Decision No. 217/QD-NH1 Issuing the Regulation on Mortgage, Pledge of Assets and Guarantees for Bank Loans

 

Pursuant to …;

Regarding the issuance of regulations on mortgage, pledge of assets, and guarantee for bank loans

and loan guarantees

____________________

 

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the State Bank Law, the Banking Law, Credit Cooperatives Law, and Financial Corporation Law promulgated by Decree No. 37/LCT-HĐNN8 and Decree No. 38/LCT-HĐNN8 dated May 24, 1990 of the Chairman of the Council of State of the Socialist Republic of Vietnam.

Pursuant to the Government Decree No. 15/CP dated March 2, 1993, regarding the tasks, powers, and responsibilities for state management of Ministries and ministerial-level agencies.

Pursuant to Directive No. 833/TTg dated December 19, 1995 of the Prime Minister on implementing the Civil Code.

After receiving unified opinions from the Ministry of Justice and the Ministry of Finance,

At the proposal of the Director of the Economic Research Department.

Pursuant to …;:

Article 1. This Decision hereby promulgates the "Regulations on Mortgage, Pledge of Assets, and Guarantee for Bank Loans."

Article 2. This Decision takes effect from the date of signature, replacing Decision No. 156/QĐ-NH dated November 18, 1989 of the Governor of the State Bank of Vietnam on the Provisions on Mortgage of Assets for Bank Loans.

Article 3. The Director of the Governor's Office, the Head of the Economic Research Department, Heads of units under the Central State Bank, Branch Governors of the State Bank in provinces and cities, General Directors (Directors) of State-owned Commercial Banks, Investment and Development Bank, Joint Stock Commercial Banks, Joint Ventures Banks, Branches of Foreign Banks in Vietnam, Financial Companies, People's Credit Funds, and Chairpersons of Credit Cooperatives are responsible for implementing this Decision.

 

STATE BANK OF VIETNAM

Cao Sĩ Kiêm

 

(Signed)

 

 

REGULATIONS

MORTGAGE, PLEDGE OF ASSETS AND GUARANTEE FOR BANK LOANS
(Issued together with Decision No. 217/QĐ-NH1 dated August 17, 1996 of the Governor of the State Bank)

Chapter 1:

GENERAL PROVISIONS

Article 1. These Regulations stipulate the procedures for mortgage, pledge of assets, and guarantee for loans from Credit Institutions operating under the Banking Law, Credit Cooperatives Law, and Financial Corporation Law and the system of People's Credit Funds.

Article 2. In this Regulation, the following terms are understood as follows:

2.1. Mortgage of assets for bank loans is the act where the borrower (called the mortgagor) uses immovable property owned by them to secure the performance of their obligation to repay the debt (including principal, interest, and late interest penalties) to the lender (called the mortgagee).

2.2. Pledge of assets for bank loans is the act where the borrower (pledgor) has the obligation to deliver movable property owned by them to the lender (called the pledgee) to secure the performance of their obligation to repay the debt (including principal, interest, and late interest penalties); If the asset is subject to registration of ownership rights or has a document proving ownership rights, the parties may agree that the pledgor retains possession of the pledged asset and delivers the original ownership document to the pledgee to secure the performance of the repayment obligation.

2.3. Guarantee for bank loans is the act where a third party (legal entity or individual - called the guarantor) commits to the lender (called the creditor) to perform the obligation to repay the debt on behalf of the borrower (called the debtor) if the debtor fails to fully or partially repay the loan (including principal, interest, and late interest penalties) at maturity. The guarantor performs the guarantee with their own assets, or the parties may agree that the guarantor must mortgage or pledge assets to the creditor.

Article 3. The mortgagee, pledgee, and creditor are credit institutions including:

3.1. State-owned commercial banks, Investment and Development Bank, Joint Stock Commercial Banks, Joint Venture Banks, Branches of Foreign Banks in Vietnam, Financial Companies, Credit Cooperatives established and operating under the Banking Law, Credit Cooperatives Law, and Financial Corporation Law, and People's Credit Funds lending according to the Governor of the State Bank's regulations.

3.2. For Joint Venture Banks and Branches of Foreign Banks in Vietnam, they are not allowed to accept mortgages of land use rights according to the laws on land.

Article 4. The mortgagor, pledgor, debtor, and guarantor:

4.1. The mortgagor, pledgor of assets, and debtor are legal entities, cooperatives, production households, individuals eligible to borrow from credit institutions.

4.2. The guarantor for loans is a legal entity, cooperative, production household, individual having legal capacity and capacity to act.

Article 5. Assets used for mortgage:

5.1. Assets used for mortgage for loans from credit institutions are immovable properties capable of being easily transferred, sold, including:

a) Residential buildings, construction works attached to land, including assets attached to residential buildings and construction works.

b) For immovable properties insured, the insurance contract value also belongs to the mortgaged assets.

c) Production and business facilities such as factories, hotels, shops, warehouses... and machinery, equipment attached to factories, ships, aircraft...

d) Other assets if provided by law.

5.2. Land use rights according to the laws on land.

5.3. Income, profits, and rights arising from mortgaged immovable properties belong to the mortgaged assets or not, as agreed by the parties or provided by law.

Article 6. Assets used for pledge:

6.1. Assets used for pledge for loans from credit institutions are valuable movable properties capable of being easily transferred, sold, including: means of transportation, travel tools, labor tools, machinery and equipment for production and business, raw materials and goods; means of living for groups and individuals, and other movable properties.

6.2. Valuable documents still within their validity period for payment such as savings books, bills of exchange, deposit certificates; bonds issued by enterprises, banks, or the government, and other valuable documents.

6.3. Precious items made of gold, precious stones, and jewelry made of gold and precious stones.

6.4. For movable properties insured, the insurance contract value also belongs to the pledged assets.

6.5. Other assets if provided by law.

Article 7. Assets not accepted for mortgage or pledge:

7.1. Assets prohibited by the State from trading, buying, selling, or transferring.

7.2. Assets currently in dispute.

7.3. Assets not legally owned by the mortgagor, pledgor, or guarantor.

7.4. Leased or borrowed assets.

7.5. Assets currently seized, sealed, frozen, or undergoing dissolution or bankruptcy procedures of enterprises.

7.6. Assets that are already mortgaged, pledged, or secured for other obligations (except in cases provided for in Article 17 and Article 36 of this Regulation).

7.7. Assets that are difficult to store, preserve, inspect, or evaluate.

7.8. Land and assets attached to land that cannot be accepted as collateral according to the provisions of Article 25 of this Regulation.

7.9. For assets formed during the borrowing process, they are generally not considered collateral or pledge for the same loan; however, if it is deemed that the loan or project has national economic significance, is economically viable, and has the ability to repay but lacks collateral, the decision on whether the borrower can use the assets formed during the borrowing process as security for the loan shall be made by the General Director (Director) of the Credit Organization and such person shall bear responsibility for the decision.

Article 8. Duration of mortgage, pledge, and guarantee.

The duration of each mortgage, pledge, or guarantee is calculated from the date of signing the mortgage, pledge, or guarantee contract until the date of termination of the mortgage, pledge, or guarantee (equal to or longer than the loan term specified in the credit contract).

Article 9. Scope of mortgage, pledge, and guarantee.

9.1. For assets with registered ownership rights, an asset may be used as collateral, pledge, or guarantee for one or more loans at one lender, each mortgage, pledge, or guarantee must be registered with the competent state agency; the total amount of loans does not exceed the limit prescribed in Article 12 of this Regulation.

9.2. In cases where multiple Credit Organizations jointly lend to an investment project, an asset with registered ownership rights may be used as collateral or pledge simultaneously at those Credit Organizations; when mortgaging or pledging, registration must be made with the competent state agency. The total amount of loans from Credit Organizations does not exceed the limit prescribed in Article 12 of this Regulation. The priority in settling guaranteed debts through collateral or pledge in such cases shall be agreed upon in the loan cooperation contract among the Credit Organizations or according to the order registered with the competent state agency.

9.3. A legal entity or individual may guarantee one or more borrowers at the same time, but the total amount of guaranteed loans does not exceed the limit prescribed in Article 12 of this Regulation.

9.4. Multiple legal entities or individuals may guarantee a borrower according to the provisions of Clause 44.2 of Article 44 of this Regulation.

Article 10. Valuation of collateral, pledge, and guarantee assets:

10.1. The value of collateral, pledge, and guarantee assets is determined by mutual agreement between the mortgagor, pledgor, guarantor, and the creditor based on market prices at the local level at the time of mortgage, pledge, or guarantee, taking into account factors affecting price increases or decreases up to the end of the mortgage, pledge, or guarantee period. If necessary, experts from specialized agencies may be hired to determine the valuation.

10.2. For negotiable instruments valued in money, the value for pledge is determined by both parties based on the face value of the instrument and its market price, taking into account factors affecting price increases or decreases up to the end of the pledge period.

10.3. The value of land use rights for mortgage is regulated in Article 26 of this Regulation.

10.4. The results of the valuation of collateral, pledge, and guarantee assets need to be recorded in a record to serve as the basis for signing the contract.

Article 11. Forms of mortgage, pledge, and guarantee.

11.1. Mortgage of assets must be established in the form of a commitment letter or mortgage contract (hereinafter referred to as the mortgage contract). For assets for which the law requires registration of ownership rights, mortgage registration must be made with the competent state agency; the creditor holds the original ownership document of the asset.

11.2. Pledge of assets must be established in the form of a commitment letter or pledge contract (hereinafter referred to as the pledge contract). For assets for which the law requires registration of ownership rights, pledge registration must also be made with the competent state agency.

a) For assets for which the law requires registration of ownership rights, the creditor may hold the original ownership document of the asset or hold the pledged asset, as agreed by both parties. If the creditor holds the pledged asset, they must also hold the original ownership document of the asset.

b) For assets for which the law does not require registration of ownership rights, the pledgor must provide a commitment letter regarding their ownership of the asset, confirmed by the competent management authority (for state-owned enterprises, it is the list of pledged assets according to Circular No. 01/TT-LB dated July 3, 1996 issued jointly by the State Bank, Ministry of Finance, and Ministry of Justice), attached to the pledge contract.

11.3. Loan guarantee must be established in the form of a commitment letter or guarantee contract (hereinafter referred to as the guarantee contract).

11.4. The mortgage, pledge, or guarantee contract must be certified by a Notary Public Office or authenticated by the People's Committee of the district, county, town, or provincial city (hereinafter referred to as the People's Committee of the district) according to the following provisions:

a) For assets for which the law requires registration of ownership rights, it is essential to have the contract notarized.

b) For assets for which the law does not require registration of ownership rights, but the total value of assets recorded in the contract is 50 million VND (fifty million) or more, it is essential to have the contract notarized; if less than 50 million VND, the decision to notarize the mortgage or pledge contract is left to the mutual agreement of both parties.

c) Specifically, for guarantee contracts, all values of assets recorded in the contract must be notarized.

d) The procedures for notarizing mortgage contracts, pledge contracts, and guarantee contracts are carried out according to the guidelines set forth in Circular No. 01/TT-LB dated July 3, 1996, jointly issued by the State Bank, Ministry of Finance, and Ministry of Justice.

11.5. For assets for which the law requires registration of ownership rights, mortgage, pledge, or guarantee registration must be made with the competent state agency.

Article 12. Amount of Loan Based on the Value of Collateral, Pledge, or Guarantee:

A credit institution (the mortgagee, pledgee, guarantor) shall determine the loan amount based on the value of the mortgaged, pledged assets or guaranteed assets as stipulated in Article 10 of this Regulation. The maximum loan amount shall be equal to 70% of the value of the mortgaged, pledged assets and guaranteed assets determined and recorded in the contract. For assets pledged under Clause 6.2 and 6.3 of Article 6 of this Regulation, the maximum loan amount may be up to 80% of the value of the pledged asset. The specific loan amount for each type of asset shall be guided by the credit institution.

Article 13. Disposal of mortgaged, pledged, and guaranteed assets.

13.1. In cases where the debtor fails to repay the debt upon maturity (including any extended repayment period, if applicable), and the guarantor also fails to fulfill their obligation to repay the debt, the mortgagee, pledgee, and guarantor have the right to:

a) Dispose of the mortgaged, pledged, or guaranteed assets according to the methods agreed upon in the contract, such as transferring the debt to the mortgagee, pledgee, or guarantor through the asset; conducting self-auction or requesting an authorized agency to conduct an auction.

For state-owned enterprise assets that must be approved by authorized agencies for mortgage or pledge as prescribed by the Government, the disposal process must obtain the opinion of these authorized agencies.

b) In case of disputes, the parties may request an authorized agency to resolve them or initiate legal proceedings.

c) The disposal of mortgaged land use rights shall be carried out in accordance with the provisions of Article 33 of this Regulation.

d) For mortgaged, pledged, or guaranteed assets that are insured, if the asset is at risk or suffers damage, the compensation value from the insurance agency will be used to repay the mortgagee, pledgee, or guarantor.

e) The collection of debts from proceeds of the disposal of mortgaged, pledged, or guaranteed assets shall be conducted in the order of principal, interest, and late payment penalties.

13.2. In cases where the mortgagor, pledgor, or guarantor goes bankrupt, the mortgaged, pledged, or guaranteed assets shall be disposed of in accordance with the provisions of the Enterprise Bankruptcy Law regarding secured debts.

Article 14. Guarantees provided by political and social organizations shall be implemented in accordance with separate regulations of the Government and guidelines issued by the State Bank.

Chapter 2:

SPECIFIC PROVISIONS

I. PROVISIONS ON MORTGAGE OF ASSETS:

Article 15. Mortgage Contract.

15.1. A mortgage contract must include the following basic contents:

- Names and addresses of the parties,

- Full names and addresses of the duly authorized representatives of the parties,

- Loan agreement number and date,

- Account number at the bank...

- Type of mortgaged asset (specify quantity and value...)

- Land use rights certificates (number, date, place and issuing authority, validity period),

- Ownership certificates (number, date, place of issuance, validity period).

- Loan amount,

- Duration of mortgage,

- Method of disposing of mortgaged assets (specify: debt transfer, auction...).

- Rights and obligations of the parties in implementing the contract,

- Commitment of both parties to fulfill their obligations.

Credit institutions shall base on the basic contents specified in Article 15.1 hereof to guide the model mortgage contract.

15.2. Mortgaged assets must be appraised and inspected to determine quantity and value at the time of signing the contract. The valuation of assets shall be carried out in accordance with the provisions of Article 10 of this Regulation.

15.3. The mortgage contract shall be established in four copies with equal validity:

- One copy retained by the mortgagee,

- One copy retained by the registration authority (if any),

- One copy retained by the mortgagor,

- One copy retained by the Notary Public or People's Committee of the district certifying the contract (if certified).

Article 16. Mortgaged assets owned by different entities:

16.1. State-owned mortgaged assets shall be executed in accordance with the Law on State Enterprises, related guiding documents implementing the Law on State Enterprises, and Circular No. 01/TT-LB dated July 3, 1996 issued jointly by the State Bank, Ministry of Finance, and Ministry of Justice. 16.2. Mortgaged assets owned by multiple individuals (two or more) must be committed in writing by all co-owners agreeing to hand over to the representative borrower and sign the mortgage contract.

16.3. Mortgaged assets owned by collectives, joint ventures, or Joint Stock Companies, Limited Liability Companies must have a resolution of the Board of Directors or General Meeting of Members agreeing to mortgage and authorize in writing the representative borrower to sign the mortgage contract.

16.4. Mortgaged assets of a household must have a commitment from all co-owners within the family.

Article 17. Mortgage of one asset for multiple loans:

17.1. An asset can be mortgaged for multiple loans from one lender, each mortgage must be registered with the competent authority, and subsequent loans shall establish supplementary contracts, which must be certified by a Notary Public or People's Committee of the district. The total loan amount shall not exceed the limit prescribed in Article 12 of this Regulation.

17.2. An asset can be mortgaged for multiple lenders in the case of joint financing for a single investment project, the content of the mortgage contract, in addition to the contents stipulated in Clause 15.1 of Article 15 of this Regulation, must clearly specify that one of the lenders retains the original ownership documents of the mortgaged asset attached to the contract, other lenders retain copies (certified by a Notary Public or People's Committee of the district) and record in the multi-lender cooperation loan contract the principles for handling mortgaged assets when the mortgagor fails to repay the debt or when there is a dispute among the lenders.

17.3. In cases where it is necessary to dispose of mortgaged assets to recover a due loan, other loans that have not yet matured shall also be considered due and participate in the debt settlement. The debt settlement of the loans shall be carried out in accordance with Clause 9.2 of Article 9 and in the order of principal, interest, and late payment penalties as specified in Point 13.1.e of Article 13 of this Regulation.

Article 18. Obligations of the mortgagor:

18.1. Register the mortgage of assets with the competent authority.

18.2. Propose the State Notary Office or the People's Committee at the district level to authenticate the mortgage contract.

18.3. Deliver the original documents regarding ownership rights over the mortgaged property (except in cases where they are copies as provided for in Clause 17.2, Article 17 of this Regulation) to the mortgagee; along with other documents related to the exploitation and use of the property if the mortgagee retains possession of the property and exploits it; in the case of land use right certificates, a copy of the cadastral map of the land area must be attached.

18.4. In the event that the mortgagor retains possession and continues to exploit and use the mortgaged property, the mortgagor must:

a) Safeguard the mortgaged property and maintain its value as at the time of signing the contract (without taking into account intangible depreciation and inflation factors).

b) Apply necessary measures including suspending the exploitation and use of the mortgaged property if such activities pose a risk of reducing or devaluing the mortgaged property.

c) Shall not sell, exchange, transfer, give away, or gift the mortgaged property. In the event that the mortgaged property is sold, exchanged, given away, or gifted, the buyer, exchanger, or recipient becomes a guarantor if both the mortgagee and the buyer, exchanger, or recipient agree.

Bear all costs arising from the appraisal, valuation, notarization, and auction of the mortgaged property. Pay storage costs for the mortgaged property to the mortgagee if the mortgagee retains and stores the property; storage costs shall be agreed upon by both parties or as stipulated by law depending on the nature, duration of storage, and recorded in the mortgage contract.

Article 19. Rights of the mortgagor:

19.1. Exploit and derive benefits from the mortgaged property (excluding cases where both parties agree that the benefits also constitute part of the mortgaged property) if the mortgagor retains possession of the property and such agreement is recorded in the mortgage contract.

19.2. Recover the mortgaged property (in cases where the mortgagee retains the property) and the documents pertaining to the mortgaged property from the mortgagee upon completion of the obligation to repay the principal, interest, and penalties (if any), or when replaced by another form of security.

Article 20. Obligations of the mortgagee:

20.1. Return the documents concerning the mortgaged property to the mortgagor when the debt, interest, and penalties (if any) have been fully repaid or when the mortgage has ended according to the law, in cases where the mortgagee retains the documents but not the property.

20.2. In cases where the mortgagee retains the mortgaged property and the ownership documents:

a) Safeguard the mortgaged property to ensure its value remains the same as at the time of mortgage (without considering intangible depreciation and inflation factors).

b) Compensate the mortgagor if poor storage causes loss or reduction in value compared to the time of mortgage (excluding intangible depreciation and inflation factors).

c) Shall not exploit or derive benefits from the mortgaged property except in cases where both parties have agreed as stipulated in Clause 19.1, Article 19 of this Regulation.

d) Return all mortgaged property and related documents to the mortgagor upon full repayment of the principal, interest, and penalties (if any).

Article 21. Rights of the mortgagee:

21.1. Exploit and derive benefits from the mortgaged property in cases where the mortgagee retains possession and exploitation, if both parties have agreed in the contract.

21.2. Retain the original documents concerning ownership rights over the mortgaged property in cases where the mortgagee retains or does not retain the property, except in cases where only copies of the documents are retained as provided for in Clause 17.2, Article 17 of this Regulation.

21.3. Inspect the mortgaged property and take measures to remind the mortgagor to comply with the mortgage contract if there are signs of breach.

21.4. Organize the auction of the mortgaged property or request the competent authority to auction the mortgaged property according to the principles agreed upon in the contract when disposing of the mortgaged property as stipulated in Article 13 of this Regulation; and be paid the debt, interest, and penalties (if any) from the proceeds of the auction.

21.5. Receive the costs related to the storage of the mortgaged property paid by the mortgagor.

Article 22. The mortgage ends in the following cases:

22.1. Both parties agree to cancel the contract and replace the security for the loan with another method.

22.2. The mortgagor fulfills the obligation to repay the principal, interest, and penalties (if any).

22.3. The mortgaged property has been disposed of to recover the debt.

II. REGULATIONS ON THE MORTGAGE OF LAND USE RIGHTS:

Article 23. Object and scope of mortgage of land use rights.

23.1. Households and individuals using agricultural land, forestry land, residential land with a certificate of land use rights issued by the competent state agency have the right to mortgage their land use rights at a Vietnamese bank to obtain loans. Fixed assets on the land such as houses, planted forests, orchards, and other construction works are included in the mortgaged property or not, as agreed by both parties and recorded in the mortgage contract.

23.2. Domestic economic organizations using land for agricultural, forestry, aquaculture, or salt production purposes may mortgage the value of their land use rights together with the value of fixed assets they own and have built on the land at a Vietnamese bank to obtain loans.

22.3. Economic organizations leased land by the state may mortgage the value of the prepaid lease payments together with the value of fixed assets they own and have built on the land at a Vietnamese bank to obtain loans.

23.4. Foreign organizations and individuals, overseas Vietnamese investing in Vietnam under the Law on Foreign Investment in Vietnam who are granted land leases by the state may mortgage the value of their land use rights together with the value of fixed assets they own and have built on the land at a Vietnamese bank to obtain loans.

23.5. Land use rights may be mortgaged partially or entirely.

Article 24. Conditions for mortgaging land use rights:

24.1. The mortgagor must have a certificate of land use rights issued by a competent state agency in accordance with the provisions of the law on land.

24.2. The land must be capable of being easily transferred according to the provisions of the law on land.

24.3. The land must not be in dispute.

24.4. The maximum mortgage period for land use rights shall only be equal to the remaining period of land allocation or lease.

Article 25. Types of land and immovable property attached to land that are not accepted as collateral:

25.1. Land without a lawful certificate of land use rights issued by a competent state agency in accordance with the provisions of the law on land.

25.2. Land used for public purposes, national interests (not for business purposes), including: roads, bridges, culverts, sidewalks, water supply and drainage systems, irrigation works, hydroelectric plants, rivers, lakes, dikes, dams, schools, hospitals, markets, parks, flower gardens, children's playgrounds, squares, sports fields, airports, ports, reservoirs, wells serving multiple families, communal waste disposal sites, power transmission lines, power generation stations, substations, infrastructure construction projects, cemeteries, scientific research facilities, government offices (headquarters of state agencies, political organizations, social organizations, associations, etc.).

25.3. Land used for defense, security, and other special cases as prescribed by the Government.

25.4. Unused land.

25.5. Land within the State's construction planning.

25.6. Land currently in dispute.

Article 26. Value of land use rights for mortgage.

26.1. For households and individuals granted agricultural land, forest land, aquaculture land, or salt-making land by the State, the land value for mortgage shall be set by the People's Committee of the province or centrally-administered city in accordance with the price range prescribed by the Government.

26.2. For households and individuals granted residential land by the State, the land value for mortgage shall be set by the People's Committee of the province or centrally-administered city in accordance with the price range prescribed by the Government.

26.3. For domestic organizations; organizations and individuals from foreign countries granted land or leased land as stipulated in Clauses 23.2, 23.3, and 23.4 of Article 23 of this Regulation, the value of land for mortgage shall be the land use fee or lease fee under current regulations plus the value of assets already invested in construction on the land.

Article 27. Forms of mortgaging land use rights:

27.1. Mortgaging land use rights shall be established in writing as a Mortgage Contract for Land Use Rights. The contents of the Mortgage Contract for Land Use Rights shall be as prescribed in Clause 15.1 of Article 15 of this Regulation.

The Mortgage Contract for Land Use Rights shall be made in four copies, each with notarization and having equal validity:

- One copy accompanied by the original certificate of land use rights and the extract of the plot map of the mortgaged land, kept by the pledgee (except in cases prescribed in Clause 17.2 of Article 17 of this Regulation).

- One copy kept by the registration authority for pledges.

- One copy kept by the mortgagor.

- One copy kept by the Notary Public Office or the People's Committee of the district where the certification takes place.

27.2. The Mortgage Contract for Land Use Rights must be registered at the land administration office at the same level as the People's Committee issuing the certificate of land use rights.

27.3. When terminating the mortgage of land use rights, the cancellation procedures must be carried out at the registration authority for pledges.

Article 28. Re-mortgaging land use rights for multiple loans from one lender or from multiple lenders in the case of multiple lenders jointly financing one investment project as prescribed in the mortgage of assets in Article 17 of this Regulation.

Article 29. Obligations of the mortgagor of land use rights:

29.1. Deliver the original certificate of land use rights, including the extract of the plot map of the mortgaged land, to the pledgee.

29.2. Request a Notary Public Office or the People's Committee of the district to certify the mortgage contract.

29.3. Register the mortgage and cancel the mortgage as prescribed in Clauses 27.2 and 27.3 of Article 27 of this Regulation.

29.4. Not transfer, assign, or lease the mortgaged land use rights.

29.5 Use the land for its intended purpose, not destroy or reduce the value of the mortgaged land.

29.6. Facilitate the lender's inspection of the mortgaged land.

29.7. Repay the principal, interest, and any overdue interest penalties as stipulated in the credit agreement.

29.8. Bear all costs arising from notarization, registration, and handling of the mortgage of land use rights.

Article 30. Rights of the mortgagor of land use rights:

30.1. Exploit and use the land during the mortgage period.

30.2. Enjoy profits derived from the mortgaged land, except when such profits also constitute collateral.

30.3. Receive back the certificate of land use rights after repaying the principal, interest, and any overdue interest penalties (if applicable).

Article 31. Obligations of the pledgee of land use rights:

31.1. Safeguard the certificate of land use rights of the mortgagor securely.

31.2. Return the certificate of land use rights and other documents (if any) to the mortgagor after fully repaying the debt, interest, and any penalties (if applicable).

31.3. Compensate the mortgagor for any damage or loss of the land use rights documents during the mortgage period.

Article 32. Rights of the pledgee of land use rights:

32.1. Inspect and remind the mortgagor to protect, maintain, and use the mortgaged land properly for its intended purpose, and report any violations of the land law to the competent authorities for handling.

32.2. Have the right to request the competent state authorities to auction the mortgaged land use rights to recover the debt, including principal, interest, and any penalties (if applicable).

Article 33.- Disposal of mortgaged land use rights.

When the due date for repayment specified in the credit agreement and the mortgage contract arrives and the mortgagor fails to repay the principal, interest, and any penalties (if applicable), the pledgee has the right to request the competent state authorities to organize an auction of the mortgaged land use rights to recover the debt. The auction of the mortgaged land use rights shall comply with the provisions of the law on land and the Civil Code.

III. PROVISIONS ON PLEDGING ASSETS:

Article 34. Pledging assets in cases where the pledgee only retains documents regarding the ownership of the pledged assets without retaining the assets themselves shall be implemented as prescribed for asset mortgages from Articles 15 to 22 of this Regulation.

Article 35. Pledge of assets where the pledgee retains the pledged assets shall be carried out in accordance with the provisions from Article 37 to Article 42 of this Regulation.

Article 36. Pledging an asset for multiple loans:

36.1. An asset may be used as collateral for multiple loans from one lender in accordance with the provisions regarding mortgaged assets under Clause 17.1 of Article 17 of this Regulation.

36.2. An asset may be used as collateral for multiple lenders in the same investment project in accordance with the provisions regarding mortgaged assets under Clauses 17.2 and 17.3 of Article 17 of this Regulation.

36.3. The total amount of loans in the cases stipulated in Clauses 36.1 and 36.2 of this Article shall not exceed the limit prescribed in Article 12 of this Regulation.

Article 37. Evaluation and inspection of pledged assets:

37.1. Depending on the nature of each type of pledged asset, the pledgor and the pledgee must organize an evaluation and inspection of the quantity and valuation of the asset before signing the pledge contract. During the evaluation and inspection process, there must be a legal representative from both parties who understands the features and functions of the asset, or they can hire technical experts to conduct an appropriate evaluation and inspection.

37.2. The results of the evaluation and inspection may be recorded in a report to serve as the basis for establishing the Asset Pledge Contract.

Article 38. Asset Pledge Contract:

38.1. The asset pledge contract must include the necessary contents as prescribed for the Mortgage Contract under Clause 15.1 of Article 15 of this Regulation.

The asset pledge contract shall be established in four copies, all having equal validity:

- One copy retained by the pledgee.

- One copy retained by the registration authority (if applicable).

- One copy retained by the pledgor.

- One copy retained by the Notary Office or the People's Committee of the district where the certification takes place.

38.2. Termination of asset pledge in the following cases:

- Both parties agree to cancel the pledge contract and replace it with another form of security.

- The pledgor fulfills the obligation to repay the principal, interest, and any penalties (if applicable) to the pledgee.

- The pledged asset has been processed to recover the debt.

Article 39. Obligations of the pledgor:

39.1. Request the State Notary Office or the People's Committee of the district to certify the asset pledge contract.

39.2. Register the pledge of assets with the competent state agency as required by law.

39.3. Bear all costs related to notarization, inspection, preservation, and disposal of the pledged asset.

39.4. Hand over the original ownership certificates of the asset, related documents, and the pledged asset to the pledgee.

Article 40.- Rights of the pledgor:

40.1. To lodge complaints and claim compensation from the pledgee for damages to the pledged asset and ownership certificates caused by poor storage by the pledgee or breach of the pledge contract.

40.2. To reclaim the pledged asset and ownership certificates from the pledgee after termination of the pledge contract.

Article 41. Obligations of the pledgee:

41.1. To store the pledged asset and ownership certificates as stipulated in the asset pledge contract.

41.2. Not to use or exploit the pledged asset for any purpose without prior agreement between both parties in the contract.

41.3. To compensate the pledgor for any damage caused by poor storage or breach of the pledge contract resulting in damage, depreciation, or loss of the pledged asset or ownership certificates (except for natural wear and tear or depreciation).

41.4. To return the entire pledged asset and ownership certificates (if any) when the pledgor fulfills the obligation to repay the principal, interest, and any overdue penalties.

Article 42. Rights of the pledgee:

42.1. To retain the pledged asset and the original ownership certificates (if any) of the pledgor.

42.2. To receive expenses related to the preservation of the pledged asset paid by the pledgor.

42.3. To have the right to organize an auction of the pledged asset or request the competent authority to organize an auction of the pledged asset to recover debts according to the agreed principles in the contract and to recover the principal, interest, and any penalties (if applicable) from the proceeds of the auction.

IV. PROVISIONS ON GUARANTEES FOR BANK LOANS

Article 43. Forms of guarantee.

43.1. A guarantee must be established in a written guarantee contract; the guarantee contract must include the following basic contents:

- Names of the parties (guarantor, recipient of guarantee, and beneficiary).

- Names and titles of the authorized representatives of the three parties.

- Account number of the guarantor at the Bank.

- Loan contract number and date of the beneficiary.

- Collateral or pledge contract number and date of the guarantor (if the guarantor and the recipient of guarantee agree that the guarantor must provide collateral or pledge).

- List and total value of assets used as guarantees.

- Commitment of the guarantor to repay the debt on behalf of the beneficiary and to handle the guarantee assets to repay the debt on behalf of the beneficiary in case of non-collateral or non-pledge, and commitment to handle collateral or pledge assets (if collateral or pledge is required).

- Method of handling the contract.

The guarantee contract must be signed by both parties: the guarantor and the recipient of guarantee.

Credit institutions shall provide detailed templates for guarantee contracts.

43.2. The guarantor can only provide guarantees with assets legally owned by themselves. Whether the guarantor must provide collateral or pledge is determined by mutual agreement between the guarantor and the recipient of guarantee and recorded in the contract.

a) In the case where the guarantor must provide collateral or pledge, it shall be carried out in accordance with the provisions of Article 45 of this Regulation.

b) The recipient of guarantee should carefully examine the economic and financial capacity, asset status, and business reputation of the guarantor before accepting the guarantee.

Article 44. Scope of guarantee:

44.1. The guarantor may agree to provide partial or full guarantee for the loan of the beneficiary.

44.2. Multiple guarantors may provide guarantees for one beneficiary to fulfill a loan contract. Each guarantor provides a partial guarantee for the principal, interest, and penalties and signs an independent guarantee contract.

44.3. One guarantor may provide guarantees for multiple beneficiaries, each time signing an independent guarantee contract.

Article 45. In the case where both parties agree that the guarantor needs to provide collateral or pledge, it shall be carried out as follows:

45.1. The mortgage or pledge of the guarantor's property shall be carried out in accordance with the provisions from Article 15 to Article 22 on mortgaging assets or from Article 23 to Article 33 on mortgaging land use rights under this Regulation when the beneficiary of the guarantee only holds the certificate of ownership of the asset.

45.2. The pledge of the guarantor's property shall be carried out in accordance with the provisions from Article 37 to Article 42 on pledging assets under this Regulation when the beneficiary of the guarantee holds the pledged asset.

Article 46. Obligations of the guarantor:

46.1. Urging the guaranteed party to repay the principal and interest to the beneficiary of the guarantee on time.

46.2. Fulfilling the obligation to repay the principal, interest, and penalty (if any) on behalf of the guaranteed party when the repayment deadline arrives and the guaranteed party fails to fully or partially repay the debt to the beneficiary of the guarantee.

Article 47. Rights of the guarantor:

47.1. Recommending the beneficiary of the guarantee to conduct inspections on the use of borrowed funds by the guaranteed party when necessary.

47.2. Recovering the certificates and pledged assets when the guarantee is terminated (if the guarantee includes a pledge or mortgage agreement).

47.3. Requesting the guaranteed party to reimburse the amount of debt that the guarantor has repaid on its behalf.

Article 48.- Obligations of the beneficiary of the guarantee.

48.1. Safeguarding the certificates of ownership of the guarantor's property and the pledged or mortgaged assets at their value at the time of signing the guarantee contract, except for intangible wear and tear and depreciation, when the guarantee agreement includes a pledge or mortgage of assets.

48.2. Returning the certificates of ownership of the property and the pledged or mortgaged assets (if any) to the guarantor when the guarantee is terminated.

Article 49. Rights of the beneficiary of the guarantee.

49.1. Requesting the guarantor to take measures to urge the guaranteed party to repay the principal and interest on time.

49.2. Requesting the guarantor to fulfill the guarantee obligation when the repayment deadline arrives and the guaranteed party fails to fully or partially repay the loan (including principal, interest, and overdue penalties).

49.3. Being entitled to deduct funds from the guarantor's deposit account or request payment to repay the debt on behalf of the guaranteed party if the guarantor fails to fully perform the guarantee obligation when due.

49.4. Having the right to request auction or propose the competent authority to organize an auction of the guarantor's pledged or mortgaged assets according to the agreed conditions to repay the debt on behalf of the guaranteed party when the guarantor fails to fully perform or does not have the ability to perform the guarantee obligation when due.

49.5. Proposing the competent authority to handle the guarantor's assets to repay the debt on behalf of the guaranteed party if the guarantee does not include a pledge or mortgage of assets as stipulated in the Guarantee Contract.

Article 50. Termination of Guarantee: The guarantee shall be terminated in the following cases:

50.1. The guaranteed party has fully repaid the principal, interest, and penalty (if any) to the beneficiary of the guarantee.

50.2. The guarantor has fulfilled the guarantee obligation.

50.3. The guarantee is replaced by another security measure upon mutual agreement between the two parties.

Article 51.- In case the individual guarantor dies or goes missing, or the corporate guarantor ceases operations, the matter shall be handled in accordance with the law; in case the corporate guarantor is declared bankrupt, it shall be handled in accordance with the Enterprise Bankruptcy Law.

Chapter 3:

IMPLEMENTING PROVISIONS

Article 52. The General Directors (Directors) of State-owned Commercial Banks, Investment and Development Bank, Joint Stock Commercial Banks, Joint Venture Banks, Branches of Foreign Banks in Vietnam, Finance Companies, People's Credit Funds, and Cooperative Credit Union Managers are responsible for issuing guidelines on specific procedures and practices, providing templates for mortgage, pledge, and bank loan guarantee contracts in compliance with this Regulation, and implementing them within their respective systems in accordance with the issued Regulation.

Article 53. The Chief Inspector of the State Bank of Vietnam, Heads of relevant units at the Central State Bank, and Provincial and City Branch Directors of the State Bank of Vietnam are responsible for inspecting and supervising the implementation of this Regulation.

Article 54. Any amendments or supplements to this regulation shall be decided by the Governor of the State Bank of Vietnam.