Vietnam: Banks shall only extend credits with a term of 01 year to clients to serve the purpose of stock trading

Duy Thinh

11:03, 30/12/2017

The State Bank of Vietnam issued Circular No. 19/2017/TT-NHNN on amending and supplementing a number of articles of Circular No. 36/2014/TT-NHNN providing for prudential ratios and limits for operations of credit institutions and branches of foreign banks.

According to Circular No. 19/2017/TT-NHNN of the State Bank of Vietnam, credit institutions and branches of foreign banks shall only extend credits with a term of 01 year or shorter to clients to serve the purpose of investment and trading in enterprise bonds.

Concurrently, in this case, credit extensions must meet the following conditions:

- Credit extensions shall comply with prudential ratios and limits in accordance with law provisions;

- Bad debt ratio remains below 3%;

- Regulations on risk management under law provisions on credit extensions, internal control system shall be strictly observed and risk provisions shall be set up adequately in accordance with law provisions.

View other regulations at Circular No. 19/2017/TT-NHNN of the State Bank of Vietnam, effective from February 12, 2018.

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