State Bank of Vietnam Restructures Debt Repayment Schedule from March 13, 2020

Illustrative image (Source: Internet)

Circular 01/2020/TT-NHNN stipulates that the restructuring of debt repayment terms applies to outstanding principal and/or interest (including the outstanding balance of loans within the scope of Decree 55/2015/ND-CP) that meet all the following conditions:

- Originating from lending, financial leasing activities;- Obligation to repay principal and/or interest arises during the period from January 23, 2020, to the day immediately following 03 months after the Prime Minister of the Government of Vietnam announces the end of the Covid-19 epidemic;- Customers are unable to repay the principal and/or interest on time according to the signed loan or financial lease contract/agreement due to reduced revenue or income caused by the impact of the Covid-19 epidemic.

The restructuring of debt repayment terms for outstanding debt is implemented in the following cases:

- The outstanding balance is still within the term or overdue up to 10 (ten) days from the due date of repayment, as per the signed loan or financial lease contract/agreement;- The outstanding balance has been overdue (except for the case stipulated at point a of this clause) during the period from January 23, 2020, to the day immediately following 15 (fifteen) days from the effective date of this Circular.

Additionally, Circular 01/2020/TT-NHNN stipulates that credit institutions and branches of foreign banks decide on restructuring the repayment terms for the outstanding balance stipulated in clauses 1 and 2 of Article 4, based on the proposal of the customer and the assessment of the credit institution or branch of a foreign bank on the ability of the customer to fully repay the principal and/or interest after the restructuring, appropriate to the level of impact of the Covid-19 epidemic and ensuring the following requirements:

- The credit institution or branch of a foreign bank does not restructure the repayment terms for loans violating legal regulations.- The restructuring period, in case of extending the repayment term, does not exceed 12 months from the last day of the loan or financial lease term (the point at which the customer must repay all principal and interest as per the signed loan or financial lease contract/agreement).

Thus, credit institutions and branches of foreign banks restructure the repayment terms to support customers affected by the Covid-19 epidemic from March 13, 2020 (the effective date of Circular 01/2020/TT-NHNN) provided they meet all the above criteria.

For further details, refer to Circular 01/2020/TT-NHNN, effective from March 13, 2020.

Le Hai

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