Circular No. 06/2009/TT-NHNN provides detailed regulations on preferential interest rate loan policies under the Program to Support Poor Districts as stipulated in Resolution No. 30a/2008/NQ-CP dated December 27, 2008 of the Government.

CIRCULAR

detailing the interest rate preferential loan policy under the Program

to support poor districts as stipulated in Resolution No. 30a/2008/NQ-CP

dated December 27, 2008 of the Government

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;
Pursuant to Resolution No. 30a/2008/NQ-CP dated December 27, 2008 of the Government on the program to reduce poverty quickly and sustainably in 61 poor districts;
After reaching consensus with the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Agriculture and Rural Development, the Ministry of Industry and Trade, the Ministry of Labor, Invalids and Social Affairs, the State Bank of Vietnam (hereinafter referred to as SBV), this Circular guides certain preferential lending policies for credit organizations towards customers in the 61 poor districts according to Resolution No. 30a/2008/NQ-CP dated December 27, 2008 of the Government as follows:

Article 1. Scope of regulation and applicable subjects

1. Scope of Regulation: This Circular guides the implementation of certain preferential credit policies to support the planting of production forests, the development of agricultural production, investment in processing, preservation, and consumption of agricultural products, the development of animal husbandry, aquaculture, and small-scale handicraft industries according to Resolution No. 30a/2008/NQ-CP dated December 27, 2008 of the Government on the Program to Reduce Poverty Quickly and Sustainably in 61 Poor Districts.

2. This Circular applies to loans in Vietnamese Dong (VND) made to customers in the 61 poor districts from state commercial banks and the Vietnam Social Policy Bank. For loans that fall within the scope of interest rate subsidies but are not repaid on time and are transferred to overdue status, such loans will not be eligible for interest rate subsidies from the date they are transferred to overdue status.

3. The customer groups entitled to the interest rate preferential policies stipulated in this Circular include: poor households, households engaged in production and business activities, enterprises, cooperatives, and farmstead owners investing in production and business activities in the 61 poor districts (attached list to this Circular).

4. Credit institutions (CIs) implementing preferential interest rate loan policies for customers in the 61 poor districts include: the Vietnam Agricultural and Rural Development Bank, the Vietnam Investment and Development Bank, the Mekong Delta Development Bank, the Vietnam Industrial and Commercial Bank, and the Vietnam Joint Stock Commercial Bank for Foreign Trade (collectively referred to as state commercial banks) and the Vietnam Social Policy Bank.

5. State commercial banks shall provide loans to customer groups entitled to preferential interest rate policies as prescribed in Resolution No. 30a/2008/NQ-CP dated December 27, 2008 of the Government at the lowest applicable interest rates for loans during the same period.

Article 2. Preferential interest rate loan policy for customers borrowing from state commercial banks

1. Poor households borrowing from state commercial banks for planting production forests shall receive a 50% interest subsidy from the State budget;

2. Customer groups specified in Clause 3 of Article 1 of this Circular when borrowing from state commercial banks for developing agricultural production, investing in processing facilities, preserving, and consuming agricultural products shall receive a 50% interest subsidy from the State budget;

3. Processing facilities in agriculture, forestry, and fisheries belonging to enterprises, cooperatives, and farmsteads investing in production and business operations in the 61 poor districts shall receive a 50% interest subsidy from the State budget when borrowing from state commercial banks.

Article 3. Preferential interest rate loan policy for poor households at the Vietnam Social Policy Bank

1. Poor households in the 61 poor districts may borrow from the Vietnam Social Policy Bank in accordance with Decree No. 78/2002/ND-CP dated October 4, 2002 on credit for the poor and other policy beneficiaries, and related documents issued by the Government, the Prime Minister, and relevant Ministries and Departments.

a) They can borrow preferentially once up to VND 5 million per household with a 0% interest rate for a two-year period to purchase livestock (cattle, buffalo, goats) or poultry breeding or aquatic seedlings;

b) For poor households without conditions for livestock breeding but with a need to develop small-scale handicraft industries to generate income, they can borrow preferentially once with a maximum amount of VND 5 million at a 0% interest rate for a two-year period.

Article 4. Conditions for applying support policies

1. For poor households:

Poor households shall be eligible to apply for support policies as stipulated in this Circular when they meet the following conditions:

a) They are families residing and having permanent residence registration at the communes and towns within the 61 poor districts and must be included in the list of poor households decided by the Chairman of the People's Committee of the commune based on the poverty standard announced by the Ministry of Labor, Invalids and Social Affairs, and approved by the Savings and Loan Group with a plan for using capital, confirmed by the People's Committee of the commune;

b) The head of household (or authorized person) has full capacity for civil acts and represents the family in credit relations with banks.

2. For other customer groups:

Households engaged in production and business; enterprises; cooperatives; farm owners shall be eligible to apply for interest subsidy policies when borrowing from state-owned commercial banks according to this Circular when they meet the following conditions:

a) Investing in developing production and business activities in the 61 poor districts;

b) Meeting the loan conditions as prescribed in the Credit Regulation for Customers issued together with Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001 by the Governor of the State Bank of Vietnam and Decisions No. 127/2005/QĐ-NHNN dated February 3, 2005, No. 783/2005/QĐ-NHNN dated May 31, 2005 amending and supplementing certain articles of the Credit Regulation for Customers issued together with Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001, and approved by state-owned commercial banks for lending.

1. For customers receiving loans with support in poor districts:

a) Using borrowed funds for their intended purpose; if the funds are misused, the supported amount will be recovered and dealt with according to current laws;

b) Adhering strictly to the procedures and formalities set out by state-owned commercial banks and the Social Policy Bank regarding the implementation of the lending support policy for poor districts.

2. For the Social Policy Bank:

a) Implementing preferential lending as prescribed in this Circular for poor households meeting the support conditions. The Social Policy Bank shall not refuse to apply the support policy for poor households meeting the support conditions in the 61 poor districts;

b) Conducting strict checks before, during, and after lending to ensure that the support is implemented according to regulations. In case of discovering customers misusing the supported funds, the Social Policy Bank shall recover the supported amount and deal with violations according to current laws;

c) Reporting monthly (no later than the 10th day of the following month) to the State Bank of Vietnam (Credit Department) on the results of implementing the lending policy for poor districts as specified in Form No. 02 of this Circular.

3. For state-owned commercial banks:

a) Applying normal lending mechanisms for loan needs falling under the interest subsidy category as prescribed in this Circular;

b) Providing interest subsidies strictly according to regulations, without refusing interest subsidies to customers meeting the interest subsidy conditions as prescribed in this Circular; ensuring transparency and accountability for the amount of interest subsidies provided and being responsible under the law for cases of providing or refusing interest subsidies contrary to legal provisions;

c) Deducting the interest subsidy amount directly from the customer's account when the customer pays the bank's interest on the loan and requesting the customer to confirm the bank's interest subsidy;

d) Summarizing the interest subsidy data for the 61 poor districts across the entire system and requesting the Ministry of Finance to provide interest rate compensation to the bank. The Chairman of the Board of Directors and General Director of state-owned commercial banks shall be responsible for the validity and accuracy of the data requested from the state budget for compensation;

đ) Procedures for requesting interest rate compensation shall be carried out in accordance with the regulations of the Ministry of Finance;

e) State-owned commercial banks shall conduct strict checks before, during, and after lending to ensure that interest subsidies are provided according to regulations. In case of discovering customers misusing the subsidized funds, the amount already subsidized shall be recovered and dealt with according to current laws;

g) Reporting monthly (no later than the 10th day of the following month) to the State Bank of Vietnam (Credit Department) on the results of implementing the interest subsidy policy for poor districts as specified in Form 01 of this Circular.

a) Monitoring the interest subsidy situation for the 61 poor districts as stipulated in this Circular:

- Monthly (no later than the 10th day of the following month), the State Bank branches in provinces and centrally-administered cities with poor districts shall be responsible for monitoring, urging, and compiling reports on preferential interest rate lending situations in their areas according to Form 03 of this Circular;

- The Credit Department shall compile and report to the Governor of the State Bank on the preferential interest rate lending situation upon request;

b) Relevant units of the State Bank shall cooperate with the Ministry of Finance in inspecting, supervising, and handling issues arising during the implementation of the preferential lending policy for poor districts by state-owned commercial banks and the Social Policy Bank as prescribed in this Circular;

c) Reporting to the Prime Minister on the implementation and results of Resolution 30a/2008/NQ-CP upon request.

1. This Circular takes effect from the date of signature.

2. The Head of the Office, the Director of the Credit Department, and the heads of units under the State Bank of Vietnam, the Chairmen of the Boards of Directors and General Directors of state-owned commercial banks and the Social Policy Bank are responsible for enforcing this Circular./.