Legal Counselling

Vietnam’s new regulation on currency used for foreign loan repayment

08:40, 03/01/2019

Circular No. 42/2018/TT-NHNN was issued by the State Bank of Vietnam, providing amendments to some Articles of Circular No. 24/2015/TT-NHNN on foreign currency loans granted to the residents by credit institutions and foreign branch banks.

Circular No. 42/2018/TT-NHNN of the State Bank of Vietnam amends regulation on currency used for foreign loan repayment as follows:

1. As for the foreign currency loans which borrower have sufficient foreign currency revenues to repay before signing the credit contract or the loan agreement:

- Borrowers shall pay the loan principal and interest in the currency that they borrow; in case where borrowers repay debts by using another foreign currency, they shall be bound to the agreement between the credit institutions, foreign branch banks and borrowers.

- On the due date of the loan, if the borrower is able to prove that their late repayment in foreign currency is caused by unexpected events, such as the borrower's deferred collection of operating revenues or the borrower does not have sufficient foreign currency to repay the loan, the borrower may buy the foreign currency from the lender or from another credit institution or FBB to repay such loan.

2. As for the foreign currency loans which the borrower does not have sufficient foreign currency revenues to repay before signing the credit contract or the loan agreement: the borrower may buy the foreign currency from the lender of from another credit institution or FBB to repay such loans.

View demands for foreign currency loans at Circular No. 42/2018/TT-NHNN of the State Bank of Vietnam, effective from January 01, 2019.

- Thanh Lam -

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