CIRCULAR

AMENDMENTS TO CIRCULAR NO. 08/2021/TT-NHNN DATED JULY 06, 2021 OF GOVERNOR OF STATE BANK OF VIETNAM PRESCRIBING GRANT OF SPECIAL LOANS TO CREDIT INSTITUTIONS PLACED UNDER SPECIAL CONTROL

Pursuant to the Law on Credits Institutions dated June 16, 2010;

Pursuant to the Law on amendments to the Law on credit institutions dated November 20, 2017;

Pursuant to the Government's Decree No. 16/2017/ND-CP dated February 17, 2017 prescribing functions, tasks, powers and organizational structure of the State bank of Vietnam;

At the request of the Director of the Monetary Policy Department;

The Governor of the State Bank of Vietnam promulgates a Circular providing amendments to the Circular No. 08/2021/TT-NHNN dated July 06, 2021 of the Governor of State Bank of Vietnam prescribing grant of special loans to credit institutions placed under special control.

Article 1. Amendments to Circular No. 08/2021/TT-NHNN dated July 06, 2021 of Governor of State Bank of Vietnam

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a) Point a Clause 2 is amended as follows:

“a) The value of the collateral types specified in Clause 1 and Clause 6 of this Article shall be determined according to the provisions of Appendix No. IV enclosed herewith;”

b) Point c Clause 2 is amended as follows:

“c) The collateral conversion ratio (TL) is determined as follows:

(i) With regard to the financial instruments specified in Point a Clause 1 of this Article, TL is the minimum ratio of the value of the financial instrument to the loan amount secured by the pledge of that financial instrument granted by SBV to the credit institution according to SBV’s regulations in each period;

(ii) With regard to the types of collateral specified in Points b, c Clause 1 and Clause 6 of this Article, TL shall be 120%;”

c) Clause 3 is amended as follows:

“3. If any type of collateral specified in Point c Clause 1 of this Article does not meet the requirements laid down in Clause 2 Article 13 of this Circular resulting in the circumstance that total conversion value of eligible collateral is smaller than the outstanding principal of the special loan, the borrower shall be required to implement the provisions of Point a Clause 4, Point a Clause 5 of this Article to ensure that total conversion value of eligible collateral shall not be smaller than the outstanding principal of the special loan within 10 working days from the occurrence of the circumstance.”

d) Clause 6 is added as follows:

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a) Mortgage of rights to claim debts of credit extensions provided by the borrower to its clients (except credit institutions);

b) Mortgage of rights to assets which are interests receivable of credit extensions provided by the borrower to its clients (except credit institutions).”.

2. Clause 3 Article 13 is amended as follows:

“3. Credit extensions specified in Clause 6 Article 12 of this Circular are secured by the collateral.”.

3. Article 15 is amended as follows:

a) Point a Clause 3 is amended as follows:

“a) In case the borrower receives money from exercising the right to claim debts or interests receivable provided as collateral for the special loan (hereinafter referred to as “collected debts”), within the first 05 working days of the month, the borrower shall repay the principal amount of the special loan in the chronological order of the signed indebtedness contracts; repayment amounts equal total collected debts in the previous month;”

b) Point dd Clause 5 is amended as follows:

“dd) Collect the special loan debts (including principal and interest amounts) from the borrower’s proceeds from disposition of the collateral specified in Points b, c Clause 1 and Clause 6 Article 12 of this Circular;”

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a) Point b Clause 2 is amended as follows:

 “b) Specific opinions about the fact the credit institution is in danger of becoming insolvent or has become insolvent and such insolvency threatens the stability of the system; the credit institution has provided all types of assets specified in Clause 1 Article 12 of this Circular as collateral in case the credit institution wishes to use the types of assets specified in Clause 6 Article 12 of this Circular as collateral;”

b) Point d Clause 5 (as amended in Clause 4 Article 2 of the Circular No. 02/2022/TT-NHNN dated March 31, 2022) is amended as follows:

“d) Based on the list of collateral types provided by the credit institution as prescribed in Point dd Clause 1 of this Article, give opinions about the conformity of collateral-related information in the list of collateral types with the provisions of Article 13 of this Circular (unless the applicant is subject to the microprudential supervision of the SBV’s provincial branch) or opinions about the conformity of collateral-related information in the list of collateral types with contents about the collateral for the special loan granted for supporting liquidity under the approved restructuring plan or transfer plan (if any) (unless the restructuring plan including such contents is subject to the approval of a SBV’s provincial branch);”.

5. Article 18 is amended as follows:

a) Point a Clause 2 is amended as follows:

“a) The operating status and solvency of the credit institution; opinions about the fact the credit institution has provided all types of assets specified in Clause 1 Article 12 of this Circular as collateral in case the credit institution wishes to use the types of assets specified in Clause 6 Article 12 of this Circular as collateral;”

b) Point d Clause 5 is amended as follows:

“d) Based on the list of collateral types provided by the credit institution as prescribed in Point d Clause 1 of this Article, give opinions about the conformity of collateral-related information in the list of collateral types with the provisions of Article 13 of this Circular (unless the applicant is subject to the microprudential supervision of the SBV’s provincial branch);”

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a) Clause 2 (as amended in Clause 3 Article 2 of the Circular No. 02/2022/TT-NHNN dated March 31, 2022) is amended as follows:

“2. Assume responsibility to:

a) ensure that the collateral for special loan meets the eligibility requirements laid down in Article 13 of this Circular or conforms to the contents about the collateral in the approved restructuring plan or transfer plan (if any);

b) use the types of assets specified in Clause 6 Article 12 of this Circular as collateral for the special loan only after having provided all types of assets specified in Clause 1 Article 12 of this Circular as collateral; and

c) ensure that the credit extensions specified in Clause 6 Article 12 of this Circular comply with regulations of law on credit extension operations.”

b) Clause 4 is amended as follows:

“4. During the special loan term, the borrower shall:

a) Separately keep and retain documents relating to credit extensions from which rights to claim debts or interests receivable are used as the collateral for special loan;

b) Not use the assets pledged or mortgaged as collateral for special loan for other purposes;

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d) Submit reports to the special control board on the collateral which fails to meet eligibility requirements laid down in Clause 3 Article 12 or the case where all types of assets specified in Clause 1 Article 12 of this Circular have been provided as collateral;

dd) Submit reports to the special control board on collected debts as prescribed in Point a Clause 3 Article 15 of this Circular within 03 working days from the collection date.”.

7. Point dd Clause 4 Article 26 is amended as follows:

“dd) Cooperate with SBV’s Operations Center to implement the provisions in Point d Clause 3 of this Article; give a written notification to SBV’s Operations Center of receipt of pledge of collateral which is the right to claim debts or interests receivable additionally provided by the borrower (unless the special loan is recorded at SBV’s provincial branch and the borrower does not replace the collateral which includes financial instruments); give written notification to the credit institution of withdrawal of money from its account for debt recovery and implementation of the provisions in Points a, b, dd, e Clause 5, Clause 6 Article 15 of this Circular with regard to the special loans recorded at SBV’s provincial branch;”.

8. Point a(iv) Clause 4 Article 27 is amended as follows:

“(iv) The list of collateral types meeting the requirements laid down in Article 13 of this Circular which is made according to Appendix VII enclosed herewith, and of which the collateral conversion ratio (TL) is 100% and total conversion value of eligible collateral types shall not be smaller than the amount of special loan to be extended;”.

Article 2. Addition, replacement and abrogation of some Points, Clauses, Articles and Appendixes of Circular No. 08/2021/TT-NHNN

1. Point d Clause 1 Article 12 is abrogated.

2. Appendix III, Appendix IV and Appendix VII enclosed with the Circular No. 08/2021/TT-NHNN are replaced with Appendix III, Appendix IV and Appendix VII enclosed herewith.

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The Chief of Office, the Director of the Monetary Policy Department, heads of SBV’s affiliated units, Deposit Insurance of Vietnam, and relevant credit institutions shall organize the implementation of this Circular.

Article 4. Implementation

1. This Circular comes into force from October 28, 2022.

2. From the effective date of this Circular, with regard to special loans which have been granted on October 27, 2021 onwards and of which outstanding debts are still unpaid by the effective date of this Circular, the relevant credit institution shall, based on the collateral conversion ratio prescribed in this Circular, be allowed to use its collateral at SBV to apply for a special loan provided that total conversion value of its eligible collateral types shall not be smaller than total special loan amount./.

PP. GOVERNOR
DEPUTY GOVERNOR




Pham Thanh Ha