Decision No. 13/2018/QD-TTg on conditions, documents, and procedures for requesting approval of maximum credit limits exceeding the limit for credit institutions and foreign bank branches.

Pursuant to …;

PROVISIONS ON CONDITIONS, DOCUMENTS, AND PROCEDURES FOR REQUESTING APPROVAL OF THE MAXIMUM LEVEL OF OVER-LIMIT CREDIT GRANTING TO A CUSTOMER

Pursuant to the Law on Government Organization dated June 19, 2015;

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; the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

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

The Prime Minister issues a Decision stipulating conditions, documents, and procedures for requesting approval of the maximum level of over-limit credit granting to a customer by credit organizations and foreign bank branches.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decision stipulates conditions, documents, and procedures for requesting approval of the maximum level of over-limit credit granting to a customer by credit organizations and foreign bank branches for one customer and one customer and related parties as prescribed in Clause 1, Clause 2, and Clause 7 of Article 128 of the Law on Credit Institutions 2010 (as amended and supplemented).

Article 2. Applicability

Credit organizations and foreign bank branches (hereinafter referred to as credit organizations) include:

1. Banks: State-owned commercial banks, joint-stock commercial banks, cooperative banks, joint venture banks, and wholly foreign-owned banks.

2. Non-bank credit institutions: Financial companies, financial leasing companies, and other non-bank credit institutions.

3. Microfinance organizations.

4. People's Credit Funds.

5. Foreign bank branches.

6. Borrowing customers and related organizations or individuals.

Chapter II

SPECIFIC PROVISIONS

Article 3. Conditions for Considering Over-Limit Credit Granting

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

a) The customer meets the credit granting conditions as prescribed by law, has no bad debts in the three most recent consecutive years prior to the year of requesting over-limit credit granting, and has a debt-to-equity ratio not exceeding three times the owner's equity recorded in the quarterly or annual financial report of the customer at the time closest to the time of requesting over-limit credit granting;

b) The customer has capital needs to implement projects or business plans aimed at fulfilling economic and social development tasks in one of the following cases:

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

- Implementing investment programs and projects decided on by the National Assembly or the Prime Minister regarding investment policies.

- Investing in priority and encouraged fields according to Resolutions of the National Assembly and the Government on economic and social development during specific periods.

c) The project or plan proposed for over-limit credit granting has been appraised by the credit organization as feasible, the customer has the ability to repay the loan, and the decision to grant credit has been made; it complies with current regulations on investment and construction, aligns with planning and production and business plans, and has been approved by competent authorities or granted an Investment Registration Certificate.

2. Credit institutions must meet the following conditions:

a) Regarding syndicated lending:

- Proposing and implementing necessary procedures under the law regarding joint credit provision for the project or plan proposed for over-limit credit granting where the joint credit capacity of credit organizations does not meet the borrowing requirements of a single customer; or

- Issuing invitations for joint credit provision to at least five other credit organizations, publishing them on the official website of the credit organization and mass media for at least thirty working days but no other credit organizations have joined the joint credit provision.

b) At the time of requesting over-limit credit granting, the credit organization meets the requirements on limits and safety ratios in operations as prescribed by the Law on Credit Institutions and relevant laws.

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) Ensuring the credit limit prescribed in Clause 8 of Article 128 of the Law on Credit Institutions 2010 when including the over-limit credit granting being requested.

Article 4. Documents for requesting credit exceeding the limit

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

The documents submitted by credit organizations to the State Bank of Vietnam for requesting over-limit credit granting to one customer and one customer and related parties include copies issued from original books or certified copies by the credit organization, comprising:

a) A letter from the credit organization requesting the State Bank of Vietnam to report to the Prime Minister for permission to grant over-limit credit to one customer and one customer and related parties according to the model 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) Legal documents related to the customer requesting credit, including: Business registration certificate, audited financial reports of the last three consecutive years before the request, and other relevant documents;

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

- Investment registration certificate or documents approving or endorsing the project or plan by competent authorities.

- Other relevant documents.

h) Report on the credit relationship situation and the need for over-limit credit granting to one customer and one customer and related parties according to Model No. 01 attached to this Decision.

2. Documents submitted by the State Bank of Vietnam to the Prime Minister include a report from the State Bank of Vietnam accompanied by the following documents:

a) A letter from the credit organization requesting the State Bank of Vietnam to report to the Prime Minister for permission to grant over-limit credit to one customer and one customer and related parties;

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

c) An explanatory letter from the credit organization and the customer;

d) Other relevant documents.

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

The maximum level of over-limit credit granting to one customer and one customer and related parties is determined by the formula:

Where:

- MCTDTĐ is the maximum level of over-limit credit granting;

- DN is the total outstanding credit balance at the reporting date;

- CC is the amount still available under signed credit contracts;

- ĐN is the amount of new credit requested and approved.

In the above formula, DN, CC, and ĐN are determined as follows:

1. The total outstanding credit balance at the reporting date (DN) included in the maximum level of over-limit credit granting is the total outstanding credit balance of one customer and one customer and related parties at the credit organization at the reporting date, including:

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

b) The total outstanding credit balance exceeding the limit that has been approved by the Prime Minister for over-limit credit granting and remains valid up to the reporting date.

2. The remaining amount to be granted under the signed credit contract (CC) is included in the maximum credit limit exceeding the threshold, which includes:

a) The remaining amount of credit that can be granted under credit contracts already signed within the permitted limit under the authority of the credit institution;

b) The remaining amount of credit that can be granted under credit facilities already approved by the Prime Minister for granting credit beyond the limit still in effect at the time of reporting.

3. A new credit grant request (DN) is accepted:

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 grants exceeding the limit

1. The credit institution shall submit one set of documents to the State Bank of Vietnam in accordance with Article 4 of this Decision either directly or by mail.

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

- In case the documents submitted by the credit institution do not meet the conditions stipulated in Article 3 of this Decision, the State Bank of Vietnam shall notify the credit institution in writing, specifying the conditions that have not been met.

- In case the documents submitted by the credit institution are valid, the State Bank of Vietnam shall seek opinions from relevant ministries, sectors, and localities on the economic, technical, and legal aspects of the project, plan, and customer requesting credit grants exceeding the limit.

3. Within ten working days from the date of receipt of the opinion solicitation letter from the State Bank of Vietnam, the ministries, sectors, and localities shall provide their written opinions on matters within their respective areas of management to the State Bank of Vietnam. If necessary, the State Bank of Vietnam may require the credit institution and the customer to explain issues raised by the ministries, sectors, and localities within seven working days from the date the State Bank of Vietnam receives all participating opinions.

4. Within ten working days from the date of receipt of the opinions from the ministries, sectors, and localities or the explanations provided by the credit institution and the customer, the State Bank of Vietnam shall review the validity and reasonableness of the credit grant exceeding the limit documents provided by the credit institution and present them to the Prime Minister for consideration and decision regarding the credit institution's request for credit grants exceeding the limit.

5. Within five working days from the date of receipt of the Prime Minister's written opinion, the State Bank of Vietnam shall inform the credit institution of the Prime Minister's opinion and implement it accordingly.

Chapter III

IMPLEMENTATION AND EFFECTIVE PROVISIONS

Article 7. Implementation Organization

1. The State Bank of Vietnam

a) Responsible for appraising the documents provided by the credit institution and presenting them to the Prime Minister for consideration and decision regarding the credit institution's request for credit grants exceeding the limit, ensuring compliance with the conditions, procedures, and formalities 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 on the implementation of credit grants exceeding the limit that have been approved and are still effective, while sending these reports to relevant ministries, sectors, and localities.

2. Ministries, sectors, and localities

a) Cooperate with the State Bank of Vietnam to provide opinions on the credit institution's request for credit grants exceeding the limit for a specific customer, in accordance with Clause 3 of 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 grants exceeding the limit; shall also be responsible for other matters within their scope of state management concerning projects, plans, and customers receiving credit grants exceeding the limit, in accordance with the law.

3. Credit institutions

a) Implement the contents specified in the notification letter from the State Bank of Vietnam, only using the approved maximum credit limit for each specific project and plan requested 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 grants exceeding the limit;

c) Shall be responsible for the appraisal, credit granting, post-loan monitoring, debt recovery, and risk handling (if any) in accordance with regulations for credit grants exceeding the limit;

d) Closely monitor to ensure that the customer uses the borrowed funds for the intended purpose and report monthly on the 12th day of each month on the implementation of the credit grants exceeding the limit approved by the Prime Minister according to Form 02, 03 attached to this Decision.

Article 8. Implementation clause

1. This Decision takes effect from May 1, 2018.

2. Credit grants exceeding the limit that were approved by the Prime Minister before the effective date of this Decision shall continue to be implemented in accordance with previous approval documents.

3. The 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./.