Decree No. 78/2023/NĐ-CP Amending and supplementing some articles of Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on state investment credit

DECREE
Amending and supplementing some articles of Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on state investment credit

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the State Budget Law promulgated on May 26, 2015;

Pursuant to the Public Debt Management Law dated November 23, 2017;

Pursuant to the Investment Law dated June 17, 2020;

Pursuant to the Law on Public Investment dated June 13, 2019;

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;

At the proposal of the Minister of Finance;

The Government issues this Decree amending and supplementing some articles of Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on state investment credit.

Article 1. Amending and supplementing some articles of Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on state investment credit

1. Amending and supplementing Clause 7 of Article 3 as follows:

"7. 'Reorganization of debt repayment term' means the Vietnam Development Bank's approval to adjust the debt repayment term, extend the debt as follows:

a) Adjusting the debt repayment term means the Vietnam Development Bank's approval to extend the repayment period for part or all of the principal and/or interest of the loan within the agreed repayment term (including cases where the number of repayment periods remains unchanged), without changing the loan term;

b) Extending the debt means the Vietnam Development Bank's approval to extend the repayment period for the principal and/or interest beyond the agreed loan term."

2. Amending and supplementing Clause 4 as follows:

"Article 4. Plan for state investment credit capital

1. Before July 31 each year, the Vietnam Development Bank shall prepare the plan for state investment credit capital for the following year and submit it to the Ministry of Planning and Investment and the Ministry of Finance, including the following contents:

a) Implementation status and results of the state investment credit capital plan for the current year, and the projected state investment credit capital plan for the following year;

b) Ability to mobilize capital and balance sources of capital to implement the state investment credit capital plan;

c) Plan for subsidizing interest rates on preferential loans, management fees, and paid-in capital of the Vietnam Development Bank to implement the state investment credit capital plan for the following year;

d) Management solutions, organization of implementation, and expected results.

2. Before August 31 each year, the Ministry of Planning and Investment shall take the lead and coordinate with the Ministry of Finance and the Vietnam Development Bank to review and finalize the state investment credit capital plan for the following year prepared by the Vietnam Development Bank.

3. Before December 31 each year, the Ministry of Planning and Investment shall take the lead and coordinate with the Ministry of Finance to report to the Prime Minister to allocate the total credit growth target for state investment or the total state investment credit capital plan for the following year to the Vietnam Development Bank."

3. Amending Clause 3 and Clause 4 of Article 6 as follows:

"3. Having a project that has been assessed and determined by the Vietnam Development Bank to be an effective project; having financial capacity to repay debt at the time when the Vietnam Development Bank considers and decides to provide a loan.

4. The equity participating in the implementation of the project must be at least 20% of the total investment capital of the project (excluding working capital), with specific levels determined by the Vietnam Development Bank based on the financial capacity of the investor and the debt repayment plan of the project."

4. Amending Clause 6 of Article 6 as follows:

"6. The customer does not have bad debts at credit institutions, foreign bank branches at the time when the Vietnam Development Bank considers and decides to provide a loan."

"4. The review of the application file, investigation, and implementation of emergency measures for textile products must be carried out in compliance with the Law on Foreign Trade Management 2017, Decree No. 86/2025/NĐ-CP, and the provisions set forth in Articles 10, 11, and 12 of this Circular."

"2. The total amount of credit extended by the Vietnam Development Bank (excluding credit transactions where the Vietnam Development Bank does not bear risk) calculated on the basis of its own capital and the remaining balance of government-guaranteed bonds with a maturity of five years or more shall not exceed 15% for a single customer, and not exceed 25% for a single customer and related parties, except in cases provided for in Clause 4 of this Article."

6. Supplementing Clauses 4, 5, 6, 7, 8, and 9 of Article 7 as follows:

"4. In special cases, to fulfill economic and social development tasks and national defense and security requirements, if the combined lending capacity of the Vietnam Development Bank and other credit institutions cannot meet the needs of a customer, the Vietnam Development Bank shall prepare a proposal to extend credit beyond the limits specified in Clause 2 of this Article for each specific case and submit it to the Ministry of Finance for consolidation and reporting to the Prime Minister for consideration and decision.

5. Customers applying for loans, projects proposed by the Vietnam Development Bank to extend credit beyond the limit specified in Clause 4 of this Article must meet the following conditions:

a) The customer must satisfy the credit extension conditions stipulated in this Decree, the Law on Credit Institutions, and guiding documents; must not have bad debts in the three most recent consecutive years prior to the year of application for credit extension beyond the limit; must have a debt-to-equity ratio not exceeding three times the paid-in capital recorded in the quarterly or annual audited financial statements of the customer at the latest date before the application for credit extension beyond the limit;

b) The customer must have a need for capital to implement economically and socially significant, urgent projects for economic and social development, national defense, and security, serving essential living needs of the people, in priority and encouraged sectors and fields according to resolutions of the National Assembly, the Government, and directives of the Prime Minister during specific periods, or to implement programs and projects decided on investment principles by the National Assembly or the Prime Minister.

6. When proposing to extend credit beyond the limit specified in Clause 4 of this Article, the Vietnam Development Bank must meet the following conditions:

a) The Vietnam Development Bank has cooperated with other credit institutions to jointly finance the project proposed for credit extension beyond the limit, but the combined financing capacity of the Vietnam Development Bank and other credit institutions has not met the borrowing requirements of a customer; or has issued invitations to jointly finance to at least five other credit institutions, published on the official website of the Vietnam Development Bank and mass media for at least 30 working days, but no other credit institution has participated in joint financing;

b) At the time of requesting to exceed credit limits, the Vietnam Development Bank meets the requirements for safety ratios in operations as prescribed by law for the Vietnam Development Bank;

c) Ensure that the total credit limit does not exceed four times the bank's own capital and the remaining balance of government-guaranteed bonds with a term of five years or more when including the proposed excess credit limit.

7. The Vietnam Development Bank reports to the Ministry of Finance the documents for requesting to exceed credit limits;

The documents for requesting to exceed credit limits from the Vietnam Development Bank for a single customer or a customer and related party submitted to the Ministry of Finance include:

a) A document from the Vietnam Development Bank requesting the Ministry of Finance to report to the Prime Minister for permission to exceed credit limits for a single customer or a customer and related party;

b) A document proving that the Vietnam Development Bank has met the conditions stipulated in Clause 6 of this Article;

c) An appraisal document from the Vietnam Development Bank regarding the customer and the borrowing project of the customer;

d) A document requesting credit at the Vietnam Development Bank from the customer (a copy issued from the original or a certified copy by the Vietnam Development Bank);

đ) Legal documents related to the customer requesting credit (a copy issued from the original or a certified copy by the Vietnam Development Bank), including: Certificate of Enterprise Registration or Decision on Establishment issued by the competent authority (for public service units financially autonomous), audited financial statements of the three consecutive years prior to the year of request and other relevant documents proving that the customer has fully met the conditions stipulated in Clause 5 of this Article;

e) Legal documents related to the project requesting credit (a copy issued from the original or a certified copy by the Vietnam Development Bank), including: Investment Registration Certificate or approval document of the project by the competent authority and other relevant documents (if any);

g) Report on the credit relationship situation and the need to exceed credit limits for a single customer or a customer and related party.

8. The documents reported by the Ministry of Finance to the Prime Minister include the Ministry of Finance’s Memorandum accompanied by the following documents:

a) A document from the Vietnam Development Bank requesting the Ministry of Finance to report to the Prime Minister for permission to exceed credit limits for a single customer or a customer and related party;

b) Opinion documents of relevant ministries, sectors, and localities if they are related;

c) Explanation documents of the Vietnam Development Bank and the customer (if any);

d) Other relevant documents (if any).

9. Procedure for considering requests to exceed credit limits:

a) The Vietnam Development Bank sends one set of documents to the Ministry of Finance according to Clause 7 of this Article directly or by mail;

b) Within fifteen working days from the date of receiving complete and valid documents from the Vietnam Development Bank, the Ministry of Finance issues a document seeking opinions from relevant ministries, sectors, and localities on the economic, technical, and legal aspects of the project and the customer requesting to exceed credit limits.

In case the documents of the Vietnam Development Bank do not meet the conditions stipulated in Clauses 5 and 6 of this Article, the Ministry of Finance issues a document informing the Vietnam Development Bank about the conditions that the customer, the project, and the Vietnam Development Bank have not met;

c) Within ten working days from the date of receiving the document seeking opinions from the Ministry of Finance, relevant ministries, sectors, and localities provide their opinions in writing on matters within their management scope to the Ministry of Finance. If necessary, the Ministry of Finance requests the Vietnam Development Bank and the customer to explain issues raised by relevant ministries, sectors, and localities within seven working days from the date the Ministry of Finance receives all participation opinions. Within seven working days from the date of receiving the request from the Ministry of Finance, the Vietnam Development Bank and the customer issue documents to the Ministry of Finance explaining the issues raised by relevant ministries, sectors, and localities;

d) Within ten working days from the date of receiving complete opinions from relevant ministries, sectors, and localities or explanations from the Vietnam Development Bank and the customer, the Ministry of Finance submits to the Prime Minister for consideration and decision on the Vietnam Development Bank's request to exceed credit limits;

đ) Within five working days from the date of receiving the Prime Minister's written opinion, the Ministry of Finance informs the Vietnam Development Bank of the Prime Minister's opinion and implements it."

7. Amending Article 8 as follows:

"The loan term shall be agreed upon between the Social Policy Bank and the customer but shall not exceed five years (60 months).

The Vietnam Development Bank bases its loan term decisions for each project on the project's appraisal results, production and business characteristics, capital recovery capability, and customer repayment ability.

8. Amend and supplement Article 9 as follows:

"1. The interest rate on loans is 9.0% per annum.

1. The interest rate for state investment credit provided by the Vietnam Development Bank shall be determined to ensure sufficient coverage of costs for capital mobilization, operational expenses, and risk reserve costs for loans under credit contracts signed from December 22, 2023, but not less than eighty-five percent of the average lending rate of domestic commercial banks during the same period; the state budget will not subsidize interest rates and management fees for these loans.

2. Procedures for determining the interest rate for state investment credit:

a) Before January 25 each year, the State Bank of Vietnam sends a document to the Ministry of Finance providing data on the average lending rate of domestic commercial banks during the same period for the Ministry of Finance to provide to the Vietnam Development Bank;

b) Within three working days after receiving the document from the State Bank of Vietnam at point a of this clause, the Ministry of Finance sends a document transferring the average lending rate data of domestic commercial banks during the same period provided by the State Bank of Vietnam to the Vietnam Development Bank;

c) Not later than three working days after receiving the document from the Ministry of Finance as stipulated at point b clause of this Article, the Vietnam Development Bank shall determine the interest rate for State investment credit loans based on the principle of determining the interest rate for State investment credit loans prescribed in Clause 1 of this Article;

d) In case there is a significant fluctuation in the lending interest rates of domestic commercial banks in a year, the Vietnam Development Bank shall report to the Ministry of Finance to issue a document sent to the State Bank of Vietnam requesting the average lending interest rate of domestic commercial banks at the time of request so that the Vietnam Development Bank can decide the interest rate for State investment credit loans;

3. The interest rate for State investment credit loans determined by the Vietnam Development Bank pursuant to Clause 2 of this Article shall be applied to the entire outstanding principal within the due period and new disbursements of loan contracts for investment credit signed from December 22, 2023;

4. As for the entire overdue principal balance of each loan debt:

a) The overdue interest rate shall be reviewed and decided by the Vietnam Development Bank, with a maximum of 150% of the interest rate for loans within the due period;

b) The interest rate for loans within the due period as stipulated at point a clause of this Article shall be adjusted according to the interest rate for State investment credit loans determined by the Vietnam Development Bank pursuant to Clause 2 of this Article;"

9. Amend and supplement Article 13 as follows:

"Article 13. Guarantee for Loans

1. When borrowing State investment credit funds to invest in projects, customers must implement guarantee measures for loans at the Vietnam Development Bank in accordance with the laws on guaranteeing performance of obligations and other relevant laws. For each project, the Vietnam Development Bank shall examine and agree with the customer to decide and be responsible for the guarantee measures for loans in accordance with the laws on guaranteeing performance of obligations;

2. The Vietnam Development Bank and the customer shall carry out the procedures for guaranteeing loans in accordance with the laws on guaranteeing performance of obligations and other relevant laws;

3. The Vietnam Development Bank may dispose of collateral assets to recover debts in accordance with the laws on guaranteeing performance of obligations and other relevant laws.";

10. Amend and supplement Article 15 as follows:

"Article 15. Restructuring Loan Repayment Terms, Waiving or Reducing Interest on Loans

1. Based on the customer's proposal and the Vietnam Development Bank's assessment of the customer's ability to repay, the Vietnam Development Bank shall consider and decide on restructuring the loan repayment terms as follows:

a) If the customer is unable to repay the principal and/or interest on time but is assessed by the Vietnam Development Bank as having the ability to fully repay the principal and/or interest according to the adjusted repayment schedule, the Vietnam Development Bank shall consider and decide to adjust the repayment term of the principal and/or interest in line with the customer's repayment sources; the loan term remains unchanged;

b) If the customer is unable to fully repay the principal and/or interest by the agreed loan term but is assessed by the Vietnam Development Bank as having the ability to fully repay the principal and/or interest within a certain period after the loan term, the Vietnam Development Bank shall consider and decide to extend the loan term in line with the customer's repayment sources.

2. Based on the financial situation of the Vietnam Development Bank and the customer's ability to repay, the Vietnam Development Bank shall consider and decide on waiving or reducing the interest on the customer's loans.

3. The Vietnam Development Bank shall guide the documentation, procedures, and processes for restructuring loan repayment terms, waiving or reducing interest on loans as stipulated in Clause 1 and Clause 2 of this Article."

11. Add Article 15a after Article 15 as follows:

"Article 15a. Provision for Risk

1. For credit loan contracts signed from December 22, 2023 onwards, the Vietnam Development Bank shall establish risk provisions in accordance with the guidelines of the State Bank of Vietnam for commercial banks, which shall be included in the operational costs of the Vietnam Development Bank and used to address risks associated with loans under these contracts.

2. For credit loan contracts signed before December 22, 2023, the Vietnam Development Bank shall implement and utilize risk provisions in accordance with the provisions of Government Decree No. 46/2021/NĐ-CP dated March 31, 2021 on financial management systems and performance evaluation for the Vietnam Development Bank and any subsequent amendments, supplements, or replacements thereof.

12. Amend Article 17 as follows:

"Article 17. Handling Credit Risks

1. Principles for handling credit risks:

a) The handling of credit risks by the Vietnam Development Bank must comply strictly with legal regulations, ensuring all required conditions, documents, and materials as stipulated by law;

b) The handling of credit risks by the Vietnam Development Bank must hold the Vietnam Development Bank, borrowers, and related organizations and individuals accountable for lending, recovery, and debt resolution;

c) The Vietnam Development Bank shall use the credit risk reserve fund to handle risks.

2. Authority to handle credit risks: The Vietnam Development Bank shall review and decide on the handling of credit risks according to the mechanism for handling credit risks at the Vietnam Development Bank issued by the Prime Minister.

13. Amend Clause 3 of Article 19 as follows:

"3. Coordinate with the Ministry of Planning and Investment to report to the Prime Minister to allocate the total credit growth target for state investment or the total annual state investment credit plan to the Vietnam Development Bank."

14. Amend Clause 1 of Article 20 as follows:

"1. Take the lead and coordinate with the Ministry of Finance to report to the Prime Minister to allocate the total credit growth target for state investment or the total annual state investment credit plan to the Vietnam Development Bank."

15. Add Clause 6 to Article 21 as follows:

"6. Annually, before January 25, submit a document to the Ministry of Finance providing the average interest rate for domestic commercial bank loans during the same period so that the Ministry of Finance can provide it to the Vietnam Development Bank as the basis for determining the interest rate for state investment credit loans."

16. Amend and supplement Clause 3 and Clause 6 of Article 23 as follows:

"3. Determine the interest rate for state investment credit loans in accordance with this Decree.

6. Supervise customers in the use of borrowed funds to ensure they are used for the intended purpose, effectively, and fully repaid both principal and interest to the Vietnam Development Bank on time; if the customer has bad debts at the Vietnam Development Bank and/or other credit institutions, foreign bank branches at the time of disbursement by the Vietnam Development Bank, the Vietnam Development Bank shall assess the customer's financial capacity to repay debts to consider and decide on further disbursements to the customer and bear legal responsibility for such decisions."

17. Add Clause 5 to Article 25 as follows:

"5. Customers shall implement accounting records, financial reports, and annual audits of financial reports in accordance with legal regulations."

Article 2. Abolish and Replace

1. Replace the List of Credit Investment Loan Projects issued together with Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on State Credit Investment with the List of Credit Investment Loan Projects attached as Appendix to this Decree.

2. Replace the phrase "financially autonomous public service units" with the phrase "publicly established financially autonomous public service units" at Point a Clause 2 Article 1 and Clause 1 Article 3 of Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on State Credit Investment.

3. Remove the phrase "except where the Prime Minister has provided otherwise" at Clause 4 Article 3 of Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on State Credit Investment.

4. Abolish Clause 5 Article 2, Clause 8 Article 3, Clause 2 Article 5, Clauses 7 and 8 Article 6, Clauses 2 and 3 Article 20, and Article 29 of Decree No. 32/2017/NĐ-CP dated March 31, 2017 of the Government on State Credit Investment.

Article 3. Transitional Provisions

1. For interest subsidy support contracts signed before the effective date of this Decree, the Vietnam Development Bank, the customer, and related parties shall continue to implement according to the commitments, rights, and responsibilities recorded in the signed contract.

2. For credit investment loan contracts signed before the effective date of this Decree:

a) The state budget will not subsidize interest rates and management fees for the entire outstanding balance and remaining disbursements (if any) of these credit contracts if the Vietnam Development Bank, the customer, and related parties agree to apply one of the provisions regarding loan terms at Clause 7 Article 1, interest rates at Clause 8 Article 1, and restructuring repayment terms, waiving, or reducing interest on loans at Clause 10 Article 1 of this Decree, based on the principle that the Vietnam Development Bank assesses and bears responsibility for the customer's repayment capacity and plan;

b) In cases where the Vietnam Development Bank, the customer, and related parties do not reach a consensus on applying the provisions at point a of this clause, they shall continue to implement according to the commitments in the signed credit contract and be subsidized by the state budget for interest rates and management fees; specifically, the interest rate for remaining disbursements from the effective date of this Decree shall be determined by the Vietnam Development Bank according to the provisions at Clause 8 Article 1 of this Decree for each disbursement.

3. For credit investment loan contracts and export credit loan contracts signed before the effective date of this Decree, the Vietnam Development Bank shall stop charging interest on overdue interest debt from the effective date of this Decree and write off overdue interest debt accrued but not collected up to the date of stopping interest calculation on overdue interest debt.

Article 4. Implementation provisions

1. This Decree takes effect from December 22, 2023.

2. Determining the interest rate for State Credit Investment Loans after this Decree takes effect:

a) Within fifteen working days from the effective date of this Decree, the State Bank of Vietnam shall send a document to the Ministry of Finance providing data on the average lending interest rate of domestic commercial banks during the same period for the Ministry of Finance to provide to the Vietnam Development Bank;

b) Within three working days after receiving the document from the State Bank of Vietnam at point a of this clause, the Ministry of Finance sends a document transferring the average lending rate data of domestic commercial banks during the same period provided by the State Bank of Vietnam to the Vietnam Development Bank;

c) Within three working days after receiving the document from the Ministry of Finance at point b of this clause, based on the principle of determining the interest rate for State Credit Investment Loans stipulated at Clause 8 Article 1 of this Decree, the Vietnam Development Bank shall determine the interest rate for State Credit Investment Loans.

3. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees under central cities, Chairpersons of the Management Board, and General Directors of the Vietnam Development Bank are responsible for implementing this Decree.

The Central Committee of the Communist Party of Vietnam;

Prime Minister, Deputy Prime Ministers;

Ministries, ministerial-level agencies, government-affiliated agencies;

Provincial People's Councils and People's Committees;

Central Party Office and Party Departments

Office of the General Secretary;

President's Office;

National Ethnic Council and Committees of the National Assembly;

National Assembly Office;

Supreme People's Court;

Supreme People's Procuracy;

State Audit Agency;

National Financial Supervisory Council;

The Social Policy Bank;

Central Committee of the Vietnam Fatherland Front;

Central bodies of mass organizations;

VPCP: Deputy Prime Minister, Vice Chairpersons, Assistant to the Prime Minister, General Director of the Government Portal, all Departments, Bureaus, subordinate units, Gazette;

To be filed: VT, KTTH (2b)

dated November 7, 2023 of the Government)