What are interest rates when lending a special loan from State Bank of Vietnam?
What are interest rates when lending a special loan from State Bank of Vietnam? Our bank is under the special control of State Bank of Vietnam. To support the bank's liquidity, in the near future we are being considered for a special loan from State Bank of Vietnam. So what is the interest rate in the above case? How long is the maximum loan term?
1. What are interest rates when lending a special loan from State Bank of Vietnam?
Pursuant to Point a, Clause 1, Article 4 of Circular 08/2021/TT-NHNN stipulating SBV shall use funding sources from performance of functions of the central bank in terms of money issuance for granting special loans to credit institutions placed under special control in the following cases:
a) A special loan shall be granted for supporting the liquidity of a credit institution that is in danger of becoming insolvent or has become insolvent and such insolvency threatens the stability of the banking system while the credit institution is placed under special control, even if the credit institution is implementing an approved restructuring plan or transfer plan;
Thus, in the case of the bank, you will be entitled to a special loan according to the above provisions in Vietnam.
In Clause 1, Article 11 of Circular 08/2021/TT-NHNN stipulating interest rates in case of being entitled to a special loan from the State bank as follows:
1. With regard to the special loan specified in Point a Clause 1 Article 4 hereof:
a) The lending interest rate and the interest rate charged on an extended special loan shall be equal to the refinancing rate announced by SBV in each period at the time the relevant special loan is disbursed or extended;
b) The interest rate charged on the overdue principal of a special loan shall be 130% of the interest rate charged on due repayment determined on the day in which the debt becomes delinquent;
c) No interest will be charged on late payment of outstanding interests.
So in your case the special loan interest rate is equal to the refinancing rate announced by SBV in each period at the time the relevant special loan is disbursed or extended. With the interest rate charged on the overdue principal of a special loan shall be 130% of the interest rate charged on due repayment determined on the day in which the debt becomes delinquent in Vietnam.
3. What is special loan term in Vietnam?
Article 10 of Circular 08/2021/TT-NHNN stipulates special loan term as follows:
The term of a special loan prescribed in Point a Clause 1, Point b Clause 2, or Point b Clause 3 Article 4 hereof shall be considered and decided by SBV, but less than 12 years.
According to the above regulations, SBV will decide on the term of a special loan, but on a case-by-case basis, the maximum will not exceed 12 months in Vietnam.
Best Regards!
