Circular 57: How is the Guarantee Risk Provision Fund Utilized?

Currently, the Guarantee Risk Reserve Fund is a risk reserve fund established in accordance with the provisions of Decree 34/2018/ND-CP of the Government of Vietnam.

Illustrative image (source: internet)

According to the provisions of Article 17 of Circular 57/2019/TT-BTC, the Credit Guarantee Fund for Small and Medium Enterprises (hereinafter referred to as the Credit Guarantee Fund) is authorized to utilize the Guarantee Risk Reserve Fund for the following purposes:

- The Credit Guarantee Fund is permitted to utilize the Guarantee Risk Reserve Fund to address risks related to principal debt write-offs and debt sales (in cases where the debt sale price is lower than the book value of the principal debt) as stipulated in this Circular.- In the event that the Guarantee Risk Reserve Fund is insufficient to cover the risks arising from customer debts incurred during the year, resources may be drawn from the Financial Reserve Fund as prescribed in Clause 3, Article 43 of Decree 34/2018/ND-CP of the Government of Vietnam.- If both the Guarantee Risk Reserve Fund and the Financial Reserve Fund are insufficient to cover the risks arising from customer debts incurred during the year, the Credit Guarantee Fund shall report and propose that the provincial People's Committee balance and allocate funds from the local budget to supplement the Guarantee Risk Reserve Fund to address the arising risks in compliance with the law.

View the complete regulations at Circular 57/2019/TT-BTC effective from October 15, 2019.

Thu Ba

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