The State Bank of Vietnam is draft circular amending Circular 39/2016/TT-NHNN stipulating lending activities of credit institutions, foreign bank branches to customers which proposes additional requirements that are not eligible for bank loans.
Article table of contents
Proposing additional requirements that are not allowed to borrow from banks in Vietnam (Illutration)
Specifically, the capital needs that are not eligible for bank loans in Vietnam include:
- To carry out business investment activities in banned industries and business according to the provisions of the Law on Investment of Vietnam.
- To pay expenses, meet the financial needs of business investment activities in banned industries and business business according to the provisions of the Law on Investment and other transactions and acts prohibited by Law of Vietnam.
- To buy and use goods and services banned industries and business according to the provisions of the Law on Investment of Vietnam.
- To buy gold bars.
- To repay the loan at the credit institution, except in the case of lending to pay interest, which the credit institution and the customer have decided from the outset when signing the loan agreement with proper regulations of Law of Vietnam.
- To repay loans at other credit institutions and repay foreign loans (excluding foreign loans in the form of goods sale and purchase with deferred payment), except for loans for early repayment. In this case, it shall meet these following requirements:
+ The loan term does not exceed the remaining loan term of the old loan;
+ At the time of loan consideration, the loan is classified into group 1 or group 2 according to the most recent results on debt classification and off-balance sheet of commitments of customers provided by the Vietnam National Credit Information Center.
- To prove the financial ability of borrowers in civil transactions with third parties (suggested amendments).
- Capital contribution, investment cooperation or business, where the contributed capital forms the charter capital of the party receiving the contributed capital; capital contribution, investment and business cooperation does not form the charter capital of the party receiving the contributed capital; receive and transfer capital contributions in other companies; pay a deposit to perform future transactions that at the time of deposit are not eligible to perform as prescribed by law; offset equity/loan to buy real estate/goods (suggested amendments).
Refer for more details in the draft Circular.
