From April 1, 2025, what documents are required for a bank guarantee application in Vietnam?
What is a bank guarantee?
Pursuant to Article 4 of the Law on Credit Institutions 2024:
Article 4. Interpretation of Terms
In this Law, the following terms are construed as follows:
- Factoring is a form of credit granting through the acquisition of receivables from the seller or prepayment on behalf of the buyer according to a contract for the sale of goods or provision of services between the buyer and the seller.
- Bank guarantee is a form of credit granting to customers where the credit institution or foreign bank branch commits to the guarantee recipient to fulfill financial obligations on behalf of the obligor when the obligor fails to fulfill or fully fulfill the committed obligations; the customer must compulsorily acknowledge the debt and repay the credit institution or foreign bank branch according to the agreement.
- Early intervention refers to measures taken by the State Bank of Vietnam (hereinafter referred to as the State Bank) by applying requirements and restrictive measures on credit institutions or foreign bank branches and requiring them to implement remedial plans under the oversight of the State Bank as regulated in Clause 1, Article 156 of this Law.
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Thus, a bank guarantee is a form of credit granting to customers where the credit institution or foreign bank branch commits to the guarantee recipient to fulfill financial obligations on behalf of the obligor when the obligor fails to fulfill or fully fulfill the committed obligations; the customer must compulsorily acknowledge the debt and repay the credit institution or foreign bank branch according to the agreement.
From April 1, 2025, what documents are required for a bank guarantee application in Vietnam? (Image from Internet)
From April 1, 2025, what documents are required for a bank guarantee application in Vietnam?
According to Article 14 of Circular 61/2024/TT-NHNN stipulating the application for guarantee:
Article 14. Application for Guarantee
- The guarantee application includes the following primary documents:
a) Guarantee request;
b) Customer documents; including information about individuals related to the customer as regulated by the Law on Credit Institutions if the total outstanding credit of that customer at the credit institution or foreign bank branch (including the amount being requested for guarantee) is equal to or greater than 0.1% of the charter capital of the credit institution, foreign bank branch at the end of the nearest working day to the time the customer requests the guarantee, except when the customer is a foreign credit institution. If the credit institution or foreign bank branch has negative capital, the above rate applies to the charter capital or capital granted (for foreign bank branches). Information about related persons includes:
(i) Information about the related individual, including: full name, personal identification number for Vietnamese citizens; nationality, passport number, date of issue, place of issue for foreigners; relationship with the customer;
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According to the above regulation, the documents required for a bank guarantee application include:
[1] Guarantee Request
[2] Customer Documentation
Information about related persons includes:
- Information on the related individual, including: full name, personal identification number for Vietnamese citizens; nationality, passport number, date of issue, place of issue for foreigners; relationship with the customer
- Information on the related organization, including: name, enterprise code, address of the head office, business registration certificate or equivalent legal documents, legal representative, relationship with the customer.
[3] Documentation on the Guaranteed Obligation
[4] Documentation on Securing Measures (if any)
[5] Documentation on Other Related Parties (if any).
What contents must a guarantee agreement in Vietnam include?
According to Article 15 of Circular 61/2024/TT-NHNN, a guarantee granting agreement must include the following content:
- Applicable law. If no specific applicable law is stipulated, it is understood that the parties agree to apply Vietnamese law
- Information about the parties in the guarantee relationship
- Obligations being guaranteed
- Guarantee amount, currency of guarantee
- Form of issuing the guarantee commitment
- Conditions for fulfilling the guarantee obligations
- Rights and obligations of the parties
- Guarantee fee
- Agreement on compulsory debt repayment, interest rate applicable to payments made on behalf, and obligations to repay when performing guarantee obligations
- Number, date of signing, the validity of the guarantee granting agreement
- Dispute resolution
- Other contents not contrary to the provisions of law
