Vietnam: What are the requirements for special bonds so that credit institutions are refinanced? What are the conditions for refinancing of credit institutions?
- Amend the conditions for refinancing of credit institutions on the basis of special bonds in Vietnam?
- What are the requirements for special bonds so that credit institutions in Vietnam are refinanced?
- What is the purpose of refinancing for credit institutions on the basis of special bonds in Vietnam?
Amend the conditions for refinancing of credit institutions on the basis of special bonds in Vietnam?
Currently, the conditions for refinancing of credit institutions on the basis of special bonds of asset management companies of of Vietnam credit institutions shall comply with the provisions of Article 4 of Circular 18/2015/TT-NHNN as follows:
Conditions for refinancing
The State Bank shall consider and decide on refinancing when the credit institution fully satisfies the following conditions:
1. Be a credit institution specified in Clause 1, Article 2 of this Circular, lawfully owning special bonds deposited at the Transaction Department of State Bank of Vietnam that have not been paid by the Asset Management Company of Vietnam credit institutions (hereinafter referred to as the Asset Management Company).
2. Make risk provisions for special bonds as prescribed in Decree No. 53/2013/ND-CP, Decree No. 34/2015/ND-CP and guidance of the State Bank.
However, in the coming time, the conditions for refinancing of credit institutions on the basis of special bonds in Vietnam shall follow Article 5 of Circular 15/2022/TT-NHNN as follows:
Conditions for refinancing
The State Bank shall consider and decide on refinancing of credit institutions that fully satisfy the following conditions:
1. Credit institutions shall not be under special control or being processed due to violations as prescribed in Article 15 of this Circular.
2. Credit institutions have contributed to risk prevention funds regarding all of the special bonds they own according to the law or approval documents of competent authorities for 12 consecutive months before preparing Refinancing Loan Applications.
3. Credit institutions shall comply with the safety ratios specified in Clause 1, Article 130 of the Law on Credit Institutions (amended and supplemented) and regulations of the State Bank within 12 consecutive months before preparing Refinancing Loan Applications.
4. Special bonds that are used as the basis for refinancing shall adequately satisfy conditions prescribed in Article 4 of this Circular.
Accordingly, in the coming time, to be refinanced, credit institutions owning special bonds of asset management companies of Vietnam credit institutions must meet the following conditions:
- Credit institutions shall not be under special control or being processed due to violations.
- Credit institutions have contributed to risk prevention funds regarding all of the special bonds they own according to the law or approval documents of competent authorities for 12 consecutive months before preparing Refinancing Loan Applications.
- Credit institutions shall comply with the safety ratios within 12 consecutive months before preparing Refinancing Loan Applications.
- Special bonds that are used as the basis for refinancing shall adequately satisfy conditions specified by the Law.
What are the requirements for special bonds so that credit institutions in Vietnam are refinanced?
Pursuant to Article 4 of Circular 15/2022/TT-NHNN stipulating as follows:
Requirements for special bonds as a basis for refinancing, extension of refinancing
Special bonds as the basis for refinancing and extension of refinancing must fully satisfy the following requirements:
1.Special bonds are legally owned by credit institutions and are deposited at the Transaction Department of State Bank of Vietnam.
2. Special bonds are not eligible for the payment process.
3. Special bonds are not eligible for the list of special bonds that credit institutions are requesting the State Bank to consider extending the terms prescribed by the State Bank on the purchase, sale and settlement of bad debts of the Asset Management Company of Vietnam credit institutions (hereinafter referred to as the Asset Management Company).
4. At the date on which the credit institutions make special bond statements as a basis for refinancing or extension of refinancing and the date on which the credit institutions update the special bond statements as prescribed in Clause 5, Article 10 of this Circular, the remaining term of the special bond is longer than the time limit for requesting refinancing or extension of refinancing for at least 06 months.
Accordingly, in order to be refinanced, special bonds owned by credit institutions must satisfy the following conditions:
- Special bonds are legally owned by credit institutions and are deposited at the Transaction Department of State Bank of Vietnam
- Special bonds are not eligible for the payment process
- Special bonds are not eligible for the list of special bonds that credit institutions are requesting the State Bank to consider extending the term.
- The remaining term of the special bond is longer than the time limit for requesting refinancing or extension of refinancing for at least 06 months.
What is the purpose of refinancing for credit institutions on the basis of special bonds in Vietnam?
Pursuant to Article 3 of Circular 15/2022/TT-NHNN, the purpose of refinancing for credit institutions on the basis of special bonds is as follows:
The State Bank refinances credit institutions in order to support the operating capital of credit institutions in the process of handling bad debts according to Decree 53/2013/ND-CP.
Circular 15/2022/TT-NHNN will take effect from January 17, 2023.
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