Circular No. 14/2012/TT-NHNN stipulates the maximum interest rate for short-term loans in Vietnamese dong by credit institutions and foreign bank branches to borrowers for capital needs serving certain economic sectors and industries.

CIRCULAR

Regulations on the maximum interest rate for short-term loans in Vietnamese dong by credit institutions and foreign bank branches to borrowers for capital needs serving certain economic sectors and industries

To meet capital requirements for certain economic sectors and industries

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Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on Credit Organizations No. 47/2010/QH12 dated June 16, 2010;

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;

Considering the proposal of the Director of the Monetary Policy Department;

The Governor of the State Bank of Vietnam issues this Circular regulating the maximum interest rate for short-term loans in Vietnamese dong by credit institutions and foreign bank branches to borrowers for capital needs serving certain economic sectors and industries,

Article 1. Interest rate for short-term loans in Vietnamese dong by credit institutions and foreign bank branches

1. The maximum interest rate for short-term loans in Vietnamese dong shall be equal to the maximum interest rate for Vietnamese dong time deposits with terms of one month or longer, as prescribed by the State Bank of Vietnam, plus 3%/year.

2. Short-term loans in Vietnamese dong subject to the maximum interest rate prescribed in Clause 1 of this Article are those loans intended to meet the following capital needs:

a) For the development of agriculture and rural areas as stipulated in Decree No. 41/2010/NĐ-CP dated April 12, 2010 of the Government on credit policies to support agricultural and rural development;

b) To implement production and business plans and projects for export goods as provided for in the Law on Trade;

c) To serve the production and business activities of small and medium-sized enterprises as provided for in Decree No. 56/2009/NĐ-CP dated June 30, 2009 of the Government on assistance for the development of small and medium-sized enterprises;

d) To develop supporting industries as prescribed in Decision No. 12/2011/QĐ-TTg dated February 24, 2011 of

Article 2. Responsibilities of Borrowers

1. Borrowers of credit institutions and foreign bank branches who are eligible to apply the interest rates prescribed in Article 1 of this Circular are those borrowers meeting the conditions for borrowing set forth by the State Bank of Vietnam regarding credit institutions' lending activities to customers and assessed by credit institutions and foreign bank branches as having transparent and sound financial situations.

2. Borrowers are responsible for providing information and documents proving that their loan purposes fall within the sectors and fields subject to the interest rates prescribed in this Circular and bear legal responsibility for the truthfulness and accuracy of the provided information and documents.

Article 3. Responsibilities of Credit Institutions and Foreign Bank Branches

1. Credit institutions and foreign bank branches shall publicly display the interest rates for loans and the criteria for determining eligible borrowers as stipulated in Clause 2 of Article 1 and Clause 1 of Article 2 of this Circular.

2. Credit institutions and foreign bank branches shall implement lending activities to the borrowers specified in this Circular in accordance with the laws governing lending activities, safety ratios in business operations of credit institutions, and other relevant laws; they may not charge fees related to the loan from the borrower except for certain fees as prescribed in Circular No. 05/2011/TT-NHNN dated March 10, 2011 of the Governor of the State Bank of Vietnam on charging fees for lending by credit institutions to customers.

Article 4. Organization of Implementation

1. This Circular takes effect from May 8, 2012.

2. Interest rates applicable to credit contracts signed before the effective date of this Circular shall continue to be implemented according to the signed credit contracts in compliance with the laws at the time of signing.

3. For loans outside the scope of this Circular, credit institutions and foreign bank branches shall implement in accordance with Circular No. 12/2010/TT-NHNN dated April 14, 2010 of the Governor of the State Bank of Vietnam guiding credit institutions' lending in Vietnamese dong to customers based on agreed interest rates.

4. The Heads of the Office, Directors of the Monetary Policy Department, and Heads of 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 Board of Members, and General Directors (Directors) of credit institutions and foreign bank branches, other organizations, and individuals concerned are responsible for implementing this Circular./.