Prohibition on Banks Purchasing Bonds for the Purpose of Debt Restructuring

Tuyet Hoan

08:55, 11/07/2024

The State Bank has just issued Circular 15/2018/TT-NHNN amending and supplementing a number of articles of Circular 22/2016/TT-NHNN regulating the purchase of corporate bonds by credit institutions and foreign bank branches.

Credit institutions and foreign bank branches are prohibited from purchasing corporate bonds issued for the purpose of restructuring the debts of the enterprise.

Specifically, internal control over the purchase of bonds issued with the purpose of implementing programs in areas assessed by credit institutions and foreign bank branches as potentially risky is mandated. This is to detect risks, legal violations, and ensure the recovery of the principal and interest on the bonds.

For bond purchase contracts signed before the effective date of this Circular, credit institutions, foreign bank branches, and customers shall continue to execute the signed contract or amend and supplement the contract in accordance with the provisions of this Circular.

Circular 15/2018/TT-NHNN takes effect from August 02, 2018.

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