| STATE BANK OF VIETNAM --------- No. 02/2010/TT-NHNN | SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness -------------- Hanoi, 22 January 2010 |
CIRCULAR
PROVIDING IN DETAILS FOR THE IMPLEMENTATION OF GIVING INTEREST RATE SUPPORT TO BANK LOANS IN 2010 FOR PROCUREMENT OF MACHINE, EQUIPMENT, MATERIALS TO SERVE AGRICULTURAL PRODUCTION AND MATERIALS FOR BUILDING DWELLING HOUSES IN RURAL AREAS
OF THE GOVERNOR OF THE STATE BANK
Pursuant to the Resolution No. 43/2009/NQ-QH12 dated 27 November 2009 of the National Assembly on inquiry and inquiry answer at the sixth session, National Assembly, legislature XII;
Pursuant to the Resolution No. 54/NQ-CP dated 11 November 2009 of the Government on the regular Government’s meeting session in October 2009;
Pursuant to the Decision No. 497/QD-TTg dated 17 April 2009 of the Prime Minister on giving interest rate support to the procurement of machine, equipment, materials to serve agricultural production and materials for building dwelling house in rural areas;
Pursuant to the Decision No. 2213/QD-TTg dated 31 December 2009 of the Prime Minister on the amendment of, supplement to several Articles of the Decision No. 497/QD-TTg dated 17 April 2009 of the Prime Minister on giving interest rate support to the procurement of machine, equipment, materials to serve agricultural production and materials for building dwelling house in rural areas;
After coming to a united agreement with the Ministry of Finance, the State Bank of Vietnam hereby provides in details for the implementation of giving interest rate support to organizations, individuals that borrow capital from banks in 2010 to procure machine, equipment, materials for agricultural production and materials for building dwelling house in rural areas (hereinafter referred to as interest rate support) as follows:
Article 1. Subjects and scope of application of provisions on interest rate support
1. Credit institutions that are authorized to give interest rate support shall include:
a. State owned commercial banks, joint stock commercial banks, joint venture banks, foreign banks’ branches operating in Vietnam, 100% foreign owned banks and Central People’s Credit Fund (hereinafter referred to as commercial banks).
b. Finance companies (excluding specialized finance companies which engage in consumer credit field and cards field in accordance with provisions of applicable laws) shall comply with provisions of the State Bank of Vietnam on prudential ratios in operation of credit institutions, setting up and use of provisions against credit risk in banking activity and have ratio of bad debt over total credit outstanding to be of less than 5%.
2. Borrowers who are entitled to interest rate support shall include:
a. Households, farm owners, individuals, cooperative groups, cooperatives, enterprises, who borrow short, medium term loans in Vietnamese Dong to procure machine, equipments, facilities, materials to serve agricultural production;
b. Households, individuals who borrow short, medium term loans in Vietnamese Dong to procure materials for building dwelling house in communes; excluding urban wards and townlets.
3. Types of loans, which are entitled to interest rate support, shall be short term, medium term loans in Vietnamese Dong under credit contracts signed and disbursed within the period from 01 January 2010 to 31 December 2010 to buy goods that are produced in Vietnam, including:
a. Machinery products, mechanical equipments, facilities to serve agricultural production and processing;
b. Light truck with load capacity of less than 5 tons;
c. Personal computer;
d. Materials for agriculture production:
- Chemical fertilizer of all kinds: urea, melted phosphate and super phosphate, NPK fertilizers with nutrition contents (N2, P20, K20) from 18% and higher, DAP fertilizer;
- Pesticides which are subject to the List of pesticides that are permitted to use in Vietnam, issued in conjunction with the Circular No. 09/2009/TT-BNN dated 03 March 2009 of the Ministry of Agriculture and Rural Development.
dd. Major construction materials for building dwelling houses: cement, construction steel, bricks, tiles, roof plates of all kinds.”
Article 2.Principle, conditions, term, amount of loan, amount of interest rate support, mode of interest rate support and application file for loan entitled to interest rate support
1. Principle of interest rate support is that commercial banks, finance companies shall provide loan to demands for short, medium term capital to procure machine, equipment, facilities, materials to serve agricultural production and materials for building dwelling houses in rural areas on the basis of balancing the capital resource for business of such commercial banks, finance companies under the normal lending mechanism; perform the interest rate support in compliance with provisions of the Prime Minister and guidance of the State Bank of Vietnam.
2. Conditions to enjoy interest rate support:
a. For borrowers:
- To directly engage in or serves agricultural production, if borrowing for procurement of machine, equipment, materials to serve agricultural production (other than buying for selling).
- To have a legal resident address in the commune with a confirmation of the Commune People’s Committee, if borrowing for purchase of materials for the construction of dwelling house.
b. For goods which are entitled to interest rate support:
- Goods manufactured, assembled by organizations, individuals (whose production premises are located in Vietnam, established and operating in accordance with provisions of applicable laws of Vietnam);
- They possess labels as stipulated in the Decree No.89/2006/ND-CP dated 30 August 2006 of the Government on goods label.
3. Term of interest rate support from the disbursement of the loan fund shall be within the period from 01 January 2010 to 31 December 2010:
a. For loans to procure machine, equipment, materials to serve agricultural production, processing and personal computer: 24 months at the maximum; interest rate support shall be given from 01 January 2010 to 31 December 2012.
b. For loans to procure agricultural materials and materials for building dwelling house: 12 months at the maximum; interest rate support shall be given from 01 January 2010 to 31 December 2011.
c. Loans entitled to interest rate support, which are overdue, shall be rescheduled, if the actual borrowing period exceeds the loan term entitled to interest rate support as provided for in points a and b in this Paragraph, then the interest rate support shall not be applied to the overdue time, rescheduled time and the period of time in excess of loan term entitled to interest rate support.
4. Maximum loan amount
a. In respect of machinery products, equipment, materials to serve agricultural production, processing and material products to serve agricultural production: the maximum amount of loan shall be equal to 100% of goods value; the specific loan amount shall be considered and decided upon by commercial banks, finance companies in accordance with the normal lending mechanism.
b. For personal computer: the maximum amount of loan shall be equal to 100% of the goods value, but not in excess of 05 million dong/item); the specific loan amount shall be considered and decided upon by commercial banks, finance companies in accordance with the normal lending mechanism.
c. For materials of all kinds for building dwelling house: the maximum amount of loan shall be equal to 100% of the goods value, but not in excess of 50 million dong; the specific loan amount shall be considered and decided upon by commercial banks, finance companies in accordance with the normal lending mechanism.
5. Amount of interest rate support:
a. The interest rate support shall be 100% of the loan interest based on the loan amount and actual borrowing period for loans to purchase goods as stipulated in points a, b, c Paragraph 3 Article 1 of this Circular.
b. The interest rate support shall be 2%/annum of the loan interest based on the loan amount and actual borrowing period of the loans for goods purchase as stipulated in points d, dd Paragraph 3 Article 1 of this Circular.
6. For the case where the borrowers are entitled to interest rate support while he has positive balance on deposit account and valuable paper denominated in Vietnamese dong, foreign currency (hereinafter referred to as balance of deposit account); or the loan is mortgaged, guaranteed by valuable paper, savings book and other forms of cash in Vietnamese dong and foreign currency (collectively called valuable paper), the interest rate support shall be given as follows:
a. For the case where the borrower has positive balance on deposit account at a lending commercial bank, finance company and other credit institutions, in signing the credit contract, that commercial bank, finance company shall calculate the entire balance of the deposit account as own capital of the borrower and the lending capital amount must exclude (-) such deposit account balance. The borrower shall be responsible for sending a report to the commercial bank, finance company on the balance of the deposit account and value of valuable paper in Vietnamese dong, foreign currency at other credit institutions and be accountable for the legality and accuracy of that report. Balance of the VND, foreign currency deposit account of the borrower shall include: demand deposit, term deposit; term savings deposit, demand savings deposit and other savings deposits; and exclude balance of deposit account with specialized capital, security deposit and frozen deposit in accordance with provisions of applicable laws.
