Decision No. 09/2024/QĐ-TTg stipulates the conditions, documents, and procedures for requesting approval of maximum credit limits exceeding the threshold for credit institutions and foreign bank branches.

Pursuant to …;

Regulations on conditions, documents, and procedures for requesting approval of the maximum credit limit exceeding the threshold of credit institutions,

Circular 09/2024/QĐ-TTg provides regulations on conditions, documents, and procedures for requesting approval of the maximum credit limit exceeding the threshold of credit institutions, foreign bank branches.

foreign bank branches

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

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

Pursuant to the Law on Credit Institutions dated January 18, 2024;

At the proposal of the Governor of the State Bank of Vietnam;

The Prime Minister issues this Decision to provide regulations on conditions, documents, and procedures for requesting approval of the maximum credit limit exceeding the threshold of credit institutions, foreign bank branches for a single customer, a customer and related parties of that customer as stipulated in Clause 1, Clause 2, and Clause 7 Article 136 of the Law on Credit Institutions 2024.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decision provides regulations on conditions, documents, and procedures for requesting approval of the maximum credit limit exceeding the threshold of credit institutions, foreign bank branches for a single customer, a customer and related parties of that customer as stipulated in Clause 1, Clause 2, and Clause 7 Article 136 of the Law on Credit Institutions 2024.

Article 2. Applicability

1. Credit institutions, foreign bank branches (hereinafter referred to as credit institutions) include:

a) Banks: Commercial banks, cooperative banks, joint venture banks, wholly foreign-owned banks;

b) Non-bank credit institutions: Comprehensive financial companies, specialized financial companies;

c) People's Credit Funds;

d) Microfinance organizations;

đ) Foreign bank branches.

2. Borrowers, related organizations and individuals.

Chapter II

SPECIFIC PROVISIONS

Article 3. Conditions for considering approval of credit exceeding the limit

1. Borrowers, projects, plans proposed to be granted credit exceeding the limit must meet the following conditions:

a) The borrower meets the credit granting conditions under the law, has no bad debts at credit institutions in the three consecutive years prior to the time of requesting credit exceeding the limit, and has a debt-to-equity ratio recorded in the borrower's annual financial report at the nearest time point to the time of requesting credit exceeding the limit not exceeding three times;

b) The borrower has capital needs to implement projects, production and business plans aimed at fulfilling national socio-economic tasks falling within one of the following cases:

Implementing projects, plans with significant economic and social importance and urgency to fulfill socio-economic development tasks, serving essential living needs of the people in sectors and fields such as electricity, coal, oil and gas, petroleum products, transportation, public transport, and other fields as directed by the Government and the Prime Minister during each period;

Implementing investment programs and projects decided on the investment orientation by the National Assembly or the Prime Minister;

Investing in priority and encouraged fields according to the Resolution of the National Assembly and the Government on socio-economic development during each period.

c) Projects, plans proposed to be granted credit exceeding the limit have been appraised and evaluated as feasible by the credit institution, the borrower has the ability to repay the loan and the decision to grant credit; comply with current regulations on investment and construction, conform to planning and production and business plans, and have been approved by competent authorities or issued with Investment Registration Certificates.

2. Credit institutions must meet the following conditions:

a) Regarding syndicated lending:

Have proposed and implemented necessary procedures in accordance with the law on syndicated lending for projects, plans proposed to be granted credit exceeding the limit where the syndication capacity of credit institutions does not meet the borrowing requirements of a single customer; or

Have issued invitations for syndication to at least five other credit institutions; published the invitation for syndication on the official website of the credit institution and the website of the State Bank of Vietnam or Banking Magazine or Banking Times for at least 45 days but no other credit institution has joined the syndication.

b) At the time of requesting credit exceeding the limit, the credit institution must meet the requirements on limits and safety ratios in operations as stipulated in the Law on Credit Institutions and guidance documents of the State Bank of Vietnam;

c) Fully implement all requirements related to responsibilities and obligations stated in the application for credit exceeding the limit and previous approvals for credit exceeding the limit;

d) Ensure compliance with the credit limit regulations in Clause 8 Article 136 of the Law on Credit Institutions 2024 when including the proposed credit exceeding the limit.

Article 4. Documents for requesting credit exceeding the limit

1. Documents submitted by credit institutions to the State Bank of Vietnam:

The documents submitted by a credit institution to the State Bank of Vietnam for requesting credit exceeding the limit for a customer, a customer and related parties of that customer include copies issued from the original book or certified true copies or copies stamped with confirmation by the credit institution, including:

a) A document from the credit institution requesting the State Bank of Vietnam to report to the Prime Minister for permission to provide credit exceeding the limit for a customer, a customer and related parties of that customer according to the form attached to this Decision;

b) Documents and materials proving that the credit institution has met the conditions specified in point a, Clause 2, Article 3 of this Decision;

c) An appraisal document of the credit institution regarding the customer, project, and borrowing plan of the customer;

d) A document approving credit provision for the customer by the competent authority of the credit institution making the request;

đ) A document requesting credit at the credit institution from the customer;

e) Documents related to the customer requesting credit, including: Business Registration Certificate or Establishment Certificate or Establishment Decision; audited financial reports of the three consecutive years prior to the time of requesting credit exceeding the limit; other relevant documents (if any);

g) Legal documents related to the project and plan for requesting credit, including:

Investment Registration Certificate or approval document, consent document of the project, plan by the competent authority;

Other relevant documents.

h) Report on the credit relationship situation and the need for credit exceeding the limit for a customer, a customer and related parties of that customer according to Form No. 01 attached to this Decision.

2. Documents submitted by the State Bank of Vietnam to report

a) A document from the credit institution requesting the State Bank of Vietnam to report to the Prime Minister for permission to provide credit exceeding the limit for a customer, a customer and related parties of that customer;

b) Opinion documents of relevant ministries, sectors, and localities;

c) Explanation document of the credit institution, customer (if any);

d) Other relevant documents (if any).

Article 5. Determining the maximum level of credit exceeding the limit

The maximum level of credit exceeding the limit for a customer, a customer and related parties of that customer is determined according to the formula:

Where:

MCTDTĐ is the maximum level of credit exceeding the limit;

TMDN is the total outstanding credit balance at the reporting date;

ĐN is the amount of new credit requested and approved.

In the above formula, TMDN and ĐN are defined as follows:

1. Total outstanding credit balance at the reporting date (TMDN) included in the maximum level of credit exceeding the limit is the total outstanding credit balance of a customer, a customer and related parties of that customer at the credit institution at the reporting date, including:

a) Total outstanding credit balance provided within the permitted limit under the authority of the credit institution;

b) Total outstanding credit balance of credit facilities already approved by the Prime Minister for credit exceeding the limit still valid up to the reporting date.

2. New credit request approved (ĐN):

The amount of new credit calculated into the maximum level of credit is the total amount of credit facilities newly approved by the Prime Minister for credit exceeding the limit.

Article 6. Procedures for reviewing credit limits exceeding the limit

1. Credit institutions shall submit to the State Bank of Vietnam one set of documents in accordance with Clause 1, Article 4 of this Decision directly at the One-Stop Service Center or through postal services.

2. Within fifteen days from the date of receipt of all documents from the credit institution:

In case the documents of the credit institution do not meet the conditions stipulated in Article 3 of this Decision, the State Bank of Vietnam shall issue a written notice to the credit institution specifying the conditions that have not been met.

In case the documents of the credit institution are valid, the State Bank of Vietnam shall issue a written request for opinions from relevant ministries, sectors, and localities on the economic, technical, and legal aspects of the project, plan, and customer requesting credit limits exceeding the limit.

3. Within fifteen days from the date of receipt of the opinion request from the State Bank of Vietnam, ministries, sectors, and localities shall provide their written opinions on matters within their management scope to the State Bank of Vietnam. Based on the opinions of ministries, sectors, and localities, the State Bank of Vietnam shall require the credit institution and customer to explain any related issues (if any).

Within forty days from the date of receipt of opinions from ministries, sectors, and localities or explanations from the credit institution and customer, the State Bank of Vietnam shall examine the reasonableness and validity of the application documents for credit limits exceeding the limit provided by the credit institution.

In case the documents of the credit institution do not meet the conditions stipulated in Article 3 of this Decision, the State Bank of Vietnam shall issue a written notice to the credit institution specifying the conditions that have not been met.

In case the documents of the credit institution are reasonable and valid, the State Bank of Vietnam shall submit to the Prime Minister for consideration and decision regarding the credit institution's request for credit limits exceeding the limit.

Based on the credit institution's request for credit limits exceeding the limit, the State Bank of Vietnam's opinion, and the opinions of ministries, sectors, and localities, the Prime Minister shall decide on the credit institution's request for credit limits exceeding the limit.

Chapter III

IMPLEMENTATION AND EFFECTIVE PROVISIONS

Article 7. Implementation Organization

1. The State Bank of Vietnam

a) Shall be responsible for appraising the documents provided by the credit institution and submitting to the Prime Minister for consideration and decision regarding the credit institution's request for credit limits exceeding the limit, the maximum credit limit exceeding the limit, ensuring compliance with the conditions and procedures stipulated in this Decision;

b) Shall inspect and supervise the implementation of credit limits exceeding the limit by credit institutions;

c) Annually, the State Bank of Vietnam shall compile and report to the Prime Minister the situation of implementing credit limits exceeding the limit approved by the Prime Minister and still in effect.

2. Ministries, sectors, and localities

a) Shall cooperate with the State Bank of Vietnam to provide opinions on the credit institution's request for credit limits exceeding the limit for a specific customer, a customer, and related parties of that customer in accordance with Clause 3, Article 6 of this Decision;

b) Shall be responsible for the contents they have participated in providing opinions on projects, plans, and customers requesting credit limits exceeding the limit and for projects, plans, and customers granted credit limits exceeding the limit within their administrative management scope in accordance with the law.

3. Credit institutions

a) Shall strictly implement the Prime Minister's directives and the contents specified in the State Bank of Vietnam's notification regarding the credit institution's request for credit limits exceeding the limit; may only use the maximum credit limit approved for each specific project and plan proposed and accepted;

b) Shall be liable under the law for the accuracy and completeness of the information and documents provided to the State Bank of Vietnam for compilation and advice to the Prime Minister for consideration and decision on the credit institution's request for credit limits exceeding the limit;

c) Shall be responsible for the appraisal, granting of credit, monitoring, and supervision of the use of borrowed funds and repayment of debt by customers, recovery of loans (principal and interest), and risk handling (if any) in accordance with regulations on credit limits exceeding the limit.

d) Shall closely monitor and ensure that customers use borrowed funds for the intended purpose and periodically report to the State Bank of Vietnam the implementation of credit limits exceeding the limit approved by the Prime Minister monthly according to Form No. 02, 03 attached to this Decision.

Article 8. Transitional Provisions

Cases of credit limits exceeding the limit approved before the effective date of this Decision shall continue to be implemented in accordance with previous approval documents.

Article 9. Effective Date

1. This Decision takes effect from July 1, 2024.

2. This Decision replaces Decision No. 13/2018/QĐ-TTg dated March 6, 2018 of the Prime Minister on conditions, documents, and procedures for approving the maximum credit limit exceeding the limit for credit institutions and foreign bank branches.

Article 10. Responsibility for Implementation

Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of the Board of Members, Chairmen of the Board of Directors, General Managers (Directors) of credit institutions, and related organizations and individuals are responsible for implementing this Decision.