Circular No. 11/2015/TT-NHNN guiding the handling of loans of agricultural and forestry companies at credit institutions when restructuring and modernizing in accordance with Government Decree No. 118/2014/NĐ-CP dated December 17, 2014.

CIRCULAR

Guidelines for handling loans of agricultural and forestry companies at credit institutions when restructuring and reforming pursuant to N |||Decree No. 118/2014/NĐ-CP dated December 17, 2014 of the Government; Cof the GovernmentDeputy ministers of ministerial-level agencies,

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 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 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Pursuant to Decree No. 118/2014/NĐ-CP dated December 17, 2014 of the Government on restructuring, reforming, developing, and enhancing the efficiency of operations of agricultural and forestry companies;

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 handling of loans of agricultural and forestry companies at credit institutions when restructuring and reforming pursuant to Decree No. 118/2014/NĐ-CP dated December 17, 2014 of the Government.

Article 1. Scope of Regulation and Applicability

2. Applicability:

This Circular guides the handling of loans of agricultural and forestry companies at credit institutions when restructuring and reforming pursuant to Decree No. 118/2014/NĐ-CP dated December 17, 2014 of the Government on restructuring, reforming, developing, and enhancing the efficiency of operations of agricultural and forestry companies (hereinafter referred to as Decree No. 118/2014/NĐ-CP).

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

a) Agricultural and forestry state-owned limited liability companies holding 100% of the charter capital as stipulated in Clause 2, Article 1 of Decree No. 118/2014/NĐ-CP; state-owned agricultural and forestry enterprises holding 100% of the charter capital as stipulated in Clause 1, Article 26 of Decree No. 118/2014/NĐ-CP (hereinafter referred to as agricultural and forestry companies);

b) Credit institutions operating under the Law on Credit Institutions No. 47/2010/QH12 dated June 17, 2010;

c) Organizations, households, and individuals related to the handling of loans of agricultural and forestry companies.

Article 2. Interpretation of Terms

In this Circular, the following terms are understood as follows:

1. "Time of transition" means the time of closing the accounting books and preparing financial statements at the end of the nearest quarter from the date the restructuring and reform plan of the agricultural and forestry company was approved by the competent authority.

2. "Restructuring and reform plan of the agricultural and forestry company" means the restructuring and reform plan of the agricultural and forestry company in the forms of continuing to maintain, consolidate, and develop under the form where the State holds 100% of the charter capital, converting into a joint-stock company, converting into a limited liability company with two or more members, dissolving the agricultural and forestry company and converting it into a forest protection management board under the mechanism of a public service unit with income.

3. "Loan" includes all old debts arising from lending, discounting, financial leasing, factoring, bank guarantees, and other credit activities up to the time when the agricultural and forestry company implements restructuring and reform according to the approved restructuring and reform plan of the agricultural and forestry company.

4. "Handling of loan" includes: restructuring the repayment period, waiving or reducing interest, prioritizing the recovery of principal before interest, selling debt, transferring debt, converting debt into equity contribution or shares, and other measures as prescribed in this Circular and other relevant laws.

Article 3. Principles for Handling Loans

1. The loans of agricultural and forestry companies from credit institutions must be preserved during the process of restructuring and reforming as prescribed in Decree No. 118/2014/NĐ-CP.

2. Before implementing restructuring and reforming according to the approved restructuring and reform plan of the agricultural and forestry company, the agricultural and forestry company must mobilize legitimate sources of funds to repay the loans to credit institutions or negotiate with credit institutions about the plan for handling the loans.

3. The time for handling the loan is the time of transition or another time after the time of transition agreed between the credit institution and the agricultural and forestry company.

4. Credit institutions shall handle the loans of agricultural and forestry companies in accordance with this Circular and other relevant laws.

Article 4. Verification and Confirmation of Loan Debts

After the agricultural and forestry company has received the decision from the competent authority regarding the implementation of restructuring and renovation in accordance with Decree No. 118/2014/ND-CP, the credit organization and the agricultural and forestry company must immediately carry out the verification and confirmation of loan debts that need to be handled and the collateral for such loan debts based on the credit contract, documentation on collateral for borrowed funds, debt acknowledgment letters, and other related documents.

Article 5. Handling of Loan Debts

1. For agricultural and forestry companies that continue to maintain, consolidate, develop, and restructure in accordance with Article 4, Clause 1, and Clause 2 of Article 8 of Decree No. 118/2014/ND-CP:

a) Based on the Restructuring and Renovation Plan of the agricultural and forestry company approved by the competent authority, the agricultural and forestry company shall proactively develop a feasible repayment plan for loan debts to request the credit organization to consider and decide on restructuring the repayment period, waiving or reducing interest rates, or prioritizing the collection of principal before interest.

b) In cases where agreement cannot be reached on the handling of loan debts as stipulated in point a of Clause 1 of this Article, the credit organization shall implement measures to handle the loan debts in accordance with current laws.

2. For agricultural and forestry companies that are converted into joint-stock companies, limited liability companies with two or more members, or forest protection management boards in accordance with Articles 5, 6, Clause 3 of Article 8, Articles 9, and 10 of Decree No. 118/2014/ND-CP:

a) Prior to implementing the conversion according to the Restructuring and Renovation Plan of the agricultural and forestry company approved by the competent authority, the agricultural and forestry company must fully settle all loan debts to the credit organization or negotiate with the credit organization about the transfer plan for loan debts from the agricultural and forestry company (the transferring party) to the forest protection management board, joint-stock company, or limited liability company with two or more members established through the restructuring and renovation of the agricultural and forestry company (the receiving party). The transfer plan for loan debts must be documented in writing, specifying the transfer date, the value of transferred loans, collateral, rights, and obligations of the parties after the transfer of loan debts.

b) Transfer of Loan Debts

(i) The transfer of loan debts is evidenced in writing based on the following documents:

+ Legal documents of the forest protection management board, joint-stock company, or limited liability company with two or more members converted from the agricultural and forestry company including the document from the competent authority regarding the change in business ownership form; Business Registration Certificate or Enterprise Registration Certificate; Decision on appointment of management positions and other relevant documents;

+ Credit contract; Debt acknowledgment letter of the agricultural and forestry company at the credit organization;

+ Minutes of verification and confirmation of loan debts;

+ Documentation on collateral for loan debts;

+ Other relevant documents.

(ii) The credit organization and the forest protection management board, joint-stock company, or limited liability company with two or more members sign a credit contract (or an appendix to the credit contract), debt acknowledgment letter for the transferred loan debts. The loan term, repayment period, interest rate, guarantee mechanism, and repayment method shall be implemented according to the agreement between the credit organization and the forest protection management board, joint-stock company, or limited liability company with two or more members in compliance with current laws.

(iii) The credit organization considers and decides on restructuring the repayment period, waiving or reducing interest rates, and prioritizing the collection of principal before interest for the forest protection management board, joint-stock company, or limited liability company with two or more members in accordance with current laws.

(iv) The forest protection management board, joint-stock company, or limited liability company with two or more members shall be responsible for fulfilling their obligations related to the transferred loan debts.

c) Conversion of Loan Debts into Share Capital Contributions

The credit organization agrees with the agricultural and forestry company to convert loan debts into share capital contributions (for agricultural and forestry companies undergoing shareholding transformation) or capital contributions (for agricultural and forestry companies converting into limited liability companies with two or more members). The contribution of capital and purchase of shares by the credit organization shall be carried out in accordance with the Law on Credit Institutions and regulations of the State Bank of Vietnam.

3. For agricultural and forestry companies being dissolved in accordance with Articles 7 and 11 of Decree No. 118/2014/ND-CP:

a) The agricultural and forestry company must fully settle all loan debts to the credit organization before dissolution;

b) In cases where the agricultural and forestry company being dissolved is unable to pay off its loan debts and has no remaining assets for disposal, the credit organization shall report in writing to the State Bank of Vietnam so that the State Bank of Vietnam can take the lead and coordinate with the Ministry of Finance to submit to the Prime Minister for consideration and handling of each specific case.

4. The credit organization shall cooperate with the agricultural and forestry company to handle loan debts through selling them to organizations or individuals with the function of purchasing debts in accordance with current regulations.

Article 6. Handling of loan debts for cases where agricultural and forestry companies transfer land to local management and assets on the land are formed from credit organization loans.

In cases where agricultural and forestry companies transfer land to local management according to Article 15 of Decree No. 118/2014/NĐ-CP, and assets on the land are formed from credit organization loans, the handling of loan debts shall be carried out as follows:

1. The agricultural and forestry company and the credit organization shall determine the value of the asset formed from part or all of the credit organization loan (loan-formed asset) at the time of transfer to serve as the basis for determining the corresponding loan debt (principal, interest) based on the value of the loan-formed asset being transferred. The determination of the value of the loan-formed asset shall be conducted in accordance with current laws.

2. The transfer of loan-formed assets and loan debts must be recorded in a protocol signed by all parties involved: the agricultural and forestry company; organizations, households, individuals, and the credit organization. The protocol must clearly state the type of asset, the value of the loan-formed asset, the corresponding loan debt (principal, interest), commitments, and responsibilities of the related parties. If the value of the transferred loan debt to organizations, households, or individuals is less than the loan debt of the agricultural and forestry company at the credit organization, the agricultural and forestry company has the obligation to continue paying the difference to the credit organization.

3. The credit organization and the transferring organizations, households, or individuals shall sign a credit contract for the transferred loan debt. The loan term, repayment period, loan interest rate, guarantee mechanism, and repayment method shall be implemented according to the agreement between the parties in compliance with current laws.

Article 7. Classification of Debts and Risk Management

1. Credit organizations may consider and decide on restructuring the repayment schedule and maintaining the original debt classification before the restructuring for loan debts arising prior to the reorganization and modernization of agricultural and forestry companies under Decree No. 118/2014/NĐ-CP.

2. Restructuring the repayment schedule and maintaining the original debt classification for loan debts specified in Clause 1 of this Article can only be implemented once and the restructuring period is two years from the date the agricultural and forestry company continues to maintain, consolidate, develop, and restructure according to Article 4, Clause 1, Clause 2 of Article 8 of Decree No. 118/2014/NĐ-CP or is converted into a forest protection management board, joint-stock company, or limited liability company with two or more members according to the decision of the competent authority.

3. Credit organizations must regularly review and assess the ability of agricultural and forestry companies to repay debts after the loan debt repayment schedule has been restructured and the original debt classification maintained. If the agricultural and forestry company still cannot repay the loan debt when it becomes due after restructuring the repayment schedule and maintaining the original debt classification as stipulated in this Circular, the credit organization shall classify and handle the loan debt according to the provisions of the law on asset classification, provisioning levels, provisioning methods for risk, and the use of provisions to address risks in the operations of credit organizations.

4. Except for the case provided for in Clause 1 of this Article, the classification of debts, provisioning for risk, and the use of provisions to address risks for agricultural and forestry companies, forest protection management boards, joint-stock companies, and limited liability companies with two or more members established through the reorganization and modernization of agricultural and forestry companies shall be carried out in accordance with the provisions of the law on asset classification, provisioning levels, provisioning methods for risk, and the use of provisions to address risks in the operations of credit organizations.

Article 8. Responsibilities of agricultural and forestry companies and organizations, households, and individuals receiving transferred loans

Clause 1. Agricultural and forestry companies shall provide complete, truthful information and bear legal responsibility for the accuracy of the information and documents provided to credit institutions for verification, confirmation, and handling of loans during restructuring and modernization processes; they shall fulfill their debt repayment obligations to credit institutions.

Clause 2. Management boards of protective forests, joint-stock companies, limited liability companies with two or more shareholders, and organizations, households, and individuals receiving transferred loans shall fulfill their debt repayment obligations to credit institutions.

Article 9. Responsibilities of credit organizations

Clause 1. Re-examine agricultural and forestry companies subject to restructuring and modernization to handle loans according to this Circular and current regulations.

Clause 2. Monitor and manage separately loan disbursements to agricultural and forestry companies before and after restructuring and modernization.

Clause 3. Proactively review lists of agricultural and forestry companies subject to restructuring and modernization under Decree No. 118/2014/NĐ-CP to coordinate in handling loans according to regulations.

Clause 4. Report to the State Bank of Vietnam (Department of Credit Policies for Economic Sectors) on the results of handling debts for agricultural and forestry companies no later than the tenth day of the first month of each quarter starting from Quarter 4 of 2015, according to the annex attached to this Circular.

Article 10. Responsibilities of units under the State Bank of Vietnam

1. Department of Credit for Economic Sectors:

a) Take the lead and coordinate with the Monetary Policy Department, Banking Inspection and Supervision Agency in advising the Governor of the State Bank of Vietnam on issues arising during the implementation of this Circular;

b) Regularly compile and report to the Governor of the State Bank of Vietnam on the results of handling debts for agricultural and forestry companies according to this Circular.

2. Department of Monetary Policy:

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) Conduct inspections and supervision of credit institutions' debt handling of agricultural and forestry companies according to this Circular;

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

Clause 4. Branches of the State Bank of Vietnam in provinces and centrally-administered cities shall monitor and coordinate in addressing issues arising during the implementation of this Circular.

Article 11. Implementation Provisions

Clause 1. This Circular takes effect from October 5, 2015, and replaces Circular No. 02/2005/TT-NHNN dated April 11, 2005, of the State Bank of Vietnam on guiding the implementation of debt transfer between organizations, households, and individuals receiving transferred assets formed with borrowed funds from credit institutions during restructuring and modernization and the development of state-owned agricultural and forestry enterprises.

Clause 2. For loans of agricultural and forestry companies undergoing restructuring and modernization under Decree No. 118/2014/NĐ-CP that have been handled by credit institutions before this Circular takes effect, continue to implement according to previously signed agreements between credit institutions and agricultural and forestry companies. Any amendments to these agreements can only be made if the amended content complies with this Circular.

The Director of the Office, Heads of the Department of Credit Policies for Economic Sectors, and Heads of units under the State Bank of Vietnam; Governors of State Bank branches in provinces and centrally-administered cities; Chairpersons of the Board of Members, Chairpersons of the Board of Directors, and General Managers (Directors) of credit institutions, relevant organizations, and individuals are responsible for implementing this Circular.