SBV Updates Measures to Support Customers Affected by COVID-19 Crisis
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
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
NGFS Updates Address Short-Term Climate Scenarios and Transition Plans
The Network for Greening the Financial System (NGFS) is exploring the development of short-term climate scenarios to complement its existing scenario framework of long-term climate scenarios.
ISSB Updates Address ESG Issues while IASB Consults on Impairments
The International Sustainability Standards Board (ISSB) is seeking feedback, until August 09, 2023, on the exposure draft that sets out the methodology proposed by ISSB to amend the Sustainability Accounting Standards Board (SASB) Standards' metrics
ESRB Publishes Report on Cryptos and DeFi; ECB Updates on Digital Euro
The European Systemic Risk Board (ESRB) published a report that outlines the systemic implications of crypto markets and proposes policy options to address the risks stemming from crypto-assets and decentralized finance or DeFi.
EU Agencies Issue Updates on DORA, ESAP, and Crowdfunding Regulation
The European Supervisory Authorities (ESAs) published a discussion paper on their joint advice to the European Commission (EC) on proposals to specify criteria for critical information and communication technology (ICT) third-party service providers
UK Authorities Issue Updates, Finalize Policy on Model Risk Management
The Prudential Regulation Authority (PRA) finalized the model risk management principles for banks, the policy statement PS5/23 on risks from contingent leverage, and PS4/23 on moving senior managers regime forms from the PRA Rulebook.
APRA Revises Implementation Timeline for Operational Risk Standard
The Australian Prudential Regulation Authority (APRA) updated the implementation date of the new cross-industry prudential standard CPS 230 on operational risk management
BCBS Consults on Basel FAQs and Amendments, Issues Other Updates
The Basel Committee on Banking Supervision (BCBS) published a report assessing implementation of the global Basel standards on net stable funding ratio (NSFR) and large exposures (LEX) in South Africa
EBA Announces Multiple Regulatory and Reporting Updates in April 2023
The European Banking Authority (EBA) published consultations on the amendments to the guidelines on risk-based anti-money laundering and countering the financing of terrorism (AML/CFT) supervision
FSB Issues Statement on USD LIBOR Transition, Issues Other Updates
The Financial Stability Board (FSB) released a report that offers insights into how financial institutions incorporate climate-related metrics into their compensation frameworks
ACPR Issues Updates on Reporting by Banks and on DLT Pilot Scheme
The French Prudential Supervisory Authority (ACPR) published reporting updates for the banking sector