LEGAL UPDATE RELATING TO FINANCE AND CREDIT (MONTHLY LEGAL UPDATE – 05/2021)
·
Firstly, stipulating on collateral for security for obligation fulfillment
Specifically, Article 8 of Decree
No. 21/2021/NĐ-CP stipulates: “Article 8. Collateral for security for obligation
fulfillment
Collateral for security for obligation fulfillment includes:
1. Current properties or off-plan properties, except for cases
where the Civil Code or other relevant laws forbid sale, transfer or other
change of ownership at the time of establishing security contracts, security
measures;
2. Properties sold under property sale agreements with retention
of ownership;
3. Properties considered as subjects of obligations under
infringed bilateral contracts in case of lien measures;
4. Properties under general public’s ownership if prescribed by
relevant laws.”
·
Secondary, stipulating on effectiveness of security contracts
Specifically, Article 22 of Decree
No. 21/2021/NĐ-CP stipulates: “Article 22. Effectiveness of security
contracts
1. Security contracts certified, verified under the Civil Code or
relevant law provisions or at request shall enter into force from the date on
which they are certified, verified.
2. Security contracts not specified under Clause 1 of this Article
shall enter into force from the date agreed upon by all parties. In case
no agreement is made, security contracts shall enter into force from the date
on which the contracts are signed.
3. In case collateral is withdrawn under agreement, sections of
security contracts that relate to the withdrawn collateral shall no longer be
effective; in case collateral is added or replaced, revision of security
contracts relating to this collateral shall be implemented according to the
Civil Code and other relevant law provisions.
4. Security measures that have not entered into effect against a
third individual shall not alter or nullify security contracts.”
·
Thirdly, stipulating on Effects of
security measures against a third individual
Specifically, Article 33 of
Decree No. 21/2021/NĐ-CP stipulates: “Article 23. Effects of security measures
against a third individual
1. Security measures shall only take effect against a third
individual when security contracts have legally entered into force.
2. In case security measures require registration according to the
Civil Code or other relevant law provisions or are registered under agreement
or at request of secured parties, registration shall be carried out in
competent agencies as per relevant law provisions when security measures take
effect against a third individual.
3. For cases not specified under Clause 2 of this Article, effect
against a third individual in case of pledge of property, deposit or security
collateral measure shall start from the date on which secured parties hold collateral.
“holding of collateral” specified under this Clause refers to when
secure parties directly manage and control collateral or when other individuals
manage collateral according to agreements or regulations and law and secured
parties control the collateral.
4. In case collateral under security measures specified under
Clause 3 of this Article is given to other individuals for management, effect
against a third individual of security measures shall start from the date on
which:
a) Pledgees, depositees or security collateral receiving parties hold
collateral;
b) Individuals managing collateral receive collateral directly from
pledgers, depositors or security collateral making parties;
c) Security contracts take effect when other individuals are directly
managing properties which are used as pledge, deposit or security collateral.
5. Effect against a third individual of escrow deposit measure
shall start from the date on which escrow deposit is sent to escrow accounts in
credit institutions where escrow deposit is made.”
·
Firstly, regulating the face value
of valuable papers.
Specifically, Article 8 Circular
No. 01/2021/TT-NHNN stipulates: “Article 8. Face value of valuable papers
1. The face value of a valuable paper is 100,000 (one hundred thousand)
Viet Nam Dong or a multiple of 100,000 (one hundred thousand) Viet Nam Dong.
2. The face value of valuable papers (except bonds) issued in the form
of pre-printed certificates or under agreement issued by credit institutions,
foreign bank branches with buyers.
3. The face value of a bond issued in the form of a certificate is
pre-printed on the bond.
4. The face value of the valuable paper issued not in the form of a
certificate is agreed upon by the issuing credit institution or foreign bank
branch with the buyer. ”
·
Secondly, stipulating the time
limit, issuance date and maturity date of the valuable paper.
Specifically, Article 10 of
Circular No. 01/2021/TT-NHNN stipulates:
“Article 10. Time limit, issuance date and payment due date of valuable papers
1. Bonds with a time limit of one year or more, with a specific term
prescribed by the credit institution. Bonds that are issued in the same batch
and the same term are recorded on the same date of issue and the same date of
maturity.
2. Time limit, date of issue and due date for promissory notes,
treasury bills and certificates of deposit shall be stipulated by credit
institutions, foreign bank branches. ”
·
Firstly, regulating on the transaction currency and the exchange rate.
Specifically, Article 5 of
Circular No. 02/2021/TT-NHNN stipulates: “Article 5. Currency of the transaction and
exchange rate
1. An authorized credit institution
must prescribe the types of foreign currency transacted at the credit
institution.
2. The spot exchange rate between VND and USD in a spot transaction and
a spot transaction in a swap transaction is determined on the basis of the
central exchange rate announced by the State Bank on the date of the
transaction and the amplitude range specified by the State Bank.
3. The forward exchange rate between the Viet Nam Dong and the US
dollar in a forward transaction or a forward transaction in a swap transaction
shall be agreed upon by the parties to the transaction but must not exceed the
rate determined on the basis:
a) The spot exchange rate on the transaction date;
b) The difference between the two current interest rates is the
refinancing rate announced by the State Bank and the US dollar target rate of
the Federal Funds Target Rate. If the US dollar target interest rate is in the
range, the lowest interest rate within that range will be applied.
c) Term of the transaction.
4. The exchange rate between Viet Nam Dong and foreign currencies other
than the US dollar and the exchange rate between those foreign currencies in
foreign currency transactions shall be agreed upon by the parties.
5. Authorized credit institutions must post up spot rates between Viet
Nam Dong and foreign currencies in transactions with customers at foreign
currency transaction locations of the authorized credit institutions and on the
official website (if applicable). Authorized credit institutions conducts
transactions with customers at the listed exchange rate, unless the two parties
agree otherwise on the applicable exchange rate at the time of transaction.”
·
Secondly, Specifically, Article 8 of Circular No. 02/2021/TT-NHNN stipulates: “Article 8. Transaction fees
Authorized credit institutions are not allowed to charge transaction
fees for foreign currency transactions. ”
Specifically, Clause 3 of
Article 1 stipulates: “Article 1.
Amending and supplementing a number of articles of Circular No. 01/2020/TT-NHNN
...
3. Amending and supplementing Article 5 as follows:
“Article 5. Reduction and exemption of interest and/or fees
1. Credit institutions and foreign bank branches shall decide on the
exemption or reduction of interests and fees according to internal regulations
for the outstanding balance of debts arising before June 10, 2020 from credit
extension activities. (except for the purchase and investment of corporate
bonds) whose obligations to repay principal and / or interest are due during
the period from January 23, 2020 to December 31, 2021 and the customer has no
ability to repay principal and / or interest on time according to contracts or
agreements due to declining revenue and income due to the impact of Covid-19
pandemic.
2. The exemption or reduction of interests and fees for customers
according to the provisions of this Circular will be implemented until December
31, 2021.””
Specifically, ADMINISTRATIVE PROCEDURES TO BE ABOLISHED
IN THE MONETARY OPERATION SECTOR UNDER THE JURISDICTION OF THE STATE BANK OF
VIETNAM (Issued together with Decision No. 649/QĐ-NHNN dated April 15, 2021
of the Governor of the Bank State) stipulates:
“
|
No. |
Number of administrative procedure
dossier |
Name of administrative procedure |
The name of
the legal document stipulates the abolition of administrative procedures |
Sector |
Implementing
agencies |
|
01 |
1.001754 |
Procedures for
approval of plan for public bond issuance of credit institutions |
Circular No. 01/2021/TT-NHNN dated March 31, 2021 of
the Governor of the State Bank of Vietnam prescribing issuance of promissory
notes, treasury bills, deposit certificates and domestic bonds by credit
institutions and foreign bank branches |
Monetary operation |
Money Policy Department |
”
·
Firstly, stipulating on refinance
amount.
Specifically, Article 4
of Circular No. 04/2021/TT-NHNN stipulates: “Article 4. Refinance amount
1. The maximum refinance amount for each VNA loan must not exceed the
loan amount of each VNA loan under the refinancing application form of a credit
institution.
2. The total refinance amount for credit institutions is maximum of
4,000 billion dong (four thousand billion dong).”
·
Secondly, stipulating on refinance
interest rate.
Specifically, Article 5
of Circular No. 04/2021/TT-NHNN stipulates: “Article 5. Refinance interest
rate
1. The refinance interest rate is 0%/year, applicable to the
refinancing term and the refinancing term (if any).
2. The interest rate applicable to overdue refinancing principals is
equal to 150% of the refinancing interest rate announced by the State Bank from
time to time at the time when the refinancing is transferred overdue.”
·
Thirdly, stipulating on collateral.
Specifically, Article 6
of Circular No. 04/2021/TT-NHNN stipulates: “Article 6. Collateral
The State Bank refinancing without collateral for credit institutions.”
Specifically, Item 1, Part II New
administrative procedures issued in the monetary sector, performed at the
one-door department under the jurisdiction of the State Bank of Vietnam, issued
together with Decision No. 617/QD-NHNN stated: “1. Procedures for refinancing approval for credit institutions after
credit institutions lend to VIETNAM AIRLINES JSC.
- The order of execution:
Step 1: The credit institution
sends 01 application for refinancing loan according to Appendix I issued
together with Circular No. 04/2021/TT-NHNN dated April 5, 2021 to the head
office of the State Bank.
Step 2: Within 12 working days
from the date of receipt of the request for refinancing loan from the credit
institution, the State Bank of Vietnam shall issue a decision to refinance the
credit institution, in case of disagreement, the State Bank shall issue a
written document clearly stating the reason to the credit institution.
- The way to perform:
+ Head office of the State Bank
(directly at the One-Door Department); or
+ Postal service.
- Dossier composition: Application for refinancing loan according
to Appendix I issued together with Circular No. 04/2021/TT-NHNN.
- Number of dossier: 01 set.
- Processing term: 12 working days from the date of receipt of
complete and valid dossier.
- Subjects of administrative procedures: Credit institutions.
- Administrative procedure settlement agency: State Bank of Vietnam
(Monetary Policy Department).
- Result of the implementation of administrative procedures: Decision
on refinancing.
- Fees and charges: No.
- Name of application form, declaration form: Re-financing
application form according to Appendix I issued together with Circular No.
04/2021/TT-NHNN.
- The legal basis of administrative procedures:
+ Law on the State Bank of
Vietnam dated June 16, 2010;
+ Law on Credit Institutions dated June 16, 2010; Law amending and supplementing a number of articles of the Law on Credit Institutions dated November 20, 2017;
+ Circular No. 04/2021/TT-NHNN dated April 5, 2021 of the Governor of the State Bank of Vietnam on refinancing of credit institutions after credit institutions for VIETNAM AIRLINES JSC and the restructuring of repayment term, keeping intact debt group, setting up a risk provision for debts of VIETNAM AIRLINES JSC due to the influence of Covid-19pandemic./ .”
