On June 28, 2023, the State Bank of Vietnam issued Circular 06/2023/TT-NHNN amending and supplementing several Articles of Circular 39/2016/TT-NHNN regulating lending activities of credit institutions to customers. Accordingly, the new Circular has added 04 cases towards capital requirements not to be lent at credit institutions.
(The circular takes effect from September 1, 2023)
1. Four new cases towards capital requirements not to be lent under Circular 06/2023/TT-NHNN:
- Borrowing to deposit;
- Borrowing to pay for capital purchase and contribution, transfer of contributed capital of limited liability companies or partnerships; purchase, contribute capital, receive share transfer of joint stock companies that are not listed on the stock market or have not registered for trading on the Upcom trading system;
- Borrowing to pay capital contribution under investment cooperation contracts, capital contribution or business cooperation contracts for the implementation of investment projects that are not eligible for putting into business in accordance with laws at the time of loan decision;
- Borrowing to offset finance, unless the loan fully meets the following conditions: a) Customers who have advanced capital to pay for business project implementation costs incurred less than 12 months from the time of loan decision; b) The expenses paid by the customer’s own capital for the implementation of a business project are expenses that use borrowed capital resources of credit institutions according to the capital use plan sent to the credit institutions for consideration of medium- and long-term loans in order to implement such business projects.
2. In addition, the non-lent capital requirements as follows that previously applied in Article 8 of Circular 39/2016/TT-NHNN will continue to be implemented:
- Borrowing to carry out business investment activities under business lines prohibited from business investment in accordance with the Law on Investment;
- Borrowing to pay expenses and meet financial needs of business investment activities under business lines prohibited from business investment in accordance with the Law on Investment and other transactions and acts prohibited by laws;
- Borrowing to purchase and use goods and services under business lines prohibited from business investment in accordance with the Law on Investment;
- Borrowing to buy gold bars;
- Borrowing to repay given credits from credit institutions, except for loans to pay interest on loans incurred during the construction of works, for which interest expense shall be calculated in the total amount of construction and investment approved by the competent authorities in accordance with the laws;
- Borrowing to repay foreign loans (excluding foreign loans in the form of deferred sale and purchase of goods), given credits at other credit institutions, except for loans for early repayment of loans that fully satisfy the following conditions: a) The loan term does not exceed the remaining loan term of the old loan; b) It is a loan that has not been restructured in the payback period.
