On what basis does the credit institution in Vietnam consider deciding whether the debt rescheduling is necessary? Will the periods of loan principal and interest repayment be imposed by the credit institution?
On what basis does the credit institution in Vietnam consider deciding whether the debt rescheduling is necessary?
The basis for credit institutions to consider deciding whether the debt rescheduling is necessary is specified in Article 19 of Circular No. 39/2016/TT-NHNN as follows:
Debt rescheduling in Vietnam
The credit institution shall consider deciding whether the debt rescheduling is necessary at the customer’s request and depending on the financial capability of that credit institution and results of assessment of the customer's capability to repay debt as prescribed hereunder:
1. If the customer is incapable of making due repayment of loan principal and/or interest, and is rated by the credit institution as having capacity for fully repaying loan principal and/or interest within the adjusted repayment period, the credit institution shall consider adjusting the period of repayment of that principal and/or interest as appropriate to the customer's source of financing for debt repayment without prejudice to the loan term.
2. If the customer is incapable of paying off loan principal and/or interest in full within the agreed loan term, and is rated by the credit institution as having capacity for fully repaying loan principal and/or interest within a specified period of time following the said loan term, the credit institution shall consider extending the period of debt repayment as appropriate to the customer’s source of financing for such debt repayment.
3. The debt rescheduling shall be performed prior to or within a period of 10 (ten) days from the agreed date on which debt repayment is due.
Thus, the credit institution shall consider deciding whether the debt rescheduling is necessary at the customer’s request and depending on the financial capability of that credit institution and results of assessment of the customer's capability to repay debt.
On what basis does the credit institution in Vietnam consider deciding whether the debt rescheduling is necessary? Will the periods of loan principal and interest repayment be imposed by the credit institution?
Will the periods of loan principal and interest repayment be imposed by the credit institution?
According to the provisions of Article 18 of Circular No. 39/2016/TT-NHNN on repayment of loan principal and interest as follows:
Repayment of loan principal and interest
1. The credit institution and its customer must agree on the period of loan principal and interest repayment in either of the following manners:
a) Separate periods of repayment of loan principal and interest;
b) Same period of repayment of loan principal and interest.
2. The credit institution and its customer shall agree on repayment of debt prior to the due date.
3. Where the customer is unable to make due repayment of principal and/or interest in part or in full, the credit institution shall consider approving the debt scheduling as provided by Article 19, or delinquency of such debt in accordance with Article 20 hereof. The credit institution and its customer shall agree on the interest rate charged for the overdue debt mentioned above in compliance with provisions of Clause 4 Article 13 hereof.
4. The credit institution and its customer must agree on the priority order for collection of principal and interest amounts. In terms of overdue loan debts, the credit institution shall observe the order in which collection of principal amount will take priority over that of interest amount.
Thus, the credit institution and its customer must agree on the period of loan principal and interest repayment.
In which case does the credit institution in Vietnam terminate the loan?
According to the provisions of Article 21 of Circular No. 39/2016/TT-NHNN on this issue as follows:
Loan termination, debt treatment, loan interest or fee exemption or reduction
1. The credit institution shall be accorded the right to terminate a loan and collect debt prior to the payment due date under terms and conditions of a loan agreement when it has established that the customer provided unauthentic information or violated terms and conditions of a loan agreement and/or loan guarantee contract. Upon terminating a loan and recovering debt prior to the agreed due date, the credit institution shall notify the customer of such loan termination and early debt recovery. The minimum contents of such notification include the date of loan termination and debt collection prior to the due date, the principal amount to be recovered prior to the due date; deadline for repayment of principal amount to be recovered prior to the due date, date of debt delinquency and interest rate applied to the outstanding amount of principal to be recovered prior to the due date.
2. Where the customer fails to make repayment of debt due, the credit institution shall be entitled to apply methods for debt recovery under terms and conditions of a loan agreement, loan guarantee contract and regulations of relevant laws. If the amount of money obtained after application of methods for debt recovery is not adequate to fulfill obligations to pay debt owed to the credit institution, the customer shall keep on assuming responsibility for paying off loan principal and interest in full to the credit institution.
3. Where the customer or guarantor is affected by the court’s decision to open the bankruptcy proceedings or declaration of bankruptcy, the credit institution's recovery of debt owed by the customer and guarantor shall be carried out under regulations of the law on bankruptcy.
4. The credit institution shall have the right to decide to offer the customer loan interest or fee exemption or reduction in accordance with internal rules of the credit institution.
Thus, the credit institution shall be accorded the right to terminate a loan and collect debt prior to the payment due date under terms and conditions of a loan agreement when it has established that the customer provided unauthentic information or violated terms and conditions of a loan agreement and/or loan guarantee contract.
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