Circular No. 39/2016/TT-NHNN on the lending activities of credit institutions and foreign bank branches for customers

CIRCULAR

Regulations on lending activities of credit institutions,

foreign bank branches to customers.

______________________

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

Pursuant to the Law on Credit Organizations dated June 16, 2010;

Pursuant to Decree No. 156/2013/NĐ-CP dated November 11, 2013, of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

Article 1.

The Governor of the State Bank of Vietnam issues this Circular regulating the lending activities of credit institutions and foreign bank branches to customers.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular regulates the lending activities of credit institutions (hereinafter referred to as credit institutions) to customers.

2. This Circular does not regulate lending activities between credit institutions.

Article 2. Interpretation of Terms

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

2. Credit institutions that lend are credit institutions established and operating under the provisions of the Law on Credit Institutions, including:

a) Commercial banks;

b) Cooperative banks;

c) Non-bank credit institutions;

d) Microfinance organizations;

đ) People's Credit Funds;

e) Foreign bank branches.

3. Borrowers at credit institutions (hereinafter referred to as customers) are legal entities, individuals, including:

a) Legal entities established and operating in Vietnam, legal entities established abroad and legally operating in Vietnam;

b) Individuals with Vietnamese citizenship, individuals with foreign citizenship.

4. Lending to meet living needs is the activity of credit institutions lending to individual customers to pay for expenses for personal consumption and household purposes.

5. Lending to support business operations and other activities (hereinafter referred to as business operations) is the activity of credit institutions lending to corporate and individual customers to meet capital requirements outside those specified in Clause 4 of this Article, including the capital requirements of such corporate and individual customers and the capital requirements of households and private enterprises where such individuals are the household heads or enterprise owners.

6. Capital utilization plan is a collection of information about the customer's capital usage, which must include:

a) Total capital needed to be used, detailed types of capital within the total capital needed to be used (including capital to be borrowed from credit institutions); purpose of capital usage; duration of capital usage;

b) Customer's source of debt repayment;

7. Financial capacity is the customer's ability regarding capital, assets, and other lawful financial sources.

8. Loan term is the period calculated from the day following the date when the credit institution disburses the loan to the customer until the date when the customer must repay the entire principal and interest of the loan according to the agreement between the credit institution and the customer. If the last day of the loan term is a public holiday or weekly rest day, it will be extended to the next working day. For loan terms less than one day, the provisions of the Civil Code on the commencement of the term shall apply.

9. Repayment periods are intervals within the agreed loan term during which the customer must repay part or all of the principal and/or interest of the loan to the credit institution.

10. Restructuring of repayment terms is the credit institution's acceptance to adjust the repayment terms, extend the debt as follows:

a) Adjusting repayment terms is the credit institution's acceptance to extend the repayment period for part or all of the principal and/or interest of the loan within the agreed repayment terms (including cases where the number of repayment terms remains unchanged), without changing the loan term;

b) Extending the debt is the credit institution's acceptance to extend the repayment period for the principal and/or interest of the loan beyond the agreed loan term.

a) The overdue principal balance transferred according to Article 20 of this Circular;

b) The principal balance that the customer cannot repay ahead of schedule when the credit institution terminates the loan and recovers the loan ahead of schedule according to Clause 1 of Article 21 of this Circular.

Article 3. Autonomy of Credit Institutions

1. Credit institutions have the right to operate autonomously in lending activities and bear responsibility for their lending decisions. No organization or individual may interfere with the lending activities of credit institutions in violation of the law.

2. Credit institutions have the right to refuse requests from customers that do not comply with the provisions of this Circular and the loan agreement.

Article 4. Principles of Lending

1. The lending activities of credit institutions towards customers shall be carried out in accordance with agreements between credit institutions and customers, in compliance with the provisions of this Circular and relevant laws including environmental protection laws.

Article 5. Application of Relevant Legal Documents

1. Lending activities of credit institutions shall be conducted in accordance with the Law on Credit Institutions, this Circular, and relevant legal provisions.

2. Specific lending activities prescribed in separate documents issued by the Government, Prime Minister, and State Bank of Vietnam shall be implemented according to the provisions of those documents; where such documents provide for the application of this Circular or related content not covered in the specific documents, they shall be implemented in accordance with the relevant provisions of this Circular. Specific lending activities include:

a) Syndicated lending activities;

b) Lending activities for customers to invest abroad;

c) Lending activities for customers engaged in business operations under government economic and social policies and programs;

d) Foreign currency lending activities for resident customers;

đ) Overseas lending and debt collection activities for non-resident customers;

e) Lending activities of people's credit funds and microfinance organizations;

g) Consumer lending activities of finance companies;

h) Other specific lending activities prescribed in separate documents issued by the Government, Prime Minister, and State Bank of Vietnam.

Article 6. Language Usage

1. Loan agreements shall be drafted in Vietnamese or simultaneously in Vietnamese and a foreign language.

2. For other documents used in lending activities in a foreign language, when authorized agencies request translation into Vietnamese, the translation must be confirmed by an authorized representative of the credit institution or must be notarized or certified.

Article 7. Conditions for borrowing

Credit institutions shall consider and decide to lend when customers meet the following conditions:

1. Customers are legal entities with full civil capacity as provided by law. Customers are individuals aged 18 years or older with full civil capacity as provided by law or individuals aged 15 to under 18 years old who have not lost or been restricted in their civil capacity as provided by law.

2. The need for borrowing funds for lawful purposes.

4. Financial capability to repay the debt.

Credit organizations shall not provide loans for the following capital needs:

1. To carry out business investment activities in industries and trades prohibited by law.

2. To pay expenses and meet financial requirements for transactions and acts prohibited by law.

3. To purchase and use goods and services in industries and trades prohibited by law for business investment.

4. To buy gold bars.

5. To repay credit granted by the lending credit organization itself, except in cases where the loan is provided to pay interest on borrowed funds arising during the construction period of a project, with the interest cost included in the approved total investment cost according to the law.

6. To repay credit from other credit organizations and foreign loans, except in cases where the loan is provided to prepay a loan that meets the following conditions:

a. It is a loan for business operations;

b. The loan term does not exceed the remaining term of the original loan;

c. It has not undergone restructuring of the repayment schedule.

When applying for a loan, customers must submit to the credit organization documents proving their eligibility for borrowing as stipulated in Article 7 of this Circular and other documents as guided by the credit organization.

Article 10. Types of Loans

Credit organizations consider and decide to grant loans to customers based on the following types of loans:

1. Short-term loans are loans with a maximum term of 01 (one) year.

2. Medium-term loans are loans with a term exceeding 01 (one) year but not more than 05 (five) years.

3. Long-term loans are loans with a term exceeding 05 (five) years.

Article 11. Loan Currency and Repayment Currency

1. Credit organizations and customers agree on the currency of the loan, either Vietnamese dong or foreign currency, in accordance with this Circular and relevant laws.

Article 12. Loan Amount

Based on the capital usage plan, financial capacity of the customer, credit limits for the customer, and the credit organization's available resources, the credit organization agrees with the customer on the loan amount.

Article 13. Interest Rates on Loans

1. Credit organizations and customers agree on the interest rate on loans based on market demand for capital, borrowing needs, and the customer's creditworthiness, except when the State Bank of Vietnam sets a maximum interest rate for loans as stipulated in Clause 2 of this Article.

a. To serve the development of agriculture and rural areas as prescribed by the Government's policy on credit for agricultural and rural development;

b. To implement export trade plans as stipulated in the Commercial Law and guiding documents of the Commercial Law;

c. To serve the business operations of small and medium-sized enterprises as prescribed by the Government's support policies for small and medium-sized enterprises;

d. To develop supporting industries as prescribed by the Government's policies on supporting industry development;

e. To serve the business operations of high-tech enterprises as stipulated in the High-Tech Industry Law and guiding documents of the High-Tech Industry Law.

3. The agreement on the interest rate for loans includes the loan interest rate and the method of calculating interest on the loan. If the loan interest rate is not convertible to an annual percentage rate and/or does not apply the actual outstanding balance method, then the loan agreement must include the converted annual interest rate (a year being three hundred sixty-five days) based on the actual outstanding balance and the duration of maintaining that balance.

4. Upon maturity, if the customer fails to repay or fully repay the principal and/or interest as agreed, the customer must pay interest on the loan as follows:

a. Interest on the principal at the agreed loan interest rate corresponding to the loan term that has not been repaid;

b. In case the customer fails to pay the interest as stipulated in point a of this clause on time, they must pay overdue interest at the rate agreed between the credit organization and the customer, but not exceeding 10%/year on the outstanding interest balance corresponding to the overdue period;

c. In case the loan becomes overdue, the customer must pay interest on the overdue principal balance at the rate not exceeding 150% of the in-term loan interest rate applicable at the time of becoming overdue.

5. In case of adjustable interest rates on loans, the credit organization and the customer must agree on the principles and factors to determine the adjusted interest rate and the timing for adjusting the loan interest rate. If the factors determining the adjusted interest rate result in multiple loan interest rates, the credit organization shall apply the lowest loan interest rate.

Article 14. Fees related to lending activities

Credit organizations and customers shall agree on the collection of fees related to lending activities, including:

1. Prepayment fee in case the customer repays the loan ahead of schedule.

2. Fee for standby credit limit.

3. Syndication fee.

4. Commitment fee from the date the lending agreement becomes effective until the first disbursement of the loan.

5. Other fees related to lending activities as specified in relevant regulatory documents.

Article 15. Loan Security

1. The application of loan security measures or the non-application thereof shall be agreed upon between credit organizations and customers. The agreement on loan security measures between credit organizations and customers must comply with the provisions of the law on security measures and related laws.

2. Credit organizations shall decide and bear responsibility for granting loans without applying loan security measures.

3. Customers and guarantors must cooperate with credit organizations to handle secured assets when there is a basis for handling according to the lending agreement, the loan guarantee contract, and the provisions of the law.

Article 16. Provision of Information

1. Credit organizations have the responsibility to provide customers with complete information before establishing a lending agreement: lending interest rate; principles and factors determining, timing of determining the adjustable lending interest rate; interest rate applied to overdue principal balance; interest rate applied to late payment interest; method of calculating loan interest; types of fees and fee levels applicable to the loan; criteria for determining borrowers eligible for the lending interest rate as stipulated in Clause 2, Article 13 of this Circular.

a) Documents prescribed in Article 9 of this Circular;

b) Reports on the use of borrowed funds and proof that the borrowed funds were used for the purpose stated in the lending agreement;

c) Documents to prove the application of loan security measures.

Article 17. Appraisal and Decision to Grant Loans

1. Credit organizations shall appraise the customer's ability to meet the borrowing conditions as stipulated in Article 7 of this Circular to consider granting loans. During the appraisal process, credit organizations may use their internal credit rating system, combined with information from the National Credit Information Center, and other sources of information.

2. Credit organizations must organize loan approval procedures based on the principle of defining responsibilities between the appraisal stage and the decision-making stage for granting loans.

3. In cases where a loan is not granted, credit organizations shall notify customers of the reasons upon request by the customers.

Article 18. Repayment of Principal and Interest on Loans

1. Credit organizations and customers shall agree on the terms for repayment of principal and interest on loans as follows:

a) Repayment of principal and interest on loans according to separate periods;

b) Repayment of principal and interest on loans within the same period.

2. Credit organizations and customers shall agree on early repayment.

3. In cases where customers are unable to repay part or all of the principal and/or interest on loans on time, credit organizations shall consider restructuring the repayment schedule according to the provisions of Article 19 or transferring overdue loans according to the provisions of Article 20 of this Circular. Credit organizations and customers shall agree on the calculation of interest payable in accordance with Clause 4, Article 13 of this Circular.

Article 19. Restructuring of Debt Repayment Periods

Credit institutions shall consider and decide on restructuring debt repayment periods based on the customer's request, the credit institution's financial capacity, and the assessment of the customer's ability to repay debts, as follows:

1. If the customer is unable to repay the principal and/or interest on time and is assessed by the credit institution as having the ability to fully repay the principal and/or interest according to the adjusted repayment period, the credit institution shall consider adjusting the repayment period for the principal and/or interest in accordance with the customer's source of repayment; the loan term remains unchanged.

2. If the customer is unable to fully repay the principal and/or interest within the agreed loan term but is assessed by the credit institution as having the ability to fully repay the principal and/or interest within a certain period after the agreed loan term, the credit institution shall consider extending the debt repayment period in accordance with the customer's source of repayment.

3. The restructuring of debt repayment periods shall be carried out before or within 10 (ten) days from the due date of the agreed repayment period.

Article 20. Overdue Debts

Credit institutions shall transfer overdue debts for the outstanding principal that customers fail to repay on time as agreed and have not been approved by the credit institution for restructuring of debt repayment periods; notify the customer about the transfer of overdue debts. The notification content must minimally include the amount of overdue principal, the date of transferring overdue debts, and the interest rate applied to the overdue principal.

Article 21. Termination of Loans, Debt Collection, Waiver, and Reduction of Interest and Fees

1. Credit institutions have the right to terminate loans and recover debts ahead of schedule as agreed when they discover that customers provide false information, violate provisions in the loan agreement and/or the loan guarantee contract. When implementing the termination of loans and recovery of debts ahead of schedule as agreed in the loan agreement, credit institutions must notify customers about the termination of loans and recovery of debts ahead of schedule. The notification content must minimally include the date of terminating loans and recovering debts ahead of schedule, the amount of principal recovered ahead of schedule; the deadline for repaying the recovered principal, the date of transferring overdue debts, and the interest rate applied to the recovered principal.

2. In cases where customers are unable to repay maturing debts, credit institutions have the right to apply debt collection measures as agreed in the loan agreement, loan guarantee contract, and relevant laws. In cases where applying debt collection measures still fails to fulfill the obligation to repay debts to the credit institution, customers are responsible for continuing to fully repay the principal and interest to the credit institution.

3. In cases where customers or guarantors are decided by the court to initiate bankruptcy proceedings or declared bankrupt, the credit institution's debt recovery against customers and guarantors shall be carried out in accordance with the law on bankruptcy.

4. Credit institutions have the right to decide to waive or reduce interest and fees for customers in accordance with internal regulations of the credit institution.

Article 22. Internal regulations

2. The internal regulations on lending of credit institutions shall be implemented throughout the system and must include at least the following specific contents:

d) Application of collateral measures for borrowed funds, appraisal of collateral assets, management, supervision, and tracking of collateral assets that are appropriate to the collateral measures, characteristics of collateral assets, and customers;

đ) Termination of lending, debt handling; exemption or reduction of interest on borrowed funds, fees;

3. Within ten working days from the date of issuance or amendment of the internal regulations on lending, microfinance organizations and people's credit funds shall submit such internal regulations to the State Bank of Vietnam branch in the province or city; other credit institutions shall submit them to the State Bank of Vietnam (Supervisory Authority).

Article 23. Loan Agreements

1. Loan agreements must be documented in writing, containing at least the following contents:

a) Name, address, business registration number of the lending credit institution; name, address, identification card number, citizen identity card number, passport number, or business registration number of the customer;

b) Amount of the loan; credit limit for cases of credit limit lending; reserve credit limit for cases of reserve credit limit lending; overdraft limit for cases of overdraft limit lending on a transaction account;

c) Purpose of using borrowed funds;

d) Currency of the loan, currency of repayment;

đ) Method of lending;

e) Term of the loan; maintenance period for the credit limit for cases of credit limit lending, validity period of the reserve credit limit for cases of reserve credit limit lending, or maintenance period for the overdraft limit for cases of overdraft limit lending on a transaction account;

g) Interest rate for the loan as agreed and the converted interest rate expressed as a percentage per annum based on the actual outstanding balance of the loan and the actual duration of maintaining that balance, as stipulated in Clause 3, Article 13 of this Circular; principles and factors determining the interest rate, the timing of determining the interest rate for cases applying adjustable interest rates; interest rate applied to overdue principal balances; interest rate applied to late interest payments; types of fees related to the loan and applicable fee levels;

h) Disbursement of loan funds and the use of payment instruments for disbursement of loan funds;

i) Repayment of principal and interest on the loan and the order of recovering principal and interest on the loan; early repayment;

k) Restructuring of repayment terms; transfer of overdue debt for the principal balance that the customer cannot repay on time as agreed and has not been approved by the credit institution for restructuring of repayment terms; form and content of notification of overdue debt transfer as stipulated in Article 20 of this Circular;

l) Customer's responsibility to cooperate with the credit institution and provide documents related to the loan for the credit institution to conduct reviews and make lending decisions, monitor the use of borrowed funds, and customer repayment;

m) Cases of termination of lending; early debt recovery; transfer of overdue debt for the principal balance that the customer cannot repay early when the credit institution terminates lending and recovers early debt; form and content of notification of termination of lending and early debt recovery as stipulated in Clause 1, Article 21 of this Circular;

n) Debt resolution; penalty for breach and compensation for damages; rights and responsibilities of the parties;

o) Effectiveness of the loan agreement.

5. In cases of using standard contracts or general transaction terms in concluding consumer loan contracts, the finance company must perform:

3. The loan agreements specified in Clauses 1 and 2 of this Article shall be established in the form of specific loan agreements or framework agreements and specific loan agreements.

4. In cases where standard contracts or general trading terms are used in establishing loan agreements, credit institutions must perform the following:

a) Publicly display standard contracts and general trading terms for lending at their headquarters and post them on their electronic information websites;

1. The customer shall be responsible for using the borrowed capital and repaying the debt according to the agreed content; reporting and providing documents proving the usage of the borrowed capital upon request of the credit institution.

Article 25. Penalties for Violations and Compensation for Damages

1. Credit institutions and customers may agree on penalties for violations and compensation for damages in accordance with the provisions of the law for cases where the credit institution or the customer does not fulfill the contents of the loan agreement, except for the cases provided for in Clause 4, Article 13 of this Circular.

2. Credit institutions and customers may agree that the party violating the obligation only bears the penalty for violation without having to compensate for damage, or both bear the penalty for violation and compensate for damage. In case the credit institution and the customer have agreed on penalties for violation but not on bearing both penalties for violation and compensation for damage, the party violating the obligation only bears the penalty for violation.

Article 26. Other Provisions

When implementing loans, credit institutions shall be responsible for:

Chapter II
SPECIFIC PROVISIONS

Section 1
LENDING ACTIVITIES

TO SUPPORT BUSINESS OPERATIONS

Article 27. Methods of Lending

Credit institutions shall agree with customers on the application of the following lending methods:

2. Syndicated lending: This involves two or more credit institutions jointly implementing lending to a customer to carry out a single plan or project.

3. Seasonal lending: This involves the credit institution lending to the customer to cultivate and care for seasonal crops and livestock according to the production cycle within a year or perennial trees and industrial crops harvested annually. Accordingly, the credit institution and the customer agree that the principal balance of the previous cycle can continue to be used for the next production cycle but not exceeding the duration of two consecutive production cycles.

6. Overdraft facility on settlement account: The credit institution agrees to allow the customer to exceed the amount available in their settlement account up to a maximum overdraft limit to perform settlement services on the settlement account. The maximum overdraft limit is maintained for a maximum period of one year.

7. Revolving lending: The credit institution and the customer agree to apply lending to meet working capital needs with a business cycle not exceeding one month, allowing the customer to use the principal balance from the previous business cycle for the next cycle, but the lending term shall not exceed three months.

8. Rolling-over lending: The credit institution and the customer agree to apply short-term lending to the customer under the condition that:

a) Upon maturity of the loan, the customer has the right to repay the loan or extend the repayment period for a certain period for part or all of the outstanding principal balance of the loan;

b) The total loan period does not exceed twelve months from the initial disbursement date and does not exceed one business cycle;

c) At the time of considering the loan, the customer has no bad debts at other credit institutions;

d) During the rolling-over lending process, if the customer has bad debts at other credit institutions, they shall not be allowed to extend the repayment period as agreed.

9. Other lending methods may combine the lending methods prescribed in Clauses 1, 2, 3, 4, 5, 6, 7, and Clause 8 of this Article, suitable for the operating conditions of the credit institution and the characteristics of the loan.

Article 28. Loan Term

1. Credit organizations and customers shall base on the business cycle, capital recovery period, customer's debt repayment capacity, loanable funds, and remaining operating period of the credit organization to agree on the loan term.

2. For legal entities established and operating in Vietnam, legal entities established abroad but legally operating in Vietnam, the loan term shall not exceed the remaining lawful operating period of the customer; for individuals with foreign nationality residing in Vietnam, the loan term shall not exceed the remaining permitted residence period in Vietnam.

1. Credit organizations shall establish loan files, including:

a) Loan application file;

b) Loan agreement;

c) Financial status report submitted by the customer during the borrowing period: financial statements filed with competent state authorities and/or audited financial statements in cases where the customer is required to prepare financial statements under the law; financial situation reports of the customer according to the guidance of the credit organization.

d) File related to collateral for the loan;

đ) Loan decision signed by authorized persons; in case of collective decision, there must be a record clearly stating that the decision has been approved;

e) Documents generated during the use of the loan related to the loan agreement as guided by the credit organization.

2. Credit organizations must retain loan files; the retention period for loan files shall be carried out in accordance with the provisions of the law.

MEETING LIVING NEEDS

Article 30. Methods of Lending

Credit institutions shall agree with customers on the application of the following lending methods:

1. The lending methods prescribed in Clause 1, 4, and 6 of Article 27 of this Circular.

2. Other lending methods may combine the lending methods prescribed in Clause 1 of this Article, in accordance with the business conditions of the credit organization and the characteristics of the loan.

Article 31. Loan Term

1. Credit organizations and customers shall agree on the loan term based on the customer's debt repayment capacity, loanable funds, and the remaining operating period of the credit organization.

2. For individuals with foreign nationality residing in Vietnam, the loan term shall not exceed the remaining permitted residence period in Vietnam.

1. Credit organizations shall establish loan files, including:

a) Loan application file;

b) Loan agreement;

c) Report on the customer's income situation during the borrowing period according to the guidance of the credit organization;

d) File related to collateral for the loan;

đ) Loan decision signed by authorized persons; in case of collective decision, there must be a record clearly stating that the decision has been approved;

e) Documents generated during the use of the loan related to the loan agreement as guided by the credit organization.

2. Credit organizations must retain loan files; the retention period for loan files shall be carried out in accordance with the provisions of the law.

Chapter III
IMPLEMENTATION

Article 33. Effective Date

1. This Circular takes effect from March 15, 2017.

1. This Circular takes effect from February 26, 2018.

a) Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001 of the Governor of the State Bank of Vietnam on the issuance of the Regulation on lending by credit organizations to customers;

b) Decision No. 28/2002/QĐ-NHNN dated January 11, 2002 of the Governor of the State Bank of Vietnam amending Article 2 of Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001 of the Governor of the State Bank regarding the issuance of the Regulation on lending by credit organizations to customers;

c) Decision No. 127/2005/QĐ-NHNN dated February 3, 2005 of the Governor of the State Bank of Vietnam on amending and supplementing some articles of the Regulation on lending by credit organizations to customers issued pursuant to Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001 of the Governor of the State Bank;

d) Decision No. 783/2005/QĐ-NHNN dated May 31, 2005 of the Governor of the State Bank of Vietnam on amending and supplementing Clause 6 of Article 1 of Decision No. 127/2005/QĐ-NHNN dated February 3, 2005 of the Governor of the State Bank of Vietnam on amending and supplementing some articles of the Regulation on lending by credit organizations to customers issued pursuant to Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001 of the Governor of the State Bank of Vietnam;

đ) Circular No. 12/2010/TT-NHNN dated April 14, 2010 of the Governor of the State Bank of Vietnam guiding credit organizations to lend in Vietnamese dong to customers at agreed interest rates;

e) Circular No. 05/2011/TT-NHNN dated March 10, 2011 of the Governor of the State Bank of Vietnam stipulating fees for lending by credit organizations and foreign banks to customers;

g) Circular No. 33/2011/TT-NHNN dated October 8, 2011 of the Governor of the State Bank of Vietnam amending and supplementing some articles of Circular No. 13/2010/TT-NHNN dated May 20, 2010 on risk ratios in the operation of credit organizations and the Regulation on lending by credit organizations to customers issued together with Decision No. 1627/2001/QĐ-NHNN dated December 31, 2001 of the Governor of the State Bank of Vietnam;

h) Circular No. 08/2014/TT-NHNN dated March 17, 2014 of the State Bank of Vietnam stipulating short-term interest rates in Vietnamese dong for credit organizations lending to customers to meet capital needs for certain economic sectors and industries.

Article 34. Transitional Provisions

For credit contracts signed before the effective date of this Circular:

1. Credit organizations and customers shall continue to implement the contents in the signed credit contracts in accordance with the laws in force at the time of signing the contract or amend and supplement the credit contract in accordance with this Circular.

2. In case the credit limit, standby credit limit, and overdraft limit on the settlement account are applied, if the contract does not specify the duration of maintaining the credit limit, overdraft limit on the settlement account, and the validity period of the standby credit limit, then the credit organization and the customer may continue to implement the contents in the signed credit contract in accordance with the laws in force at the time of signing the contract, but the duration of maintaining the credit limit, overdraft limit on the settlement account, and the validity period of the standby credit limit shall not exceed one year from the effective date of this Circular.

Article 35. Implementation

1. Credit organizations shall base this Circular to internally regulate their lending activities to customers.

2. The Director of the Office, the Heads of the Monetary Policy Department and the Heads of units under the State Bank of Vietnam, the Governors of the State Bank of Vietnam branches in provinces and centrally governed cities; the Chairmen of the Management Boards, the Chairmen of the Member Councils and the General Directors (Directors) of credit organizations shall be responsible for organizing the implementation of this Circular./.