What are regulations on guarantee for a joint obligation regarding bank guarantee in Vietnam?

What are regulations on guarantee for a joint obligation regarding bank guarantee in Vietnam?

Pursuant to Article 25 of the Circular 11/2022/TT-NHNN (takes effect from 01/04/2023) stipulating guarantee for a joint obligation regarding bank guarantee in Vietnam as follows:

A credit institution or FBB shall issue guarantee for a joint obligation on the basis of a contract containing joint rights and obligations of the parties.

What are internal regulations on guarantee of credit institutions and FBBs in Vietnam?

Pursuant to Article 26 of the Circular 11/2022/TT-NHNN (takes effect from 01/04/2023) stipulating internal regulations on guarantee of credit institutions and FBBs in Vietnam as follows:

1. Pursuant to the provisions of this Circular and relevant laws, credit institutions and FBBs shall promulgate their own internal regulations on guarantee operations (including regulations on e-guarantee and off-plan housing guarantee (if any), guarantee for customers that are non-residents) in conformity with regulations on credit extension, in which the responsibility to appraise and approve applications for guarantee must be clearly defined.

2. The credit institution or FBB shall send 01 copy of its internal regulations on guarantee to the SBV (via the SBV Banking Supervision Agency or SBV’s provincial branch) in accordance with regulations of relevant laws.

What are rights of a guarantor regarding bank guarantee in Vietnam?

Pursuant to Article 27 of the Circular 11/2022/TT-NHNN (takes effect from 01/04/2023) stipulating rights of a guarantor regarding bank guarantee in Vietnam as follows:

1. Approve or refuse applications for guarantee issuance.

2. Request the guarantee-confirmation giver to give guarantee confirmation in respect of its guaranteed amounts to the obligor.

3. Request the obligor or the counter-guarantor and relevant parties to provide information and documents concerning the appraisal of guarantee and collateral (if any).

4. Request the obligor or the counter-guarantor to provide security for the guaranteed obligations (if needed).

5. Examine and monitor the financial status of customers during the validity period of the guarantee.

6. Collect and adjust guarantee service fee; impose and adjust interest rates or penalty interest rates.

7. Refuse to fulfill guarantee obligations when the application for fulfillment of guarantee obligations is invalid or there are reasonable grounds to believe that the submitted documents are forged.

8. Request the counter-guarantor to fulfill the agreed-upon guarantee obligations.

9. Record to account the amount paid on behalf of the obligor (in case of bank guarantee) immediately after fulfilling guarantee obligations in accordance with SBV's regulations; or on behalf of the counter-guarantor (in case the guarantee is issued on the basis of a counter guarantee) immediately when the counter-guarantor fails to fulfill or insufficiently fulfills the agreed-upon guarantee obligations; request the obligor or counter-guarantor to repay the amount paid by the guarantor on their behalf.

10. Request other co-guarantors to repay amounts paid by the guarantor to the obligor on their behalf according to the co-guarantee contribution ratio as agreed upon by the parties in case the guarantor acts as the leading guarantor in fulfilling obligations of a co-guarantee relationship.

11. Dispose of collateral as agreed and in accordance with regulations of law.

12. Transfer their rights and obligations to another credit institution or FBB as agreed upon with relevant parties in conformity with regulations of law.

13. File a lawsuit in accordance with regulations of law when the obligor or counter-guarantor is in breach of their agreed-upon obligations.

14. Perform other rights as agreed upon between the parties in conformity with regulations of law.

Best regards!