MONTHLY LEGAL UPDATE – 04/2020: LEGAL UPDATE RELATING TO FINANCE AND CREDIT
1. LEGAL DOCUMENTS ARE EFFECTIVE FROM 01/04/2020
1.1. Circular No. 28/2019/TT-NHNN amending and supplementing a number of articles of Circular No. 19/2016/TT-NHNN dated on June 30, 2016 of the Governor of the State Bank of Viet Nam on bank card operations
v Name of legal document: Circular No. 28/2019/TT-NHNN issued on 25/12/2019 by the State Bank of Viet Nam amending and supplementing a number of articles of Circular No. 19/2016/tt-nhnn dated on June 30, 2016 of the Governor of the State Bank of Viet Nam on bank card operations (referred to as the “Circular No. 28/2019/TT-NHNN”).
v Effective date: 01/04/2020.
Some contents should be noted:
· Firstly, amending the provison on non-physical card and supplement the provisions on domestic transactions which present the card and make non-payment transactions at merchants.
Specifically, Clause 1 Article 1
of Circular No. 28/2019/TT-NHNN stipulates: “Article 1. amending and supplementing a
number of articles of Circular No. 19/2016/tt-nhnn dated on June 30, 2016 of
the Governor of the State Bank of Vietnam on bank card operations
1. Amending Clauses 7, 19, 23 and 25 and
adding Clauses 8a and 8b to Article 3 as follows:
“7. Non-physical card is a card that
does not exist in physical form, exists in electronic form and contains
information on the card as prescribed in Article 12 of this Circular (Circular
No. 19/2016/TT-NHNN) and is issued by the card issuer to the cardholder for
transaction on internet environment, application program on mobile devices;
excluding cases that physical card registered functions for transactions on the
internet environment, application programs on mobile devices. Non-physical
cards may be printed by physical card issuers upon the request of
cardholders.”.
“8a. Domestic transaction which presents
the card is a card transaction in which the card is issued by a card issuer in
Vietnam and is used to make card transactions at Automated Teller Machine and
point of sale terminals in Vietnam.”
“8b. A non-payment transaction at a
merchant is the use of card and card information to pay for goods or services
but in fact does not generate or sell goods and services.”
.... ”
·
Secondly, Amending and supplementing
the regulation on subjects entitled to use cards.
Specifically, Clause 5 Article 1
of Circular No. 28/2019/TT-NHNN stipulates: “Article
1. Amending and supplementing a number of
articles of Circular No. 19/2016/TT-NHNN dated on June 30, 2016 of the Governor
of the State Bank of Vietnam on bank card operations
…
5. Amend Point b, Clause 3, Article 16 as follows:
“b) Persons aged between full 15 and under 18 who do not lose or have
limited civil act capacity may use debit cards, credit cards and prepaid
cards;”.”
v Name of legal document: Circular No. 04/2020/TT-NHNN issued on 31/03/2020 by the State Bank of Viet Nam amending and supplementing a number of articles of Circular No. 26/2013/TT-NHNN dated December 5, 2013 of the State Bank of Viet Nam promulgating the tariff of charges for payment services offered via the state bank of Viet Nam (referred to as the “Circular No. 01/2020/TT-NHNN”).v Effective date: 01/04/2020.The content should be noted: providing on reduction of payment fees via the inter-bank electronic payment system.
Specifically, Article 1 of
Circular No. 04/2020/TT-NHNN stipulates: “Article
1. Amending and supplementing a number of articles of Circular No. 26/2013/TT-NHNN
as follows:
Article 1a is added as follows:
“Article 1a. Reducing 50% on payment fees at Points 1.1 and 1.2, Section 1 “Charge for payment transactions performed via the eIPS” in Part III “In-country payment service charge” Tariff of charges for payment services offered via the State Bank of Viet Nam issued together with this Circular (Circular No. 26/2013 / TT-NHNN) from April 1, 2020 to December 31, 2020.”.”
v Name of legal document: Circular No. 01/2020/TT-NHNN issued on 13/03/2020 by the State Bank of Viet Nam debt rescheduling, exemption or reduction of interest and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic (referred to as the “Circular No. 01/2020/TT-NHNN”).v Effective date: 13/03/2020.Some contents should be noted:
·
Firstly, providing on debt
rescheduling.
Specifically, Article 4 of
Circular No. 01/2020/TT-NHNN stipulates:
“Article 4. Debt rescheduling
1. An outstanding debt, including the principal and/or interest
(including the debts regulated by the Government's Decree No. 55/2015/ND-CP)
may be rescheduled if it fully satisfies the following conditions:
a) The debt is a loan or finance lease;
b) The principal and/or interest arises during the period from
23/01/2020 to the day after 03 months after the day on which the Prime Minister
declares the end of the Covid-19 outbreak;
c) The borrower is unable to repay the principal and/or interest under
the loan/finance lease agreement due to decrease in revenue caused by Covid-19
pandemic.
2. The debts mentioned in Clause 1 of this Article shall be rescheduled
in the following cases:
a) The unpaid debt is undue or up to 10 days overdue according to the
loan/finance lease agreement;
b) The debt is overdue (except for the cases in Point a of this Clause)
during the period from 23/01/2020 to the 16th day from the effective date
of this Circular (Circular No. 01/2020/TT-NHNN).
3. Credit institutions and FBBs shall decide the rescheduling of debts
cases specified in Clause 1 and Clause 2 of this Article in consideration of
the borrowers’ request and ability to fully repay the principal and/or interest
after the debt is rescheduled. The rescheduling shall be suitable for the
impacts of Covid-19 and follow these rules:
a) Debts that violate regulations of law shall not be rescheduled.
b) The debt shall not be deferred for more than 12 months from the
initial repayment deadline according to the loan/finance lease agreement.”
·
Secondly, providing on reduction and
exemption of interest and/or fees.
Specifically, Article 5 of
Circular No. 01/2020/TT-NHN stipulates: “Article
5. Reduction and exemption of interest and/or fees
Credit institutions and FBBs shall, according to their own rules and
regulations, decide reduction and exemption of interest and/or fees on
extension of the debts (except purchases of corporate bonds) that are due
during the period from 23/01/2020 to the day after 03 months after the Prime
Minister declares the end of the Covid-19 outbreak and the borrowers are not
able to repay the principal and/or interest by the deadline specified in the
original agreement due to decrease in revenue caused by Covid-19.”
·
Thirdly, providing on Retention of debt category
Specifically, Article 6 of
Circular No. 01/2020/TT-NHNN stipulates: “Article
6. Retention of debt category
1. Credit institutions and FBBs may retain the categories of the
following debts if they have been categorized in accordance with regulations of
the State bank of Vietnam (SBV) before 23/01/2020:
a) The debts that are rescheduled as prescribed in Article 4 of this
Circular (Circular No. 01/2020/TT-NHNN);
b) The outstanding debts on which interest is exempted or reduced as
prescribed in Article 5 of this Circular (Circular No. 01/2020/TT-NHNN);
c) The outstanding debts mentioned in Point a and Point b of this
Clause, including the debts that are rescheduled, have interest reduced or
exempt, or re-categorized as prescribed by SBV during the period from
23/01/2020 to the 16th day after the effective date of this Circular.
2. Credit institutions and FBBs shall classify and make bad debt
provision for the debts mentioned in Clause 1 of this Article according to
their rescheduled term without having to put them into a higher-risk category.
3. From the rescheduling date, credit institutions and FBBs are not
required to record the interests on the outstanding debts that are rescheduled,
debts on which interest is reduced or exempted, debts that remain current
non-performing loans (Group 1) as prescribed in this Circular (Circular No.
01/2020/TT-NHNN) as revenue. Instead,
they shall be monitored off-balance sheet and recorded as revenue when they are
collected in accordance with regulations of law.
v Name of legal document: Decision No. 418/QĐ -NHNN issued on 16/03/2020 by the State Bank of Viet Nam on the refinancing interest rate, rediscount interest rate, overnight lending interest rate in inter-bank electronic payment and lending capital to offset the shortage of capital in the clearing of the State Bank of Vietnam for the banks (referred to as the “Decision No. 418/QĐ-NHNN”).v Effective date: 17/03/2020.The contents should be noted: providing on the interest rates of the State Bank of Viet Nam.
Specifically, Article 1 Decision
No. 422/QĐ-NHNN stipulates: “Article 1. Stipulation
on the interest rates of the State Bank of Viet Nam as follows:
1. Refinancing interest rate: 5.0%/year.
2. Rediscount interest rate: 3.5%/year.
3. Overnight lending interest rate in inter-bank electronic payment and
lending to offset the capital shortage in clearing of the State Bank of Viet
Nam for banks: 6.0%/year.”
v Name of legal document: Decision No. 419/QĐ -NHNN issued on 16/03/2020 by the State Bank of Viet Nam on maximum interest rate for Vietnamese Dong deposits of organizations and individuals at credit institutions and branches of foreign bank as prescribed in Circular No. 07/2014/TT-NHNN[1] of March 17, 2014 (referred to as the “Decision No. 419/QĐ-NHNN”).v Effective date: 17/03/2020.The contents should be noted: providing on maximum interest rates for Vietnamese Dong deposits of organizations (except for credit institutions, branches of foreign bank) and individuals at credit institutions and branches of foreign bank according to Circular No. 07/2014/TT-NHNN of March 17, 2014.
Specifically, Article 1 Decision No. 422/QĐ-NHNN stipulates: “Article 1. Maximum interest rates for Vietnamese Dong deposits of organizations (except for credit institutions, branches of foreign bank) and individuals at credit institutions and branches of foreign bank according to Circular No. 07/2014/TT-NHNN of March 17, 2014 are as follows:
1. The maximum interest rate applicable to demand deposits and terms with less than 1 month is 0.5%/year.
2. The maximum interest rate applicable to deposits with terms from 1 month to less than 6 months is 4.75%/year; Particularly for People's Credit Funds and Microfinance Institutions, the maximum interest rate applicable to deposits with a term of between 1 month and under 6 months shall be 5.25%/year.”
2.4.
Decision No. 420/QĐ-NHNN on the maximum
interest rates for short-term loans in Vietnamese Dong of credit institutions
and branches of foreign bank to borrowers to meet the capital demand in service
of a number of economic sectors and industries according to regulations. in
Circular No. 39/2016/TT-NHNN dated December 30, 2016
v Name of
legal document: Decision No. 420/QĐ
-NHNN issued on 16/03/2020 by the State Bank of Viet Nam on the maximum
interest rates for short-term loans in Vietnamese Dong of credit institutions
and branches of foreign bank to borrowers to meet the capital demand in service
of a number of economic sectors and industries according to regulations in Circular
No. 39/2016/TT-NHNN[2]
dated December 30, 2016 (referred to as the “Decision No. 420/QĐ-NHNN”).
v
Effective date: 17/03/2020.
The contents should be noted: providing
on on maximum interest rates for short-term loans in Vietnamese Dong that
credit institutions and customers agree to meet a number of certain demands for
borrowed fund.
Specifically, Article 1 Decision
No. 420/QĐ-NHNN stipulates: “Article 1.
Maximum interest rates for short-term loans in Vietnamese dong as prescribed in
Clause 2, Article 13[3]
of Circular No. 39/2016/TT-NHNN dated December 30, 2016 are as follows:
1. Credit institutions and foreign bank branches (except for People's
Credit Funds and Microfinance Institutions), which apply the maximum short-term
lending interest rate in Vietnamese Dong, shall be 5.5%/year.
2. People's credit funds and Microfinance Institutions apply the
maximum interest rate for short-term loans in Vietnam dong at 6.5%/year. "”
v Name of legal document: Decision No. 421/QĐ -NHNN issued on 16/03/2020 by the State Bank of Viet Nam on interest rates of compulsory reserve deposits and deposits in excess of compulsory reserves of credit institutions and branches of foreign bank at the State Bank of Viet Nam (referred to as the “Decision No. 421/QĐ-NHNN”).v Effective date: 17/03/2020.The contents should be noted: providing on interest rates applicable to compulsory reserve deposits and deposits exceeding the compulsory reserves of credit institutions and branches of foreign bank at the State Bank of Vietnam.
Specifically, Article 1 Decision
No. 421/QĐ-NHNN stipulates: “Article 1.
The interest rates applicable to compulsory reserve deposits and deposits
exceeding the compulsory reserves of credit institutions and branches of
foreign bank at the State Bank of Vietnam are as follows:
1. For compulsory reserve deposits in Vietnamese Dong: 1.0%/year.
2. For compulsory reserve deposits in foreign currencies: 0%/year.
3. For deposits exceeding the compulsory reserve in Vietnamese Dong:
0%/year.
4. For deposits exceeding compulsory reserves in foreign currencies:
0.05%/year.”
v Name of legal document: Decision No. 422/QĐ -NHNN issued on 16/03/2020 by the State Bank of Viet Nam on the interest rates for deposits in Vietnamese Dong of Viet Nam Development Bank, Social Policy Bank, People's Credit Funds, and microfinance institutions at the State Bank of Viet Nam (referred to as the “Decision No. 422/QĐ-NHNN”).v Effective date: 17/03/2020.The contents should be noted: providing on interest rates applicable to Vietnamese Dong deposits of Viet Nam Development Bank, Social Policy Bank, People's Credit Funds, microfinance institutions at the State Bank of Viet Nam.
Specifically, Article 1 Decision
No. 422/QĐ-NHNN stipulates: “Article 1. Interest
rates applicable to Vietnamese Dong deposits of Viet Nam Development Bank,
Social Policy Bank, People's Credit Funds, microfinance institutions at the
State Bank of Viet Nam as follows:
1. For deposits of Viet Nam Development Bank: 1.0%/year.
2. For deposits from Vietnam Bank for Social Policies: 1.0%/year.
3. For deposits of People's Credit Funds: 1.0%/year.
4. For deposits of microfinance institutions: 1.0%/year.”
v Name of legal document: Decision No. 423/QĐ -NHNN issued on 16/03/2020 by the State Bank of Viet Nam on the deposit interest rates of the State Treasury, Viet Nam Deposit Insurance at the State Bank of Viet Nam (referred to as the “Decision No. 423/QĐ-NHNN”).v Effective date: 17/03/2020.The contents should be noted: providing on interest rates applicable to deposits of the State Treasury, Viet Nam Deposit Insurance at the State Bank of Viet Nam.
Specifically, Article 1 Decision
No. 423/QĐ-NHNN stipulates: “Article 1.
The interest rates applicable to deposits of the State Treasury, Viet Nam
Deposit Insurance at the State Bank of Viet Nam are as follows:
1. For Vietnamese Dong deposits of the State Treasury: 1.0%/year.
2. For deposits in foreign currencies of the State Treasury:
0.05%/year.
[1] Circular No. 07/2014/TT-NHNN issued on 17/03/2014 of the
State Bank of Viet Nam providing for the maximum interest rate applicable to
VND deposits of entities, individuals at credit institutions
[2] Circular No. 39/2016/TT-NHNN issued on December 30,
2016 of the State Bank of Viet Nam prescribing lending transactions of credit
institutions and/or foreign bank branches with customers
[3] Clause 2 Article 13 of
Circular No. 39/2016: “Article
13. Loan interest rate
...
2. A credit institution and customer
shall agree on the interest rate on short-term loan denominated in Vietnamese
dong but shall not allow it to exceed the maximum interest rate decided by the
State Bank’s Governor over periods of time in order to meet certain demands for
borrowed fund as follows:
a) Loans taken out to support the
agricultural and rural development sector under regulations of the Government
on credit policies for agricultural and urban development;
b) Loans taken out to implement the
export business plan in accordance with the Law on Commerce and other
instructional directives thereof;
c) Loans taken out to finance business
activities of small and medium-sized enterprises under the Government’s
regulations on support for development of small and medium-sized enterprises;
d) Loans taken out to develop ancillary
industries under the Government’s regulations on development of ancillary
industries;
dd) Loans taken out to finance business
operations of high technology application enterprises under the provisions of
the Law on High Technology and other instructional directives thereof.”
