Circular No. 07/2011/TT-NHNN on foreign currency loans by credit institutions to resident borrowers

CIRCULAR

Regulations on foreign currency loans by credit institutions for resident borrowers

 ____________________________________

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;

Implementing Resolution No. 11/NQ-CP dated February 24, 2011 of the Government on key measures to focus on curbing inflation, stabilizing macroeconomic conditions, and ensuring social welfare;

The State Bank of Vietnam stipulates foreign currency loans by credit institutions and foreign bank branches (hereinafter referred to as credit institutions) for resident borrowers as follows:

Article 1. Credit institutions permitted to conduct foreign exchange operations shall consider and decide to grant foreign currency loans to resident customers for the following capital needs:

1. Short-term, medium-term, and long-term loans to pay for imported goods and services abroad where the borrowing customer has foreign currency to repay the loan from production and business revenue, purchased from the lending credit institution or another credit institution committed in writing.

2. Short-term loans to implement production and business plans for exporting goods through Vietnamese border gates where the borrowing customer has sufficient foreign currency to repay the loan from export revenue; in case the borrowing customer takes out a foreign currency loan for this capital need to be used domestically, then the borrowing customer must sell the borrowed foreign currency to the lending credit institution through spot foreign exchange transactions.

3. Other foreign currency capital needs outside those specified in Clause 1 and Clause 2 of this Article must be approved in writing by the Governor of the State Bank of Vietnam.

Article 2

1. Credit institutions granting foreign currency loans in accordance with this Circular shall comply with loan regulations, foreign exchange management laws, safety ratio requirements in credit institution business operations, and other relevant laws.

2. Credit institutions shall report to the State Bank of Vietnam on foreign currency loans in accordance with the annex attached to this Circular.

Article 3. Implementation

1. This Circular takes effect from May 9, 2011, and replaces the following documents: Decision No. 09/2008/QĐ-NHNN dated April 10, 2008 of the Governor of the State Bank of Vietnam on foreign currency loans by credit institutions for resident borrowers, Circular No. 25/2009/TT-NHNN dated December 15, 2009 supplementing Article 1 of Decision No. 09/2008/QĐ-NHNN dated April 10, 2008.

2. For credit contracts signed before the effective date of this Circular, credit institutions and borrowing customers shall perform according to the contents of the signed credit contracts in compliance with applicable laws at the time of signing such contracts.

3. The Director of the Office, the Director 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 Management Boards and General Directors (Directors) of credit institutions, other organizations, and related individuals are responsible for implementing this Circular./.