Circular No. 12/2009/TT-NHNN guiding certain supplementary provisions for loans with guarantees provided by the Vietnam Development Bank under the Guarantee Regulation for Enterprises Borrowing from Commercial Banks issued pursuant to Decision No. 14/2009/QĐ-TTg and Decision No. 60/2009/QĐ-TTg of the Government.

CIRCULAR

Guidelines for certain contents in loans with guarantees provided by the Vietnam Development Bank under the Guarantee Regulation for Enterprises Borrowing from Commercial Banks issued pursuant to Decision No. 14/2009/QĐ-TTg and Decision No. 60/2009/QĐ-TTg of the Government.

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Pursuant to the Law on the State Bank of Vietnam 1997 and the Law Amending and Supplementing Certain Provisions of the Law on the State Bank of Vietnam 2003;

Pursuant to the Law on Credit Institutions 1997 and the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions 2004;

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. 30/2008/NQ-CP dated December 11, 2008 of the Government on urgent measures to prevent economic decline, maintain economic growth, and ensure social welfare;

Pursuant to Decision No. 14/2009/QĐ-TTg dated January 21, 2009 of the Prime Minister on the issuance of the Guarantee Regulation for Enterprises Borrowing from Commercial Banks;

Pursuant to Decision No. 60/2009/QĐ-TTg dated April 17, 2009 of the Prime Minister amending and supplementing certain provisions of Decision No. 14/2009/QĐ-TTg dated January 21, 2009 of the Prime Minister on the issuance of the Guarantee Regulation for Enterprises Borrowing from Commercial Banks,

The State Bank of Vietnam hereby provides guidelines for certain contents in loans by commercial banks to enterprises guaranteed by the Vietnam Development Bank as follows:

Article 1. Scope and Applicability

1. Commercial banks shall implement loans to enterprises guaranteed by the Vietnam Development Bank according to the Guarantee Regulation for Enterprises Borrowing from Commercial Banks issued together with Decision No. 14/2009/QĐ-TTg dated January 21, 2009 and amended and supplemented by Decision No. 60/2009/QĐ-TTg dated April 17, 2009 of the Prime Minister (referred to as the Guarantee Regulation), including state-owned commercial banks, joint-stock commercial banks, joint venture banks, branches of foreign banks operating in Vietnam, and wholly foreign-owned banks (collectively referred to as commercial banks).

2. Enterprises eligible for loans from commercial banks are those guaranteed by the Vietnam Development Bank, falling within the scope of guaranteed borrowing as stipulated in Article 1 and Article 2 of the Guarantee Regulation.

3. Commercial banks shall provide loans to enterprises in accordance with the lending regulations of credit institutions for customers issued together with Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001, Decision No. 09/2008/QĐ-NHNN dated April 10, 2008 of the Governor of the State Bank of Vietnam, and current relevant regulations, with short-term, medium-term, and long-term loans in Vietnamese dong and freely convertible foreign currencies. The assessment of loan conditions shall be carried out in accordance with Clause 7, Article 2 of Decision No. 60/2009/QĐ-TTg dated April 17, 2009 of the Prime Minister (Decision 60).

Article 2. Interest Rate on Loans

1. Commercial banks shall base their decisions on the current interest rate management mechanism, capital sources, financial capacity, market loan interest rates during each period, actual conditions of enterprises, and their customer policies to determine appropriate interest rates, ensuring preferential actual loan interest rates for enterprises, thereby supporting enterprises to reduce production and business costs, and promoting production and business development.

2. Loans by commercial banks guaranteed by the Vietnam Development Bank, if eligible for interest rate support, shall be implemented strictly in accordance with the provisions of the Prime Minister's Decisions and the guidance of the Governor of the State Bank of Vietnam.

Article 3. Procedures and responsibilities of commercial banks in certain specific cases

1. Within the latest seven working days from the date of receiving complete loan application documents from enterprises and the notification document approving the guarantee for the loan issued by the Vietnam Development Bank, the commercial bank shall examine and sign the Credit Contract with the enterprise if the enterprise meets all loan conditions. In case of refusal to sign the Credit Contract, the commercial bank must issue a reply letter to the enterprise, simultaneously sending it to the Vietnam Development Bank, clearly stating the reasons for refusing to sign the Credit Contract.

2. The commercial bank shall disburse the loan to the enterprise after receiving the Loan Guarantee Contract (original copy) signed between the enterprise and the Vietnam Development Bank and the Guarantee Certificate issued by the Vietnam Development Bank that matches the contents stipulated in the Credit Contract already signed with the enterprise. In case these documents contain inconsistent contents, the commercial bank has the right to request the Vietnam Development Bank to review, compare, and adjust them appropriately before disbursing the loan.

3. The commercial bank is responsible for strictly monitoring the loan process, the use of loan funds, assets formed from loan funds, and repayment of loan principal by the enterprise to ensure that the enterprise uses the loan funds for their intended purpose, safely, and effectively. In case the enterprise encounters temporary difficulties in production and business operations and submits a written request to the commercial bank to adjust the repayment period or extend the loan, the commercial banks shall adjust the repayment period or extend the loan based on actual conditions and current legal provisions, but must ensure the safety and effectiveness of the loan and be consistent with the guarantee period set by the Vietnam Development Bank for the loan.

Article 4. Coordination between commercial banks and the Vietnam Development Bank in fulfilling guarantee obligations

1. Within one working day after the due date for debt repayment as agreed in the Credit Contract and the debtor fails to repay the debt, the commercial bank shall send a written notice to the Vietnam Development Bank requesting it to fulfill its guarantee obligation according to the terms stated in the Guarantee Certificate.

2. In case the Vietnam Development Bank refuses to fulfill its guarantee obligation as prescribed in the Guarantee Regulation, within one working day from the date of receipt of the refusal notice from the Vietnam Development Bank, the commercial bank must issue a written request to the Vietnam Development Bank to carry out the procedures for transferring collateral securing the guarantee (as stipulated in Clause 5, Article 2 of Decision No. 60) so that the commercial bank can proceed with the disposal and recovery of debts in accordance with current laws on secured transactions.

Article 5. Implementation of Reporting

1. Monthly, the Vietnam Development Bank shall compile the situation of guarantees provided to enterprises borrowing from commercial banks according to Decision No. 14/2009/QD-TTg dated January 21, 2009, of the Government (Decision 14), and submit it to the State Bank of Vietnam (Credit Department) using Form 01 attached.

2. Monthly, commercial banks shall compile the situation of loans granted to enterprises guaranteed by the Vietnam Development Bank according to Decision No. 14 and submit it to the State Bank of Vietnam (Credit Department) using Form 02 attached.

Article 6. Inspection and Supervision of Implementation

The State Bank shall be responsible for inspecting and supervising commercial banks in their credit activities towards enterprises to ensure that loans to enterprises guaranteed by the Vietnam Development Bank are effective and comply with regulations.

Article 7. Implementation Organization

1. Responsibilities of commercial banks:

- Closely cooperate with the Vietnam Development Bank in organizing the implementation of the Prime Minister's decisions on lending to enterprises guaranteed by the Vietnam Development Bank and this Circular.

- Specifically implement the provision of guaranteed loans from the Vietnam Development Bank. Develop and implement specific business measures to meet the requirements for guaranteed loans as stipulated in Decision No. 14 and Decision No. 60, ensuring strict compliance, asset safety, and adherence to the law.

- During the implementation process, if encountering difficulties or obstacles, commercial banks shall compile reports to competent authorities for consideration and resolution.

2. Responsibilities of units under the State Bank:

- The Banking Inspection and Supervision Authority shall carry out inspection, supervision, and handling of violations by commercial banks and borrowers in accordance with the law during the lending activities to enterprises guaranteed by the Vietnam Development Bank to ensure that enterprise borrowing complies with regulations, is safe, and effective.

- The State Bank branches in provinces and centrally-administered cities shall conduct inspection, supervision, and inspection within their authority over commercial banks in their jurisdictions during the lending activities to enterprises guaranteed by the Vietnam Development Bank, proposing solutions to the Governor of the State Bank and the Chairman of the People's Committee of the province or centrally-administered city for handling arising issues.

- The Credit Department shall be responsible for compiling, reporting, and advising the Governor of the State Bank to resolve difficulties and obstacles (within its authority) during the implementation of Decision No. 14, Decision No. 60, and this Circular.

Article 8. Implementation clause

1. This Circular takes effect from July 11, 2009.

2. Units under the State Bank, Chairmen of the Board of Directors and General Managers (Directors) of commercial banks, the Vietnam Development Bank, and borrowing enterprises are responsible for implementing this Circular./.