What are total amount of credit extended of non-bank credit institutions included in Vietnam?

What are total amount of credit extended of non-bank credit institutions included in Vietnam?

Pursuant to Clause 11 Article 3 of the Circular 23/2020/TT-NHNN stipulating total amount of credit extended of non-bank credit institutions included in Vietnam as follows:

Total amount of credit extended includes the aggregate outstanding balance arising from loans, discounts, rediscounts, factoring, total investments in corporate bonds (except special bonds, bonds issued directly to debt-selling credit institutions in order for them to buy bad debts of Vietnam Asset Management Company (VAMC) at the market prices), and other credit facilities extended as defined by the State Bank (including those of credit offered by using funds of other juridical persons of which any risks are borne by non-bank credit institutions in accordance with regulations of laws); undisbursed loan limits, credit limits, bank guarantee balance and balance of other funds held in trust by other credit institutions for lending or finance leasing purposes.

What are regulations on limits for extension of credit of non-bank credit institutions in Vietnam?

Pursuant to Article 10 of the Circular 23/2020/TT-NHNN stipulating limits for extension of credit of non-bank credit institutions in Vietnam as follows:

1. Non-bank credit institutions shall comply with regulations on the cases in which credit extension is banned or limited and the credit extension limits specified in Articles 126, 127 and 128 of the Law on credit institutions (amended).

2. A non-bank credit institution shall determine its credit extension limits mentioned in Clause 1 of this Article on the basis of its standalone equity specified in Clause 3 of this Article at the end of the last working day.

What are conditions and limits for credit extension for investment in corporate bonds of non-bank credit institutions in Vietnam?

Pursuant to Article 11 of the Circular 23/2020/TT-NHNN stipulating conditions and limits for credit extension for investment in corporate bonds of non-bank credit institutions in Vietnam as follows:

1. A financial company may extend credit with terms of up to 01 (one) year for customers to invest in corporate bonds if the following conditions are met:

a) The credit extension comply with the prudential limits and ratios prescribed by law;

b) Bad debt ratio must be below 3%;

c) Risks are properly managed in accordance with regulations of SBV on internal control systems of non-bank credit institutions, regulations on classification of assets, rates of funds set aside for and use of provisions for losses for risk management by credit institutions and foreign bank branches.

2. A financial company must not extend credit with for a customer to invest in corporate bonds in the following cases:

a) The collateral is a bond issued by a credit institution, subsidiary of a credit institution or foreign bank branch;

b) The collateral is a bond of an enterprise borrowed by the customer to buy that enterprise’s bond;

c) The customer is one of the organizations and individuals mentioned in Clause 1 Article 126 of the Law on credit institutions (amended);

d) The client is a related person of any of the organizations or individuals mentioned in Clause 1 and Clause 4 Article 126 of the Law on credit institutions (amended);

dd) The customer is or is related to one of the organizations or individuals mentioned in Clause 1 Article 127 of the Law on credit institutions (amended);

e) The bonds are not listed or registered on the Unlisted Public Company Market (Upcom);

g) The bonds are issued by a subsidiary of the financial company;

h) The customer is a subsidiary or associate company of the credit institution.

3. The total balance of credit extended for investment in corporate bonds (including bonds of credit institutions and foreign bank branches) must not exceed 5% of the charter capital of a financial company.

What are conditions and limits for credit extension for investment in shares of non-bank credit institutions in Vietnam?

Pursuant to Article 12 of the Circular 23/2020/TT-NHNN stipulating conditions and limits for credit extension for investment in shares of non-bank credit institutions in Vietnam as follows:

1. A financial company may extend credit with terms of up to 01 (one) year for customers to invest in shares if the following conditions are met:

a) The credit extension comply with the prudential limits and ratios prescribed by law;

b) Bad debt ratio must be below 3%;

c) Risks are properly managed in accordance with regulations of SBV on internal control systems of non-bank credit institutions, regulations on classification of assets, rates of funds set aside for and use of provisions for losses for risk management by credit institutions and foreign bank branches.

2. A financial company must not extend credit to a customer for investment in shares in the following cases:

a) The collateral is shares of a credit institution or its subsidiary;

b) The collateral is the shares of an issuing enterprise that the customer borrows for purchase of shares of that enterprise;

c) Credit is used for investment in shares of credit institutions;

d) The customer is one of the organizations and individuals mentioned in Clause 1 Article 126 of the Law on credit institutions (amended);

dd) The client is a related person of any of the organizations or individuals mentioned in Clause 1 and Clause 4 Article 126 of the Law on credit institutions (amended);

e) The customer is or is related to one of the organizations or individuals mentioned in Clause 1 Article 127 of the Law on credit institutions (amended);

g) The customer is a subsidiary or associate company of the credit institution.

3. The total balance of credit extended for investment in shares of a financial company must not exceed 5% of its charter capital.

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