Decision No. 189/1999/QD-NHNN on the ceiling interest rate for loans in Vietnamese Dong by credit institutions to customers

Pursuant to …;

Regarding the ceiling interest rate for loans in Vietnamese Dong

 by credit institutions to customers

_________________________

GOVERNOR OF THE STATE BANK OF VIETNAM

BASED ON THE LAW ON THE STATE BANK OF VIETNAM AND THE LAW ON CREDIT ORGANIZATIONS dated December 12, 1997;

Pursuant to Decree No. 15/CP dated February 3, 1993 of the Government regarding the tasks, powers, and responsibilities of state management of ministries and ministerial-level agencies;

At the request of the Director of the Monetary Policy Department of the State Bank of Vietnam;

Pursuant to …;

Article 1. The ceiling interest rate for loans in Vietnamese Dong by credit institutions to customers is hereby stipulated as follows:

1. The ceiling interest rate for loans at 1.15% per month (including fees) shall be uniformly applied to all credit institutions providing loans to customers in urban and rural areas; however, the ceiling interest rate for loans by People's Credit Funds and Credit Cooperatives to their members shall remain at 1.5% per month.

2. Interest rates for loans in mountainous regions (as defined in Decision No. 42/UB-QĐ dated May 23, 1997 on recognizing the list of three mountainous and highland regions of the National Ethnic Committee and mountainous areas), islands, and concentrated Khmer areas shall be reduced by 30% compared to the same type of loan interest rates.

3. Preferential loan interest rates shall continue to be implemented according to the current regulations of the Governor of the State Bank of Vietnam.

4. The overdue interest rate shall be specifically agreed upon in the credit contract between the lender and borrower, but shall not exceed 150% of the current loan interest rate of the same type.

5. Credit institutions shall base the ceiling interest rate specified in Clause 1 of this Article to set specific deposit and loan interest rates suitable for different regions' conditions, the supply and demand situation of capital at each period, and the risk characteristics of each loan, with longer terms having higher interest rates than shorter terms.

Article 2: The ceiling interest rate prescribed in Article 1 of this Decision shall take effect from June 1, 1999.

The outstanding loan balances and un-disbursed credit contracts up to May 31, 1999 shall continue to be implemented according to the previously agreed interest rates on the contracts.

The ceiling interest rates for loans in Vietnamese Dong prescribed in Clause 1 of Article 1 of Decision No. 39/1998/QĐ-NHNN1 dated January 17, 1998, Directive No. 01/1999/CT-NHNN1 dated January 29, 1999, and Circular No. 422/CV-NHNN1 dated May 15, 1998 of the Governor of the State Bank of Vietnam regarding the ceiling interest rates for loans by rural commercial banks in Cần Thơ and An Giang provinces shall cease to be effective.

Article 3. Heads of units under the Central Bank of Vietnam, Governors of provincial and city branches of the State Bank of Vietnam, Chairmen of Management Boards and General Directors (Directors) of credit institutions and customers of credit institutions are responsible for implementing this Decision.