THE STATE BANK OF VIETNAM

Circular No. 29/2013/TT-NHNN dated December 6, 2013 of the State Bank of Vietnam, stipulating on provision of foreign currency loans of the credit institutions and foreign banks’ branches with customers being residents

Pursuant to the Law on State Bank of Vietnam No. 46/2010/QH12 dated June 16, 2010;

Pursuant to the Law on credit institutions No. 47/2010/QH12 dated June 16, 2010;

Pursuant to the Ordinance on Foreign Exchange No. 28/2005/PL-UBTVQH11 dated December 13, 2005;

Pursuant to the Government’s Decree 160/2006/ND-CP dated December 28, 2006 detailing the implementation of the Ordinance on Foreign Exchange;

Pursuant to the Government’s Decree No. 96/2008/ND-CP dated August 26, 2008 defining functions, duties, powers and organizational structure of the State Bank of Vietnam;

At the proposal of the Director of the Monetary Policy Department;

The Governor of the State Bank of Vietnam promulgates Circular stipulating on provision of foreign currency loans of the credit institutions and foreign banks’ branches with customers being residents,

Article 1. Scope of regulation

This Circular stipulates on provision of foreign currency loans of the credit institutions and foreign banks’ branches with customers being residents.

Article 2. Subjects of application

1. The credit institutions and foreign banks’ branches that are permitted to operate foreign exchange and implement provision of foreign currency loans with customers.

2. The customers being residents who are loaning capital at the credit institutions and branches of foreign banks as prescribed by law on loan activities.

Article 3. Demands of borrowing foreign currency capital

1. Credit institutions, branches of foreign banks may be reviewed for being provided with foreign currency loans for demands of capital loan as follows:

a) The short-term, mid-term and long-term loans for the overseas payment for imported goods and services on condition that customers have sufficient foreign currency from the production and business revenues for paying of loan debt.

b) The short-term loans for wholesale enterprises importing petrol and oil have been assigned the 2014 petrol and oil import quota by the Ministry of Industry and Trade and have demand to borrow capital in foreign currency for overseas payment for import petrol and oil when the borrowers fail to have or have sufficient foreign currency revenues from production and business operation for paying of loan debt.  Provisions in this Clause shall be implemented until the end of December 31, 2014.

c) The short-term loans in order to meet the domestic capital demands aiming to implement plan on production and business of export goods passing the border gates of Vietnam on condition that borrowers have sufficient foreign currency from export revenue for paying of  loan debt; when being disbursed the loan capital by credit institutions or branches of foreign bank, the borrowers must sell that loaning foreign currency amount for credit institutions or branches of foreign bank have provided loans in according to form of foreign exchange spot transaction, except for case whether demand of capital loan of customers for implementation of payment transactions which law stipulated that the transaction currency must be in foreign currency.  Provisions in this clause shall be implemented until the end of December 31, 2014.

d) Loans to perform overseas direct investment for national important projects, works that have been decided on investment guidelines by National Assembly, Government or the Prime Minister and have been issued certificate of overseas investment by the Ministry of Planning and Investment.

2. Credit institutions, branches of foreign banks may reviewed for being provided with foreign currency loans for demands of capital loan, apart from provisions in Clause 1 this Article, but in fields prioritized, encouraged for production and business development in according to guidelines of Government after the State Bank of Vietnam has accepted in writing under the orders and procedures specified in Article 4 of this Circular for each specific case.