The State Bank of Vietnam's response to 6 questions regarding capital needs that cannot be loaned in Vietnam

The State Bank of Vietnam's response to 6 questions regarding capital needs that cannot be loaned in Vietnam (Internet image)

On November 8, 2023, the State Bank of Vietnam issued Official Dispatch 8631/NHNN-CSTT on answering related questions specified in Circular 06/2023/TT-NHNN.

The State Bank answers 6 questions about capital needs that cannot be loaned

Question: Is a foreign loan in the form of buying and selling goods on deferred payment a foreign loan in the form of importing goods on deferred payment?

Answer: According to the provisions of Circular 12/2022/TT-NHNN, foreign loan is a common phrase to refer to foreign loans not guaranteed by the Government and foreign loans guaranteed by the Government in all forms of foreign loans through loan contracts, deferred payment import contracts, loan entrustment contracts, financial leasing contracts, or the issuance of debt instruments on the international market by the borrower.

Foreign loans in the form of buying and selling goods with deferred payment stated in Clause 6, Article 8 of Circular 39/2016/TT-NHNN (amended and supplemented in Clause 2, Article 1 of Circular 06/2023/TT-NHNN) are foreign loans in the form of a goods import contract with deferred payment according to current regulations on the management of foreign loans and debt repayment of enterprises that are not guaranteed by the Government.

Question: Are credit institutions allowed to borrow money to repay foreign loans from organizations and individuals before maturity (other than loans from credit institutions)?

Answer: According to the provisions of Clause 6, Article 8 of Circular 39/2016/TT-NHNN (amended and supplemented), credit institutions may consider and decide to lend to repay foreign loans early if they fully meet the conditions prescribed in Points a and b, Clause 6, Article 8, Circular 39/2016/TT-NHNN (amended and supplemented in Clause 2, Article 1 of Circular 06/2023/TT-NHNN), and when customers meet loan conditions as prescribed in Circular 39/2016/TT-NHNN (amended).

Question: In the event that a customer borrows to buy a house, a credit institution disburses loan capital and blocks the disbursed amount until the customer completes the home-buying procedure. Is this a case of lending to deposit money?

Answer: If a customer borrows money to buy a house and a credit institution disburses loan capital and blocks the disbursed amount until the customer completes the house purchase procedure, then this is not the case where a credit institution lends money to deposit money.

Question: Credit institutions are not allowed to lend money to deposit money in what forms of deposits at credit institutions, including certificates of deposit issued by credit institutions?

Answer: According to the provisions of Clause 7, Article 8 of Circular 39/2016/TT-NHNN (amended and supplemented), credit institutions are not allowed to lend for capital needs for the purpose of depositing money. According to the provisions of Clause 13, Article 4 of the Law on Credit Institutions (amended and supplemented), deposit receiving is the activity of receiving money from organizations and individuals in the form of demand deposits, term deposits, savings deposits, the issuance of certificates of deposit, promissory notes, and Treasury bills and other forms of receiving deposits on the principle of fully refunding principal and interest to depositors as agreed.

Credit institutions are not allowed to lend capital for the purpose of purchasing certificates of deposit issued by the lending credit institution or another credit institution.

Question: Is a credit institution disbursing money into a customer's payment account to make payment for consumer expenses considered a credit institution lending money to deposit money?

Answer: According to the provisions of Circular 39/2016/TT-NHNN (amended and supplemented), credit institutions are allowed to consider and decide to lend to pay living expenses for consumption of borrowers; The credit institution disburses money to the customer's payment account so that the customer can pay living expenses, which is one of the loan disbursement methods and ensures compliance with regulations in Circular 39/2016/TT-NHNN (amended and supplemented) and Circular 21/2017/TT-NHNN.

The disbursement by a credit institution to a customer's payment account to pay consumer expenses is not the case of a credit institution lending money to deposit money.

Question: According to the provisions of Clause 7, Article 8 of Circular 39/2016/TT-NHNN (amended and supplemented), can credit institutions lend to customers for margin purposes?

Answer: According to the provisions of Article 7 and Article 22 of Circular 39/2016/TT-NHNN (amended and supplemented), credit institutions consider and decide to lend to customers when they meet all loan conditions; Credit institutions issue internal regulations on lending and loan management in accordance with the characteristics of credit institutions' business activities.

Credit institutions make loans to customers for margin purposes when customers meet all loan conditions, in accordance with internal regulations on lending and loan management issued by credit institutions.

More details can be found in Official Dispatch 8631/NHNN-CSTT, issued on November 8, 2023.

Ho Quoc Tuan

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