How is bank loan considered a nonperforming loan in Vietnam?
When borrowing money at a bank, if I do not make the payment according to regulations in Vietnam, can it be considered a nonperforming loan? So please give me the information on what loans are nonperforming loans?
According to the provisions of Clause 8, Article 3 of Circular 11/2021/TT-NHNN, there are regulations.
8. Nonperforming loan (NPL) refers to a bad debt on the balance sheet which is classified into group 3, 4 or 5.
And in Article 10 of the Circular, there are provisions on debts/loans groups in Vietnam as follows:
c) Group 3 (Sub-standard debts/loans), including:
(i) Debts/loans which are from 91 days to 180 days overdue, except those prescribed in clause 3 of this Article;
(ii) Debts/loans with first-time extended repayment terms that are unmatured, except those prescribed in point b of clause 2 and clause 3 of this Article;
(iii) Debts/loans on which interest is exempted or reduced due to the borrower's inability to pay in full as agreed upon, except for those specified in Clause 3 of this Article;
(iv) Debts/loans falling in one of the following cases that have not yet been recovered within less than 30 days from the effective dates of recovery decisions:
- Those violating provisions laid down in clause 1, 3, 4, 5 and 6 of Article 126 in the Law on Credit Institutions (amended);
- Those violating provisions laid down in clause 1, 2, 3 and 4 of Article 127 in the Law on Credit Institutions (amended);
- Those violating provisions laid down in clause 1, 2 and 5 of Article 128 in the Law on Credit Institutions (amended);
(v) Debts/loans falling within the recovery periods under inspection and examination conclusions;
(vi) Debts/loans that need to be recovered under premature debt recovery decisions of credit institutions or foreign bank branches due to borrowers’ breach of agreements with them, but are not yet recovered within a period of less than 30 days from the effective dates of recovery decisions;
(vii) Debts/loans that are classified into group 3 as provided in clause 2 and clause 3 of this Article;
(viii) Debts/loans that are classified into group 3 as provided in clause 4 of Article 8 herein.
d) Group 4 (Doubtful debts/loans), including:
(i) Debts/loans which are from 181 days to 360 days overdue, except those prescribed in clause 3 of this Article;
(ii) Debts/loans with first-time rescheduled repayment terms that are up to 90 days past due from the first-time rescheduled maturity dates, except those specified in clause 3 of this Article;
(iii) Debts/loans with second-time rescheduled repayment terms that are unmatured, except those prescribed in point b of clause 2 and clause 3 of this Article;
(iv) Debts/loans referred to in point c(iv) of clause 1 of this Article that are not yet been recovered in 30 and 60 days from the effective dates of recovery decisions.
(v) Debts/loans that need to be recovered under inspection and examination conclusions, but are not yet recovered in up to 60 days after expiry of the recovery deadlines;
(vi) Debts/loans that need to be recovered under premature debt recovery decisions of credit institutions or foreign bank branches due to borrowers’ breach of agreements with them, but are not yet recovered in 30 and 60 days from the effective dates of recovery decisions;
(vii) Debts/loans that are classified into group 4 as provided in clause 2 and clause 3 of this Article;
(viii) Debts/loans that are classified into group 4 as provided in clause 4 of Article 8 herein.
dd) Group 5 (Debts/loans likely giving rise to loss), including:
(i) Debts/loans that are more than 360 days past due;
(ii) Debts/loans with first-time rescheduled repayment terms that are at least 91 days past due from the first-time rescheduled maturity dates;
(iii) Debts/loans with second-time rescheduled repayment terms that are past due from the second-time rescheduled maturity dates;
(iv) Debts/loans with third- or more-time rescheduled repayment terms, except those prescribed in point b of clause 2 of this Article;
(v) Debts/loans referred to in point c(iv) of clause 1 of this Article that are not yet been recovered in more than 60 days from the effective dates of recovery decisions;
(vi) Debts/loans that need to be recovered under inspection and examination conclusions, but are not yet recovered in more than 60 days after expiry of the recovery deadlines;
(vii) Debts/loans that need to be recovered under premature debt recovery decisions of credit institutions or foreign bank branches due to borrowers’ breach of agreements with them, but are not yet recovered in more than 60 days from the effective dates of recovery decisions;
(viii) Debts/loans of borrowers that are credit institutions put under special control, or foreign bank branches of which capital and assets are frozen;
(ix) Debts/loans classified into group 5 as provided in clause 3 of this Article;
(x) Debts/loans that need to be classified into group 5 as provided in clause 4 of Article 8 herein.
Best Regards!
