Cessation of a number of regulations on non-lending capital needs in Circular 06 in Vietnam

Cessation of a number of regulations on non-lending capital needs in Circular 06 in Vietnam

On August 23, 2023, the Governor of the State Bank issued Circular 10/2023/TT-NHNN suspending the implementation of Clause 8, Clause 9 and Clause 10, Article 8 of Circular 39/2016/TT-NHNN (supplemented by Clause 2, Article 1 of Circular 06/2023/TT-NHNN).

Accordingly, in Article 1 of Circular 10/2023/TT-NHNN, there are provisions on suspension of a number of regulations on capital demand not allowed to be loaned in Circular 06 as follows:

Cessation of effect of Clause 8, Clause 9 and Clause 10, Article 8 of Circular No. 39/2016/TT-NHNN dated December 30, 2016 of the Governor of the State Bank of Vietnam on regulations on lending activities of financial institutions. credit institutions, foreign bank branches for customers (added according to Clause 2, Article 1 of Circular No. 06/2023/TT-NHNN dated June 28, 2023 of the Governor of the State Bank of Vietnam on the amendment and supplementation of a number of articles of Circular No. 39/2016/TT-NHNN) from September 1, 2023 until the effective date of the new legal document regulating issues This.

In Clause 8, Clause 9 and Clause 10, Article 8 of Circular 39/2016/TT-NHNN as amended by Clause 2, Article 1 of Circular 06/2023/TT-NHNN stipulating the need to borrow capital from credit institutions Loans include:

Non-lending capital needs

Credit institutions are not allowed to lend for capital needs:

...

8. To pay for capital contribution, purchase, receive and transfer capital contributions of limited liability companies or partnerships; contribute capital, purchase, receive and transfer shares of joint stock companies that have not been listed on the stock market or have not been registered for trading on the Upcom trading system.

9. To pay the capital contribution under the capital contribution contract, investment cooperation contract or business cooperation contract for the implementation of an investment project that is not eligible to be put into business according to the provisions of law at the time the credit institution decides to lend.

10. For financial compensation, unless the loan fully meets the following conditions:

a) The customer has advanced the customer's own capital to pay and pay the cost of implementing business projects that the costs of implementing this business project are incurred less than 12 months by the time the credit institution decides to lend;

b) Expenses that have been paid and paid with the customer's own capital to carry out business projects are expenses that use loans from credit institutions according to the plan on using capital already submitted to credit institutions for consideration for medium and long-term loans for the implementation of that business project.

Thus, from September 1, 2023, the regulation on non-lending capital needs in Circular 06 will be stopped until the effective date of the new legal document stipulating for 03 non-lending capital needs of credit institutions, including:

- Lending to pay for capital contribution, purchase or transfer capital contributions of limited liability companies or partnerships; contribute capital, purchase, receive and transfer shares of a joint-stock company that has not been listed on the stock market or registered for trading on the UPCOM trading system.

- Loans to pay for capital contributions under capital contribution contracts, investment cooperation contracts or business cooperation contracts for the implementation of investment projects that are not eligible to be put into business as prescribed by law at the time when the credit institution decides to lend.

- Loans for financial compensation, except for cases where the loan fully meets the conditions as prescribed in Circular 06/2023/TT-NHNN.

How many types of loans do credit institutions currently have?

In Article 10 of Circular 39/2016/TT-NHNN, there are currently 03 types of loans as follows:

Short-term loans are loans with a maximum loan term of 1 year

- Medium-term loans are loans with a loan term of more than 1 year and up to 5 years.

- Long-term loans are loans with a loan term of more than 5 years.

What are the documents required to apply for a loan from a credit institution?

Article 9 of Circular 39/2016/TT-NHNN stipulates the loan application documents as follows:

Dossier to apply for a loan

When there is a need to borrow capital, the customer must send to the credit institution the documents proving eligibility for the loan as prescribed in Article 7 of this Circular and other documents guided by the credit institution.

In Article 7 of Circular 39/2016/TT-NHNN a number of contents are annulled by Article 2 of Circular 06/2023/TT-NHNN with the following provisions on loan conditions:

Loan conditions

Credit institutions consider and decide on loans when customers fully meet the following conditions:

1. Customer is a legal entity with civil legal capacity as prescribed by law. Customers being individuals aged full 18 years or older with full civil act capacity as prescribed by law or from full 15 years old to under 18 years old without loss or limitation of civil act capacity as prescribed by law.

2. Demand for loans to use for lawful purposes.

3. Having a feasible plan to use capital.

4. Have the financial ability to repay the debt.

5. (repealed)

Thus, the application file for a loan from a credit institution includes the following documents:

(1) Documents proving eligibility for loans. Loan conditions include:

- Customer is a legal entity with civil legal capacity as prescribed by law.

- Customers are individuals aged full 18 years or older with full civil act capacity as prescribed by law or from full 15 years old to under 18 years old without loss or limitation of civil act capacity according to the provisions of law. provisions of law.

- Demand for loans to use for lawful purposes.

- Have a feasible plan to use capital.

- Have the financial ability to repay the debt.

(2) Other papers guided by the credit institution.

Best regards!