Retention of debt category and debt classification to assist borrowers affected by Covid-19 pandemic in Vietnam
What are regulations on retention of debt category and debt classification to assist borrowers affected by Covid-19 pandemic in Vietnam? Which legal document stipulates this issue?
Pursuant to Clause 4 Article 1 of the Circular 03/2021/TT-NHNN stipulating retention of debt category and debt classification to assist borrowers affected by Covid-19 pandemic in Vietnam as follows:
1. Credit institutions and FBBs may retain the debt categories that have been assigned in accordance with regulations of SBV on classification of debts by credit institutions and FBBs at the nearest time before 23/01/2020 for outstanding debt that occur before 23/01/2020 as follows:
a) The outstanding debts that are rescheduled as prescribed in Article 4 of this Circular;
b) The outstanding debts on which interest is exempted or reduced as prescribed in Article 5 of this Circular;
c) The outstanding debts mentioned in Point a and Point b of this Clause, including the debts that have been rescheduled, granted interest reduction or exemption, or re-categorized as prescribed by SBV during the period from 23/01/2020 to 29/3/2020.
2. Credit institutions and FBBs may retain the debt categories that have been assigned in accordance with regulations of SBV on classification of debts by credit institutions and FBBs for the debts that are incurred from 23/01/2020 to before 10/6/2020 if the outstanding debts have been rescheduled, granted interest reduction or exemption as prescribed in Article 4 and Article 5 of this Circular. To be specific:
a) Retain debt categories that are assigned at the nearest time before the date of first rescheduling of the outstanding debts specified in Point a Clause 3 Article 4 of this Circular;
b) Retain debt categories that are assigned at the nearest time before the date the outstanding debts specified in Point c Clause 3 Article 4 of this Circular are categorized as overdue debts;
c) Retain debt categories that are assigned at the nearest time before the date of first exemption or reduction of interest on the outstanding debts specified Article 5 of this Circular.
3. After debt rescheduling and retention of debt categories are carried out as prescribed in Clause 1 and Clause 2 of this Article within the time limit for rescheduling, credit institutions and FBBs are not required to put these debts into a higher-risk category according to regulations of SBV on debt classification by credit institutions and FBBs.
4. If the outstanding debts after rescheduling and retention of debt categories prescribed in Clause 1 and Clause 2 of this Article are not granted another debt rescheduling by the credit institution or FBB, the credit institution or FBB shall carry out debt classification in accordance with regulations of SBV on debt classification by credit institutions and FBBs.
5. From the rescheduling date, credit institutions and FBBs shall not record the interests on the outstanding debts that are rescheduled, debts on which interest is reduced or exempted, debts that remain current non-performing loans (Group 1) as prescribed in this Circular as revenue (estimated). Instead, they shall be monitored off-balance sheet and recorded as revenue when they are collected in accordance with regulations of law.
6. From 01/01/2024, pursuant to regulations of SBV on classification of debts by credit institutions and FBBs, credit institutions and FBBs shall classify all outstanding debts and OBS commitments of their customers, including the outstanding debts that are rescheduled, granted interest exemption, interest reduction or debt category retention prescribed by this Circular
Best regards!
