Circular No. 03/2012/TT-NHNN on foreign currency loans by credit institutions and branches of foreign banks for resident borrowers

CIRCULAR

Regulations on foreign currency loans by credit institutions and branches of foreign banks

The Governor of the State Bank of Vietnam promulgates this Circular amending and supplementing certain provisions of Circular No. 24/2015/TT-NHNN dated December 8, 2015 of the Governor of the State Bank of Vietnam on foreign currency loans granted by credit institutions and branches of foreign banks to resident borrowers (hereinafter referred to as Circular No. 24/2015/TT-NHNN).

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Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Organizations No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Foreign Exchange Ordinance No. 28/2005/PL-UBTVQH11 dated December 13, 2005;

Pursuant to Decree No. 160/2006/NĐ-CP dated December 28, 2006 of the Government detailing the implementation of the Foreign Exchange Ordinance;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Considering the proposal of the Head of the Monetary Policy Department;

The Governor of the State Bank of Vietnam issues this Circular regulating foreign currency loans by credit institutions and branches of foreign banks for resident borrowers.

Article 1. Credit institutions and branches of foreign banks permitted to conduct foreign exchange operations may consider and decide to grant short-term, medium-term, and long-term foreign currency loans to resident customers for the purpose of paying abroad for imported goods and services when the borrowing customer has sufficient foreign currency from production and business revenue to repay the loan.

Article 2. Credit institutions and branches of foreign banks permitted to conduct foreign exchange operations may consider and decide to grant foreign currency loans to resident customers for capital requirements other than those specified in Article 1 of this Circular in the following cases:

1. Granting short-term loans to pay abroad for imported oil products when approved in writing by the State Bank of Vietnam.

2. Granting loans for capital requirements that are approved in writing by the State Bank of Vietnam for each specific case upon the request of credit institutions and branches of foreign banks, based on:

a) The need for foreign currency loans by customers to implement projects and business plans for goods in priority sectors according to government policies.

b) Credit institutions and branches of foreign banks have reviewed and ensured that the projects and business plans of customers are feasible and effective, and the borrowing customers meet all conditions for loans as stipulated by laws on lending activities and have the ability to repay the principal and interest on time.

Article 3

1. Credit institutions and branches of foreign banks granting foreign currency loans in accordance with this Circular shall comply with the provisions of laws on lending, foreign exchange management, safety ratios in credit institution operations, and other relevant laws.

2. Monthly, credit institutions and branches of foreign banks shall report to the State Bank of Vietnam on foreign currency loans in accordance with the annex attached to this Circular.

Article 4

1. This Circular takes effect from May 2, 2012, and replaces Circular No. 07/2011/TT-NHNN dated March 24, 2011 of the Governor of the State Bank of Vietnam on foreign currency loans by credit institutions to resident borrowers.

2. For credit agreements concluded before the date this Circular takes effect, credit institutions and branches of foreign banks and borrowing customers shall perform in accordance with the contents of the signed credit agreement consistent with the laws in force at the time of signing the agreement or amend and supplement the credit agreement in compliance with this Circular.

3. The Heads of the Office, the Heads of the Monetary Policy Department, and the Heads of units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam branches in provinces and centrally-administered cities; Chairmen of the Board of Directors, Chairmen of the Board of Members, and General Managers (Directors) of credit institutions and branches of foreign banks, other organizations, and related individuals are responsible for implementing this Circular./.