In furtherance of Prime Minister Directive 11, SBV on March 13 issued Circular 01 providing a number of measures to support enterprises affected by the COVID-19 pandemic, including debt rescheduling, remission and reduction of loan interests and fees, and maintaining debt groups for borrowers.
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| The State Bank of Vietnam on March 13 issued Circular 01 providing a number of measures to support enterprises affected by the COVID-19 pandemic__Photo: VNA |
Under the new circular, eligible for rescheduling are outstanding debts, including principals and interests that arise from lending and financial leasing activities or become due for principal and interest repayment during the period from January 23 of this year to the day three months following the Prime Minister’s announcement of control of the COVID-19 pandemic. Customers eligible for rescheduling include those unable to pay debts or interests when they become due because of their revenue and income loss during the pandemic.
Credit institutions and foreign bank branches are requested to guide criteria of customers whose revenues and incomes are reduced because of the pandemic, said the new regulation.
Credit institutions and foreign banks branches will decide on remission and reduction of loan interests and fees under their internal regulations on outstanding loans arising from credit extension activities with the obligation to repay loan principals or interests becoming due between January 23 and the day three months following the date the Prime Minister announces the total control of the pandemic.
Credit institutions and foreign bank branches may keep unchanged debt groups classified under SBV’s regulations at the latest time before January 23 of this year with regard to debit balances eligible for rescheduling of repayment deadlines or th interest and fee remission or reduction as mentioned above.
They are also requested to carry out debt classifications, set aside risk provisions corresponding to the rescheduled debt repayment deadlines in accordance with regulations on debt classification, and set aside and use provisions to offset risks in operations of credit institutions and foreign bank branches in order to prevent putting existing debts into groups of debts with higher risk levels.
In order to effectively implement such measures, SBV requests credit institutions and foreign bank branches to issue specific internal regulations on debt rescheduling, loan interest and fee remission and reduction, and maintenance of debt groups in accordance with this Circular for consistent and uniform implementation within the whole system, thereby ensuring the strict and safe surveillance, preclusion and prevention of abuse of debt rescheduling, loan interest and fee remission and reduction and maintenance of debt groups for self-seeking purposes, and rejection of rumors misleading as to credit quality.
Meanwhile, SBV will be responsible for inspection, supervision and handling of issues arising in the course of implementation of this Circular by credit institutions and foreign bank branches.- (VLLF)
