Decision No. 286/2002/QD-NHNN On Issuing the Joint Financing Regulation for Credit Institutions

DECISION OF THE GOVERNOR OF THE STATE BANK OF VIETNAM

Regarding the issuance of the Joint Financing Regulation for Credit Organizations

 

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 Decision No. 02/1993/QD-TTg of the Government on the tasks, powers, and responsibilities of ministries and ministerial-level agencies in state management

At the proposal of the Director of the Credit Department,

 

DECISION:

Article 1.This Decision promulgates the Joint Financing Regulation for Credit Organizations.

Article 2. This Decision shall take effect 15 days from the date of signature and replace Decision No. 154/1998/QD-NHNN dated April 29, 1999 of the Governor of the State Bank of Vietnam on the issuance of the Joint Financing Regulation for Credit Organizations.

Article 3.The Heads of the Office, Department Heads of the Credit Department, Heads of units under the State Bank, Governors of the State Bank's branches in provinces and centrally governed cities, Chairmen of Management Boards and General Directors (Directors) of credit organizations are responsible for implementing this Decision./.

 

JOINT FINANCING REGULATION FOR CREDIT ORGANIZATIONS

(issued together with Decision No. 286/2002/QD-NHNN dated April 3, 2002 of the Governor of the State Bank of Vietnam)

GENERAL PROVISIONS

Article 1.Scope of regulation.

This regulation governs joint financing by credit organizations for one or part of a project, production plan, business operation, service, development investment, and living needs (referred to as the project in this regulation) aimed at enhancing the capacity and efficiency of the financed party's production and business operations and those of the credit organization.

Article 2.Definitions.

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

1Joint financing:is the process of organizing the provision of credit by the joint financier with the participation of two or more credit organizations, led by one credit organization for one or part of a project, production plan, business operation, service, development investment, and living needs.

2Joint financier: are two or more credit organizations that commit and cooperate with each other to jointly finance the financed party according to the provisions of this regulation.

3.Member: is a credit organization or branch of a credit organization authorized by the General Director (Director) of the credit organization to participate in providing credit in specific forms implemented in joint financing for the project.

5. Develop plans for coordinating activities among Ministries, agencies equivalent to Ministries, government agencies,Lead joint financier: is one of the member credit organizations selected and entrusted by other members based on its capability to organize joint financing. The Central People's Credit Fund and financial companies under the Holding Company cannot act as lead joint financiers.

5.Lead credit provider member: Must be a member capable of performing specific related transactions of the credit form assigned as lead, including:

5.1. Lead member for syndicated loans: is the member chosen and entrusted by syndicated loan participating members to organize syndicated loans.

5.2. Lead member for joint guarantees: is the member chosen and entrusted by guarantee participating members to organize joint guarantees.

6.Organization Payment lead function: Organization the payment lead function must be a credit organization permitted to provide payment services and selected and entrusted by other participating members to provide payment services in joint financing.

7. Financed party: is a legal entity, private enterprise, cooperative, household, limited liability company, or individual with funding needs and eligible to receive credit from joint financiers according to this regulation to implement the project.

8. Joint financing agreement: is a written commitment between participating members regarding the specific rights and obligations of each member throughout the joint financing process.

9. Credit agreement for joint financing: is a written commitment between the joint financier (group of members or individual members) and the financed party concerning the implementation of their respective rights and obligations in lending and guarantee relationships to execute the joint financing project. party The credit agreement for joint financing includes: loan agreements, syndicated loan agreements, guarantee agreements, and joint guarantee agreements.

Circumstances for applying joint financing.

Article 3.1. The credit demand of the financed party for the project exceeds the current lending or guarantee limits of the credit organization;

2. Financial capacity and capital sources of a single credit organization are insufficient to meet the project's credit needs;

3. Risk diversification needs of the credit organization;

4. The financed party requires funds from multiple different credit organizations.

Eligible participants in joint financing.

Article 4. Credit organizations on Participants in joint financing are credit organizations established and operating under the Law on Credit Organizations and their authorized branches. Basic People's Credit Funds are not eligible to participate in joint financing.

Forms of credit for joint financing.

Article 5.1. Loans, syndicated loans;

2. Guarantees, joint guarantees;

3. Combination of the above forms.

The use of other credit forms in joint financing is regulated by the Governor of the State Bank of Vietnam.

Currency used in joint financing.

Article 6.The currency used in joint financing is VND

or foreign currency, appropriate to the project's needs and relevant credit regulations and foreign exchange management rules. Principles for organizing joint financing.

Article 7.1. Members voluntarily participate and cooperate with each other to carry out joint financing.

2. Members unanimously select the lead organization, lead credit provider member, and lead payment member to implement joint financing.

3. The form of credit and transaction methods between participating parties in joint financing and the financed party must be agreed upon and recorded in the joint financing agreement.

Principles for implementing joint financing.

Article 8.In addition to complying with joint financing regulations, all related parties must also comply with:

1. Specific credit provision under each form, application of security measures during joint financing: must be carried out according to the Governor of the State Bank of Vietnam's regulations and other relevant laws.

1. The granting of credit in specific forms and the application of security measuresduring joint financing shall be carried out in accordance with the provisions ofthe Governor of the State Bank and other relevant laws.

2. Members participating in joint financing must agree on the method for reviewingthe project, which may involve establishing a Review Board (with members fromfinancing organizations participating in joint financing) or not establishing sucha board but ensuring consistency among members regarding the feasibility of theproject, creating favorable conditions for credit disbursement in accordance withlegal regulations.

3. The rights and obligations of joint financiers and the receipt of financing areimplemented according to each form of credit provision as stipulated by theGovernor of the State Bank.

4. Joint financiers must regularly monitor the use of financing sources for theproject in accordance with the terms agreed upon in the joint financing contractand the credit provision contract, and cooperate with the recipient of financingto address any arising issues.

Article 9. Interest and fees in joint financing.

1. Parties participating in joint financing collect interest and various fees inaccordance with legal provisions.

2. Any costs incurred during the joint financing process shall be borne by themembers of joint financing as agreed and recorded in the joint financing contract,which can be offset from the interest and various fees of the customer.

II. SPECIFIC PROVISIONS

Article 10. Proposal for joint financing for a project.

1. After receiving the application for credit disbursement in accordance with theregulations for each type of credit provision sent by the customer, the financialorganization conducts an initial review, assessing the feasibility of the proposedloan project.

2. Immediately following the initial review, if the project is feasible and requiresjoint financing, the financial organization receives the anticipated applicationsfrom other financial organizations to participate in joint financing, sending outinvitations for joint financing along with the results of the initial review to theseorganizations. If the project is not feasible, the financial organization willrespond in writing to the customer, clearly stating the reasons for rejecting thecredit disbursement.

3. The invitation for joint financing must include the main contents of the project(name of the project, investor, total investment capital, need for joint financingto implement the project, loan period and repayment period, guarantee period,expected interest rate, fees, and repayment plan) and the main information aboutthe proposed participation in joint financing, the method of participation, the termof joint financing, interest rate, and related fees for implementing joint financingfor the project.

Article 11. Coordination in joint financing.

1.Organizations and individuals in Vietnam, organizations and individuals from foreign countries (hereinafter referred to as organizations and individuals) who have cultural goods for export and import not for business purposes must comply with the provisions of this Decree and other relevant laws. Financial organizations invited to participate in joint financing base theirdecision on the proposals from the inviting financial organization, accompanyingdocuments, their own capital availability, and current legal regulations to decidewhether to participate or not, and they must respond in writing to the proposalsfrom the inviting party.

2. If the need for joint financing is approved and meets the credit disbursementrequest of the financing recipient, the inviting financial organization will informthe recipient of the approval for joint financing. All parties are responsible foragreeing and implementing the terms of joint financing.

3. In cases where the approved joint financing does not meet the requirements ofthe financing recipient's request, the inviting financial organization will handleit as follows:

a) Reassess the ability to provide credit to the financing recipient in compliancewith legal regulations and their own financial capacity, capital sources, andassets.

b) If the financial organization cannot unilaterally provide credit after acceptingthe application, it must notify the financing recipient that it cannot provide alloan, guarantee, including through joint financing, and specify the reasons.

4. During the agreed period for joint financing requests, the financing recipientmay not seek joint financing from another financial organization without theapproval of the organization that has already accepted the application.

5. Inviting joint financing may be carried out through other methods, but the approval ofmembers must be documented and sent in writing.

Article 12.Project review. 1. Joint financiers select and agree on the method for reviewing the project, theoriginal review documents must be kept at the lead organization for jointfinancing, and the review results must be sent to all members and stored at thelead organization for joint financing.

2. The review results must contain essential information about the project,financial capability, and the ability of the financing recipient to fulfill itsobligations to the joint financiers.

3. The review results must fully cover the main information about the project,financial capability, and the ability of the financing recipient to fulfill itsobligations to the joint financiers.

Article 13.Joint financing contract.

1. The joint financing contract should include the following main contents:

1.1. Members participating in joint financing.

2. Scope: The examination and recruitment of primary and preschool teachers shall be conducted to recruit teachers to teach at public educational institutions at the primary and preschool levels. Lead organization for joint financing.

1.3. Credit provider member.

1.4. Financing recipient, capital structure, and funding plan to implement theproject.

1.5. Method and results of project review.

1.6. Form of credit provision.

1.7. Contents of joint financing:

a) Total amount of joint financing divided according to each form of creditprovision by participating members.

b) Specific agreements on joint financing fees.

c) Main contents of each form of credit provision according to current legalregulations, specifically for:

Loan, syndicated loan: Lead syndicated loan organization, participatingfinancial organizations, type and method of loan, amount, term, loan interestrate, security measures for the loan, method of recovering principal andinterest (including principal and interest), and other contents as stipulated bythe Governor of the State Bank regarding loans.

Guarantee, joint guarantee: Lead joint guarantee organization, participatingfinancial organizations, type of guarantee, value of guarantee obligation, termof guarantee, guarantee fee, and other contents as stipulated by the Governor ofthe State Bank regarding guarantees.

1.8. Payment guarantee (if applicable): Payment lead organization, financingmethod, debt collection, payment of fees and interest for the financing recipientand between joint financing participants.

1.9. Provisions for information exchange between joint financing participants onthe progress of joint financing and other relevant news related to theimplementation of the project by the financing recipient.

1.10. Credit guarantee: Form of guarantee, method of evaluating collateral forloans, guarantee contract, handling of collateral to recover debts, and otherrelated issues.

1.11.Handling risks and disputes among members, principles for dealing witharising issues during the implementation of joint financing.

1.12. Record keeping of documents.

1.13. Other contents agreed upon by the joint financing participants.

1.14.Rights, obligations, and responsibilities of each member in signing and performingthe co-sponsorship contract and credit facility contract with the recipient.

2.The specific contents of the co-sponsorship contract must be consistent with theprovisions of the law on economic contracts, the provisions of this Regulation, andother relevant legal provisions.

3.The co-sponsorship contract must be established in multiple copies of equal valueand sufficient for each member to hold one copy.

Article 14. Credit facility contract.

1.The content of the credit facility contract includes the contents related to thespecific provisions of each form of credit facility and the provisions on therights and obligations of each party in each credit relationship, necessarycontents agreed upon in the co-sponsorship contract. The credit facility contractmust have the certification of the lead organization if the lead organizationdoes not participate in the credit facility under this contract. 7.The credit facility contract may be concluded between the participating partiesin the co-sponsorship and the recipient through the lead member of the creditfacility, or directly between the financial institution and the recipient inaccordance with the provisions of the co-sponsorship contract.

2. The credit-granting contract may be concluded between the parties participatingin joint financing through the lead credit-grantor, or directly between the creditinstitution and the recipient of financing in compliance with the provisions of thejoint financing agreement.

Article 15.Guarantee of loan, recovery of principal, interest, and extension of debt.

The guarantee of loan, recovery of principal, interest, and extension of debt shallbe carried out in accordance with the current regulations of the Governor of theState Bank on lending, guarantee, and agreements among the participating partiesin the co-sponsorship contract and the credit facility contract.

Article 16. Liability of the participating co-sponsorship parties.

1.Participating co-sponsorship parties are responsible for implementing the currentregulations for each form of credit facility in accordance with the commitmentsmade in the co-sponsorship contract and the credit facility contract.

2.The recipient has the responsibility to report fully on its financial situation andactivities to the co-sponsorship parties (lead organization of co-sponsorship,lead member of credit facility, and related parties) to facilitate monitoring andinspection when conducting co-sponsorship.

3.Organizations The lead organization of co-sponsorship drafts the co-sponsorship contract andsolicits the unified opinion of the members; represents the co-sponsorship partiesto discuss with the recipient and is responsible for urging other members tohandle arising issues.

4.The lead member for joint lending drafts the joint lending contract, solicits theunified opinion of the joint lending members; represents the joint lendingmembers to sign the joint lending contract with the recipient in accordance withthe Governor's regulations on lending and is responsible for urging, monitoringother members and the recipient in joint lending while also promptly reportingfull results of capital usage checks and other related information to the leadorganization of co-sponsorship and the parties for discussion and implementationof necessary measures.

5.The lead member for joint guarantee implements according to the Governor'sregulations on guarantee.

6.Organ The payment organization implements payment transactions arising during theexecution of co-sponsorship in accordance with the payment agreements in thecosponsorship contract and the credit facility contract.

7.Participating co-sponsorship members implement the exchange of information onthe execution of the co-sponsorship contract as agreed in the co-sponsorshipcontract.

Article 17. Inspection, risk handling, dispute resolution.

1.Participating co-sponsorship parties must regularly inspect the execution processof co-sponsorship and the management and use of funds by the recipient accordingto the signed contract between the parties and current legal regulations.

2.In case risks arise during co-sponsorship, participating co-sponsorship partiesshall agree and unify with the recipient to handle them according to the cosponsorship contract and current legal regulations.

3.Any disputes arising from violations of the co-sponsorship contract or the creditfacility contract shall be resolved by negotiation and agreement among theparties.

In case they cannot be resolved, the parties have the right to initiate litigationaccording to the law.

III. IMPLEMENTATION PROVISIONS

Article 18.Credit organizations on Implementation deployment.

1.On the basis of this Regulation, financial institutions issue specific guidancedocuments suitable for their conditions, characteristics, and operational bylaws.

2.The head of units under the State Bank of Vietnam, the Director of provincialbranches of the State Bank under central cities, based on the functions andresponsibilities assigned, are responsible for directing and supervising theimplementation of this Regulation.

3.The Head of the Accounting and Finance Department is responsible for guidingaccounting for transferred capital, credit facilities, and other specifictransactional activities arising when financial institutions conduct co-sponsorshipunder this Regulation.

Article 19. Amendment and supplementation.

The amendment and supplementation of this Regulation shall be decided by the Governor of the State Bank of Vietnam./.