Vietnam: Repayment of special loan debts

According to Circular No. 01/2018/TT-NHNN of the State Bank of Vietnam (SBV), when the special loan is due, the borrower must immediately and fully repay both principal and interest of such special loan to the lender. The borrower may also repay the special loan debts before its maturity date.

The SBV shall adopt the following measures for dealing with the cases where a borrower fails to repay the special loan debt in full on the agreed schedule but is not given an extension:

- Mark and manage the special loan as overdue debt in accordance with the SBV’s regulations on methods of calculating and accounting of revenues and payment of interests in depositing and lending operations between SBV and credit institutions; charge interests on overdue principal;

- Withdraw money from deposit account of the credit institution opened at the SBV after receiving the notice from the credit institution of withdrawing money from its deposit account for debt recovery;

- Collect debts from other sources of funding of the credit institution.

Concurrently, Circular No. 01/2018/TT-NHNN also stipulates the Deposit Insurance of Vietnam, Cooperative Bank of Vietnam and other credit institutions shall adopt the following measures dealing with the cases where a borrower fails to repay the special loan debt in full on the agreed schedule but is not given an extension as follows:

- Mark and manage the loan principal and interest which are not yet paid by the credit institution by the due date as overdue principal and interest, and charge interest on overdue principal;

- Collect debts as agreed and prescribed by law.

The special loan must be repaid before every other debt, including debts secured by collateral of the credit institution in the following cases:

- When the loan is due, unless the restructuring plan or adjustment thereto is not approved;

- The credit institution is dissolved or goes bankrupt.

In particular, if a borrower is not financially capable of paying all special loans to all lenders, repayments are made on a percentage basis in proportion to debt amounts.

View more details at Circular No. 01/2018/TT-NHNN of the State Bank of Vietnam, effective from January 29, 2018.

-Thao Uyen-

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE