Regulations on the implementation of bank guarantee obligations in Vietnam from April 1, 2025

Regulations on the implementation of bank guarantee obligations in Vietnam from April 1, 2025 (Image from the internet)

On December 31, 2024, the Governor of the State Bank issued Circular 61/2024/TT-NHNN regarding regulations on bank guarantees.

Regulations on the implementation of bank guarantee obligations in Vietnam from April 1, 2025

Article 22 of Circular 61/2024/TT-NHNN stipulates the implementation of bank guarantee obligations from April 1, 2025 in Vietnam as follows:

(1) To request the fulfillment of a guarantee obligation, the guarantee recipient must submit a request dossier for the fulfillment of the guarantee to the guarantor as prescribed in point i, Clause 1, Article 16 of Circular 61/2024/TT-NHNN. The guarantor shall check the submitted request dossier against the terms and conditions stipulated in the guarantee commitment to implement the guarantee obligation as regulated in (3) if the dossier is valid. If the request dossier is invalid, the guarantor shall decline the fulfillment of the guarantee obligation as regulated in (4).

(2) A request dossier for fulfilling a guarantee obligation is valid when:

* The guarantor receives a complete request dossier within the validity period of the guarantee commitment, specifically:

(i) In the case of direct submission in writing, it must be within the working hours of the guarantor;

(ii) In the case of submission by guaranteed letter via postal service, the day the guarantor receives the request is the day of receipt of the guaranteed letter;

(iii) In the case of submission by electronic means, it is calculated based on the time the guarantor receives the data message according to the law on electronic transactions;

* It fully meets the conditions for fulfilling the guarantee obligation stipulated in the guarantee commitment.

(3) Implementation of the guarantee obligation:

- In the case of bank guarantees (excluding counter-guarantee, confirmation guarantee):

Within 5 working days following the day the guarantor receives a valid request dossier as stipulated in (2), the guarantor is responsible for fully implementing the agreed guarantee obligation to the guarantee recipient, simultaneously recording a mandatory loan debit entry for the amount paid on behalf of the guaranteed party and notifying the customer. The customer is obligated to fully repay the amount the guarantor has paid on their behalf along with interest as stipulated in (5);

- In the case of counter-guarantees:

Within 5 working days following the day the guarantor receives a valid request dossier as stipulated in (2), the guarantor requests the counter-guarantor to make payment for the guaranteed party.

The counter-guarantor shall fully implement the counter-guarantee obligation agreed with the guarantor, simultaneously recording a mandatory loan debit entry for the amount paid on behalf of the guaranteed party and notifying the customer. The customer is responsible for fully repaying the amount the counter-guarantor has paid on their behalf along with interest as stipulated in (5).

If the counter-guarantor fails to fulfill or does not fully fulfill the agreed obligation with the guarantor, the guarantor fully implements the agreed guarantee obligation to the guarantee recipient, simultaneously recording a mandatory loan debit entry for the amount paid on behalf of the counter-guarantor and notifying the counter-guarantor. The counter-guarantor is responsible for fully repaying the amount the guarantor has paid on their behalf along with interest as stipulated in (5);

- In the case of confirmation guarantees:

Within 5 working days following the day the guarantor receives a valid request dossier as stipulated in (2), the guarantor fully implements the agreed guarantee obligation to the guarantee recipient, simultaneously recording a mandatory loan debit entry for the amount paid on behalf of the guaranteed party and notifying the customer. The customer is obligated to fully repay the amount the guarantor has paid on their behalf along with interest as stipulated in (5).

If the guarantor fails to fulfill or does not fully fulfill the agreed guarantee obligation with the guarantee recipient, the guarantee recipient submits a request dossier for fulfilling the guarantee obligation as per the agreement in the guarantee commitment to the confirmation guarantor.

Within 5 working days following the day the confirmation guarantor receives a valid request dossier as stipulated in (2), the confirmation guarantor fully implements the agreed obligation to the guarantee recipient, simultaneously recording a mandatory loan debit entry for the amount paid on behalf of the guarantor and notifying the guarantor. The guarantor is responsible for fully repaying the amount the confirmation guarantor has paid on their behalf along with interest as stipulated in (5), and requests the customer to concurrently acknowledge the mandatory debt and repay the guarantor.

(4) In case of refusal to fulfill the guarantee obligation, within 5 working days following the day of receiving the request for fulfillment of the guarantee obligation, the party refusing must provide a written response clearly stating the reasons for refusal.

(5) The paying party (guarantor, counter-guarantor, or confirmation guarantor) applies the interest rate on the replaced amount in accordance with the guarantee commitment agreement but not exceeding the highest overdue loan interest rate currently applied by that credit institution or foreign bank branch.

(6) In case of debt repayment in foreign currency, the paying party records the mandatory loan in the foreign currency replaced, and the customer repays in the replaced foreign currency or converts to Vietnamese Dong or another foreign currency at the agreed exchange rate. In the case of repayment in Vietnamese Dong, the substitute party records the mandatory loan in Vietnamese Dong.

More details can be found in Circular 61/2024/TT-NHNN effective from April 1, 2025.

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