Vietnam: Rights and obligations of credit institutions granting loans for execution of projects in Vietnam

Vietnam: Rights and obligations of credit institutions granting loans for execution of projects in Vietnam (illustrative image)

According to Circular 06/2011/TT-BKHCN, credit institutions granting loans for execution of projects in Vietnam have the following rights and obligations:

1. The creditor in Vietnam has the right to:

- Exercise the rights of the credit institution in relation to customers as stipulated by the Law on Credit Institutions and relevant documents.

- Request the guarantor to fulfill obligations according to the guarantee certificate and other related agreements.

- Request the guarantor to transfer the right to receive and handle guaranteed assets if the guarantor refuses to perform the guarantee obligation.

- Bring lawsuits according to the provisions of law when the parties violate agreements in the contract.- Exercise other rights according to agreements.

2. The creditor in Vietnam has the obligation to:

- Fulfill the obligations of the credit institution towards customers as stipulated by the Law on Credit Institutions and relevant documents.

- Check and supervise the use of loan funds, the assets formed from loan funds, and the repayment of loans by the creditor to ensure the proper use of funds and assets formed from loans, and the repayment of loans as committed in the credit contract.

- Provide the Guarantor with all records proving the disbursement of loan funds; check and supervise the use of loan funds and assets formed from loans by the creditor when requesting the guarantor to perform guarantee obligations.

- Provide information and reports periodically or unexpectedly about the secured loans to the guarantor and competent state authorities.

More details can be found in Circular 06/2011/TT-BKHCN effective from July 1, 2011.

Thuy Tram

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