Vietnam: Amending principles of providing loan syndication specified in Circular 42

10:10, 05/07/2016

On June 30, 2016, the State Bank of Vietnam issued Circular No. 24/2016/TT-NHNN on amendment and supplement to a number of articles of Circular No. 42/2011/TT-NHNN on grant of syndicated loans to clients by credit institution.

Circular No. 24/2016/TT-NHNN of the State Bank of Vietnam amends 03 principles of providing loan syndication of credit institution, specifically as follows:

- Syndicate members shall make capital contributions according to the proportion set forth in the capital syndication contract, receive shared interests and fees and share expenses and risks incurred as stipulated in the capital syndication contract.

- A lead lender may play the role as the member taking charge of arrangement of syndicated loans, payment or custody of pledged assets. Such lead lenders shall be appointed by other members in accordance with Vietnam’s regulations of laws. Foreign credit institutions participating in syndicated loans shall not be entitled to assume a role as the member taking charge of payment activities.

- Syndicate members other than foreign credit institutions shall comply with prudential limits and ratios for syndicated loans prescribed by the State Bank.

View more details at Circular No. 24/2016/TT-NHNN of the State Bank of Vietnam, effective from June 30, 2016.

-Thanh Lam-

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