Cases of interest rate on short-term loan in VND in Vietnam

Cases of interest rate on short-term loan in VND in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

On June 28, 2023, the Governor of the State Bank of Vietnam issued Circular 06/2023/TT-NHNN amending and supplementing a number of articles of Circular 39/2016/TT-NHNN.

1. Cases of interest rate on short-term loan in VND in Vietnam

Specifically, in Clause 4, Article 1 of Circular 06/2023/TT-NHNN amending Clause 2, Article 13 of Circular 39/2016/TT-NHNN, if the customer has been rated transparent and healthy in its financial status by the credit institution, the credit institution and the customer shall agree on the interest rate on short-term loan in VND which shall not exceed the maximum lending interest rate decided by SBV’s Governor over periods of time in order to meet certain demands for borrowed fund as follows:

- Loans taken out to support the agricultural and rural development sector under the Government’s regulations on credit policies for agricultural and rural development;

- Loans taken out to implement the export business plan in accordance with the Law on Commerce and its instructional documents; 

- Loans taken out to finance business activities of small and medium-sized enterprises under the Law and the Government’s regulations on support for development of small and medium-sized enterprises;

- Loans taken out to develop ancillary industries under the Government’s regulations on development of ancillary industries;

- Loans taken out to finance business operations of enterprises that apply high technologies included in the List of prioritized high technologies approved by the Prime Minister and other high-tech enterprises under the provisions of the Law on High Technology and its instructional documents.

2. Regulations on agreed amount of loan principal and/or interest in Vietnam

Pursuant to Clause 3, Article 13 of Circular 39/2016/TT-NHNN, if a customer fails to repay or fully repay the agreed amount of loan principal and/or interest at the payment due date, the customer shall be obliged to repay loan interest as prescribed hereunder:

- The amount of interest on principal is charged at the agreed interest rate in proportion to the period during which repayment of that principal due has not been made;

- If a customer fails to make due payment of interest as prescribed by Point a of Clause 3, Article 13 of Circular 39/2016/TT-NHNN, that customer must pay late payment interest charged at the interest rate agreed upon between the credit institution and customer which is not allowed to exceed 10%/year interest rate on the outstanding balance of late payment interest in proportion to the period of late payment;

- Where a debt has become delinquent, the customer owing a delinquent debt must pay interest on the outstanding amount of principal which is overdue in proportion to the period of late payment for which the interest rate charged is not allowed to exceed 150% of the interest rate charged on due repayment that is determined upon the date of such debt becoming delinquent.

More details can be found in Circular 06/2023/TT-NHNN effective from September 1, 2023.

Ho Quoc Tuan

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