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| A counter of Vietcombank’s branch in Vinh Phuc province__Photo: VNA |
The State Bank of Vietnam (SBV) would provide special loans to commercial banks, cooperative banks, people’s credit funds, and microfinance institutions that are facing mass withdrawals to help them improve their solvency, according to the latest draft of the circular on special loans.
The draft underlines that borrowers might only use special loans exclusively for payment of Vietnam-dong deposits to individual depositors. The use of special loans for payment of deposits to other entities would be decided by the State Bank Governor on a case-by-case basis.
The loan amounts to be provided to credit institutions would be determined by the SBV on the basis of evaluating the latter’s solvency. The term of a special loan would be at the SBV’s discretion but must be shorter than 12 months.
The interest rate applicable to special loans or extended special loans would equal the refinance rate applicable to secured lending with collaterals being valuable papers such as State Bank bills and Government bonds.
Particularly, credit institutions under special control would be entitled to special loans at the interest rate of zero percent for part of the term of the loans, provided interest waiver on those special loans is mentioned in the credit institutions’ restructuring plans as a method to support the credit institutions.
The SBV might also grant special loans to commercial banks, cooperative banks, finance companies, and microfinance institutions subject to special control to help them implement their approved business recovery plans. Particularly, commercial banks under special control would also be entitled to special loans to carry out the mandatory transfer plans.-(VLLF)
