To officially reduce the ratio of short-term capital for provision of medium-term and long-term loans in Vietnam from October 1, 2023? What are the total medium-term and long-term loans?
- To officially reduce the ratio of short-term capital for provision of medium-term and long-term loans in Vietnam from October 1, 2023?
- What are the total medium-term and long-term loans in Vietnam?
- To determine the maximum short-term capital for provision of medium-term and long-term loans in Vietnam?
To officially reduce the ratio of short-term capital for provision of medium-term and long-term loans in Vietnam from October 1, 2023?
According to the provisions of Article 1 of Circular 08/2020/TT-NHNN amending and supplementing Circular 22/2019/TT-NHNN, of the Governor of the State Bank of Vietnam on limits and prudential ratios of banks and foreign bank branches
Specifically, Article 1 of Circular 08/2020/TT-NHNN stipulates the maximum ratio of short-term capital for provision of medium-term and long-term loans as follows:
“5. Banks and FBBs shall maintain the maximum ratio of short-term capital for provision of medium-term and long-term loans as follows:
a) From January 01, 2020 to September 30, 2020 inclusive: 40%;
b) From October 01, 2021 to September 30, 2022 inclusive: 37%;
c) From October 01, 2022 to September 30, 2023 inclusive: 34%;
d) From October 01, 2023 onwards: 30%.”
Thus, according to the roadmap, the maximum ratio of short-term capital for provision of medium-term and long-term loans of banks will decrease from 34% to 30% from October 1, 2023.
However, on September 30, the Ho Chi Minh City Real Estate Association continued to send an urgent document to the Prime Minister and the State Bank, requesting the State Bank of Vietnam to consider amending and supplementing Circular 08/2020/TT-NHNN proposes to extend for another 12 months the time to apply the regulation that "credit institutions use a maximum of 30% of short-term capital for provision of medium-term and long-term loans" should apply "including from October 1, 2024" instead of "from October 1, 2023".
To officially reduce the ratio of short-term capital for provision of medium-term and long-term loans in Vietnam from October 1, 2023? What are the total medium-term and long-term loans? (Image from the Internet)
What are the total medium-term and long-term loans in Vietnam?
Pursuant to Clause 2, Article 16 of Circular 22/2019/TT-NHNN stipulates as follows:
Maximum ratio of short-term capital for provision of medium-term and long-term loans
...
2. Total medium-term and long-term loans include:
a) Balance of the following amounts with remaining term of over 01 year:
(i) Loans (including loans taken by other credit institutions and FBBs in Vietnam), except:
- Loans from trust funds of the Government, individuals and other organizations (including other credit institutions and FBBs in Vietnam; parent banks, foreign branches of parent banks) the risks of which are taken by the trustors;
- Loans granted to programs and projects refinanced by SBV under decisions of the Government or the Prime Minister.
(ii) Trust funds granted by other credit institutions and FBBs under a trust agreement the risks of which are taken by the trustors;
(iii) Purchases of and investments in financial instruments; trust funds for purchases of and investments in financial instruments the risks of which are taken by the trustors; except financial instruments used in transactions of SBV (not including bonds issued by VAMC);
(iv) If the loans and or fiduciary loans mentioned in (i) and (ii) have various repayment terms, the remaining term to be included in the medium-term and long-term loan balance shall be determined according to the original term of each loan.
b) Overdue principal of loans, or fiduciary loans; total purchase or fiduciary purchase of financial instruments.
Accordingly, the total medium-term and long-term loans includes outstanding debt with a remaining term of more than 01 year and overdue principal balance of loans, loan entrustment, balance of purchase and investment of valuable papers, entrusted balance to buy and invest in valuable papers according to the law.
To determine the maximum short-term capital for provision of medium-term and long-term loans in Vietnam?
Pursuant to Clause 1, Article 16 of Circular 22/2019/TT-NHNN, Banks and FBBs shall apply the following formula to calculate maximum ratio of short-term capital for provision of medium-term and long-term loans in VND and other foreign currencies that can be exchanged into VND at the rates specified in Point a Clause 26 Article 3 of Circular 22/2019/TT-NHNN according to the following formula:
Where:
- A: Ratio of short-term capital for provision of medium-term and long-term loans.
- B: Total medium-term and long-term loans balance specified in Clause 2 of this Article minus (-) total medium-term and long-term capital specified in Clause 3 of this Article.
- C: Short-term capital specified in Clause 4 of this Article.
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