On August 9, 2023, the State Bank issued Official Dispatch 6248/NHNN-TD guiding the implementation of Circular 02/2023/TT-NHNN providing instructions for credit institutions and foreign branch banks on debt rescheduling and retention of debt category to assist borrowers in difficulties.
To ensure uniform implementation of Circular 02/2023/TT-NHNN throughout the system of credit institutions and foreign bank branches, the State Bank has comments and answers on the proposed issues of credit institutions, for example as follows:
* Problem 1:
Request the State Bank to clarify whether the debt group classified at the most recent time before restructuring the debt repayment period specified in Clause 1, Article 5 of Circular 02 is the debt group classified by the credit institution itself or the reference debt group from CIC?
Answer:
According to the provisions of Clause 1, Article 5, Circular 02, the debt group classified at the most recent time before restructuring the debt repayment term is the debt group that has been adjusted according to CIC according to the regulations of the Governor of the State Bank of Vietnam on asset classification, level of deductions, method of setting up risk provisions, and use of provisions to handle risks in the operations of credit institutions and foreign bank branches.
* Problem 2:
If the debt is restructured according to Circular 02 after the probationary period and is eligible to be converted to debt group 1 according to Circular 11, will it be recorded as accrued interest?
Answer:
Credit institutions comply with the provisions of Clause 4, Article 5 of Circular 02, specifically: “For the interest receivable on debts with restructured repayment terms and remaining in the qualifying debt group (group 1) according to the provisions of this Circular, from the date of restructuring, credit institutions and foreign bank branches do not have to account for income (receipts) but monitor the off-balance sheet to urge collection; accounting for income upon receipt according to the provisions of the law on financial regimes for credit institutions and foreign bank branches.”.
More details can be found in Official Dispatch 6248/NHNN-TD, dated August 9, 2023.
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