Decision No. 262/QD-NH14 amends certain provisions of the Regulation on Guarantee Business of Banks issued together with Decision No. 196/QD-NH14 dated September 16, 1994. This Decision applies to the State Bank and commercial, investment, and development banks.
Scope of application
The State Bank and commercial, investment, and development banks
Key points
- A guarantee bank shall not provide guarantees for a business exceeding 10% of the bank's own capital. In cases exceeding this threshold, approval from the Central State Bank is required.
- A guarantee bank shall supplement the phrase 'except overdue debts that have been allowed to be written off' and adjust the content regarding the total amount of guarantees provided to a business.
🌐 Social impact of this document
- Positive impact: Reducing credit risks, strengthening strict management of guarantee activities of banks.
- Negative impact: It may reduce businesses' access to capital if not approved by the Central State Bank.
❓ Frequently asked questions
What is the maximum percentage of a business's own capital that a guarantee bank can cover?
A guarantee bank can cover up to 10% of a business's own capital. In cases exceeding this threshold, the bank must submit a request and obtain approval from the Central State Bank.
How does a guarantee bank handle situations where overdue debts have been allowed to be written off?
A guarantee bank provides guarantees for a business excluding overdue debts that have been allowed to be written off. This provision has been added to the regulation.
When does this Decision take effect?
This Decision takes effect from the date of issuance.
What actions must banks take to provide guarantees exceeding 10% of a business's own capital?
If a bank wishes to provide guarantees exceeding 10% of a business's own capital, it must submit a request to the Central State Bank and only proceed upon receiving approval.
Which regulation does this Decision replace?
This Decision amends certain provisions of the Regulation on Guarantee Business of Banks issued pursuant to Decision No. 196/QD-NH14 dated September 16, 1994.
Full text
DECISION
REGARDING AMENDMENTS TO CERTAIN ARTICLES OF THE REGULATIONS ON GUARANTEE BUSINESS OF BANKS ISSUED PURSUANT TO DECISION NO. 196/QĐ-NH14 DATED SEPTEMBER 16, 1994 OF THE GOVERNOR OF THE STATE BANK
Amending certain Articles of the Regulations on guarantee business of banks issued pursuant to Decision No. 196/QĐ-NH14 dated September 16, 1994 of the Governor of the State Bank.
1. 1. Supplementing the phrase "(except overdue debts that have been allowed to be written off)" after the phrase "no overdue debts in Vietnamese dong and foreign currencies" of Article 6.
GOVERNOR OF THE STATE BANK OF VIETNAM
Pursuant to the Ordinance on the State Bank dated May 23, 1990;
Pursuant to Decree No. 15/CP dated March 2, 1993 of the Government on the tasks, powers, and responsibilities for state management of Ministries and ministerial-level agencies;
At the proposal of the Director of the Credit Department of the State Bank of Vietnam;
DECISION:
Article 1: 1. 2. Amending the content of the clause "The total amount of guarantees for one enterprise shall not exceed 10%, and for the ten largest enterprises, it shall not exceed 30% of the total guarantee capacity of the guarantee bank" of Article 13 to read: "The total amount of guarantees for one enterprise shall not exceed 10% of the charter capital of the guaranteed bank. In cases where the guaranteed bank requests guarantees exceeding 10% of its charter capital, it must submit a written request to the Central Bank of Vietnam for approval, and such guarantees may only be implemented upon receipt of written approval from the Central Bank of Vietnam."
This Decision takes effect from the date of issuance. All previous provisions contrary to this Decision are hereby repealed.
The Director of the Office, Heads of the Credit Department, Foreign Exchange Management Department, Economic Research Department, Accounting and Finance Department, Financial Institutions Department, Inspector General, General Supervision Department, Branch Directors of the State Bank, Heads of relevant units at the Central Bank; Branch Directors of the State Bank in provinces and cities; General Managers (Directors) of commercial banks and development banks are responsible for implementing this Decision./.
Article 2: Nguyen Doan Hung
Article 3: (SIGNED)
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