Circular supports recovery from Covid-19 pandemic

ANH DUY

that fully meeting 8 conditions as specified in Article 4 of the Circular.

Regarding exemption and reduction of interests and fees: Credit institutions, foreign bank branches shall decide on the exemption or reduction of interests and fees according to their internal regulations for outstanding loans arising before 10 June 2020 from credit extension operations (except for activities of buying and investing in corporate bonds) where the obligation to repay the principal and/or interest is due between 23 January 2020 and 31 December 2021 and the customers are unable to repay on time the principal and/or interest under the contract or agreement due to a decrease in revenue and income caused by the impact of the Covid-19 pandemic.

The exemption and reduction of interest and fees for customers will be implemented until 31 December 2021.

Maintenance of debt classifications: Article 6 of the Circular stipulates that credit institutions and foreign bank branches are entitled to maintain classified debt groups in accordance with the provisions of State Bank, with regard to the debt balances subject to loan repayment rescheduling, interest and fee waiver, and reduction as prescribed in the Circular.

From 1 January 2024, credit institutions, foreign bank branches shall base on the State Bank’s regulation on debt classification to classify all outstanding loans, offbalance sheet commitments of customers.

The State Bank of Vietnam has supplemented regulations on rescheduling debt payment, interest exemption and debt classification for customers affected by the Covid-19 pandemic.

The State Bank of Vietnam issued Circular 03/2021/TT-NHNN that amends and supplements a number of articles of the Circular 01/2020/TTNHNN on regulations on the rescheduling the repayment term, interest rate exemption and reduction, and debt classification, to support customers affected by Covid-19 pandemic. The Circular has come into effect since 17 May 2021. The following are the key measures presented in Circular 03/2021/TT-NHNN.

Regarding conditions for rescheduling repayment term, according to Circular 03/2021, credit institutions, foreign bank branches shall reschedule the repayment term for outstanding loans