Hanoi, Vietnam: Application for approval of credit overextensions from July 01, 2024

Application for approval of credit overextensions in Vietnam from July 01, 2024 (Image from the internet)

On July 01, 2024, the Prime Minister of the Government of Vietnam issued Decision 09/2024/QD-TTg regulating the conditions, documents, and procedures for applying for approval of the maximum credit overextensions of credit institutions and foreign bank branches.

Application for approval of credit overextensions in Vietnam

Based on Article 4 of Decision 09/2024/QD-TTg, the Application for approval of credit overextensions in Vietnam is regulated as follows:

- Credit institution documents to report to the State Bank of Vietnam:

The Application for approval of credit overextensions in Vietnam of credit institutions for a customer, a customer, and related persons of that customer sent to the State Bank of Vietnam should be a copy issued from the original book or a certified copy or a copy with the confirmation seal of the credit institution, including:

+ A document of the credit institution requesting the State Bank of Vietnam to report to the Prime Minister of the Government of Vietnam for permission to grant credit overextensions for a customer, a customer, and related persons of that customer according to the template in the Appendix attached to Decision 09/2024/QD-TTg;

+ Documents and materials proving that the credit institution has met the conditions at point a Clause 2 Article 3 of Decision 09/2024/QD-TTg;

+ An assessment document of the credit institution for the customer, project, loan plan of the customer;

+ Approval document for granting credit to the customer from the competent authority of the requesting credit institution;

+ A document requesting credit at the credit institution from the customer;

+ Documents related to the customer requesting credit, including: Business registration certificate or establishment certificate or establishment decision; audited financial statements for the 03 consecutive years before the time of requesting credit overextensions; and other related documents (if any);

+ Legal documents related to the project or plan requesting credit, including:

++ Investment registration certificate or project approval document, approval plan from the competent authority;

++ Other related documents.

+ A report on the credit relationship situation and the need for credit overextensions of a customer, a customer, and related persons of that customer according to Form No. 01 in the Appendix attached to Decision 09/2024/QD-TTg.

- Documents for the State Bank of Vietnam to report to the Prime Minister of the Government of Vietnam include a proposal from the State Bank of Vietnam attached with the following documents:

+ A document of the credit institution requesting the State Bank of Vietnam to report to the Prime Minister of the Government of Vietnam for permission to grant credit overextensions for a customer, a customer, and related persons of that customer;

+ Opinions from related ministries, central authorities, and local authorities;

+ Explanatory document from the credit institution, customer (if any);

+ Other related documents (if any).

Procedures for considering credit overextensions

According to Article 6 of Decision 09/2024/QD-TTg, the procedures for considering credit overextensions are as follows:

- The credit institution submits 01 set of documents as regulated in Clause 1 Article 4 of Decision 09/2024/QD-TTg directly at the One-Stop Unit or via postal services to the State Bank of Vietnam.

- Within 15 days from the date of receiving the complete documentation from the credit institution:

+ If the documentation from the credit institution does not meet the conditions specified in Article 3 of Decision 09/2024/QD-TTg, the State Bank of Vietnam shall notify the credit institution in writing, specifying the conditions that the credit institution has not yet met;

+ If the documentation from the credit institution is valid, the State Bank of Vietnam shall request opinions from related ministries, central authorities, and local authorities on the economic, technical, and legal aspects of the project or plan and the customer requesting credit overextensions.

- Within 15 days from the date of receiving the request for opinions from the State Bank of Vietnam, related ministries, central authorities, and local authorities shall provide written opinions on the contents within their management field to the State Bank of Vietnam. Based on the opinions from related ministries, central authorities, and local authorities, the State Bank of Vietnam shall request the credit institution and the customer to explain related issues (if any).

- Within 40 days from the date of receiving opinions from related ministries, central authorities, and local authorities or the explanations from the credit institution and customer, the State Bank of Vietnam shall check the rationality and validity of the documentation requesting credit overextensions provided by the credit institution:

+ If the documentation from the credit institution does not meet the conditions specified in Article 3 of Decision 09/2024/QD-TTg, the State Bank of Vietnam shall notify the credit institution in writing, specifying the conditions that the credit institution has not yet met;

+ If the documentation from the credit institution is reasonable and valid, the State Bank of Vietnam shall submit it to the Prime Minister of the Government of Vietnam for consideration and decision on the request for credit overextensions of the credit institution.

- Based on the credit request exceeding the limit from the credit institution, the opinions of the State Bank of Vietnam, and the opinions of related ministries, central authorities, and local authorities, the Prime Minister of the Government of Vietnam shall decide on credit overextensions of the credit institution.

More details can be found in Decision 09/2024/QD-TTg effective in Vietnam from July 01, 2024.

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