LEGAL UPDATE RELATING TO FINANCE AND CREDIT (MONTHLY LEGAL UPDATE – 05&06/2022)
· Firstly, stipulating on conditions for interest rate support.
Specifically, Article 4 of Decree
No. 31/2022/ND-CP
stipulates: “Article 4. Conditions for interest rate support
1. The customer has requested interest rate support, meets the loan
conditions in accordance with the current law on lending activities of credit
institutions, foreign bank branches to customers.
2. Interest rate-supported loan is a loan in Vietnam Dong, signed a
loan agreement and disbursed during the period from January 1, 2022 to December
31, 2023, using the capital for the correct purposes specified in Clause 2,
Article 2 of this Decree and have not been supported with any interest rate
from the state budget under other policies.
3. The loan may not continue to receive interest rate support in the
following cases:
a) Loans with overdue principal balance and/or late payment interest
balance are not eligible for interest support for the interest payment
obligation at the interest payment term which the time of repayment is within
the specified time period in which overdue principal balance and/or late
payment interest balance. The loan can only continue to receive interest
support for the next interest payment terms after the customer has fully paid
the overdue principal balance and/or the late payment interest balance.
b) Loans with debt extension are not supported with interest rate for
the debt extension period.”
· Secondly, stipulating on term and level of interest rate support.
Specifically, Article 5 of Decree
No. 31/2022/ND-CP stipulates: “Article 5. Term and level of interest rate
support
1. The term of interest rate support is counted from the date of loan
disbursement to the time when the customer pays off the loan principal and/or
interest as agreed between the commercial bank and the customer, consistent
with the announced interest rate support funding source, but not beyond
December 31, 2023.
2. The level of interest rate support for customers is 2%/year,
calculated on the loan balance and the actual interest rate support loan term
is within the period specified in Clause 1 of this Article.”
· Thirdly, stipulating on handling on recovery of interest rate support amounts.
Specifically, Article 9 of Decree
No. 31/2022/ND-CP stipulates: “Article 9. Handling on recovery of interest
rate support amounts
1. In the process of implementation, in case it is discovered that a
customer's loan is determined not to be the subject, uses the loan for the
wrong purpose or does not meet the conditions for interest rate support, the
commercial bank shall notify customers and convert the interest-supported loan
into a regular loan, and recover the entire amount of rate interest supported
by commercial banks within 30 days from the date of notification.
2. Where the state budget has paid the interest rate support amount or
has already settled the interest rate support for the loan specified in Clause
1 of this Article, the commercial bank shall refund the state budget or report
to deduct from the amount of state budget payment of interest rate support.
3. In case the customer does not refund the interest rate supported
amount as prescribed in Clause 1 of this Article, the commercial bank shall
send a written request to the State Bank branch in the province or central city
(where the customer's head office is located) to report to the People's
Committee of the province or city to direct the competent authorities in the
locality to coordinate with the commercial bank to recover the amount of
interest rate support.”
· Firstly, stipulating on principles of interest rate support loans.
Specifically, clause 3 Article 1
of Circular No. 03/2022/TT-NHNN stipulates: “Article 2. Principles of interest
rate support loans
Commercial banks provide loans with interest rate support in accordance
with the current law on lending activities of credit institutions and foreign
bank branches to customers, as stipulated in Decree No. 31/ 2022/ND-CP,
this Circular and relevant laws.”
· Secondly, stipulating on methods of interest rate support.
Specifically, Article 3 of Circular
No. 03/2022/TT-NHNN stipulates: “Article 3. Methods of interest rate support
By the time of repayment of each interest payment term, commercial
banks may choose to provide interest rate support to customers by one of the
following methods:
1. Directly deduct the amount of loan interest payable by the customer equal to the interest rate supported loan amount.
2. Collect the entire loan interest from the customer in the period and refund the customer the interest supported loan amount on the same day of interest collection. In case the collection of loan interest in the period is performed after business hours of the commercial bank, the refund of the interest supported loan amount can be done on the next day.”
