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SBV issues regulations on foreign currency lending for resident borrowers
The State Bank of Vietnam (SBV) issued Circular No. 03/2012/TT-NHNN on March 8 on foreign currency lending by domestic credit institutions and foreign bank branches for resident borrowers.
Accordingly, domestic credit institutions and foreign bank branches (hereafter called as credit institutions) with forex service license should decide to extend short, medium and long-term foreign currency loans for overseas payment of goods and service importation to those resident borrowers who are able to make repayment by their foreign exchange revenue
In addition, credit institutions may decide to provide resident borrowers with foreign currency loans of various terms for such purposes as: (i) short term loans for overseas payment of petrol importation should be approved in writing by the SBV Governor; and (ii) loans should be approved in writing for each specific case at the request of credit institutions on the basis of the foreign currency loan demand for implementing the projects and production – business plans in the prioritized areas as set by the Government or evaluated by credit institutions as feasible projects and plans and the borrowers’ ability to meet the lending requirements in line with applicable laws and to make timely repayments (principal and interest).
Those credit institutions extending foreign currency loans to resident borrowers should comply with this Circular, and legal texts on foreign exchange lending and management, prudent ratios of operations of credit institutions and other relevant regulations. Additionally, credit institutions should make monthly reports on foreign exchange loans to the SBV.
This Circular will effect on May 2, 2012 and replace Decision No. 07/2011/QD-NHNN of the SBV Governor dated March 24, 2011 on foreign currency lending by credit institutions for resident borrowers.
For those credit contracts signed before the effective date of this Circular, credit institutions and borrowers shall implement the signed credit contracts in accordance with the applicable regulations at the signing date or revised agreements in line with this Circular.
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