In which cases does the State Bank of Vietnam provide special loans?

1. In which cases does the State Bank of Vietnam provide special loans?

According to Article 4 of Circular 37/2024/TT-NHNN, the State Bank of Vietnam grants special loans using funds from the central bank's money issuance function in the following cases:

- Granting special loans to credit institutions experiencing massive withdrawals, including commercial banks, cooperative banks, people's credit funds, and microfinance institutions to pay depositors;

- Granting special loans to credit institutions under special control, including commercial banks, cooperative banks, financial companies, and microfinance institutions to implement the approved recovery plan;

- Granting special loans to commercial banks under special control to implement mandatory transfer plans as approved under the Law on Credit Institutions 2024;

- Granting special loans to commercial banks under special control to support recovery under mandatory transfer plans as approved under the Law on Credit Institutions 2010.

Additionally, the Vietnam Cooperative Bank grants special loans in the following cases:

- Granting special loans to people's credit funds experiencing massive withdrawals to pay depositors;

- Granting special loans to people's credit funds under special control to implement the approved recovery plan.

Thus, the State Bank of Vietnam grants special loans in the following cases:

- Special loans to some credit institutions experiencing massive withdrawals to pay depositors;

- Special loans to several credit institutions under special control to implement the approved recovery plan;

- Special loans to commercial banks under special control to implement mandatory transfer plans as approved under the Law on Credit Institutions 2024;

- Special loans to commercial banks under special control to support recovery under mandatory transfer plans as approved under the Law on Credit Institutions 2010.

2. What is the purpose of using special loans in Vietnam?

According to Article 9 of Circular 37/2024/TT-NHNN regarding the purpose of using special loans:

- If the special borrower is a credit institution not under special control, the special borrower is only permitted to use special loans to pay the deposits of individual depositors at the special borrower.

- If the special borrower is a credit institution under special control, the special borrower is only permitted to use special loans to pay the deposits of individual depositors at the special borrower; the use of special loans to pay the deposits of organizational depositors is decided by the Governor of the State Bank for each specific special borrower based on the proposal of the Special Control Committee.

- The subjects eligible for payment as specified in Clauses 1 and 2 of Article 9 of Circular 37/2024/TT-NHNN do not include:

+ Related persons of the special borrower as defined in Clause 24, Article 4 of the Law on Credit Institutions 2024 and the guidance of the State Bank regarding related persons of credit institutions;

+ Executives, managers of the special borrower as defined in Clauses 25 and 26, Article 4 of the Law on Credit Institutions, except for those appointed or designated by state authorities;

+ Related persons of individuals or organizations who are managers, executives, members contributing capital, or shareholders holding at least 5% of the charter capital or voting shares of the special borrower as defined in Clause 24, Article 4 of the Law on Credit Institutions and the guidance of the State Bank regarding related persons of individuals or organizations (if any).

- The subjects specified in Points a, b, and c, Clause 3 of Article 9 of Circular 37/2024/TT-NHNN are determined from the date:

+ The special borrower reports in writing to the State Bank when experiencing massive withdrawals as specified in Clause 1, Article 191 of the Law on Credit Institutions 2024;

+ The State Bank issues a document placing the special borrower under special control (in the case the special borrower is under special control before the date specified in point a of this clause).

- If the special borrower is a credit institution under special control and has guidance on deposit payments, the subjects eligible for payments, the subjects not eligible for payments, and the deposit amounts to be paid are implemented according to Clauses 1, 2, and 3 of Article 9 of the Law on Credit Institutions 2024 and the guidance on deposit payments.

Thus, the purpose of using special loans includes paying the deposits of individuals at borrowing credit institutions; for credit institutions under special control, payments to organizations are decided by the Governor of the State Bank...

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