Circular No. 32/2019/TT-NHNN amending and supplementing certain articles of Circular No. 19/2013/TT-NHNN dated September 6, 2013, issued by the Governor of the State Bank of Vietnam on the purchase, sale, and handling of non-performing loans of the Vietnam Asset Management Company.

CIRCULAR

Amending and supplementing certain articles of Circular No. 19/2013/TT-NHNN dated September 6, 2013, issued by the Governor of the State Bank of Vietnam on the purchase, sale, and handling of non-performing loans by Asset Management Companies. of credit institutions in Vietnam

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Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010; the Law Amending and Supplementing Certain Articles of the Law on Credit Institutions dated November 20, 2017;

Based on the Enterprise Law dated November 26, 2014;

Pursuant to Resolution No. 42/2017/QH14 dated June 21, 2017 of the National Assembly on piloting the handling of non-performing loans of credit institutions;

Pursuant to Decree No. 53/2013/NĐ-CP dated May 18, 2013 of the Government on the establishment, organization, and operation of Asset Management Companies of credit institutions; Decree No. 34/2015/NĐ-CP dated March 31, 2015 and Decree No. 18/2016/NĐ-CP dated March 18, 2016 of the Government amending and supplementing certain articles of Decree No. 53/2013/NĐ-CP;

Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of Banking Inspection and Supervision;

The Governor of the State Bank of Vietnam hereby issues this Circular amending and supplementing certain articles of Circular No. 19/2013/TT-NHNN dated September 6, 2013, issued by the Governor of the State Bank of Vietnam on the purchase, sale, and handling of non-performing loans by Asset Management Companies of credit institutions in Vietnam.

Article 1. Amending and supplementing certain articles of Circular No. 19/2013/TT-NHNN dated September 6, 2013, issued by the Governor of the State Bank of Vietnam on the purchase, sale, and handling of non-performing loans by Asset Management Companies of credit institutions in Vietnam (hereinafter referred to as Circular No. 19/2013/TT-NHNN).

1. Clauses 2, 3, and 4 of Article 3 shall be amended and supplemented as follows:

“2. Restructuring of non-performing debt involves adjusting the repayment period, extending the loan term; reducing or waiving part or all overdue interest, fees, and penalties for breach of contract; and adjusting the interest rate on non-performing debt.

3. Adjusting the repayment period means agreeing to extend the repayment period for part or all of the principal and/or interest within the agreed repayment period in the credit agreement, loan agreement, entrusted credit agreement, bond purchase agreement, or entrusted bond purchase agreement, without changing the final repayment date stipulated in the contract.

4. Extending the loan term means agreeing to extend the repayment period for the principal and/or interest beyond the originally agreed repayment period in the credit agreement, loan agreement, entrusted credit agreement, bond purchase agreement, or entrusted bond purchase agreement.”

2. Supplementing Clause 4a following Article 4 as follows:

“Article 4a. Provisions on foreign exchange management in the activities of purchasing and selling debts by Asset Management Companies

1. Asset Management Companies, credit institutions selling debts, debt buyers from Asset Management Companies, borrowers, and other related parties shall comply with the provisions of the law on restrictions on the use of foreign currency within the territory of Vietnam when conducting debt purchases and sales and recovering purchased debts.

2. When purchasing and selling debts with Asset Management Companies:

a) Debt buyers using Vietnamese Dong shall use a Vietnamese Dong-denominated settlement account opened at a commercial bank or a foreign bank branch operating in Vietnam to make payments to the Asset Management Company for the purchase price of the debt and related costs according to the debt purchase and sale contract when the debt purchase currency is Vietnamese Dong;

b) Non-resident debt buyers using foreign currency shall use a foreign currency-denominated settlement account opened at a commercial bank or a foreign bank branch permitted to operate foreign exchange business in Vietnam or a foreign currency account of the debt buyer abroad to make payments to the Asset Management Company for the purchase price of the debt and related costs according to the debt purchase and sale contract when the debt purchase currency is foreign currency.

3. When recovering debts from purchased debts from Asset Management Companies, the recovered debt amount must be transferred into one Vietnamese Dong-denominated settlement account or one foreign currency-denominated settlement account (in cases where the recovered debt is in foreign currency) opened at a commercial bank or a foreign bank branch permitted to operate foreign exchange business in Vietnam by the debt buyer.

4. In cases of purchasing and selling debts arising from overseas lending operations or debts arising from guarantee payments for non-residents:

a) The seller of the debt (credit institution selling the debt to the Asset Management Company or the Asset Management Company selling the debt) shall register changes to the overseas lending and guarantee recovery amounts according to current regulations on foreign exchange management for overseas lending and guarantee recovery for non-residents;

b) The buyer of the debt (Asset Management Company when buying the debt or the resident buyer of the debt from the Asset Management Company) shall register plans for debt recovery according to current regulations on foreign exchange management for the recovery of overseas debts arising from debt purchase and sale operations.”

3. Clause 2 of Article 6 shall be amended and supplemented as follows:

“2. In cases where Asset Management Companies use special bonds to purchase non-performing foreign currency debts of credit institutions, the VND exchange rate applied to convert to VND is as follows:

a) For non-performing debts denominated in US dollars (USD), it is the central exchange rate published by the State Bank of Vietnam at the time of signing the debt purchase and sale contract;

b) For non-performing debts denominated in foreign currencies other than USD, it is the cross-exchange rate of that foreign currency to VND through USD, with the USD to VND exchange rate being the central exchange rate published by the State Bank of Vietnam and the exchange rate of that foreign currency to USD being the rate quoted on Reuters or Bloomberg screens or other means for those foreign currencies not displayed on Reuters or Bloomberg screens at the time of signing the debt purchase and sale contract.”

4. Article 11 shall be amended and supplemented as follows:

"Article 11. Conditions and terms of bonds, special bonds

1. Face value of bonds, special bonds

a) The face value of bonds is equal to the purchase and sale price of non-performing debts. The face value of special bonds is equal to the purchase and sale price of non-performing debts as specified in Clause 1 of Article 14 of Decree No. 53/2013/NĐ-CP;

b) For the non-performing debt that is purchased or sold, which is a syndicated credit, the face value of special bonds issued to each participating credit institution for the syndicated credit shall have the corresponding value as follows:

(i) The book balance of the principal of the non-performing debt after deducting the specific provision amount not yet utilized for such non-performing debt being monitored at the participating credit institution in the case where the Asset Management Corporation purchases non-performing debt with special bonds;

(ii) The purchase price of the non-performing debt calculated based on the capital contribution ratio of each participating credit institution in the syndicated credit in the case where the Asset Management Corporation purchases non-performing debt at market value with bonds.

2. Bonds and special bonds shall be issued in VND. Bonds may be transferred between the State Bank and credit institutions and among credit institutions. Special bonds shall not be transferable.

3. Bonds and special bonds shall be issued in the form of journal entries, electronic data with identification or registered certificates. The Asset Management Corporation shall decide the form of bonds and special bonds.

4. Bonds and special bonds shall have an interest rate of 0%.

5. The term of bonds and special bonds shall be as follows:

a) The term of bonds shall be determined by agreement between the Asset Management Corporation and the credit institution selling the debt, with a minimum of one year. In cases where the recovered debt proceeds are insufficient to repay the bond when it matures, the Asset Management Corporation shall decide to extend the term of the bond, with a maximum extension period of three years. If the extension period exceeds three years, the consent of the bondholder organization is required. The Asset Management Corporation shall not extend the term of bonds being used to participate in open market operations.

b) The maximum term of special bonds is five years. In cases where special bonds are issued to purchase non-performing debt from credit institutions implementing restructuring plans or facing financial difficulties, the maximum term of special bonds shall not exceed ten years.

6. Bonds and special bonds must be deposited with the State Bank in accordance with the State Bank's regulations on depositing securities and can be used in rediscounting operations with the State Bank. Bonds may be used to participate in open market operations in accordance with the law.

7. Bonds and special bonds are exempted from deposit fees at the State Bank.

8. Credit institutions holding bonds are not required to establish provisions for risk for the bonds.”

5. Clause 1 Article 16 is amended and supplemented as follows:

“1. Non-performing debt purchased by the Asset Management Corporation with special bonds must meet the following conditions:

a) It is non-performing debt as stipulated in Clause 7a Article 3 of this Circular;

b) The non-performing debt has collateral;

c) The non-performing debt and the collateral for the non-performing debt must be lawful and have valid documentation, including at least the following requirements:

(i) The loan contract or borrowing agreement, entrusted credit contract, debt purchase contract, corporate bond purchase or entrusted purchase contract, guarantee contract must clearly reflect the creditor rights of the credit institution, the obligations and liabilities of the borrower, guarantor, and parties responsible for repayment to the credit institution;

(ii) The non-performing debt has not been used to secure the obligations of the credit institution;

(iii) The collateral for the non-performing debt is not disputed property in a lawsuit that has been accepted but not resolved or is currently being resolved by the competent court; is not subject to urgent temporary measures by the court; is not seized or subject to enforcement security measures under the law at the time of purchasing or selling the debt.

The Asset Management Corporation shall base its determination of the legality and validity of the documentation of the non-performing debt and the collateral for the non-performing debt on relevant laws.

d) The borrower still exists;

đ) The book balance of the principal of the non-performing debt or the aggregate principal of non-performing debts of a single borrower or a group of borrowers as stipulated in Clause 4 Article 8 of this Circular at the time of selling the debt shall not be less than three billion VND for groups of borrowers and borrowers who are organizations; not less than one billion VND for individual borrowers or other amounts decided by the Governor of the State Bank.

6. Point d Clause 1 Article 17 is amended and supplemented as follows:

“d) A copy of the loan contract or borrowing agreement, entrusted credit contract, debt purchase contract, corporate bond purchase or entrusted purchase contract, guarantee contract confirmed by the authorized representative of the credit institution selling the debt;”

7. Article 27 is amended and supplemented as follows:

“Article 27. Principles for restructuring purchased non-performing debt

1. The restructuring of non-performing debt must comply with the provisions of Decree No. 53/2013/NĐ-CP, this Circular, and the terms of the loan contract or borrowing agreement, entrusted credit contract, corporate bond purchase or entrusted purchase contract, debt purchase contract.

2. The Asset Management Corporation shall consider, decide, and be responsible for the restructuring of non-performing debt purchased at market value based on a written request from the borrower.

3. The Asset Management Corporation shall implement the restructuring of non-performing debt purchased with special bonds based on a written request from the borrower and in accordance with this Circular.

4. Strictly prohibit any organizations or individuals from taking advantage of debt restructuring to gain illegal benefits.”

8. Article 30 is amended and supplemented as follows:

“Article 30. Measures for restructuring the repayment term of non-performing debts purchased with special bonds

1. The Asset Management Corporation shall review and restructure the repayment term through adjusting the repayment period or extending the debt when the borrower meets the following conditions:

a) The borrower has a feasible repayment plan;

b) In the case of adjusting the repayment period for principal and/or interest: the borrower does not have the ability to repay the principal and/or interest within the agreed repayment period in the credit agreement or loan agreement, entrusted credit provision agreement, purchase, entrusted purchase of corporate bonds, and is assessed by the Asset Management Company as having the ability to repay in subsequent periods after the repayment period has been adjusted;

c) In the case of extending the debt: the borrower does not have the ability to fully repay the principal and/or interest within the agreed repayment period in the credit agreement or loan agreement, entrusted credit provision agreement, purchase, entrusted purchase of corporate bonds, and is assessed by the Asset Management Company as having the ability to fully repay the debt within a certain period after the agreed repayment period;

d) The extension period for non-performing debt shall not exceed the remaining term of the special bond corresponding to that non-performing debt. In cases where the extension period for non-performing debt exceeds the remaining term of the special bond corresponding to that non-performing debt, the Asset Management Company must reach a written agreement with the selling credit institution before making a decision;

2. When reviewing and restructuring the repayment period of non-performing debt, the Asset Management Company exchanges opinions with the selling credit institution before making a decision;

Within ten working days from the date the Asset Management Company sends a request for comments, the selling credit institution must respond in writing to the issues raised by the Asset Management Company. After this deadline, the Asset Management Company will make a decision and bear responsibility for restructuring the repayment period, except in the case provided for in point d, Clause 1 of this Article;

3. Within five working days from the date of the decision to restructure the repayment period, the Asset Management Company shall notify the selling credit institution and the borrower in writing to be informed and cooperate in implementation;

9. Clause 3 of Article 33 is amended and supplemented as follows:

“3. Borrowers undergoing liquidation, bankruptcy, or license revocation shall not be considered for restructuring of non-performing debt or financial support by the Asset Management Company;

10. Article 36 is amended and supplemented as follows:

“Article 36. Contributing to the registered capital and share capital of borrowers who are enterprises

1. The Asset Management Company may contribute to the registered capital and share capital of borrower enterprises in the following forms:

a) Converting purchased non-performing debt into special bonds into the registered capital and share capital of the borrower;

b) Using assets (excluding purchased non-performing debt in special bonds) and lawful sources of funds to contribute to the registered capital and share capital of the borrower (including the form of converting purchased non-performing debt into market value into the registered capital and share capital of the borrower);

2. The conversion of purchased non-performing debt into special bonds into the registered capital and share capital of the borrower can only be carried out under the following circumstances:

a) The borrower is a domestic enterprise operating outside the insurance, securities, remittance, foreign exchange trading, gold, factoring, credit card issuance, consumer credit, payment intermediary services, and credit information sectors;

b) The Asset Management Company must obtain a written agreement from the selling credit institution regarding the conversion of purchased non-performing debt into special bonds into the registered capital and share capital of the borrower before implementing;

c) The selling credit institution of the non-performing debt is a commercial bank meeting the following requirements:

(i) Allowed to invest capital and purchase shares according to the License for Establishment and Operation;

(ii) Ensuring the minimum capital adequacy ratio as stipulated in point b, Clause 1 of Article 130 of the Law on Credit Institutions, the contribution ratio and share purchase ratio as stipulated in Article 129 of the Law on Credit Institutions, and the actual value of the registered capital is not lower than the statutory capital requirement (when calculating these ratios, the actual value of the registered capital mentioned above must include the value of the contributed capital and share capital converted from purchased non-performing debt in special bonds) at the time of issuing the document as stipulated in point b of this clause;

(iii) Achieve profitable business results according to the audited financial report by an independent auditing organization for the year immediately preceding the year of the document as prescribed in point b of this clause;

(iv) Not being subject to administrative penalties for loan classification, provisioning, and risk management, capital contribution, and share purchase in the twelve months immediately preceding the month of issuing the document as stipulated in point b of this clause;

(v) Having an organizational structure, Board of Directors, Board of Members, Supervisory Board, General Director (Director) in accordance with the Law on Credit Institutions and regulations of the State Bank;

3. Within five working days from the date of converting purchased non-performing debt into special bonds into the registered capital and share capital of the borrower, the Asset Management Company shall resell the contributed capital and share capital to the selling credit institution at the value of the contributed capital and share capital and settle the special bonds;

4. Any proceeds recovered from the debt arising during the period from when the Asset Management Company purchases non-performing debt in special bonds until it converts such debt into registered capital and share capital shall be handled according to the provisions of Clause 2 of Article 43 of this Circular;

5. In the case of contributing to the registered capital and share capital of borrower enterprises as stipulated in point b, Clause 1 of this Article, the Asset Management Company must meet the following requirements:

a) The plan for contributing to the registered capital and share capital of the borrower must be feasible and approved by the State Bank, including analyzing and evaluating the effectiveness of the contribution, the financial situation and operations of the borrower, sources of capital for contribution, the possibility of recovering the contributed capital, and proposing measures to recover the contributed capital and participate in restructuring the borrower;

b) The Asset Management Company has the right to participate in restructuring the borrower after contributing to the registered capital and share capital;

c) The contribution to the registered capital and share capital does not violate the limit on the contribution to the registered capital and share capital of the Asset Management Company as stipulated in Clause 2 of Article 33 of this Circular;

d) The borrower has prospects for financial and operational recovery after participating in the contribution to the registered capital and share capital by the Asset Management Company;

đ) The borrower is not in the process of bankruptcy, dissolution, or license revocation.”

11. Clause 4 of Article 42 shall be amended and supplemented as follows:

"4. Fine for violation (if any)."

12. Article 43a shall be added after Article 43 as follows:

"Article 43a. Handling of the recovered funds from non-performing loans purchased at market value with bonds

1. In case the credit institution owning the bond does not borrow refinancing capital based on the issued bond to purchase such non-performing loan or the bond is being used in a forward repurchase agreement between the State Bank and the credit institution but has not yet reached the buyback date, within five working days from the date of occurrence of the recovered funds or assets from the non-performing loan, the Asset Management Corporation must deposit the corresponding amount of recovered funds or assets from the non-performing loan (maximum equal to the face value of the bond) at the credit institution owning the bond in the form of a non-interest-bearing deposit that cannot be withdrawn before the bond repayment date, except as provided for in Clauses 2 and 3 of this Article.

2. In case the credit institution owning the bond borrows refinancing capital based on the issued bond to purchase such non-performing loan (including cases where the refinancing loan has matured but the credit institution has not fully repaid the refinancing loan), the Asset Management Corporation shall implement as follows:

a) Within three working days from the date of receiving the notification from the State Bank regarding the use of the bond for refinancing borrowing at the State Bank, the Asset Management Corporation shall use the corresponding amount of cumulative recovered funds or assets from the non-performing loan purchased at market value with the bond (maximum equal to the face value of the bond) to repay the refinancing loan based on the bond;

b) Within five working days from the date of occurrence of the recovered funds or assets from the non-performing loan, the Asset Management Corporation shall use the corresponding amount of recovered funds or assets from the non-performing loan purchased at market value with the bond (maximum equal to the face value of the bond) to repay the refinancing loan based on the bond;

c) The State Bank will only lift the freeze on the bond used as collateral for refinancing borrowing after the corresponding refinancing capital has been fully repaid;

d) The Asset Management Corporation shall deduct the amounts specified in Points a and b of this Clause from the total amount the Asset Management Corporation must pay to the credit institution owning the bond when settling the bond.

3. In case the State Bank owns the bond (except for cases where the bond is being used in a forward repurchase agreement between the State Bank and the credit institution and has not yet reached the buyback date), the Asset Management Corporation shall implement as follows:

a) Within three working days from the date of receiving the notification from the State Bank regarding the purchase of the bond by the State Bank or the failure of the credit institution to fully pay or partially pay the purchase price of the bond in the forward repurchase agreement between the State Bank and the credit institution, the Asset Management Corporation shall use the corresponding amount of cumulative recovered funds or assets from the non-performing loan purchased at market value with the bond (maximum equal to the face value of the bond) to settle the remaining obligation of the credit institution under the forward repurchase agreement between the State Bank and the credit institution or to settle the debt obligation under the bond issuance agreement with the State Bank;

b) Within five working days from the date of occurrence of the recovered funds or assets from the non-performing loan, the Asset Management Corporation shall use the corresponding amount of cumulative recovered funds or assets from the non-performing loan purchased at market value with the bond (maximum equal to the face value of the bond) to settle the remaining obligation of the credit institution under the forward repurchase agreement between the State Bank and the credit institution or to settle the debt obligation under the bond issuance agreement with the State Bank;

c) The Asset Management Corporation shall deduct the amounts specified in Points a and b of this Clause from the total amount the Asset Management Corporation must pay to the bond owner when settling the bond.

4. When the recovered funds or assets from the non-performing loan are not less than the face value of the bond, the Asset Management Corporation and the bond owner shall settle the bond according to the provisions of Article 44a of this Circular."

13. Clause 2 of Article 44 shall be amended and supplemented as follows:

"2. Within five working days from the due date of special bonds as prescribed in Clause 1 of this Article, the credit institution selling the debt must fully repay the corresponding refinancing capital based on the special bond (if any), the State Bank (Trading Center) will stop freezing the special bond according to regulations and cooperate with the Asset Management Corporation to settle the special bond as follows:

a) In case the full recovery of the non-performing loan (including principal, interest, and other financial obligations related to the loan) according to the credit agreement or loan agreement, agency credit grant agreement, loan sale agreement, corporate bond purchase, agency purchase agreement has not been achieved, the credit institution selling the debt uses the corresponding special bond to repurchase the non-performing loan from the Asset Management Corporation at the recorded balance of the principal loan being monitored on the books of the Asset Management Corporation and the contributed capital, share capital at the borrower customer being accounted for on the internal balance sheet of the Asset Management Corporation in the case of converting part of the non-performing loan into the registered capital, share capital of the borrower customer (if any); the Asset Management Corporation shall settle the amount receivable on the recovered loan funds stipulated in Point b of Clause 2 of this Circular (if any);"

b) In case the full amount of non-performing debt (including principal, interest, and other financial obligations related to the debt) has been recovered according to the credit agreement or loan agreement, the entrusted credit purchase contract, the debt sale contract, or the bond purchase agency contract (including cases where the entire non-performing debt has been sold to organizations or individuals), the credit institution selling the debt shall use the corresponding special bonds to repurchase the equity investment or shares at the book value recorded in the internal balance sheet of the Asset Management Corporation for the case of converting part of the non-performing debt into the charter capital or shares of the borrowing customer (if applicable); and be paid by the Asset Management Corporation the amount of recovered debt according to the provisions of point b, Clause 2, Article 43 of this Circular;

c) In case the entire non-performing debt is converted into the charter capital or shares of the borrowing customer who is a business, the credit institution selling the debt shall use the corresponding special bonds to repurchase the equity investment or shares at the book value recorded in the internal balance sheet of the Asset Management Corporation, and simultaneously pay the Asset Management Corporation the amount of recovered debt according to the provisions of point a, Clause 2, Article 43 of this Circular.”

14. Supplement Article 44a after Article 44 as follows:

"Article 44a. Payment of Bonds

1. Bonds (excluding bonds being used in the forward purchase contract of securities between the State Bank and credit institutions that have not yet reached the redemption date) must be paid under the following circumstances:

a) The amount of money or assets recovered from non-performing debts is not less than the face value of the bonds;

b) The Asset Management Corporation sells non-performing debts, converts part or all of the non-performing debts into equity investments or shares;

c) The Asset Management Corporation has fully paid the face value of the bonds;

d) The bonds have reached their maturity date.

2. Within five working days from the date when the bonds must be paid according to the provisions of Clause 1 of this Article, the Asset Management Corporation shall carry out the following actions:

a) In case the bond holder is a credit institution and does not borrow rediscount funds based on those bonds, the Asset Management Corporation shall pay the amount equal to the face value of the bonds to the credit institution holding the bonds, and the credit institution holding the bonds shall return the bonds to the Asset Management Corporation;

b) In case the bond holder is a credit institution and is currently borrowing rediscount funds based on those bonds, the Asset Management Corporation shall act on behalf of the credit institution to repay the rediscount loans based on those bonds (up to the face value of the bonds) to the State Bank; the remaining amount of bond payment (if any), the Asset Management Corporation shall pay to the credit institution holding the bonds; the Asset Management Corporation shall reclaim the bonds from the credit institution holding the bonds;

c) In case the bond holder is the State Bank, the Asset Management Corporation shall pay the full face value of the bonds to the State Bank, and the State Bank shall return the bonds to the Asset Management Corporation.

3. In case the bonds are being used in the forward purchase contract of securities between the State Bank and credit institutions that have not yet reached the redemption date and fall into any of the situations mentioned in points a, b, and c of Clause 1 of this Article, when the redemption date arrives, the Asset Management Corporation shall carry out the following actions:

a) In case the credit institution fully pays the amount to redeem the securities in the forward purchase contract of securities between the State Bank and the credit institution using the bonds within five working days from the redemption date, the Asset Management Corporation shall pay the amount equal to the face value of the bonds to the credit institution, and the credit institution shall return the bonds to the Asset Management Corporation;

b) In case the credit institution fails to pay or pays insufficiently the amount to redeem the securities in the forward purchase contract of securities between the State Bank and the credit institution using the bonds within five working days from the redemption date, the Asset Management Corporation shall pay the State Bank the outstanding amount owed by the credit institution in the forward purchase contract of securities between the State Bank and the credit institution; the remaining amount of bond payment (if any), the Asset Management Corporation shall pay to the credit institution holding the bonds; the Asset Management Corporation shall reclaim the bonds from the credit institution holding the bonds.”

15. Clause 2 of Article 48 is amended and supplemented as follows:

"2. Trading Center:

a) Carry out the issuance, payment, cancellation of bonds and special bonds upon request of the Asset Management Corporation; implement the extension of the term of special bonds according to the approval document of the State Bank;

b) Guide the procedures for issuing, paying, canceling, and registering bonds and special bonds, and extending the term of special bonds on the electronic trading system of the State Bank;

c) Implement the freezing of bonds and special bonds related to rediscount loans when the credit institution holding the bonds or special bonds borrows rediscount funds; stop freezing bonds and special bonds when the corresponding rediscount loan of the credit institution with respect to those bonds or special bonds is fully repaid;

d) Confirm the special bonds corresponding to non-performing debts not frozen at the State Bank upon request of the Asset Management Corporation when the Asset Management Corporation transfers non-performing debts purchased with special bonds into market value-purchased non-performing debts;

đ) Take the lead and coordinate with the Monetary Policy Department to monitor the use of bonds by credit institutions to participate in open market operations, and the use of bonds and special bonds to borrow rediscount funds from the State Bank;

e) Within three working days from the date when the circumstances arise where bonds are used for refinancing loans, participating in open market operations with the State Bank; or when the refinancing loan secured by bond has matured but the credit institution has not fully repaid the principal and interest on time; or when the credit institution fails to pay or pays insufficiently the amount to repurchase securities under the forward purchase agreement between the State Bank and the credit institution using bonds, the Trading Department shall notify the Asset Management Company in writing so that the Asset Management Company is aware and performs the responsibilities prescribed in this Circular;

g) Cooperate with the Asset Management Company in handling the recovered debt proceeds and bond payments in cases where bonds are used for refinancing loans, participating in open market operations with the State Bank as stipulated in Articles 43a and 44a of this Circular.”

16. Clause 5 of Article 48 is amended and supplemented as follows:

“5. The Information Technology Department supports units under the State Bank and the Asset Management Company in coordinating, exchanging, providing, and utilizing information and statistics on the purchase, sale, and management of non-performing debts.”

17. Clause 6a is added after Clause 6 of Article 48 as follows:

“6a. The Monetary Policy Department coordinates with the Trading Department to monitor credit institutions' use of bonds to participate in open market operations, and their use of bonds and special bonds for refinancing loans at the State Bank.”

18. Clauses 9 and 10 are added to Article 49 as follows:

“9. Monthly, no later than the 10th day of each month, report and provide information on purchased non-performing debts and changes in these non-performing debts to the National Credit Information Center via the electronic portal of the National Credit Information Center.

10. Coordinate with the Trading Department in handling recovered debt proceeds and bond payments in cases where bonds are used for refinancing loans, participating in open market operations with the State Bank.”

19. Points d and e of Clause 4 of Article 50 are added as follows:

“d) Credit institutions selling debts and receiving special bonds without cash dividends until the special bonds are paid off, except as provided in point e of this clause;

e) Credit institutions selling debts and receiving special bonds with a term exceeding five years or credit institutions obtaining the State Bank's approval to extend the term of special bonds shall not distribute cash dividends to generate funds for managing non-performing debts until the special bonds with a term exceeding five years or extended special bonds are paid off.”

Article 2. Implementation

The Head of the Office, the Head of Banking Inspection and Supervision, Heads of Units under the State Bank of Vietnam, Governors of the State Bank Branches in provinces and centrally-administered cities, Chairmen of the Board of Directors, Chairmen of the Board of Members, General Directors (Directors) of Vietnamese credit institutions, Chairmen of the Board of Members, General Directors of the Asset Management Company are responsible for implementing this Circular.

Article 3. Implementation Provisions

1. This Circular takes effect from February 14, 2020.

2. This Circular abolishes:

a) Clauses 6, 9, 26, 27, and 38 of Article 1 of Circular No. 14/2015/TT-NHNN dated August 28, 2015, amending and supplementing certain provisions of Circular No. 19/2013/TT-NHNN issued by the Governor of the State Bank of Vietnam;

b) Clauses 4, 7, 13, 17, and 18 of Article 1 of Circular No. 08/2016/TT-NHNN dated June 16, 2016, amending and supplementing certain provisions of Circular No. 19/2013/TT-NHNN./.