This is the main content specified in Circular No. 42/2011/TT-NHNN of the State Bank of Vietnam providing for the provision of syndicated loans by credit institutions to their customers, issued on December 15, 2011.
According to Article 7 of Circular No. 42/2011/TT-NHNN of the State Bank of Vietnam, conditions for participating in loan syndication are specified as follows:
Subjects as prescribed in Article 1 of this Circular shall be authorized to participate in the loan syndication where following conditions are fully satisfied:
1. For the member that is a credit institution
- To be established and operate in accordance with the Law on Credit institutions;
- To comply with prudential ratios after signing syndication contract, credit contract;
- Not to break limits on credit extension as provided for in the Law on Credit institutions (including outstanding loan syndication to the customer in which the credit institution, foreign bank's branch expect to participate).
2. For the member that is a foreign credit institution
- To be established in accordance with laws of a foreign country.
- To comply with regulations on loan syndication in line with this Circular, regulations on investment, lending, foreign exchange control and other applicable regulations.
For the case where the loan syndication has the participation of foreign credit institutions, the customer shall be required to register for foreign loan; open and use an account of foreign loan and debt repayment and observe provisions of laws relating to foreign loan and debt repayment.
When fully meeting the above conditions, customers shall be granted loan syndication through the following forms:
- Loan syndication
- Guarantee syndication
- Discount syndication
- Finance leasing syndication
- Factoring syndication
- Syndication for the combination of above said forms of credit extension.
- Syndication for other forms of credit extension.
View details at Circular No. 42/2011/TT-NHNN of the State Bank of Vietnam, effective from December 15, 2011.
Thuy Tram
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