The Governor of the State Bank of Vietnam (SBV) has issued Circular No. 14/2021/TT-NHNN, which amends and supplements a number of articles of the Circular No. 01/2020/TT-NHNN on regulations on rescheduling the repayment term, interest rate exemption and reduction, and debt classification, to support customers affected by COVID-19 pandemic. The new Circular took effect on September 07, 2021.
The following are the key measures presented in Circular No. 14/2021/TT-NHNN:
- Rescheduling the repayment term—Article 4 of the Circular stipulates that credit institutions and foreign bank branches shall reschedule debt payment terms for outstanding loans that fully satisfy certain conditions mentioned in the Circular. The credit institutions and foreign bank branches shall reschedule debt payment terms for outstanding loans arising before August 01, 2021, where the obligation to repay the principal and/or interest arises from January 23, 2020 to June 30, 2022.
- Exemption and reduction of interest and fees—Article 5 of the Circular stipulates that credit institutions and foreign banks branches will decide on exempting or reducing their interest and fees according to the internal regulations for outstanding loans arising before August 01, 2021 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 January 23, 2020 and June 30, 2022.
- Maintenance of debt classifications—The Circular stipulates that credit institutions and foreign bank branches are entitled to maintain classified debt groups in accordance with the provisions of SBV, with regard to the debt balances subject to loan repayment rescheduling, exemption and reduction of interest and fees, and as prescribed in the Circular.
In addition, SBV specified, in a statement, that, from now until the end of the year and in the beginning of 2022, it would continue to conduct relief measures to support recovery from COVID-19 pandemic. These measures include reasonable credit growth associated with improving the credit quality, monitoring and urging the credit institutions to implement Circular No.14/2021/TT-NHNN, and directing the credit institutions to implement their commitments to reducing the lending interest rates and banking fees for payment services.
- Press Release on COVID Support Measures (in English)
- Circular No. 14/2021/TT-NHNN (in Vietnamese)
- Circular No. 01/2020/TT-NHNN (in Vietnamese)
Effective Date: September 07, 2021
Keywords: Asia Pacific, Vietnam, Banking, Loan Moratorium, Loan Repayment, COVID-19, Credit Risk, SBV
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