Special loan amount is determined by the State Bank of Vietnam based on the repayment ability of the requesting financial institution.
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This is the State Bank of Vietnam’s proposal in the draft decree on special loans, which is currently being consulted with the public.
The draft regulation states that the State Bank of Vietnam provides special loans from the money source from its central bank functions in the following cases:
Providing special loans to repay deposits of commercial banks, cooperative banks, people’s credit funds, and microfinance institutions that are facing mass withdrawal.
Providing special loans to commercial banks, cooperative banks, financial companies, and microfinance institutions under special control to implement approved recovery plans.
Providing special loans to commercial banks under special control to implement compulsory transfer plans that have been approved.
In addition, the draft decree also states that the Vietnam Cooperative Bank provides special loans to people’s credit funds in the following cases:
Providing special loans to repay deposits of people’s credit funds that are facing mass withdrawal.
Providing special loans from the safety assurance fund of the people’s credit fund system with an interest rate of 0%/year to implement approved recovery plans.
Other credit institutions (excluding the Vietnam Cooperative Bank) provide special loans to credit institutions in the following cases:
Providing special loans to repay deposits of commercial banks, cooperative banks, people’s credit funds, and microfinance institutions that are facing mass withdrawal;
Providing special loans to commercial banks, cooperative banks, financial companies, and microfinance institutions under special control to implement approved recovery plans;
Providing special loans to commercial banks under special control to implement compulsory transfer plans that have been approved.
Interest-free special loans from the State Bank of Vietnam
The draft clarifies that the State Bank of Vietnam decides to waive the interest on the special loan of the credit institution under special control at the State Bank of Vietnam when it meets the following conditions:
The special loan applies a 0% interest rate for a part of the time that the credit institution borrows the special loan.
The debt restructuring plan of the credit institution includes measures to support the waiver of interest on the special loan.
In the event that the credit institution amends, supplements the debt restructuring plan in a way that extends the implementation time or is unable to implement the approved debt restructuring plan, the credit institution must repay the waived interest on the special loan.
The borrower is only allowed to use the special loan from the State Bank of Vietnam to repay deposits in Vietnamese dong from individuals at the borrower; the use of the special loan to repay deposits of other entities is decided by the Governor of the State Bank of Vietnam for each specific credit institution.
The special loan amount is determined by the State Bank of Vietnam based on the repayment ability of the requesting financial institution.
The special loan period is determined by the State Bank of Vietnam in under 12 months.
