Circular No. 02/2003/TT-NHNN on guiding the handling of loans for repairing, building new fishing vessels, and purchasing fishing gear pursuant to Decision No. 144/2002/QĐ-TTg dated October 24, 2002, and Decision No. 172/2002/QĐ-TTg of the Government Prime Minister.

CIRCULAR

OF THE STATE BANK OF VIETNAM YEAR

Regarding guidance on handling loans for repairing, building new fishing vessels, and purchasing fishing gear pursuant to Decision No. 144/2002/QĐ-TTg dated 24/10/2002 and Decision No. 172/2002/QĐ-TTg of the Prime Minister

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To implement Decision No. 144/2002/QĐ-TTg dated October 24, 2002, concerning certain measures to handle loans for repairing, building new fishing vessels, and purchasing fishing gear from preferential credit sources under Decision No. 985/TTg dated November 20, 1997 of the Prime Minister, and Decision No. 172/2002/QĐ-TTg dated November 28, 2002 amending Clause 2, Article 2 of Decision No. 144/2002/QĐ-TTg dated October 24, 2002 of the Prime Minister, the Governor of the State Bank guides implementation as follows:

1. Scope and Applicability:

Households that have taken medium-term loans to repair, build new fishing vessels, and purchase fishing gear to address the aftermath of Typhoon No. 5 in the provinces and cities of Quảng Ngãi, Bình Định, Phú Yên, Khánh Hòa, Bình Thuận, Bà Rịa - Vũng Tàu, Hồ Chí Minh City, Tiền Giang, Bến Tre, Trà Vinh, Sóc Trăng, Bạc Liêu, Cà Mau, Kiên Giang, in accordance with the provisions of the Prime Minister's Decision No. 985/TTg dated November 20, 1997 on addressing the aftermath of Typhoon No. 5, restoring and developing production in coastal provinces of Southern Vietnam and Central Vietnam, and Decision No. 144/2002/QĐ-TTg dated October 24, 2002 on certain measures to handle loans for repairing, building new fishing vessels, and purchasing fishing gear from preferential credit sources under Decision No. 985/TTg dated November 20, 1997 of the Prime Minister.

For short-term loan balances: State commercial banks shall cooperate with local authorities and relevant departments of the locality where short-term loans were granted to address the aftermath of Typhoon No. 5 to recover and settle overdue debts according to current regulations.

2. Classification and handling of debts:

State commercial banks shall cooperate with functional sectors assigned by the People's Committee of the province or city to classify debts and take specific measures for handling according to the following directions:

a. For households engaged in effective production and business operations, currently repaying their debts, if they have a need for additional capital, state commercial banks shall consider granting further loans according to current commercial lending regulations.

b. For households capable of repaying debts but delaying repayment, no extension or deferral of debt shall be granted; Branches of state commercial banks shall propose specific debt resolution plans based on each case, report, and request the Chairman of the People's Committee of the province or city to direct relevant functional sectors to cooperate with the lending bank to firmly resolve and recover debts according to the law.

c. For households misusing borrowed funds: inspect and prepare records of assets formed from the loaned funds, transfer remaining debt balances to commercial loans, and recover debts according to current regulations.

d. For outstanding debts of households engaged in unprofitable production and business operations, facing difficult living conditions:

Households with skills and the ability to organize production and business operations, but unable to repay loans on time due to objective reasons or lack of capital, shall be considered for debt extension and redefined repayment periods based on the actual situation of production and business operations and financial capacity of each borrowing household, or if there is an effective production and business plan, consider granting further loans at commercial interest rates and current lending regulations, ensuring full recovery of principal and interest when due.

Households encountering unforeseeable risks such as sinking, disappearance of vessels due to natural disasters, foreign capture of vessels without return, etc., and unable to repay bank debts, state commercial banks shall propose specific resolution measures for each case, report to the People's Committee of the province for consolidation and submission to the State Bank, which will consolidate and propose general resolution measures, reporting to the Prime Minister.

3. Interest Rates and Loan Terms:

a. For customers borrowing preferential funds from state commercial banks:

Article 1. Adjust the interest rate on loans and the loan term for organizations and individuals borrowing funds to repair, build new fishing vessels, and purchase fishing gear from preferential credit sources as stipulated in Article 6 of Decision No. 985/TTg dated November 20, 1997 of the Government on addressing the aftermath of Typhoon No. 5, restoring, and developing production in coastal provinces in Southern Vietnam and Central Vietnam as follows:

Apply an annual interest rate of 5.4% for medium-term outstanding debts until 31/12/2002. 01/01/2003.

For overdue debts that have been extended according to the cases specified in Point 2d of this Circular, the repayment period shall not exceed 12 years from the date of borrowing.

b. For the outstanding balance of refinanced capital of State-owned commercial banks:

After consolidating the implementation of the Prime Minister's Decision on handling loans for repairing, building new fishing vessels, and purchasing fishing gear from preferential credit sources as stipulated in Decision No. 985/TTg dated November 20, 1997 on addressing the aftermath of Typhoon No. 5, restoring, and developing production in coastal provinces in Southern Vietnam and Central Vietnam, the State Bank will adjust the outstanding balance of refinanced capital to the level and term.

Regarding interest rates: The State Bank applies an interest rate of 0%/month for the outstanding balance of refinanced capital aimed at mitigating the aftermath of Typhoon No. 5 (equivalent to 50% of state capital used for lending to entities for repairing, building new fishing vessels, and purchasing fishing gear) of State-owned commercial banks remaining until December 31, 2002. The application period starts from 01/01/2003.

4. On transferring ship ownership and loan repayment:

a. In accordance with the directives of the People's Committee Chairmen of provinces and cities, State-owned commercial banks cooperate with local authorities to provide loans to consider and process public auctions of ships to implement the transfer of ship ownership from old owners who borrowed preferential funds to build new or repair fishing vessels but had poor skills, ineffective business operations, frequent losses, inability to repay bank loans, or whose ship owners died without successors to organize business operations.

b. The new ship owner transfers the amount from the auctioned ship's value to the lending bank to pay off the old ship owner's loan (principal and interest). New ship owners may be considered for loans from banks or financial institutions to purchase ships according to current commercial lending regulations.

c. The old ship owner continues to bear the difference between the outstanding bank debt (principal and interest) and the ship's value when transferred. If the old ship owner is unable to repay this debt (including cases where the old ship owner has died without heirs), it shall be handled according to the provisions of Point 2d of this Circular.

- Directing the Department of Information and Communications to advise on management, plan formulation, and implementation after approval by the Provincial People's Committee;

a. For State-owned commercial banks: Direct branches to classify and handle debts, and transfer ship ownership according to the provisions of this Circular based on the directives of the provincial People's Committees.

b. For State Bank Branches in provinces: Coordinate with the People's Committees and urge, inspect State-owned commercial bank branches within their jurisdiction to properly handle loans according to the Prime Minister's Decisions and the State Bank's guidance in this Circular.

c. Report on the implementation of the Prime Minister's Decision on certain measures to handle loans for repairing, building new fishing vessels, and purchasing fishing gear:

After classifying debts, based on customer lists classified according to the cases specified in Point 2 of this Circular, State-owned commercial banks consolidate system-wide and provincial State Bank Branches consolidate area-wise and submit reports to the State Bank (Credit Department) using attached Form 1 and 2.

On the 10th of each month, State-owned commercial banks consolidate system-wide and provincial State Bank Branches consolidate area-wise the results of ship ownership transfers and submit reports to the State Bank (Credit Department) using attached Form 3 and 4.

State-owned commercial banks compile a list of customers affected by force majeure as specified in Point 2d using Model 5; Provincial and city State Bank Branches compile a list of customers affected by force majeure as specified in Point 2d using Model 6 (attached) and submit reports to the State Bank Central Office (Credit Department) before March 31, 2003 for consolidation and submission to the Prime Minister.

Based on the forms and deadlines specified above, State-owned commercial banks instruct subordinate branches; provincial State Bank Branches instruct State-owned commercial bank branches within their jurisdiction to prepare reports to serve the compilation of their own reports.

6. This Circular takes effect from the date 01/01/2003.

7. Heads of units under the State Bank; Chairmen of Management Councils and General Directors of State-owned commercial banks and related units are responsible for implementing this Circular.