Decision No. 296/1999/QĐ-NHNN on the limit for lending to a single customer by credit institutions

DECISION OF THE GOVERNOR OF THE STATE BANK OF VIETNAM
Regarding the limit on loans to a customer of a credit institution

GOVERNOR OF THE STATE BANK OF VIETNAM

- Based on the Law on the State Bank of Vietnam No. 01/1997/QH10, and the Law on Credit Institutions No. 02/1997/QH10 dated December 12, 1997;

- Based on Decision No. 1073/QĐ-TTg dated November 17, 1999 of the Prime Minister concerning measures to address the aftermath of floods in the provinces and cities of Quảng Bình, Quảng Trị, Thừa Thiên Huế, Đà Nẵng, Quảng Nam, Quảng Ngãi, and Bình Định;

- At the proposal of the Director of the Department of Banks and Non-Bank Financial Institutions,

Pursuant to …;

Article 1.

1. The total outstanding loan balance of a credit institution to a customer shall not exceed fifteen percent (15%) of the credit institution's own capital.

For foreign bank branches, the total outstanding loan balance of a foreign bank branch to a customer shall not exceed fifteen percent (15%) of the foreign bank's own capital.

2. The total outstanding loan balance of a credit institution to a customer includes: the total outstanding loan balance of the credit institution's trading office and branches to that customer.

3. The provisions of Clause 1 of this Article shall not apply in the following cases:

a- Loans from entrusted funds of the Government, organizations, individuals, or loans to other credit institutions;

b- Loans decided by the Prime Minister regarding the maximum loan amount.

Article 2.

1. The own capital of the credit institution referred to in Article 1 of this Decision includes: charter capital (issued capital, contributed capital) and the supplementary charter capital reserve fund.

2. The provisions of Clause 1 of this Article shall be adjusted in accordance with the operational situation of the credit institution and the provisions of Article 20 of the Law on Credit Institutions.

3. The own capital of a foreign bank is defined by the foreign side.

Article 3.

A customer referred to in Article 1 of this Decision means a legal entity, individual, household, cooperative organization, or private enterprise as stipulated in Clause 2, Article 2 of the "Credit Institution Lending Regulations for Customers" issued together with Decision No. 324/1998/QĐ-NHNN1 dated September 30, 1998 of the Governor of the State Bank of Vietnam.

For state-owned holding companies: A state-owned holding company is considered a customer; each independent accounting member enterprise of the state-owned holding company is considered a customer.

The total outstanding loan balance of a state-owned holding company customer at a credit institution includes: the total outstanding loan balance directly borrowed by the state-owned holding company and the total outstanding loan balance borrowed by dependent member units authorized by the state-owned holding company at that credit institution.

Article 4.

1. When there is a change (increase or decrease) in own capital, credit institutions must report to the State Bank (the State Bank Inspectorate and the Credit Information Center) according to the information reporting system of the State Bank. Foreign bank branches must report changes in the foreign bank's own capital.

2. Credit institutions must report to the State Bank (through the State Bank Credit Information Center) customers whose total outstanding loan balance is five percent (5%) or more of the credit institution's own capital.

3. The State Bank Credit Information Center is responsible for providing such information to the State Bank Inspectorate and providing it upon request of other credit institutions.

Article 5.

This Decision shall take effect fifteen days after its signing. All previous provisions contrary to this Decision shall be abolished.

Article 6.

The Head of the Office, the Director of the Department of Banks and Non-Bank Financial Institutions, the Head of the State Bank Inspectorate, the Heads of State Bank units, the Governors of the State Bank Branches in provinces and cities; Chairmen of the Board of Directors, General Managers (Directors) of credit institutions are responsible for implementing this Decision./.