CIRCULAR

REFINANCING LOANS GRANTED TO VIETNAM BANK FOR SOCIAL POLICIES UNDER THE PRIME MINISTER’S DECISION NO. 15/2020/QD-TTG DATED APRIL 24, 2020 ON IMPLEMENTATION OF POLICES ON ASSISTANCE FOR PEOPLE AFFECTED BY COVID-19 PANDEMIC

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law on amendments to the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017 defining functions, tasks, powers and organizational structure of the State Bank of Vietnam;

Pursuant to the Government’s Resolution No. 42/NQ-CP dated April 09, 2020 on assistance for people affected by Covid-19 Pandemic;

Pursuant to Decision No. 15/2020/QD-TTG dated April 24, 2020 of the Prime Minister on implementation of polices on assistance for people affected by Covid-19 Pandemic;

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

The Governor of the State Bank of Vietnam promulgates a Circular prescribing refinancing loans granted to Vietnam Bank for Social Policies under the Prime Minister’s Decision No. 15/2020/QD-TTG dated April 24, 2020 on implementation of polices on assistance for people affected by Covid-19 Pandemic.

Article 1. Scope and regulated entities

This Circular provides regulations on the refinancing loan granted by the State Bank of Vietnam (“SBV”) to Vietnam Bank for Social Policies (“VBSP”) for giving loans to employers for making suspension pay for workers under the Prime Minister’s Decision No. 15/2020/QD-TTG dated April 24, 2020 on implementation of polices on assistance for people affected by Covid-19 Pandemic (hereinafter referred to as “refinancing loan”).

Article 2. Refinancing loan amount

The maximum amount of the refinancing loan is VND 16,000 (sixteen thousand billion Vietnamese Dong).

Article 3. Interest rate

1. The interest rate on refinancing loan is 0%/year.

2. The interest rate on overdue refinancing loan is 0%/year.

Article 4. Term and disbursement of refinancing loan

1. Term of the refinancing loan is 364 days commencing on the date following the day on which the SBV disburses the refinancing loan to VBSP.

2. Term of the refinancing loan prescribed in Clause 1 of this Article shall be determined according to each disbursement as prescribed in Clause 4 Article 6 hereof.

3. The refinancing loan shall be disbursed within the period commencing on the signing date of the first indebtedness contract and ending on July 31, 2020.

Article 5. Collateral

SBV does not require collateral for the refinancing loan granted to VBSP.

Article 6. Procedures for refinancing loan

1. VBSP shall send an application form for refinancing loan, which is made according to the form in Appendix I enclosed herewith, either directly or by post, to SBV (via application receipt and result return division).

2. Within 03 business days from the receipt of the application form for refinancing loan submitted by VBSP as prescribed in Clause 1 of this Article, the SBV’s Governor shall issue a decision on grant of refinancing loan to VBSP.

3. Within 03 business days from the receipt of the decision on grant of refinancing loan as prescribed in Clause 2 of this Article, SBV’s Operations Center and VBSP shall enter into a principle contract on refinancing loan, which includes primary contents as prescribed in Appendix II enclosed herewith.

4. SBV shall disburse the refinancing loan to VBSP according to the following procedures:

a) Based on the principal contract on refinancing loan prescribed in Clause 3 of this Article and the list of employers (borrowers) eligible for loans for the purpose of making suspension pay, which is approved by the provincial People’s Committee according to the Prime Minister’s Decision No. 15/2020/QD-TTg dated April 24, 2020, VBSP shall send a written request for disbursement of the refinancing loan, which is made according to the form in Appendix III enclosed herewith, either directly or by post, to SBV (via SBV’s Operations Center).

b) Within 03 business days from the receipt of VBSP’s request as prescribed in Point a of this Clause, SBV’s Operations Center shall approve and disburse the refinancing loan according to the amount specified in the VBSP’s request after the indebtedness contract made according to the form in Appendix IV enclosed herewith has been signed.

Article 7. Repayment of refinancing loan

1. When the refinancing loan is due, VBSP shall use funding from debt repayments made by borrowers under Decision No. 15/2020/QD-TTg to pay off the outstanding principal of the refinancing loan disbursed according to Clause 4 Article 6 hereof to SBV.

2. Until the end of July 31, 2020, if the refinancing loan has not been fully disbursed as prescribed in Clause 4 Article 6 hereof, VBSP shall refund remaining amounts of the refinancing loan which are not yet disbursed in chronological order of the signed indebtedness contracts by August 15, 2020.

3. If VBSP fails to pay off the refinancing loan as prescribed in Clause 1 of this Article when it becomes due, SBV shall write the refinancing loan off as an overdue debt in accordance with SBV's regulations on methods of assessment and accounting for receivables and interest payments arising from deposit reception and lending transactions between SBV and the credit institutions.

4. When borrowers make debt repayments, within 05 first days of the following month, VBSP shall use total amount of debts paid by borrowers in the month to repay refinancing loan debts in chronological order of the signed indebtedness contracts (whether the debt is written off as overdue or undue), except loan debts which have been cancelled in accordance with the provisions of Clause 4 Article 17 of Decision No. 15/2020/QD-TTg .

5. If VBSP receives debt repayments from borrowers but does not repay the refinancing loan debts as prescribed in Clause 1 and Clause 4 of this article and/or VBSP does not refund the financing loan as prescribed in Clause 2 of this Article, SBV shall adopt the following measures:

a) Applying the interest rate, which is equal to the interest rate charged by VBSP on overdue debts of borrowers as prescribed in Decision No. 15/2020/QD-TTg (12%/year), on the outstanding amounts for the period commencing on the date following the payment due date as prescribed in this Circular and ending on the day in which such outstanding amounts are fully paid by VBSP; 

b) Taking out money from VBSP’s deposit account opened at SBV for recovering the outstanding debts and interests incurred by VBSP as prescribed in Point a of this Clause within 05 business days from the day on which SBV’s Operations Center receives the written notification of the violation prescribed in Point b Clause 2 or Point b Clause 5 Article 9 hereof.

6. SBV shall settle risks related to the refinancing loan granted to VBSP according to Point b Clause 3 Section IV of the Government's Resolution No. 42/NQ-CP dated April 09, 2020 and relevant law regulations.

Article 8. Responsibilities of VBSP

1. Provide SBV with documents and materials about the refinancing loan in a full, timely and accurate manner. Assume responsibility before laws for the accuracy and legitimacy of provided documents and materials.

2. Enter into the principal contract on refinancing loan and indebtedness contracts with SBV’s Operations Center, receive disbursements of refinancing loan and repay the refinancing loan in accordance with the provisions herein.

3. Use the refinancing loan for predetermined purposes; separately monitor, record and manage the refinancing loan in accordance with the provisions herein.

4. By August 20, 2020, VBSP shall send a written report, either directly or by post, to SBV's Governor on disbursed amounts of the refinancing loan under the Decision No. 15/2020/QD-TTg according to the form in Appendix V enclosed herewith, and also send it to the Monetary Policy Department, Bank Supervision and Inspection Agency, SBV’s Operations Center and Department of Economic Sector Credit; any amounts of the refinancing loan received from the first disbursement to the end of July 31, 2020 must be reported.

5. Within 10 first business days of the month following the month in which debt repayments are made by borrowers, VBSP shall send written report, either directly or by post, to SBV (Monetary Policy Department, Bank Supervision and Inspection Agency, SBV’s Operations Center and Department of Economic Sector Credit) on repayment of the refinancing loan debts by funding from debt repayments made by borrowers according to the reporting form in Appendix VI enclosed herewith; such report includes figures arising from the 01^st to the ending day of the month in which debt repayments are made by borrowers.

6. Recover debts of loans granted to borrowers for repaying the refinancing loan to SBV.

Article 9. Responsibilities of SBV’s affiliates

1. Monetary Policy Department shall:

a) Act as a focal point tasked with requesting the SBV’s Governor to issue the decision on grant of refinancing loan to VBSP according to Clause 2 Article 6 hereof;

b) Act as a focal point tasked with settling difficulties that may arise during the implementation of regulations herein.

2. Bank Supervision and Inspection Agency shall:

a) Supervise and take actions against violations, within their jurisdiction, committed by VBSP during the implementation of this Circular; 

b) In case VBSP is found to receive debt repayments from borrowers but does not repay the refinancing loan as prescribed in Clause 1 and Clause 4 Article 7 and/or VBSP does not refund the financing loan as prescribed in Clause 2 Article 7 hereof, Bank Supervision and Inspection Agency shall give written notification of such violation to VBSP, SBV’s Operations Center, Monetary Policy Department and Department of Economic Sector Credit. This notification will indicate the violation and actions to be taken according to Clause 5 Article 7 hereof.

3. SBV’s Operations Center shall:

a) Sign the principle contract on refinancing loan, approve and disburse the refinancing loan, recover refinancing loan debts, and write the refinancing loan off as overdue debt in accordance with the provisions hereof and relevant laws;

b) Implement measures prescribed in Clause 5 Article 7 hereof upon the receipt of the written notification of violation as prescribed in Point b Clause 2 and Point b Clause 5 of this Article;

c) Within 15 first business days of the month following the reporting month, send a report to SBV's Governor on the refinancing loan amounts granted to VBSP according to the form in Appendix VII enclosed herewith; and also send it to Monetary Policy Department, Bank Supervision and Inspection Agency and Department of Economic Sector Credit; such report includes figures arising from the 01^st to the ending day of the reporting month.

4. Finance and Accounting Department shall:

a) Provide instructions on how to prepare accounting reports regarding refinancing loan to VBSP in accordance with regulations herein;

b) Act as a focal point tasked with settling risks relating to the refinancing loan granted to VBSP.

5. Each SBV’s provincial branch shall:

a) Supervise, inspect and take actions against violations, within their jurisdiction, committed by VBSP’s affiliate located in the province during the implementation of this Circular; 

b) In case VBSP is found to receive debt repayments from borrowers but does not repay the refinancing loan as prescribed in Clause 1 and Clause 4 Article 7 and/or VBSP does not refund the financing loan as prescribed in Clause 2 Article 7 hereof, the SBV’s provincial branch shall give written notification of such violation to VBSP, SBV’s Operations Center, Monetary Policy Department and Department of Economic Sector Credit. This notification will indicate the violation and actions to be taken according to Clause 5 Article 7 hereof.

6. Information Technology Department shall:

Update and upgrade operational software programs meeting the requirements laid down herein.

Article 10. Effect

1. This Circular comes into force from May 07, 2020.

2. Chief of the Ministry’s Office, the Director of the Monetary Policy Department, Heads of SBV’s affiliates, Directors of SBV’s provincial branches, Chairperson of the Board of Directors and General Director of VBSP shall implement this Circular./.