Chief of the Office, the Chief of the Banking Inspection and Supervision Agency, the Heads of units under the State Bank of Vietnam, the Governors of State Bank branches, the Chairmen of the Boards of Directors, the Chairmen of the Boards of Members, and the General Directors (Managers) of credit institutions and foreign bank branches are responsible for organizing the implementation of this Circular./.