Circular No. 16/2013/TT-NHNN stipulates the maximum interest rate for short-term loans in Vietnamese dong provided 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 borrowersto meet capital needs for certain economic sectors and industries

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;

Article 1.

The Governor of the State Bank of Vietnam issues this Circular to regulate the maximum interest rate for short-term loans in Vietnamese dong by credit institutions and foreign bank branches to borrowers to meet capital needs for 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 is 9% per annum; specifically, for Credit Cooperatives and Microfinance Organizations, the maximum interest rate for short-term loans in Vietnamese dong is set at 10% per annum.

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) To support 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 serve the development of agriculture and rural areas;

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 provided for in Decision No. 12/2011/QĐ-TTg dated February 24, 2011 of the Prime Minister on policies to develop certain supporting industries;

đ) To serve the production and business activities of high-tech enterprises as provided for in the Law on High Technology and other relevant laws.

Article 2. Responsibilities of Borrowers

1. Borrowers from 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 as specified by the State Bank of Vietnam regarding lending activities of credit institutions and foreign bank branches to borrowers, and who are assessed by credit institutions and foreign bank branches as having transparent and sound financial situations.

2. Borrowers have the responsibility to provide information and documents proving that their loan purposes fall within the sectors and industries subject to the interest rates prescribed in this Circular, and they 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 borrowers as prescribed in this Circular in accordance with the laws governing lending activities, safety ratios in business operations of credit institutions and foreign bank branches, and other relevant laws; they may not charge fees related to the loan 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 loans by credit institutions to borrowers.

Article 4. Organization of Implementation

1. This Circular takes effect from June 28, 2013 and replaces Circular No. 10/2013/TT-NHNN dated May 10, 2013 of the Governor of the State Bank of Vietnam on the maximum interest rate for short-term loans in Vietnamese dong by credit institutions and foreign bank branches to borrowers to meet capital needs for certain economic sectors and industries.

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

3. For loans outside the provisions 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 to lend in Vietnamese dong to borrowers based on agreed interest rates.

4. The Heads of the Office, Department Heads 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 the Board of Directors, Chairmen of the 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./.