Pursuant to …;

Regarding the amendment and supplementation of certain Articles of the Provision on classification of debts, provision for and utilization of reserves to handle credit risks in banking activities of credit institutions issued pursuant to Decision No. 493/2005/QĐ-NHNN dated April 22, 2005 of the Governor of the State Bank of Vietnam.

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

Issued pursuant to the Law on Credit Institutions 1997, the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions 2004;

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GOVERNOR OF THE STATE BANK OF VIETNAM

Issued pursuant to Decree No. 52/2003/NĐ-CP dated May 19, 2003 of the Government stipulating functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

After reaching consensus with the Minister of Finance pursuant to Circular No. 15887/BTC-TCNH dated December 15, 2006;

At the proposal of the Director of the Department of Banks and Non-Bank Credit Institutions.

Amend and supplement certain provisions of the Provision on classification of debts, provision for and utilization of reserves to handle credit risks in banking activities of credit institutions issued pursuant to Decision No. 493/2005/QĐ-NHNN dated April 22, 2005 of the Governor of the State Bank of Vietnam as follows:

"4. For unconditional non-cancellable commitments to guarantee, accept payment, and commit to lend with specific performance dates (collectively referred to as off-balance sheet commitments), credit institutions must classify them into the groups prescribed in Article 6 or Article 7 of this Provision as follows:

DECISION:

Clause 4 of Article 6a) When the credit institution has not yet performed its obligations under the commitment, the credit institution classifies and provides for reserves for off-balance sheet commitments as follows:

1. Clause 4 of Article 3 shall be amended and supplemented as follows:

- Classify into Group 1 and provide for general reserves according to the provisions of Article 9 of this Provision if the credit institution assesses that the customer has the ability to fulfill all obligations under the commitment;

- Classify into Group 2 or higher depending on the assessment of the credit institution and provide for specific reserves, general reserves according to the provisions of Article 8 and Article 9 of this Provision if the credit institution assesses that the customer does not have the ability to fulfill the obligations under the commitment.

b) When the credit institution must perform its obligations under the commitment, the credit institution classifies substitute payments for guarantees, payments for accepted payments into debt groups according to the provisions of Article 6 or Article 7 of this Provision with the number of days overdue calculated from the date the credit institution performs its obligation under the commitment as follows:

- Classify into Group 4 if overdue from 30 to 90 days;

- Classify into Group 5 if overdue from 91 days or more.

- Classify into Group 3 if overdue for less than 30 days;

Credit institutions classify according to the principle: substitute payments for guarantees, payments for accepted payments are classified into debt groups with equivalent or higher risk levels compared to the debt groups that the guarantees and accepted payments were previously classified into according to point a Clause 4 of this Article.

2. Article 4 is supplemented with Clause 3 as follows:

“3. Every six months, credit institutions shall submit a report to the State Bank of Vietnam (Department of Banks and Non-Bank Credit Institutions) on the progress of building the internal credit rating system as stipulated in Clause 1 of this Article, including the following contents:

- The credit rating system (rating process and decision-making results; credit scoring system; database system; review and control process);

- Progress status, expected completion time, expected trial application time, trial application results (if any);

- Issues currently being addressed;

- Other related contents.”

Article 6 is amended and supplemented as follows:

"Article 6.

3.1. Credit institutions shall classify debts into five (05) groups as follows:

- Debts within the due date and the credit institution assesses that they can be fully recovered both principal and interest on time;

- Debts overdue less than 10 days and the credit institution assesses that they can be fully recovered both principal and overdue interest and fully recovered principal and interest on the remaining due date;

a) Group 1 (Standard Debts) includes:

- Debts classified into Group 1 according to the provisions of Clause 2 of this Article.

- Debts overdue from 10 to 90 days;

- Debts with the first adjustment of repayment period (for corporate customers, credit institutions must have a customer assessment file regarding their ability to repay the full principal and interest on the adjusted due date);

b) Group 2 (Debts of Concern) includes:

- Debts classified into Group 2 according to the provisions of Clause 3 of this Article.

- Debts overdue from 91 to 180 days;

- Debts with the first restructuring of the repayment period, excluding debts with the first adjustment of the repayment period classified into Group 2 according to point b Clause of this Article;

c) Group 3 (Substandard Debts) includes:

- Debts exempted or reduced interest due to customers' inability to pay full interest according to the credit contract;

- Debts classified into Group 3 according to the provisions of Clause 3 of this Article.

- Debts overdue from 181 to 360 days;

- Debts with the first restructuring of the repayment period overdue less than 90 days according to the first restructured repayment period;

d) Group 4 (Doubtful Debts) includes:

- Debts with the second restructuring of the repayment period;

- Debts classified into Group 4 according to the provisions of Clause 3 of this Article.

- Debts overdue over 360 days;

- Debts with the first restructuring of the repayment period overdue from 90 days or more according to the first restructured repayment period;

đ) Group 5 (Loss Probable Debts) includes:

- Debts with the second restructuring of the repayment period overdue according to the second restructured repayment period;

- Debts with the third or subsequent restructuring of the repayment period, including those not yet overdue or already overdue;

- Debts written off, debts pending resolution;

- Debts classified into Group 5 according to the provisions of Clause 3 of this Article.

2. Credit institutions may reclassify debts into lower-risk debt groups in the following cases:

a) For overdue debts, credit institutions may reclassify them into lower-risk debt groups (including Group 1) when meeting all of the following conditions:

2. Financial institutions may reclassify debts into lower-risk debt groups in the following cases:

a) For overdue debts, financial institutions may reclassify them into lower-risk debt groups (including Group 1) when they meet the following conditions:

- The customer repays in full the overdue principal and interest (including interest applied to overdue principal) and the principal and interest for subsequent payment periods within a minimum period of six (06) months for medium and long-term debts, three (03) months for short-term debts, starting from the date of full repayment of overdue principal and interest;

- There are documents and records proving that the causes leading to the overdue debt have been addressed and resolved;

- The credit institution has sufficient grounds (information and accompanying documents) to assess that the customer has the ability to repay the remaining principal and interest fully and on time;

b) For restructured debts, the credit institution shall reclassify them into a lower risk category (including Category 1) when the following conditions are fully met:

- The customer repays the principal and interest according to the restructured repayment schedule within a minimum period of six (06) months for medium and long-term debts, three (03) months for short-term debts, starting from the date of full repayment of principal and interest according to the restructured schedule;

- There are documents and records proving that the causes leading to the need for restructuring the repayment schedule have been addressed and resolved;

- The credit institution has sufficient grounds (information and accompanying documents) to assess that the customer has the ability to repay the remaining principal and interest fully and on time according to the restructured schedule;

3. The credit institution must transfer the debt into a higher risk category in the following cases:

a) The entire outstanding balance of a customer at a credit institution must be classified into the same loan category. For customers with two (02) or more loans at a credit institution where any one of the loans is classified under Clause 1 of this Article into a higher risk category than the other loans, the credit institution must reclassify the remaining loans of the customer into the highest risk category;

b) For joint lending, the lead credit institution must classify the joint loan according to the provisions of this Article and notify the result of the loan classification to the participating credit institutions. In case the borrower of the joint loan has one or several other loans at the participating credit institutions which are classified into a different loan category from the joint loan classified by the lead credit institution, the participating credit institution must reclassify the entire outstanding balance (including the portion of the joint loan) of the borrower into the higher risk category classified by either the lead credit institution or the participating credit institution, whichever has a higher risk category;

c) The credit institution must proactively reclassify the loans classified into categories under Clause 1 of this Article into a higher risk category based on the credit institution's assessment when any of the following situations occur:

- There are adverse developments affecting the customer's business environment negatively;

- The customer's loans are classified into a higher risk category by other credit institutions (if such information is available);

- The customer's financial indicators (profitability, solvency, debt-to-equity ratio, and cash flow) or ability to repay debt deteriorates continuously or experiences significant downward fluctuations;

- The customer fails to provide complete, timely, and truthful financial information as required by the credit institution to assess the customer's ability to repay debt;

4. The specific provision ratio for the five (5) loan categories specified in Clause 1 of this Article is as follows:

a) Category 1: 0%;

b) Category 2: 5%;

c) Category 3: 20%;

d) Category 4: 50%;

đ) Group 5: 100%.

Specifically, for debts written off and awaiting government resolution, the credit institution shall establish specific provisions based on its financial capacity.";

4. Article 8 is amended and supplemented as follows:

"Article 8.

1. The amount of specific provisions for each loan is calculated using the following formula:

R = max {0, (A - C)} x r

Where:

RR: The amount of specific provisions to be established

AA: The outstanding principal of the loan

CC: The value of collateral assets deducted

Fr: The specific provision ratio

2. Collateral assets included for deduction when calculating the specific provision amount as stipulated in Clause 1 of this Article must meet the following conditions:

- The credit institution has the right to auction the collateral asset according to the guarantee contract when the customer fails to fulfill their obligations as committed;

- The time frame for conducting the auction of the collateral asset as planned by the credit institution should not exceed one (01) year for non-real estate collateral and two (02) years for real estate collateral, starting from the date of initiating the auction process;

If the collateral asset does not meet the above conditions or cannot be auctioned, the value of the collateral asset (C) specified in Clause 1 of this Article must be considered as zero (0);C3. The value of the collateral asset (C) is determined based on the product of the deduction rate specified in Clause 4 of this Article with:

- The market value of gold at the time of establishing specific provisions;C- The face value of government bonds, treasury bills, and other securities, excluding bonds issued by credit institutions and enterprises;

- The market value of securities issued by enterprises and credit institutions listed on the stock exchange and securities trading center at the time of establishing specific provisions;

- The value of collateral assets being securities issued by enterprises and credit institutions not listed on the stock exchange and securities trading center, movable property, immovable property, and other collateral assets recorded in the most recent valuation report agreed upon by the credit institution and the customer (if any) or the guarantee contract;

- The remaining value of the leased asset as per the lease agreement at the time of establishing specific provisions;

- The value of collateral securities issued by enterprises and other financial institutions that have not been listed on the Stock Exchange and Securities Trading Center, movable property, immovable property, and other collaterals recorded in the most recent valuation report agreed upon by the financial institution and the customer (if any) or in the guarantee contract;

- The remaining value of the financed asset calculated according to the finance lease contract at the time of establishing the provision specifically.

The value of collateral formed from borrowed capital corresponds to the amount disbursed under the credit contract at the specific time when the provision for impairment is established.

4. The deduction rate to determine the deducted value of collateralCshall be determined by the credit institution based on the recoverable value from the sale of collateral after deducting the expected costs of selling the collateral at the specific time when the provision for impairment is established, but shall not exceed the maximum deduction rate specified below:

5Clause 4 of Article 11 is amended as follows:

"4. Five (05) years after using the provision to handle credit risk, the credit institution may remove the credit risk-handled debts from off-balance sheet. For state-owned commercial banks, such removal can only be carried out with full documentation proving that all debt recovery measures have been taken but the debt has not been recovered, and must be approved in writing by the Ministry of Finance and the State Bank."

6.Article 15 is amended and supplemented as follows:

"Article 15.

Documents serving as the basis for handling credit risks:

1. Loan and collection documents; discounting and rediscounting documents for transferable instruments and other securities; guarantee and loan commitment documents; financial leasing documents; collateral-related documents and other relevant papers.

2. In cases stipulated in Clause 1 of Article 10 of this Regulation, in addition to the documents mentioned in Clause 1 of this Article, there must also be:

a) For organizational and business customers:

- A copy of the court's bankruptcy declaration decision or the competent authority's decision to dissolve the organization according to the law;

- A copy of the report implementing the bankruptcy declaration decision and the report concluding the implementation of the bankruptcy declaration decision by the Enforcement Department, and documents resolving the debts of dissolved organizations.

b) For individual customers:

- A copy of the death certificate or missing person confirmation issued by the competent authority.

3. In cases stipulated in Clause 2 of Article 10 of this Regulation, in addition to the documents mentioned in Clause 1 of this Article, there must also be:

- Documents and materials serving as the basis for classification into Group 5;

- Documents and materials proving that the credit institution has made efforts and used all means to recover the debt but was unable to do so. "

7. Report forms number 1A, 1B, 2A, and 2B will be replaced by Report forms number 1 and 2 (attached to this Decision).

12/2025/TT-BNNMT dated June 19, 2025 issued by the Minister of Agriculture and EnvironmentThis Decision takes effect fifteen days after its publication in the Official Gazette.

Article 3. The Head of the Office, the Director of the Banking Department and Non-Bank Financial Institutions Department, the Heads of units under the State Bank, the Governors of the State Bank branches in provinces and centrally-administered cities, the Chairmen of the Boards of Directors, and the General Managers (Directors) of credit institutions are responsible for implementing this Decision./.