What are regulations on bank guarantee fees in Vietnam from April 1, 2025

What is Bank Guarantee?

Pursuant to Clause 1, Article 3 of Circular 61/2024/TT-NHNN, effective from April 1, 2025, a bank guarantee is a form of credit extension for customers, in which the guarantor, being a credit institution or a foreign bank branch, commits to the obligee that it will fulfill the financial obligations on behalf of the obligor (hereinafter referred to as the guaranteed party) when the guaranteed party fails to fulfill or inadequately fulfills the commitments made with the obligee; the customer is required to obligatorily acknowledge the debt and repay the guarantor according to the agreement.

What are regulations on Bank guarantee fees in Vietnam from April 1, 2025

The bank guarantee fee is stipulated in Article 19 of Circular 61/2024/TT-NHNN, effective from April 1, 2025, as follows:

- Credit institutions and foreign bank branches negotiate guarantee fees with customers and other related parties (if any) and must publicly disclose guarantee fees.

- In the case of joint guarantee, the parties participating in the joint guarantee shall agree on the guarantee fee for each co-guarantor.

- In the case where a credit institution or a foreign bank branch guarantees a joint obligation, the credit institution or foreign bank branch will negotiate with each customer the fee based on the corresponding joint obligation of each customer, unless otherwise agreed by the parties.

- If the guarantee currency is in foreign currency, the parties can agree to collect the guarantee fee in foreign currency or convert it into Vietnamese Dong based on the selling exchange rate of the guarantor at the time of fee collection or at the time of fee notification.

- The parties can agree to adjust the guarantee fee.

What are regulations on bank guarantee fees in Vietnam from April 1, 2025? (Image from the Internet)

What should obligees do to perform guarantee obligations in Vietnam?

Based on Article 22 of Circular 61/2024/TT-NHNN, effective from April 1, 2025, to request the performance of guarantee obligations, the obligee must submit a dossier requesting the performance of the guarantee obligation, including a request to perform guarantee obligations accompanied by a list of documents and materials that must be provided to the guarantor.

A dossier for requesting the performance of guarantee obligations is considered valid when:

- The guarantor receives the complete dossier requesting the performance of guarantee obligations within the validity period of the guarantee commitment, specifically:

(i) If sent directly by document, it must be during the working hours of the guarantor;

(ii) If sent as a registered mail via postal service, the date the guarantor receives the request is the signing date of the registered mail;

(iii) If sent by electronic means, it is the time the guarantor receives the data message in accordance with the law on electronic transactions;

- Meets all the conditions for performing the guarantee obligations stipulated in the guarantee commitment.

The guarantor checks the dossier requesting the performance of guarantee obligations presented, matches it against the terms and conditions stated in the guarantee commitment to perform the guarantee obligations as prescribed in Clause 3, Article 22 of Circular 61/2024/TT-NHNN if the dossier requesting the performance of guarantee obligations is valid.

3. Performing Guarantee Obligations:

a) For bank guarantees (except for counter guarantees, confirmation of guarantees):

Within 5 working days following the date on which the guarantor receives a valid dossier requesting the performance of guarantee obligations as prescribed in Clause 2 of this Article, the guarantor is responsible for fully performing the guarantee obligations committed to the obligee, simultaneously recording a mandatory loan entry for the amount paid on behalf of the guaranteed party, and notifying the customer. The customer is obligated to fully repay the amount the guarantor paid and the interest amount stipulated in Clause 5 of this Article;

b) For counter guarantees:

Within 5 working days following the date on which the guarantor receives a valid dossier requesting the performance of guarantee obligations as prescribed in Clause 2 of this Article, the guarantor requests the counter guarantor to perform payment on behalf of the guaranteed party.

The counter guarantor will fully perform the counter guarantee obligations committed to the guarantor and simultaneously record a mandatory loan entry for the amount paid on behalf of the guaranteed party and notify the customer. The customer is obligated to fully repay the amount the counter guarantor paid and the interest amount stipulated in Clause 5 of this Article.

If the counter guarantor fails to perform or inadequately performs the obligations committed to the guarantor, the guarantor will fully perform the guarantee obligations committed to the obligee, simultaneously recording a mandatory loan entry for the amount paid on behalf of the counter guarantor and notifying the counter guarantor. The counter guarantor is obligated to fully repay the amount the guarantor paid and the interest amount stipulated in Clause 5 of this Article;

c) For guarantee confirmation:

Within 5 working days following the date on which the guarantor receives a valid dossier requesting the performance of guarantee obligations as prescribed in Clause 2 of this Article, the guarantor will fully perform the guarantee obligations committed to the obligee, simultaneously recording a mandatory loan entry for the amount paid on behalf of the guaranteed party and notifying the customer. The customer is obligated to fully repay the amount the guarantor paid and the interest amount stipulated in Clause 5 of this Article.

If the guarantor fails to perform or inadequately performs the guarantee obligations committed to the obligee, the obligee sends a dossier requesting the performance of guarantee obligations according to the agreement in the guarantee commitment to the guarantee confirmer. Within 5 working days following the date on which the guarantee confirmer receives a valid dossier requesting the performance of guarantee obligations as prescribed in Clause 2 of this Article, the guarantee confirmer fully performs the obligations committed to the obligee, simultaneously recording a mandatory loan entry for the amount paid on behalf of the guarantor and notifying the guarantor. The guarantor is responsible for fully repaying the amount the guarantee confirmer paid and the interest amount stipulated in Clause 5 of this Article, while also requiring the customer to obligatorily acknowledge the debt and repay the guarantor.

If the dossier requesting the performance of guarantee obligations is not valid, the guarantor rejects the performance of guarantee obligations and must provide a written response stating the reason for rejection within 5 working days after receiving the request for performance of guarantee obligations.