Vietnam: Debt rescheduling, exemption or reduction of interest and fees to assist borrowers affected by Covid-19 pandemic until December 31, 2021

Nguyen Trinh

14:54, 05/04/2021

Recently, the State Bank of Vietnam issued Circular 03/2021/TT-NHNN amending Circular 01 /2020/TT-NHNN stipulates instructions for credit institutions and foreign branch banks (FBB) on debt rescheduling, exemption or reduction of interest and fees, retention of debt category to assist borrowers affected by Covid-19 pandemic.

Credit institutions and FBBs shall, according to their own rules and regulations, decide reduction and exemption of interest and/or fees on debts incurred before 10/6/2020 from credit extension (except purchases of corporate bonds) that are due during the period from 23/01/2020 to 31/12/2021 and the borrowers are not able to repay the principal and/or interest by the deadline specified in the original agreement due to decrease in revenue or income caused by Covid-19.

Reduction and exemption of interest and/or fees prescribed by this Circular shall be carried out until 31/12/2021.

In addition, credit institutions and foreign bank branches are allowed to restructure the repayment term with the outstanding balance of the debt (including debts under Vietnam's Decree 55/2015/ND-CP) when fully meeting the conditions in Article 4 of Vietnam's Circular 01/2020/TT-NHNN (amended and supplemented by Clause 2, Article 1 of Vietnam's Circular 03/2021/TT-NHNN).

For more details, see: Vietnam's Circular 03/2021/TT-NHNN effective from May 17, 2021.

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