Circular No. 10/2015/TT-NHNN guiding the implementation of certain contents of the Government's Decree No. 55/2015/NĐ-CP dated June 9, 2015 on credit policies to serve agricultural and rural development.

CIRCULAR

Guidelines for Implementing Certain Provisions of Decree No. 55/2015/NĐ-CP dated June 9, 2015 of the Government on Credit Policies to Support Agricultural and Rural Development

concerning credit policies to support agricultural and rural development

_________________________

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

Pursuant to the Law on Credit Institutions dated June 16, 2010;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

The Governor of the State Bank of Vietnam issues this Circular amending and supplementing some articles of Circular No. 10/2015/TT-NHNN dated July 22, 2015, issued by the Governor of the State Bank of Vietnam guiding the implementation of certain contents of Decree No. 55/2015/NĐ-CP dated June 9, 2015, of the Government on credit policies to serve the development of agriculture and rural areas.

At the proposal of the Director of the Department of Credit for Economic Sectors;

The Governor of the State Bank of Vietnam issues this Circular guiding the implementation of certain provisions of Decree No. 55/2015/NĐ-CP dated June 9, 2015 of the Government on credit policies to support agricultural and rural development.

Article 1. Scope of Regulation

This Circular stipulates the support policies for funding sources for lending; restructuring of debt repayment terms and new lending; documentation, procedures for writing off debts and debt cancellation; the maximum deduction ratio for collateral assets of agricultural and rural loans under Decree No. 55/2015/NĐ-CP dated June 9, 2015 of the Government on credit policies to support agricultural and rural development (hereinafter referred to as Decree No. 55/2015/NĐ-CP).

Article 2. Applicability

1. Credit institutions, foreign bank branches implementing lending to the agricultural and rural sectors as specified in Clause 1, Article 2 of Decree No. 55/2015/NĐ-CP include commercial banks, cooperative banks, non-bank financial institutions (excluding financial leasing companies and factoring companies), microfinance organizations, people's credit funds, and foreign bank branches in Vietnam (hereinafter collectively referred to as credit institutions).

2. Organizations and individuals eligible to borrow capital as specified in Clause 2, Article 2 of Decree No. 55/2015/NĐ-CP (hereinafter collectively referred to as customers).

Article 3. Support Policies for Funding Sources for Lending to the Agricultural and Rural Sectors

The State Bank of Vietnam (hereinafter referred to as the State Bank) implements support for funding sources for credit institutions lending to the agricultural and rural sectors through the use of monetary policy instruments as currently prescribed, including:

1. Refinancing for credit institutions lending to the agricultural and rural sectors.

2. Reducing the reserve requirement ratio for credit institutions lending to the agricultural and rural sectors.

3. Other support policies.

Article 4. Restructuring Debt Repayment Terms and New Lending

1. Customers as specified in Clause 1, Article 12, Clause 3, Article 14, and Clause 3, Article 15 of Decree No. 55/2015/NĐ-CP experiencing difficulties in repaying debts due to objective and force majeure reasons shall be actively reviewed by credit institutions:

a) Restructuring debt repayment terms and maintaining the original loan classification to align with the customer’s ability to repay. Maintaining the original loan classification when restructuring debt repayment terms can only be implemented once for each loan from the date this Circular takes effect;

b) Providing new loans to restore production and business operations for customers with feasible production and business plans.

2. Based on current regulations and their own financial capacity, credit institutions may consider implementing other supportive measures (including interest rate reductions, grace periods, prioritizing principal repayment over interest) to assist customers in overcoming difficulties and restoring production and business operations.

Article 5. Documentation and Procedures for Writing Off Debts and Debt Cancellation

1. Documentation for requesting debt write-off in cases where customers suffer asset losses due to widespread natural disasters or epidemics, requiring debt write-off as stipulated in Clause 2, Article 12 of Decree No. 55/2015/NĐ-CP includes:

a) A request for debt write-off prepared by the borrowing customer;

b) A notification of the status of widespread natural disasters or epidemics issued by the People's Committee of the province or centrally-administered city (hereinafter referred to as the Provincial People's Committee);

c) A feasible plan for restoring production and business operations during the debt write-off period and a repayment plan after the debt write-off period, prepared by the customer and approved by the lending credit institution;

d) A record of damage caused by widespread natural disasters or epidemics to the borrowing entity, clearly stating the extent of asset loss relative to the total project or business plan capital requested and the amount of borrowed capital lost, confirmed by the lending credit institution and the local authority with jurisdiction, specifically:

(i) For corporate customers or cooperative unions: confirmation by the Provincial People's Committee;

(ii) For individual traders, cooperatives, or farm owners: confirmation by the District People's Committee;

(iii) For individual customers, household customers, or cooperative groups: confirmation by the Commune People's Committee.

đ) A copy of the credit agreement, promissory note, or other debt acknowledgment documents showing the outstanding balance (principal, interest, total) up to the date of the debt write-off request, confirmed by the lending credit institution;

e) Any related documents (if applicable).

2. Documentation for requesting debt write-off in cases where customers are key entities implementing value chain linkages or high-tech agricultural enterprises suffering asset losses due to objective and force majeure reasons, requiring debt write-off as stipulated in Point b, Clause 3, Article 14 and Clause 3, Article 15 of Decree No. 55/2015/NĐ-CP includes:

a) A request for debt write-off prepared by the borrowing customer;

b) A feasible plan for restoring production and business operations during the debt write-off period and a repayment plan after the debt write-off period, prepared by the customer and approved by the lending credit institution;

c) A record of damage caused by objective and force majeure reasons to the borrowing entity, clearly stating the extent of asset loss relative to the total project or business plan capital requested and the amount of borrowed capital lost, confirmed by the lending credit institution and the District People's Committee (for cooperatives) or the Provincial People's Committee (for enterprises or cooperative unions);

d) A copy of the credit agreement, promissory note, or other debt acknowledgment documents showing the outstanding balance (principal, interest, total) up to the date of the debt write-off request, confirmed by the lending credit institution;

đ) Any related documents (if applicable).

3. Documentation for requesting debt cancellation in cases where customers are key entities implementing value chain linkages or high-tech agricultural enterprises that have been supported according to the provisions of this Circular, have had their debts written off but still face difficulties and are unable to repay, requiring debt cancellation as stipulated in Point c, Clause 3, Article 14 and Clause 3, Article 15 of Decree No. 55/2015/NĐ-CP includes:

a) A debt cancellation request form prepared by the borrowing customer, clearly stating the reasons for difficulties and inability to repay the debt after being granted a debt write-off, specifying the amount of debt (principal and interest) proposed for cancellation, confirmed by the People's Committee of the district (for cooperatives) or the People's Committee of the province (for enterprises and cooperative unions);

b) Documentation proving that the customer has been granted a debt write-off by the credit institution, specifying the amount and duration of the write-off;

c) A copy of the credit agreement, promissory note, or other debt acknowledgment documents with the outstanding balance (principal and interest, total amount) up to the date of the debt cancellation request, confirmed by the lending credit institution;

d) A copy of the customer's financial reports for two consecutive years immediately preceding the year of the debt cancellation request, which have been audited, and the customer's financial report up to the date of the debt cancellation request, showing continuous losses and inability to repay the loan;

đ) A document from the credit institution evaluating the customer's inability to repay the debt, clearly stating the reasons and the amount of debt (principal and interest) proposed for cancellation;

e) Any related documents (if applicable).

4. Procedures for requesting debt write-offs and cancellations

a) Preparing the application for debt write-off and cancellation:

(i) In cases where customers suffer property damage due to widespread natural disasters or epidemics, requiring debt write-off according to Clause 2, Article 12 of Decree No. 55/2015/NĐ-CP, after the provincial People's Committee issues a notification on the situation of widespread natural disasters or epidemics, the credit institution shall cooperate with the customer to prepare one set of application documents for debt write-off in accordance with Clause 1 of this Article;

(ii) In cases where customers are key organizations implementing value chain linkages and high-tech agricultural enterprises suffering property damage due to objective and force majeure factors, requiring debt write-off according to Point b, Clause 3, Article 14 and Clause 3, Article 15 of Decree No. 55/2015/NĐ-CP, the credit institution shall cooperate with the customer to prepare one set of application documents for debt write-off in accordance with Clause 2 of this Article;

(iii) In cases where key organizations implementing value chain linkages and high-tech agricultural enterprises have been provided support measures as stipulated in Article 4 of this Circular, have been granted debt write-off but still face difficulties and inability to repay the debt, requiring debt cancellation according to Point c, Clause 3, Article 14 and Clause 3, Article 15 of Decree No. 55/2015/NĐ-CP, the credit institution shall cooperate with the customer to prepare one set of application documents for debt cancellation in accordance with Clause 3 of this Article;

b) The lending credit institution shall compile the application documents and detailed data for debt write-off and cancellation for each branch within the province or city, following Form No. 01 attached to this Circular, and send them directly or through postal service to the State Bank branch in the province or centrally-administered city (hereinafter referred to as the State Bank branch);

c) The State Bank branch shall aggregate the debt write-off and cancellation data of credit institutions within its jurisdiction, report to the provincial People's Committee, and request the provincial People's Committee to assign the local finance agency to cooperate with the State Bank branch to conduct inspections and confirm the detailed application documents and data for debt write-off and cancellation of credit institutions according to Form No. 02 attached to this Circular;

d) The State Bank branch shall take the lead and coordinate with the local finance agency to request the provincial People's Committee:

(i) To confirm the aggregated debt write-off and cancellation data within its jurisdiction according to Form No. 03 attached to this Circular;

(ii) To issue a report to the Prime Minister (also sent to the State Bank and the Ministry of Finance) regarding debt write-off and cancellation within its jurisdiction, accompanied by Form No. 03 attached to this Circular;

đ) Credit institutions shall compile the system-wide data for debt write-off and cancellation and submit it to the State Bank and the Ministry of Finance according to Form No. 04 attached to this Circular;

e) Based on the report from the provincial People's Committee, the State Bank shall take the lead and coordinate with the Ministry of Finance to review and submit to the Prime Minister for decision. If necessary, before submitting to the Prime Minister, the State Bank shall take the lead and coordinate with the Ministry of Finance to re-examine the application documents and data for debt write-off and cancellation at credit institutions;

g) Based on the Prime Minister's directives, the State Bank shall issue a notification to credit institutions, also sending it to the Ministry of Planning and Investment, the Ministry of Finance, the provincial People's Committees, and the State Bank branches in the relevant localities;

h) Credit institutions shall decide to implement debt write-off and cancellation for customers based on the Prime Minister's decision and the State Bank's notification.

Article 6. The maximum deduction rate for collateral assets as stipulated in point b Clause 1 Article 13 Decree No. 55/2015/NĐ-CP

1. The deduction rate for collateral assets of loans in the agricultural and rural sectors shall be at most 100% compared to the maximum deduction rate for each type of collateral asset corresponding to loans in other sectors.

2. Credit institutions shall determine the deduction rate for each type of collateral asset of the loan based on their assessment of the recovery ability when disposing of such collateral assets but shall not exceed the maximum deduction rate prescribed in Clause 1 of this Article.

Article 7. Responsibilities of credit institutions

1. To implement the provisions of Article 23 of Decree No. 55/2015/NĐ-CP.

2. To cooperate with customers in preparing applications for debt write-off and waiver; to collect and be responsible for reviewing and checking the validity and legality of the detailed data in the application for debt write-off and waiver according to this Circular.

3. To proactively coordinate with local authorities at all levels and political-social organizations in disseminating information about credit policies serving the development of agriculture and rural areas as prescribed in Decree No. 55/2015/NĐ-CP and this Circular.

4. To separately monitor loan files for the agricultural and rural sectors.

5. To report quarterly (no later than the 15th day of the first month of the following quarter) to the State Bank of Vietnam (Department of Credit for Economic Sectors) on the results of credit activities for the agricultural and rural sectors according to Form 05 attached to this Circular.

Article 8. Responsibilities of units under the State Bank

1. Department of Credit to Economic Sectors

a) To advise the Governor of the State Bank of Vietnam on coordinating with the Ministry of Finance to examine applications, compile data on debt write-offs and waivers due to objective reasons, force majeure, and widespread natural disasters and epidemics as prescribed in this Circular;

b) To take the lead and coordinate with relevant units in advising the Governor of the State Bank of Vietnam on handling issues arising during the implementation of this Circular.

2. Department of Monetary Policy

a) To take the lead and coordinate with relevant units in advising the Governor of the State Bank of Vietnam on issuing guiding documents to implement support policies for credit institutions lending to the agricultural and rural sectors through the use of monetary policy instruments;

b) Coordinate with the Department of Credit Policies for Economic Sectors and related units to address issues arising during the implementation of this Circular.

3. Banking Inspection and Supervision Authority

a) To advise the Governor of the State Bank of Vietnam on formulating policies to encourage credit institutions to open branches and service offices in rural areas (especially remote, mountainous, and particularly difficult regions) based on credit institutions meeting current legal requirements and guidance from the State Bank of Vietnam on expanding the network of credit institutions during specific periods;

b) To inspect and supervise lending activities for the agricultural and rural sectors in accordance with the law;

To coordinate with the Department of Credit for Economic Sectors and relevant units to handle issues arising during the implementation of this Circular.

4. Branches of the State Bank of Vietnam in provinces and centrally-administered cities

a) To monitor and coordinate with relevant units in handling issues arising during the implementation of credit policies serving the development of agriculture and rural areas within their jurisdiction;

b) To take the lead in examining, confirming, and compiling data on applications for debt write-offs and waivers from credit institutions to advise provincial People's Committees to report to the Prime Minister, the State Bank of Vietnam, and the Ministry of Finance;

c) To conduct or coordinate in conducting inspection and supervision work on lending activities for the agricultural and rural sectors as prescribed;

d) To report quarterly (no later than the 15th day of the first month of the following quarter) to the State Bank of Vietnam (Department of Credit for Economic Sectors) on the results of credit activities for the agricultural and rural sectors according to Form 06 attached to this Circular.

Article 9. Implementation Provisions

1. This Circular takes effect from July 25, 2015.

2. This Circular replaces Circular No. 14/2010/TT-NHNN dated June 14, 2010, of the State Bank of Vietnam detailing the implementation of Decree No. 41/2010/NĐ-CP dated April 12, 2010, of the Government on credit policies serving the development of agriculture and rural areas.

3. The Director of the Office, Heads of the Department of Credit for Economic Sectors, Heads of relevant units under the State Bank of Vietnam, Governors of the State Bank of Vietnam branches in provinces and centrally-administered cities, Chairmen of Management Boards, Chairmen of Councils of Members, General Directors (Directors) of credit institutions are responsible for organizing the implementation of this Circular./.