CIRCULAR

REFINANCING LOANS GRANTED TO VIETNAM BANK FOR SOCIAL POLICIES UNDER THE PRIME MINISTER’S DECISION NO. 23/2021/QD-TTG DATED JULY 07, 2021 ON IMPLEMENTATION OF CERTAIN POLICES TO SUPPORT EMPLOYEES AND EMPLOYERS AFFECTED BY COVID-19 PANDEMIC

Pursuant to the Law on the State bank of Vietnam dated June 16, 2010;

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

Pursuant to Decision No. 23/2021/QD-TTg dated July 07, 2021 of the Prime Minister on implementation of certain polices to support employees and employers affected by Covid-19 Pandemic;

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

The Governor of the State Bank of Vietnam promulgates a Circular prescribing refinancing loans granted to Vietnam Bank for Social Policies under the Prime Minister’s Decision No. 23/2021/QD-TTg dated July 07, 2021 of the Prime Minister on implementation of certain polices to support employees and employers affected by Covid-19 Pandemic.

Article 1. Scope and regulated entities

This Circular provides regulations on the refinancing loan granted by the State Bank of Vietnam (“SBV”) to Vietnam Bank for Social Policies (“VBSP”) for giving loans to employers in accordance with the Decision No. 23/2021/QD-TTg dated July 07, 2021 of the Prime Minister on implementation of certain polices to support employees and employers affected by Covid-19 Pandemic (hereinafter referred to as “refinancing loan”).

Article 2. Refinancing loan amount

The maximum amount of the refinancing loan is VND 7.500 billion (seven thousand five hundred billion Vietnamese Dong).

Article 3. Interest rate

1. The interest rate on the refinancing loan is 0%/year.

2. The interest rate on the overdue amount of the refinancing loan is 0%/year.

Article 4. Term and disbursement of refinancing loan

1. The term of the refinancing loan is 364 days commencing on the date following the day on which the SBV disburses the refinancing loan amount to VBSP.

2. The term of the refinancing loan specified in Clause 1 of this Article shall be determined according to each disbursement as prescribed in Clause 4 Article 6 hereof.

3. The refinancing loan shall be disbursed within the period commencing on the signing date of the first indebtedness contract and ending on March 31, 2022 or until the refinancing loan amount of VND 7.500 billion is fully disbursed, whichever comes first.  

Article 5. Collateral

SBV does not require any collateral for the refinancing loan granted to VBSP.

Article 6. Procedures for refinancing loan

1. VBSP shall send a physical copy of the application form for refinancing loan, which is made according to the form in Appendix I enclosed herewith, either directly or by post, to SBV (via the Application Receipt and Result Return Division).

2. Within 03 working days from the receipt of the application submitted by VBSP as prescribed in Clause 1 of this Article, the SBV’s Governor shall issue a decision on grant of refinancing loan to VBSP.

3. Within 02 working days from the receipt of the decision on grant of refinancing loan as prescribed in Clause 2 of this Article, SBV’s Operations Center and VBSP shall enter into a contract in principle on refinancing loan which shall include the primary contents prescribed in Appendix II enclosed herewith.

4. SBV shall disburse the refinancing loan to VBSP according to the following procedures:  

a) Based on the contract in principle on refinancing loan prescribed in Clause 3 of this Article and the sum of loan amounts applied for by the borrowers that meet eligibility requirements set out in the Decision No. 23/2021/QD-TTg dated July 07, 2021 of the Prime Minister on implementation of certain polices to support employees and employers affected by Covid-19 Pandemic (hereinafter referred to as “Decision No. 23/2021/QD-TTg”), VBSP shall send a written request for disbursement of the refinancing loan, which is made according to the form in Appendix III enclosed herewith, either directly or by post, to SBV (via the SBV’s Operations Center);

b) Within 02 working days from the receipt of VBSP’s request as prescribed in Point a of this Clause, the SBV’s Operations Center shall consider approving and disbursing the refinancing loan amount specified in the VBSP’s request after the indebtedness contract made according to the form in Appendix IV enclosed herewith has been signed.

Article 7. Repayment of refinancing loan

1. When the refinancing loan becomes due, VBSP shall use funding from debt repayments made by the employers getting loans according to the Decision No. 23/2021/QD-TTg (hereinafter referred to as “borrowers”) to fully repay the outstanding principal of the refinancing loan to SBV.

2. Until the end of April 05, 2022, if the refinancing loan amount has not been fully disbursed as prescribed in Clause 4 Article 6 hereof, VBSP shall refund the remaining amount of the refinancing loan which is not yet disbursed in the chronological order of the signed indebtedness contracts as soon as possible but not later than April 15, 2022.

3. If VBSP fails to repay the outstanding amount of the refinancing loan as prescribed in Clause 1 of this Article when it becomes due, SBV shall write the refinancing loan off as an overdue debt in accordance with SBV's regulations on methods of assessment and accounting for receivables and interest payments arising from deposit reception and lending transactions between SBV and credit institutions.

4. When borrowers make debt repayments, within the first ten days of the following month, VBSP shall use total amount of debts collected from borrowers in the month to repay the refinancing loan debts as soon as possible in the chronological order of the signed indebtedness contracts (including debts written off as overdue debts and undue debts), except recovered amounts specified in Clause 4 Article 42 of Decision No. 23/2021/QD-TTg.

5. If VBSP receives debt repayments from borrowers but does not repay the refinancing loan debts as prescribed in Clause 1 and Clause 4 of this Article and/or VBSP does not repay the financing loan debts as prescribed in Clause 2 of this Article, SBV shall adopt the following measures:

a) Applying the interest rate, which is equal to the interest rate charged by VBSP on overdue debts of borrowers as prescribed in Decision No. 23/2021/QD-TTg (12%/year), on the outstanding amounts for the period commencing on the date following the payment due date as prescribed in this Circular and ending on the day in which such outstanding amounts are fully paid by VBSP; 

b) Taking out money from VBSP’s deposit account opened at SBV for recovering the outstanding debts and interests incurred by VBSP as prescribed in Point a of this Clause within 05 working days from the day on which SBV’s Operations Center receives the written notification of the violation prescribed in Point b Clause 2 or Point b Clause 5 Article 9 hereof.

c) After implementing the measure specified in Point b of this Clause, if the outstanding debts and interests incurred by VBSP are still not yet recovered as prescribed in Point a of this Clause, SBV’s Operations Center shall continue monitoring and extracting money from VBSP’s deposit account opened at SBV for recovering debts;  

d) The recovery of the outstanding debts and interests as prescribed in Points b, c of this Clause shall comply with SBV’s regulations on methods of assessment and accounting for receivables and interest payments arising from deposit reception and lending transactions between SBV and credit institutions and other organizations.

6. SBV shall handle risks arising from the refinancing loan granted to VBSP according to Article 43 of the Decision No. 23/2021/QD-TTg and relevant laws.

Article 8. Responsibilities of VBSP

1. Provide SBV with documents and materials about the refinancing loan in a timely, adequate and accurate manner. Assume legal responsibility for the accuracy and legitimacy of provided documents and materials.

2. Enter into the contract in principle on refinancing loan and indebtedness contracts with SBV’s Operations Center, receive disbursements of refinancing loan and repay the refinancing loan in accordance with the provisions herein.

3. Use the refinancing loan for predetermined purposes; separately monitor, record and manage the refinancing loan in accordance with the provisions herein.

4. By April 20, 2022, VBPS shall provide the SBV's Governor with a report on disbursed amounts of the refinancing loan under the Decision No. 23/2021/QD-TTg according to the form in Appendix V enclosed herewith, and also send it to the Monetary Policy Department, SBV’s Banking Supervision Agency, SBV’s Operations Center and Department of Economic Sector Credit.

5. Within the first 10 working days of the month, provide the SBV (Monetary Policy Department, SBV’s Banking Supervision Agency, SBV’s Operations Center and Department of Economic Sector Credit) with a report on repayment of the refinancing loan with funding from debt repayments made by borrowers according to the form in Appendix VI enclosed herewith.

6. Recover debts of loans granted to borrowers for repaying the refinancing loan to SBV.

Article 9. Responsibilities of SBV’s affiliates

1. The Monetary Policy Department shall:

a) Act as a contact point tasked with requesting the SBV’s Governor to issue the decision on grant of refinancing loan to VBSP according to Clause 2 Article 6 hereof;

b) Act as a contact point tasked with settling difficulties that may arise during the implementation of regulations herein.

2. SBV’s Banking Supervision Agency shall:

a) Supervise and take actions against violations, within their jurisdiction, committed by VBSP during the implementation of this Circular; 

b) In case VBSP is found to receive debt repayments from borrowers but does not repay the refinancing loan as prescribed in Clause 1 and Clause 4 Article 7 and/or VBSP does not repay the financing loan as prescribed in Clause 2 Article 7 hereof, SBV’s Banking Supervision Agency shall give written notification of such violation to VBSP, SBV’s Operations Center, Monetary Policy Department and Department of Economic Sector Credit. This notification shall indicate the violation and actions to be taken according to Clause 5 Article 7 hereof.

3. SBV’s Operations Center shall:

a) Sign the contract in principle on refinancing loan, approve and disburse the refinancing loan, recover refinancing loan debts, and write the refinancing loan off as overdue debts in accordance with the provisions hereof and relevant laws;

b) Implement measures prescribed in Clause 5 Article 7 hereof upon the receipt of the written notification of violation as prescribed in Point b Clause 2 and Point b Clause 5 of this Article;

c) Within the first 15 working days of the month following the reporting month, send a report to SBV's Governor on the refinancing loan amounts granted to VBSP according to the form in Appendix VII enclosed herewith; and also send it to Monetary Policy Department, SBV’s Banking Supervision Agency, and Department of Economic Sector Credit.

4. Finance and Accounting Department shall:

a) Provide instructions on how to prepare accounting reports regarding refinancing loan to VBSP in accordance with regulations herein;

b) Act as a contact point tasked with settling risks relating to the refinancing loan granted to VBSP.

5. Each SBV’s provincial branch shall:

a) Supervise, inspect and take actions against violations, within their jurisdiction, committed by VBSP’s affiliate located in the province during the implementation of this Circular; 

b) In case VBSP is found to receive debt repayments from borrowers but does not repay the refinancing loan as prescribed in Clause 1 and Clause 4 Article 7 and/or VBSP does not repay the financing loan as prescribed in Clause 2 Article 7 hereof, the SBV’s provincial branch shall give written notification of such violation to VBSP, SBV’s Operations Center, Monetary Policy Department and Department of Economic Sector Credit. This notification shall indicate the violation and actions to be taken according to Clause 5 Article 7 hereof.

6. Information Technology Department shall:

Update and upgrade operational software programs meeting the requirements laid down herein.

Article 10. Effect

1. This Circular comes into force from July 21, 2021.

2. Chief of Office, Director of Monetary Policy Department, heads of units affiliated to SBV, and VBSP shall organize the implementation of this Circular./.

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