| THE STATE BANK OF VIETNAM ------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness -------------- |
| No. 02/2009/TT-NHNN | Hanoi, February 3, 2009 |
CIRCULAR
STIPULATING IN DETAIL THE PROVISION OF THE INTEREST RATE SUPPORT FOR ORGANIZATIONS AND INDIVIDUALS BORROWING BANK LOANS FOR THEIR PRODUCTION AND BUSINESS
Pursuant to the Government's Resolution No. 30/2008/NQ-CP of December 11, 2008, on urgent measures to curb economic decline, maintain economic growth and assure social welfare;
Pursuant to the Prime Minister's Decision No. 131/QD-TTg of January 23, 2009, on the interest rate support for organizations and individuals borrowing bank loans for their production and business;
The State Bank of Vietnam stipulates in detail the provision of the interest rate support for organizations and individuals borrowing bank loans for their production and business (below referred to as the interest rate support) as follows:
Article 1. Entities eligible for and scope of application of regulations on interest rate support
1. Credit institutions that provide loans to organizations and individuals under law and provide the interest rate support, including state-run commercial banks, joint-stock commercial banks, joint-venture banks, foreign banks' Vietnam-based subsidiaries, wholly foreign-owned banks and the Central People's Credit Fund (below collectively referred to as commercial banks).
2. Organizations and individuals borrowing bank loans eligible for the interest rate support are borrowers that get loans for realizing their domestic production or business plans under Article I of the State Bank Governor's Decision No. 127/2005/QD-NHNN of February 3. 2005, amending and supplementing a number of articles of the Regulation on provision of loans by credit institutions to borrowers, promulgated together with Decision No. 1627/200l/QD-NHNN of December 31,2001.
3. Eligible for the interest rate support are Vietnam dong short-term loans (of a term of up to 12 months) provided under credit contracts entered into and performed between February 1 and December 31, 2009, including:
a/ Loans to be used by borrowers as working capital for their production or business activities classified into economic sub-sectors under the reporting and statistical regime applicable to units of the State Bank of Vietnam and credit institutions, promulgated together with the State Bank Governor's Decision No. 477/2004/QD-NHNN of April 28, 2004.
b/ Loans to be used by borrowers as working capital for their production or business activities, including building houses for low-income earners under current law; or domains calling for social resources for their development specified in the Government's Decree No. 69/2008/ND-CP of May 30, 2008, on policies to encourage the participation of all social strata in the domains of education, job training, healthcare, culture, sports and environmental protection.
4. Loans which are provided to entities in sectors or domains classified in the Appendix to Decision No. 131/QD-TTg are ineligible for the interest rate support, including:
a/ Medium- and long-term loans in Vietnam dong; short-, medium- and long-term loans in foreign currencies.
b/ Vietnam dong short-term loans provided to entities in economic sub-sectors classified in Appendix 7 to Decision No. 477/2004/QD-NHNN, including:
- Mining industry;
- Financial, banking and insurance operations, covering also loans for offshore direct and indirect investment, payment of foreign debts or debts owed to other credit institutions and payment of debts to lending commercial banks;
- Activities related to property dealing and consultancy services;
- State management, national security and defense; activities of Party and mass organizations; compulsory social assurance;
- Education and training;
- Health care and social relief;
- Cultural and sport activities, including entertainment and recreation activities;
- Activities for personal and public-service purposes (covering also consumer loans and loans provided through issuance and use of credit cards);
- Household-based services;
- Operations of international organizations and societies.
c/ Vietnam dong short-term loans for purchase of foreign-currency amounts to pay for imported consumer goods, on which statistics are made under the State Bank of Vietnam's Document No. 13684/NHNN-CSTT of December 26, 2007, on sending of written temporary reports. Consumer goods include gems and precious metals; cars in complete units with 12 seats or less; consumer goods of all kinds specified in the Trade Minister's Decision No. 07/2007/QD-BTM of February 28, 2007, promulgating the list of consumer goods to serve as a basis for determination of import tax payment time limits; the Industry and Trade Minister's Decision No. 10/2008/QD-BCTof May 16, 2008. supplementing the list of consumer goods to serve as a basis for determination of import tax payment time limits; and the Industry and Trade Minister's Decision No. 27/2008/QD-BCT of August II, 2008, promulgating the list of consumer goods to serve as a basis for determination of import tax payment time limits.
d/ Loans for securities investment and trading specified in the State Bank Governor's Decision No. 03/2008/QD-NHNN of February 1, 2008. on provision of loans and discount of negotiable instruments for securities investment and trading.
dd/ Loans for purchase and sale of land use rights, on which statistics are made under the State Bank of Vietnam's Document No. 5659/NHNN-CSTT of June 25, 2008, on reporting on a number of credit criteria.
Article 2. Interest rate support principle, duration, level and method
1. The interest rate support principle is that commercial banks shall provide loans to meet needs for working capital for production and business under the ordinary credit mechanism and provide the interest rate support in strict compliance with the Prime Minister's regulations and this Circular. They may not refuse to provide the interest rate support for eligible loans and shall periodically report to the State Bank of Vietnam for inspection and supervision of interest rate support provision.
2. The maximum term of loans eligible for the interest rate support is 8 months from the date of disbursement and applicable to loans under credit contracts entered into and performed between February 1 and December 31, 2009. For loans of a term beyond the end of 2009, the interest rate support will be provided for the borrowing term within 2009. For loans which are overdue but have been rescheduled for repayment, the interest rate support will not be provided for the overdue and rescheduled duration.
3. The interest rate support level for borrowers is 4%/year calculated on the loan balance and actual loan term within the period from February 1 to December 31,2009.
4. The method of providing the interest rate support is that when loan interests are due. commercial banks shall immediately reduce loan interest amounts payable by borrowers by a level equal to interest amounts of loans eligible for the interest rate support. The State Bank of Vietnam shall transfer loan interest-rate support amounts to commercial banks according to the lalter's reports on interest rate support amounts.
