SBV Issues Circular on Bank Guarantee Regulations
The State Bank of Vietnam (SBV) issued a Circular that sets out regulations on bank guarantee operations of credit institutions, foreign bank branches, and other entities. The Circular defines bank guarantee as a form of credit extension in which the guarantor being a credit institution or foreign bank branch commits to the guarantee recipient that it will perform financial obligations on behalf of the beneficiary. When the obligee fails to perform or fails to fully perform the obligations committed to the guarantee recipient, the guaranteed party must accept the debt and return it to the guarantor according to the signed agreement. This Circular replaces Circular No. 07/2015/TT-NHNN dated June 25, 2015 and Circular No. 13/2017/TT-NHNN dated September 29, 2017 of the Governor of the State Bank amending and supplementing a number of articles of Circular 07/2015/TT-NHNN dated June 25, 2015 on regulations on bank guarantees. The circular will come in effect from April 01, 2023.
Related Link (in Vietnamese): Circular No. 11/2022/TT-NHNN
Keywords: Asia Pacific, Vietnam, Banking, Credit Risk, Bank Guarantee, Lending, Basel, SBV
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