Hanoi, Vietnam: Amendments to foreign loan purposes without the Government's guarantee by credit institutions

Amendments to foreign loan purposes without the Government's guarantee by credit institutions

The Circular 19/2024/TT-NHNN has amended Article 14 of Circular 08/2023/TT-NHNN regarding the foreign loan purposes without the Government's guarantee by credit institutions or foreign bank branches as follows:

• The borrower may take short, medium, and long-term foreign loans for the following purposes:

  • Supplementing capital sources to serve credit activities according to the credit growth of the borrower;

  • Restructuring foreign debt of the borrower;

  • Making payments to beneficiaries through reimbursement banks under the deferred payment letter of credit transactions with the terms of payment on-demand or earlier than the letter of credit’s maturity, as per the current legal regulations on letter of credit business and other relevant business activities.

• Except for the case specified at point c Clause 1 Article 14 of Circular 08/2023/TT-NHNN (as amended in Circular 19/2024/TT-NHNN), the borrower, when taking medium and long-term foreign loans, must prove the purpose of the foreign loan through:

  • The plan for using foreign loan capital as stipulated in Clause 2 Article 7 of Circular 08/2023/TT-NHNN in cases where the purpose stated in point a Clause 1 Article 14 of Circular 08/2023/TT-NHNN (as amended in Circular 19/2024/TT-NHNN) is to be implemented;

  • The debt restructuring plan as stipulated in Article 8 of Circular 08/2023/TT-NHNN in cases where the purpose stated in point b Clause 1 Article 14 of Circular 08/2023/TT-NHNN (as amended in Circular 19/2024/TT-NHNN) is to be implemented.

More details can be found in Circular 19/2024/TT-NHNN, effective in Vietnam from July 1, 2024.

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