According to the Law on Credit Institutions 2024, when does the State Bank provide special loans with a 0% annual interest rate to credit institutions?
When does the State Bank offer special loans to credit institutions at 0% interest per year?
According to Article 171 of the Law on Credit Institutions 2024 which stipulates measures to support the implementation of recovery plans as follows:
Measures to support the implementation of recovery plans
1. Credit institutions under special control, including commercial banks, cooperative banks, and finance companies, may apply one or several of the following support measures:
a) Special loans from the State Bank, deposit insurance organizations, other credit institutions as prescribed at point b, clause 1, clause 2 of Article 192 of this Law;
b) Exemption from interest on refinancing loans and special loans from the State Bank;
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2. Credit institutions under special control, including people's credit funds and microfinance institutions, may apply one or several of the following support measures:
a) Measures stipulated at points b, c, d, e, g, and i of clause 1 of this Article;
b) Microfinance institutions may receive special loans from the State Bank, deposit insurance organizations, other credit institutions as prescribed at point b, clause 1, clause 2 of Article 192 of this Law;
c) People's credit funds may receive special loans from cooperative banks from the safety assurance fund for the people's credit fund system at an interest rate of up to 0%/year.
As seen, credit institutions under special control, including commercial banks, cooperative banks, finance companies, people's credit funds, and microfinance institutions, that implement the recovery plan will receive refinancing loans and special loans from the State Bank at an interest rate of 0%/year.
Simultaneously, people's credit funds may receive special loans from cooperative banks from the safety assurance fund for the people's credit fund system at an interest rate of up to 0%/year.
According to the Law on Credit Institutions 2024, when does the State Bank offer special loans to credit institutions at 0% interest per year? (Image from the Internet)
How is the content of the recovery plan of credit institutions under special control guided by the Law on Credit Institutions 2024?
Based on the provision in Article 170 of the Law on Credit Institutions 2024, which guides the recovery plan of credit institutions under special control, the recovery plan includes the following main contents:
- Plan to increase charter capital and the period to implement the plan in cases where the actual value of the charter capital is lower than the statutory capital; the capital adequacy ratio is below the prescribed level by the Governor of the State Bank; as requested in writing by the State Bank to ensure the safety of the credit institution’s operations;
- Business operations plan during the recovery phase;
- Organizational structure, management, and administration restructuring plan;
- Plan to handle financial weaknesses, bad debts, secured assets, and measures to remedy legal violations;
- Payment plan for corporate depositors, deposits, and loans of other credit institutions; plan to handle special loans, including those stipulated in clause 3 of Article 162 of the Law on Credit Institutions 2024;
- Support measures stipulated in Article 171 of the Law on Credit Institutions 2024 to be applied;
- Timeline and period for implementing the recovery plan.
In cases where there is a supporting credit institution, in addition to the above contents, the credit institution under special control cooperates with the supporting credit institution to add the following contents to the recovery plan:
- Information about the supporting credit institution implementing the recovery plan;
- Support plan from the supporting credit institution for the credit institution under special control; support plan for the supporting credit institution;
- Plan for remunerations, salaries, bonuses, and other policies for dispatched participants assisting in managing, controlling, and operating the credit institution under special control;
- Salary payment plan for employees of the credit institution under special control during the special control period.
When does the new Law on Credit Institutions 2024 take effect?
At the Law on Credit Institutions 2024, which has just been officially promulgated, specifically, Article 209 of the Law on Credit Institutions 2024 stipulates:
Effectiveness
1. This Law takes effect from July 01, 2024, except as provided in clause 2 of this Article.
2. Clause 3 of Article 200 and clause 15 of Article 210 of this Law take effect from January 01, 2025.
3. Law No. 47/2010/QH12 on Credit Institutions, amended and supplemented by Law No. 17/2017/QH14, ceases to be effective from the date this Law takes effect, except for provisions in clauses 1, 2, 3, 4, 8, 9, 12, and 14 of Article 210 of this Law.
Thus, the Law on Credit Institutions 2024 will take effect from July 01, 2024, except for clause 3 of Article 200 and clause 15 of Article 210, which will take effect from January 01, 2025.
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