Back
CIRCULAR NO. 03/2021/TT-NHNN: MORE COMFORTABLE FOR BOTH BANKS AND BUSINESSES
CIRCULAR NO. 03/2021/TT-NHNN: MORE COMFORTABLE FOR BOTH BANKS AND BUSINESSES.
The State Bank of Vietnam(SBV) has just issued Circular 03/2021/TT-NHNN amending and supplementing Circular 01/2020/TT-NHNN providing for credit institutions to restructure debt repayment deadlines, reduce interest rates and maintain debt groups to continue supporting customers affected by Covid-19. This Circular comes into force from May 17, 2021.
In Circular 03, the SBV added additional conditions to allow credit institutions and branches of foreign banks to restructure the remaining debts due. Specifically, the SBV allows credit institutions to restructure the repayment term with debts indebted to debts between January 23, 2020 and the end of 2021. Previously, Circular 01/2020 only allowed restructuring with debts incurable obligations from January 23, 2020 to 3 months from the date the Prime Minister announced the end of the epidemic.
In addition, the SBV still stipulates that the time limit for debt repayment restructuring does not exceed 12 months from the date the credit institutions implement the restructuring. The restructuring of the repayment term is carried out until December 31, 2021.
For the classification of debts, Circular 03 stipulates that the restructured debt balance will be retained in the group of classified debts, not the principle of classification into the group of debts with a higher level of risk as prescribed. However, in order to avoid a profit shock that takes place at the end of the restructuring period, banks will have to start making provisions based on the nature of those debts.
_____________________________
The State Bank of Vietnam(SBV) has just issued Circular 03/2021/TT-NHNN amending and supplementing Circular 01/2020/TT-NHNN providing for credit institutions to restructure debt repayment deadlines, reduce interest rates and maintain debt groups to continue supporting customers affected by Covid-19. This Circular comes into force from May 17, 2021.
In Circular 03, the SBV added additional conditions to allow credit institutions and branches of foreign banks to restructure the remaining debts due. Specifically, the SBV allows credit institutions to restructure the repayment term with debts indebted to debts between January 23, 2020 and the end of 2021. Previously, Circular 01/2020 only allowed restructuring with debts incurable obligations from January 23, 2020 to 3 months from the date the Prime Minister announced the end of the epidemic.
In addition, the SBV still stipulates that the time limit for debt repayment restructuring does not exceed 12 months from the date the credit institutions implement the restructuring. The restructuring of the repayment term is carried out until December 31, 2021.
For the classification of debts, Circular 03 stipulates that the restructured debt balance will be retained in the group of classified debts, not the principle of classification into the group of debts with a higher level of risk as prescribed. However, in order to avoid a profit shock that takes place at the end of the restructuring period, banks will have to start making provisions based on the nature of those debts.
_____________________________
GATTACA LAW FIRM
T : +84 24 320 41777
H : +84 90 176 3379
Email: lawyer@gattacalaw.vn
Website: http://gattacalaw.vn
Address: 32 Nguyen Dinh Hoan, Nghia Do, Cau Giay, Ha Noi
Email
Facebook