Legal Counselling

Requirements applied to borrowers being credit institutions and branches of foreign banks not guaranteed by Vietnam’s Government

11:30, 05/04/2014

This is an important content of Circular No. 12/2014/TT-NHNN of the State Bank of Vietnam on Requirements for taking foreign loans applied to company not guaranteed by the government, issued on March 31, 2014.

ĐK vay nước ngoài của TCTD, chi nhánh NH nước ngoài không được CP bảo lãnh, Thông tư 12/2014/TT-NHNN

According to Article 10 of Circular No. 12/2014/TT-NHNN of the State Bank of Vietnam, additional requirements applied to borrowers being credit institutions and branches of foreign banks are specified as follows:

- Requirements for taking short-term foreign loans:

+ Credit institutions and branches of foreign banks must adhere to the safety ratios announced by the State bank, unless otherwise permitted by the Prime Minister of the Governor of the State bank;

+ Credit institutions and branches of foreign banks may only take short-term foreign loans to replenish their short-term loan capital.

- Requirements for taking mid-term and long-term foreign loans: When taking mid-term and long-term foreign loans, credit institutions and branches of foreign banks must adhere to the safety ratios announced by the State bank, unless:

+ The transgression is permitted by the Prime Minister of the Governor of the State bank;

+ The mid-term or long-term foreign loan is eligible to be included in level-2 capital of the credit institution or branch of a foreign bank, and this loan helps the credit institution or branch of a foreign bank adhere to safety ratios.

View more details at Circular No. 12/2014/TT-NHNN of the State Bank of Vietnam, effective from June 01, 2016.

Le Vy

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