Vietnam: New points regarding the restructuring of repayment terms and granting loans to customers who have not repaid their debts on time

According to Vietnam’s new regulations, the restructuring of repayment terms and granting new loans to  the borrowers prescribed in Clause 1 Article 12, Clause 3 Article 14 and Clause 3 Article 15 of Decree No. 55/2015/ND-CP of Vietnam’s Government who have difficulties with debt repayment due to objective factors and/or force majeure shall be implemented as follows:

- Rescheduling debt repayments and retaining the debt classification at the request of the borrowers and credit institution’s evaluation of borrower’s debt repayment capability; the rescheduled deadline for repayment shall be appropriate to borrower’s business operation cycles but the maximum rescheduled time limit shall not exceed the initial time limit prescribed in concluded credit agreements;

- If the borrower is still unable to repay the debt by the rescheduled deadline and thus is no longer eligible for another debt rescheduling and debt classification retention, the credit institution shall re-classify such debt according to applicable regulations of the State Bank on classification of assets, levels and method of setting up of risk provisions, and use of provisions against credit risks in the banking activity of credit institutions, foreign banks’ branches;

- Grant a new loan to facilitate the borrower’s resumption of business operation if the borrower has a feasible business operation project/plan.

View relevant provisions at Circular No. 25/2018/TT-NHNN of the State Bank of Vietnam, effective from December 10, 2018.

- Thanh Lam -

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