Vietnam: Classification of debts for loans that are unable to be repaid

Anh Tu

15:14, 29/10/2018

This is a notable content specified in Circular No. 25/2018/TT-NHNN of the State Bank of Vietnam amending a number of Articles of the Circular No. 10/2015/TT-NHNN guiding the implementation of a number of contents of the Government’s Decree No. 55/2015/ND-CP on the credit policy for agricultural and rural development.

According to Circular No. 25/2018/TT-NHNN of the State Bank of Vietnam, customers borrowing under the credit policy for agricultural and rural development will be considered for debt restructuring and will maintain their debt group if they encounter difficulties in repayment.

The rescheduled deadline for repayment shall be appropriate to the borrower's business operation cycles. If the borrower is still unable to repay the debt by the rescheduled deadline and thus is no longer eligible for another debt rescheduling and debt classification retention, the credit institution shall re-classify such debt according to applicable regulations of the State Bank on classification of assets, levels and method of setting up of risk provisions, and use of provisions against credit risks in the banking activity of credit institutions, foreign banks’ branches.

View more details at Circular No. 25/2018/TT-NHNN of the State Bank of Vietnam, effective from December 10, 2018.

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