Vietnam’s regulations on co-guarantee

09:41, 29/06/2015

Circular No. 07/2015/TT-NHNN stipulating bank guarantee was promulgated on June 25, 2015 by the Governor of the State Bank of Vietnam.

According to Circular No. 07/2015/TT-NHNN of the State Bank of Vietnam, co-guarantee refers to a loan syndication under which more than 02 (two) credit institutions or foreign bank branches collaborate in giving the bank guarantee; or a credit institution, foreign bank branch and credit institution collaborate in doing so.

Besides, Circular No. 07/2015/TT-NHNN also stipulates that co-guarantee principles, requirements or procedures shall be governed under the provisions of this Circular, the State Bank’s regulations on syndicated loans of credit institutions or foreign bank branches extended to customers and relevant legal regulations.

Concurrently, co-guarantee parties shall assume joint responsibility to fulfill guarantee obligations unless otherwise agreed. Where central credit institutions or foreign bank branches are required to fulfill guarantee obligations, involved parties shall be responsible for paying these credit institutions or foreign bank branches a sum equivalent to the agreed-upon co-guarantee contribution ratio.

Moreover, credit institutions or foreign bank branches, when issuing their guarantees for joint obligations, must be governed under the terms and conditions of the joint contract under which parties are bound to their contractual rights and obligations.

View more details at Circular No. 07/2015/TT-NHNN of the State Bank of Vietnam, effective from August 09, 2015.

Le Hai

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