Circular No. 42/2011/TT-NHNN on the provision of syndicated credit by credit institutions to customers

 CIRCULAR

Regulations on the provision of syndicated credit by credit institutions to customers

Pursuant to the Law on the State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

No. 06/2013/UBTVQH13 dated March 18, 2013;

Pursuant to Decree No. 96/2008/NĐ-CP dated August 26, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

The State Bank of Vietnam (hereinafter referred to as the State Bank) stipulates the regulations on the provision of syndicated credit by credit institutions to customers as follows:

PART I
GENERAL PROVISIONS

Thông tư này quy định chi tiết khoản 4 Điều 38 Luật Thủy sản số 18/2017/QH14 đã được sửa đổi, bổ sung tại điểm c khoản 21 Điều 14 Luật số 146/2025/QH15.

This Circular stipulates the provision of syndicated credit by credit institutions, foreign bank branches (hereinafter referred to as credit institutions) to customers with projects or business plans in Vietnam.

Thông tư này áp dụng đối với tổ chức, cá nhân có liên quan đến hoạt động kinh doanh đối tượng thủy sản nuôi chủ lực trên lãnh thổ Việt Nam.

a) Commercial banks;

b) Cooperative banks, People's Credit Funds;

c) Financial companies, Financial Leasing Companies;

d) Foreign bank branches;

đ) Foreign credit institutions;

e) Customers.

3. When participating in providing syndicated credit to customers in Vietnam, foreign credit institutions must comply with the provisions on syndicated credit under this Circular, investment and lending regulations, foreign exchange management regulations, and other relevant laws.

4. The Central People's Credit Fund shall implement syndicated credit to customers according to this Circular during the period before transitioning to the cooperative bank model as prescribed by the Law on Credit Institutions 2010.

Article 2. Interpretation of Terms

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

1. Syndicated credit provision: Is the act of two (02) or more credit institutions jointly providing credit to customers through loan, discounting, financial leasing, factoring, bank guarantee, and other credit provision operations.

4. Lead arranger for syndicated credit provision: Is the credit institution that receives the customer's application for credit and issues invitations to credit institutions to participate in syndicated credit provision, or is selected by participating credit institutions to represent them and coordinate the syndicated credit provision process for the customer.

5. Lead credit provider: Is the member chosen by other participating credit institutions to lead the execution of tasks within the syndicated credit provision process.

6. Lead disbursement and collection agent: Is the member chosen by other members to be responsible for disbursing funds, collecting debts, and performing other payment-related operations associated with syndicated credit provision for the project.

7. Lead collateral receiver: Is the member chosen by other members to be responsible for receiving and managing collateral for the syndicated credit provision to the customer.

8. Foreign credit institution: Is a credit institution established abroad in accordance with foreign law.

9. Syndicated credit provision agreement (hereinafter referred to as syndicated credit agreement): Is a written agreement between participating credit institutions committing to provide credit to the customer.

10. Syndicated credit provision agreement with the customer (hereinafter referred to as credit provision agreement): Is a written agreement regarding the provision of credit by the syndicated credit provider to the customer.

11. Syndicated credit provision balance of participating credit institutions: Is the actual credit provision balance of each member to the customer at a specific point in time. The credit provision balance of a credit institution that is a syndicated credit provider is aggregated and statistically included in the total credit provision balance of the credit institution and serves as the basis for calculating safety ratios of the credit institution.

Article 3. Principles for Joint Credit Granting

1. Joint credit granting shall be carried out based on voluntary participation of members; according to the principle of joint assessment, joint decision-making on credit provision to customers, and each member bearing its own responsibility for the results of their credit activities.

4. Participating members have the responsibility to perform assigned tasks and receive remuneration from performing tasks delegated by other members.

5. Joint credit granting for specific transactions shall be based on the provisions of this Circular and relevant legal regulations applicable to such specific transactions.

Article 4. Forms of Joint Credit Granting

1. Joint loan.

2. Joint guarantee.

3. Joint discounting.

4. Joint financial leasing.

5. Joint factoring.

6. Joint implementation of the combination of the above credit forms.

7. Joint credit granting under other forms.

Article 5. Situations for Implementing Joint Credit Granting

1. Customer's request for credit to implement a project exceeds the credit limit of the credit institution as prescribed by law.

2. Financial capacity and capital sources of a credit institution cannot meet the credit needs of the project.

3. Credit institution's need to distribute risk.

4. Customer's requirement to obtain credit from different credit institutions to implement a project.

5. Credit institutions providing joint credit for important projects as directed by the Government.

Article 6. Currency Used in Joint Credit Granting

The currency used in joint credit granting is Vietnamese Dong or foreign currency based on the borrower's requirements to implement the project, in compliance with legal regulations on credit provision and foreign exchange management.

Chapter II
SPECIFIC PROVISIONS

The subjects specified in Article 1 of this Circular may participate in joint credit granting if they meet the following conditions:

1. For members that are credit institutions

a) Established and operating in accordance with the Law on Credit Institutions;

b) Comply with safety ratios after signing the joint venture contract and credit contract;

c) Not violating credit limits prescribed in the Law on Credit Institutions (including outstanding joint credit granted to customers that the credit institution, foreign bank branch plans to participate in).

2. For members that are foreign credit institutions

a) A credit institution established in accordance with foreign laws;

b) Comply with the provisions on joint credit granting in this Circular, investment and lending regulations, foreign exchange management regulations, and other related legal regulations.

3. In cases where foreign credit institutions participate in joint credit granting, the customer must comply with regulations on registering foreign loans; opening and using foreign loan accounts, repayment accounts, and other legal regulations related to foreign borrowing and repayment.

Article 8. Proposal for Joint Credit Granting

1. After receiving the customer's application for credit, the credit institution shall conduct an initial review of the application file, assess its feasibility, and propose granting credit to the customer.

Article 9. Procedure for Arranging Joint Credit Granting

1. Based on the invitation letter from the lead credit institution arranging joint credit, the invited organizations shall examine and officially respond in writing to the lead credit institution arranging joint credit regarding their acceptance (specifying the maximum level of participation) or non-acceptance of participating in joint credit granting.

2. If the number of participating organizations and their committed credit levels do not meet the project requirements, the lead credit institution arranging joint credit may continue to issue invitations to other qualified organizations.

3. Based on the response letters from the invited organizations, the lead credit institution arranging joint credit shall consider and decide on the number of members participating in joint credit granting and convene a meeting of the members to agree on the implementation details of joint credit granting.

Article 10. Review and Decision on Joint Credit Granting

1. The members shall agree on the form of review for the joint credit granting project, through appointing representatives to jointly conduct the review, authorizing the lead credit institution to grant credit, or hiring independent third-party reviews.

2. The review costs shall be agreed upon by the members and documented in writing.

3. Based on the final review results, the members shall consider and decide on the participation ratio in joint credit granting, notify the lead credit institution arranging joint credit, and bear responsibility for their own decisions.

Article 11. Joint Venture Contract

1. Based on the notifications from the members, the lead credit institution arranging joint credit shall convene a meeting of the members to negotiate the joint venture contract.

2. The joint venture contract shall comply with the provisions of civil contract laws, credit granting activities, related legal regulations, and must include the following main contents:

a) Names and addresses of the members participating in joint credit granting;

b) Customer name, project name, and key information about the project;

c) Lead credit granting member;

d) Lead arrangement member for joint credit granting if applicable;

đ) Lead payment member if applicable;

e) Lead collateral receipt member if applicable;

g) Form of credit granting, total amount of joint credit granting; participation ratio of each member in granting credit to the project; interest rate earned by each member and incidental expenses during the joint credit granting process according to legal provisions;

h) Disbursement method, debt collection, and principal repayment;

i) Collateral and collateral management; Mechanism for handling collateral when the customer fails to repay the debt on time;

k) Fees for lead members if applicable;

l) Rights and obligations of the members and lead members;

m) Method for handling risks during the joint credit granting process, resolving disputes among participating members in joint credit granting;

n) Inspection mechanism before and after joint credit granting;

o) Information provision mechanism for joint credit granting;

p) Agreement on appointing members as asset owners' representatives for financial leasing to customers in joint venture operations for financial leasing;

q) Other agreements.

3. In case a member violates the provisions in the joint venture contract, the remaining parties have the right to sue the violating member according to the law.

Article 12. Credit Facility Contract

1. The credit facility contract shall be signed by the participating members or authorized to the lead member to sign on behalf of the syndicated credit provider with the customer.

2. The credit facility contract must comply with the provisions of the Civil Code regarding contracts, credit activities, and relevant laws, and clearly define the rights and obligations of the syndicated credit provider and the customer. The credit facility contract shall be established in multiple copies for the customer and each member to retain one copy.

Article 13. Collateral in Syndicated Credit Facilities

1. Members shall agree and decide on the form of collateral by assets or no collateral in accordance with the provisions of the law.

2. Members shall agree on the appointment or authorization of a representative or the lead member to receive collateral to represent the syndicated credit provider in managing, monitoring, and handling collateral for credit facilities in accordance with the law.

3. Members shall be reimbursed capital and have the obligation to pay arising costs according to their participation ratio in the syndicated loan when the syndicated credit provider processes collateral to recover debts. These costs shall be agreed upon and specifically stipulated in the syndicated loan contract and the credit facility contract.

Article 14. Payment Coordinator and Execution of Payment Transactions

1. The payment coordinator member shall collect funds from members, disburse loans, recover debts (including principal and interest), and perform other payment transactions related to syndicated credit facilities for projects.

2. The payment coordinator member shall be responsible for monitoring and promptly informing members about information related to payment transactions between the syndicated credit provider and customers; requesting customers and members to transfer money on time to execute payment transactions; transferring lawful amounts due to members.

Article 15. Inspection of Credit Facilities and Risk Management Procedures in Syndicated Credit Facilities

1. Participating members in syndicated credit facilities shall monitor and inspect credit facilities through rotation, appointing representatives or authorizing the lead member to carry out such tasks.

2. In case of discovering customers violating the credit facility contract, immediate notification shall be made to other members to unify measures for handling.

3. The syndicated credit provider has the right to initiate legal proceedings in accordance with the law in cases where customers violate the credit facility contract.

Article 16. Information and Reporting System

1. Customers shall be responsible for reporting to the lead member of the syndicated credit provider on the progress of using credit facilities and necessary reports and information as required by the lead member of the syndicated credit provider. Customers shall be liable for the legality and accuracy of the information provided.

2. The lead member of the syndicated credit provider shall be responsible for providing customer and project information for syndicated credit facilities to other members in accordance with the syndicated loan contract.

Chapter III
IMPLEMENTATION

Article 17. Transitional Provisions

For financing contracts and syndicated credit facility contracts for other forms of credit facilities signed before the effective date of this Circular shall continue to be implemented according to the agreements already signed until the end of the contract term. Any amendments or supplements to these contracts can only be carried out if the amended or supplemented content complies with the provisions of this Circular.

Article 18. Effective Date

This Circular takes effect from December 15, 2011, and replaces Decision No. 286/2002/QD-NHNN dated April 3, 2002, of the Governor of the State Bank of Vietnam on the issuance of the Joint Financing Regulation of Credit Institutions; Decision No. 886/2003/QD-NHNN dated August 11, 2003, of the Governor of the State Bank of Vietnam on amending and supplementing the Joint Financing Regulation of Credit Institutions issued under Decision No. 286/2002/QD-NHNN dated April 3, 2002, of the Governor of the State Bank of Vietnam; Circular No. 08/2006/TT-NHNN dated October 12, 2006, of the State Bank of Vietnam guiding joint leasing finance operations of leasing companies in accordance with Decree No. 16/2001/NĐ-CP dated May 2, 2001, of the Government on the organization and operation of leasing companies and Decree No. 65/2005/NĐ-CP dated May 19, 2005, of the Government amending and supplementing certain articles of Decree No. 16/2001/NĐ-CP dated May 2, 2001, of the Government.

Article 19. Implementation

The Director of the Office, Heads of Departments under the State Bank of Vietnam, Governors of the State Bank of Vietnam branches in provinces and centrally-administered cities, Chairmen of the Board of Directors, Chairmen of the Board of Members, and General Managers (Directors) of credit institutions, foreign bank branches, and foreign credit institutions participating in syndicated credit facilities and customers are responsible for implementing this Circular./.

 

REPORT ON THE IMPLEMENTATION OF SYNDICATED CREDIT FACILITIES

(According to Circular No. 42/2011/TT-NHNN dated December 15, 2011)