Circular No. 20/2013/TT-NHNN on providing refinancing loans based on special bonds of asset management companies of Vietnamese credit institutions

CIRCULAR

Article 24regulating the provision of refinancing loans based on special bonds issued by asset management companies

of credit institutions Vstrict N |||am

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

Based on the Law on Credit Institutions No.No. 47/2010/QH12 dated June 16, 2010;

Pursuant to DecreeNo. 96/2008/ND-CP dated August 26, 2008 of the Government stipulating functions, tasks, powers and responsibilities organizational structure of the State Bank of Vietnam;

Pursuant to DecreeNo. 53/2013/ND-CP dated May 18, 2013June 2024;of the Government At the proposal of on the establishment, organization and operation of the Asset Management Company of Credit Institutions of Vietnam;

At the proposal of the Department of Science and Technology, organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.Director of the Department Monetary Policy The Governor of the State Bank of Vietnam issues this Circular to regulate the provision of refinancing loans

based on special bonds issued by the Asset Management Companyaof credit institutions of VietnamJune 2024;This Circular regulates the provision of refinancing loans in Vietnamese dong by the State Bank of Vietnam (hereinafter referred to as the State Bank) to credit institutions based on special bonds issued by the Asset Management Company of Credit Institutions of Vietnam (hereinafter referred to as special bonds) according to Decree No. 53/2013/ND-CP dated May 18, 2013 of the Government on the establishment, organization and operation of the Asset Management Company of Credit Institutions of Vietnam (hereinafter referred to as Decree No. 53/2013/ND-CP). Management 1. Credit institutions established and operating in accordance with the Law on Credit Institutions, except for credit institutions with 100% foreign capital and joint venture credit institutions (hereinafter referred to as credit institutions).,

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

2. Organizations and individuals related to the provision of refinancing loans based on special bonds (hereinafter referred to as refinancing) of the State Bank to credit institutions.

Article 2. Applicability

The State Bank provides refinancing to credit institutions to support their operational capital during the process of handling non-performing debts according to Decree No. 53/2013/ND-CP.

The State Bank considers and decides to provide refinancing when credit institutions meet the following conditions:

Chapter II 

SPECIFIC PROVISIONS

3. To serve as a basis for evaluating and recognizing "Learning Communities" at the commune, district, and province levels.

1. Being a credit institution as defined in Clause 1 of Article 2 of this Circular, not placed under special control.

The amount of rediscounting for credit institutions shall be decided by the Governor of the State Bank based on monetary policy objectives, the total face value of special bonds, the results of establishing risk provisions for special bonds, and the results of handling non-performing loans but shall not exceed 70% of the total face value of special bonds; for credit institutions implementing restructuring plans that have been approved, the amount of rediscounting shall be decided individually by the Governor of the State Bank but shall not exceed 100% of the total face value of special bonds.

2. Legally owning special bonds that have not been paid by the Asset Management Company of Credit Institutions of Vietnam (hereinafter referred to as the Asset Management Company).

3. Setting aside risk provisions for special bonds in accordance with Decree No. 53/2013/ND-CP of the Government and guidance from the State Bank.

The amount of refinancing provided to credit institutions based on the face value of special bonds shall be decided by the Governor of the State Bank based on monetary policy objectives, results of risk provision setting for special bonds, and results of non-performing debt resolution but shall not exceed 70% of the face value of special bonds.

1. The interest rate on refinancing loans provided to credit institutions is determined by

Article 5. Level of Refinancing Capital

The term of refinancing is less than 12 months but shall not exceed the remaining term of the special bonds.

Article 6. Interest Rate on Refinancing Capital

1. The State Bank examines and decides to extend refinancing to credit institutions in compliance with the provisions of Articles 4, 5, 6, and 7 of this Circular.

2. The overdue interest rate on refinancing capital shall be 150% of the interest rate on refinancing capital stipulated in the credit agreement between the State Bank and the credit institution.

Article 7. Term for Refinancing

2. Each extension period shall not exceed the initial refinancing term of the refinancing loan.

Article 8. Extension of Refinancing

Article 9. Procedures for examining refinancing or extending refinancing

1. When there is a need to borrow refinancing or extend refinancing, credit institutions submit four sets of application documents directly or through postal service to the State Bank (Department of Monetary Policy). In case of extending refinancing, credit institutions must send the application documents to the State Bank at least 30 working days before the due date of refinancing repayment.

a) A request for refinancing or extension of refinancing, clearly stating: name of the credit institution; account number for deposit in Vietnamese dong at the State Bank; purpose of borrowing refinancing (specify each purpose); amount of refinancing or extended refinancing according to each purpose; term; total face value of special bonds; commitment that the special bonds serving as the basis for borrowing refinancing or extending refinancing belong legally to the credit institution;

b) A list of special bonds serving as the basis for borrowing refinancing or extending refinancing at the State Bank, confirmed by the Asset Management Company according to Appendix No. 01 attached to this Circular.

In cases of refusal, the State Bank will issue a document refusing approval to use foreign currency within the territory and clearly state the reasons.

2. Within two working days from the date of receiving complete application documents for refinancing or extension of refinancing from credit institutions, the Department of Monetary Policy acts as the lead to seek opinions from relevant units.

3. Within fifteen working days from the date of receiving the opinion solicitation document from the Department of Monetary Policy, units providing opinions must send them back to the Department of Monetary Policy.

4. Within fifteen working days from the date of receiving complete opinions from all units, the Department of Monetary Policy compiles and submits to the Governor of the State Bank for examination and decision.

5. Based on the Governor's decision, the State Bank Trading Department signs the credit agreement and disburses refinancing or extended refinancing to credit institutions.

1. When the refinancing loan matures, the credit institution repays the principal and interest to the State Bank. If the repayment date coincides with a holiday or public holiday, the refinancing loan term will be extended until the next working day.

2. The credit institution must repay the loan ahead of schedule to the State Bank in the following cases:

Article 10. Repayment of Refinancing Loans

a) Non-performing debts recovered in cash during the refinancing loan period, which the credit institution receives from each non-performing debt purchased with special bonds serving as the basis for borrowing refinancing at the State Bank, the corresponding repayment amount equals the amount of refinancing borrowed based on those special bonds. Quarterly, based on the debt purchase and sale contracts using special bonds, the Asset Management Company repays the refinancing loan ahead of schedule according to the State Bank's regulations on the purchase, sale, and handling of non-performing debts of the Asset Management Company; the repayment deadline is within five working days at the beginning of the next quarter.

2. Credit organizations must repay debts ahead of schedule to the State Bank of Vietnam in the following cases:

a) When bad debts are recovered in cash during the period of borrowing rediscount funds that the credit organization receives from each bad debt purchased with special bonds serving as the basis for borrowing rediscount funds from the State Bank of Vietnam, the amount of debt repayment shall correspond to the amount of borrowed rediscount funds based on such special bonds. Quarterly, based on the bond purchase and sale contracts, the Asset Management Corporation shall repay the borrowed rediscount funds ahead of schedule according to the State Bank of Vietnam's regulations on the purchase, sale, and handling of bad debts by the Asset Management Corporation; the repayment deadline shall be within the first five working days of the next quarter.

b) The amount set aside as risk reserve for special bonds shall not be less than the book value of the principal balance of the non-performing debt purchased with such special bonds, as prescribed in Clause 1, Article 22 of Decree 53/2013/NĐ-CP and the guidance of the State Bank of Vietnam on the purchase, sale, and handling of non-performing debts by the Asset Management Corporation. Within five working days from the date when the amount set aside as risk reserve for special bonds is not less than the book value of the principal balance of the non-performing debt purchased with such special bonds, the amount to be repaid is the refinancing loan borrowed from the State Bank of Vietnam based on such special bonds.

c) The Asset Management Corporation unilaterally terminates the contract for purchasing and selling debts with special bonds. Within five working days from the date of receipt of the document from the Asset Management Corporation regarding the unilateral termination of the contract for purchasing and selling debts with special bonds, the credit organization shall repay the amount of refinancing loan borrowed from the State Bank of Vietnam based on such special bonds.

Article 11. Handling of Credit Organizations Not Repaying Loans on Time

In case the refinancing loan matures and the credit organization cannot repay the debt and does not receive an extension from the State Bank, the State Bank shall apply the following measures:

1. Transfer the credit organization's debt to overdue debt and apply the overdue refinancing loan interest rate from the day of overdue.

2. Implement measures to recover the debt:

a) Deduct from the credit organization's deposit account at the State Bank;

b) Require the Asset Management Corporation to use the proceeds recovered from non-performing debts purchased with special bonds that the credit organization is entitled to, to repay the refinancing loan borrowed from the State Bank of Vietnam.

c) Recover debt from other sources of the credit organization;

d) Require the credit organization to transfer ownership to the State Bank of securities used in transactions with the State Bank owned by the credit organization;

đ) Implement procedures to convert the refinancing account into a special loan or equity investment in the credit organization by the State Bank according to the law.

Chapter III

IMPLEMENTATION AND EFFECTIVE PROVISIONS

Article 12. Responsibilities of Credit Organizations

1. Provide fully, promptly, and accurately to the State Bank of Vietnam all documents and materials as stipulated in this Circular and bear legal responsibility for the accuracy and legality of the provided documents and materials.

2. Use capital for the intended purpose and repay refinancing loans according to the provisions of this Circular.

3. Be subject to inspection, examination, and supervision by the State Bank of Vietnam in complying with the provisions of this Circular.

4. Report periodically every month to the State Bank of Vietnam (the Banking Inspection and Supervision Department, the Monetary Policy Department, the State Bank of Vietnam Trading Center) on the use of refinancing loans and data as per Appendix No. 02 attached to this Circular.

5. Transfer ownership of securities used in transactions with the State Bank of Vietnam belonging to the credit organization to fulfill the obligation of repaying the State Bank of Vietnam in case of inability to repay the refinancing loan.

6. Fulfill other responsibilities as prescribed by relevant laws.

Article 13. Responsibilities of the Asset Management Corporation

1. Confirm the list of special bonds as the basis for borrowing refinancing loans or extending refinancing loans at the State Bank of Vietnam as per Appendix No. 01 attached to this Circular.

2. Use the proceeds recovered from non-performing debts purchased with special bonds to repay the refinancing loan of credit organizations at the State Bank of Vietnam as prescribed in Point b, Clause 2, Article 10 and Point b, Clause 2, Article 11 of this Circular.

3. Notify the State Bank of Vietnam Trading Center about the amount of refinancing loan repaid as prescribed in Point a, Clause 2, Article 10 of this Circular for each special bond.

4. Take the lead and coordinate with credit organizations and related units to implement measures to handle non-performing debts and collateral purchased with special bonds to repay refinancing loans to the State Bank of Vietnam.

Article 14. Responsibilities of Units under the State Bank

1. Monetary Policy Department

a) Receive applications for refinancing and extending refinancing from credit institutions;

b) Take the lead and coordinate with related units to submit to the Governor of the State Bank of Vietnam for consideration and decision on refinancing loans and extending refinancing loans for credit organizations;

c) Coordinate with related units to advise the Governor of the State Bank of Vietnam on the interest rate for refinancing loans based on special bonds to be submitted to the Prime Minister for decision.

2. Banking Inspection and Supervision Authority

a) Provide the Monetary Policy Department with evaluations on the fulfillment of conditions for refinancing loans by credit organizations as prescribed in Article 4 of this Circular;

b) Give opinions on requests for refinancing loans and extending refinancing loans from credit organizations as requested by the Monetary Policy Department;

c) Supervise, inspect, examine, and handle violations by credit organizations in complying with the provisions of this Circular;

d) Take the lead and coordinate with related units to implement procedures to convert credit organizations' refinancing loans into special loans or equity contributions/purchase of shares of the State Bank of Vietnam in credit organizations.

3. The Credit Department: Coordinate with the Monetary Policy Department to review and submit to the Governor of the State Bank of Vietnam for decision on refinancing loans and extending refinancing loans for credit organizations.

4. State Bank of Vietnam Trading Center

a) Coordinate with the Monetary Policy Department to review and submit to the Governor of the State Bank of Vietnam for decision on refinancing loans and extending refinancing loans for credit organizations;

b) Implement the signing of credit contracts with credit organizations, disbursement, extension of refinancing loans, recovery of refinancing loans according to the provisions of this Circular and related responsibilities concerning special bonds when credit organizations borrow refinancing loans from the State Bank of Vietnam;

c) Notify the Asset Management Corporation about the list of special bonds as the basis for refinancing loans and extending refinancing loans after implementing the disbursement of refinancing loans and extending refinancing loans for credit organizations;

d) Report periodically every month to the Governor of the State Bank of Vietnam on lending, collecting debts, and pre-maturely collecting refinancing loans from credit organizations, while sending reports to the Monetary Policy Department, the Banking Inspection and Supervision Department, and the Credit Department.

5. The Finance and Accounting Department: Guide accounting entries related to the State Bank's refinancing of credit institutions in accordance with this Circular.

6. Branches of the State Bank of Vietnam in provinces and cities: Supervise, inspect, examine, and handle violations by credit organizations headquartered in their jurisdiction in complying with the provisions of this Circular.

Article 15. Implementation Provisions

1. This Circular takes effect from September 15, 2013.

2. The Director of the Office, Heads of Departments under the State Bank of Vietnam; Governors of State Bank of Vietnam branches in provinces and cities; Chairmen of the Board of Members and General Directors of the Asset Management Corporation; Chairmen of the Board of Directors, Chairmen of the Board of Members, and General Directors (Directors) of credit organizations are responsible for implementing this Circular./.