Responsibility of Credit Institutions and Foreign Bank Branches during the Covid-19 Pandemic

Illustrative image (Source Internet)

Credit institutions, branches of foreign banks are responsible for the restructuring of debt repayment terms, interest, fee exemption and reduction, and maintenance of the debt group as stipulated in Article 4, Article 5, Article 6 of Circular 01/2020/TT-NHNN to ensure strict supervision, safety, prevention, and deterrence of the misuse of debt repayment term restructuring, interest, fee exemption and reduction, maintenance of the debt group to profiteer and misrepresent credit quality.

To issue internal regulations on debt repayment term restructuring, interest, fee exemption and reduction, and maintenance of the debt group in accordance with this Circular to be implemented uniformly across the system, specifically stipulating the following contents:

- Criteria for determining the balance of customers affected by the COVID-19 pandemic;- Procedures, processes, assignments, allocation of duties, and responsibilities of each individual, department in implementing debt repayment term restructuring, interest, fee exemption and reduction, and maintenance of the debt group ensuring the principle that individuals and departments deciding on debt repayment term restructuring, interest, fee exemption and reduction, and maintenance of the debt group are not the individuals or departments approving credit grants, except where the credit grant decision is made by the Board of Management, Members' Council, General Director/Director, parent bank (for branches of foreign banks). In cases where credit approval and debt repayment term restructuring approval are carried out through the board mechanism, the Chairman of the board for debt repayment term restructuring approval must not be the Chairman of the board for credit approval, and at least two-thirds (2/3) of the members of the board for debt repayment term restructuring approval must not be members of the board of credit approval;- Frequency of reviewing and evaluating the debt repayment capability of customers after debt repayment term restructuring, interest, fee exemption and reduction, and maintenance of the debt group in accordance with legal regulations; monitoring, checking, controlling, and supervising debt repayment term restructuring, interest, fee exemption and reduction, and the balance restructured for debt repayment term, interest, fee exemption and reduction, maintenance of the debt group.

Within the first 10 (ten) days of each month, credit institutions (except people's credit funds), branches of foreign banks must submit a report to the State Bank of Vietnam (through the Credit Department for Economic Sectors) on the implementation status of debt repayment term restructuring, interest, fee exemption and reduction, maintenance of the debt group up to the end of the previous month, as prescribed in the appendix attached to this Circular.

Within the first 10 (ten) days of each month, credit institutions that are people's credit funds must submit a report to the State Bank branches in provinces, centrally-run cities (hereinafter referred to as the State Bank branches) where their headquarters are located on the implementation status of debt repayment term restructuring, interest, fee exemption and reduction, maintenance of the debt group up to the end of the previous month, as prescribed in the appendix attached to this Circular.

For details, see Circular 01/2020/TT-NHNN effective from March 13, 2020.

Le Hai

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE