Credit institutions allowed to reschedule repayment terms
An employee of Bao Viet Bank with a client at its office in Hanoi (Photo: VNA)
Credit institutions and foreign bank branches are now allowed to restructure the repayment terms to support clients struggling with production and business expenses.
The State Bank of Vietnam (SBV) on April 23 issued Circular No. 02/2023/TT-NHNN stipulating the restructuring of repayment terms and keeping the debt group of credit institutions and foreign bank branches unchanged.
The rescheduling of debt repayment terms for customers is implemented from the effective date of this circular, starting from April 24 to the end of June 30, 2024.
Restructured debts include loans and financial leases.
SBV authorised credit institutions and foreign bank branches to take the initiative in reviewing and assessing the difficulties of borrowers to decide on the restructuring.
The rescheduled terms shall be decided by credit institutions but not exceed 12 months from the due date of the balances subject to the restructured repayment term.
The just-issued circular, along with other supportive policies, will contribute to removing difficulties for people and businesses, extending the lending period, repaying bank loans, and creating conditions for continued capital turnover and access to new loans.
In a meeting with representatives of the central bank at the end of March, business leaders all expressed their most pressing need for a suspension of debt payments.
Most export items saw a decline in the first quarter, which led to a slowdown in GDP growth.
Nguyen Ngoc Hoa, chairman of the Ho Chi Minh City Union of Business Association (HUBA), said: "Since the beginning of the year, the city's main export industries have all dropped sharply by 20-40%. Although businesses have limited expansion, they still need capital to endure this tough time."
Dinh Trong Thinh, senior lecturer at the Academy of Finance, said that the circular helps banks have a legal basis to be able to extend, postpone, and charge off debt groups for businesses, thereby creating favourable conditions for businesses to access credit.
However, other financial experts said the rescheduling term of 12 months is short. Therefore, the period should be extended to support inpiduals and enterprises in overcoming challenges due to the slowdown of the global economy.
In the middle of last year, a debt restructuring policy was also issued to support businesses affected by the COVID-19 pandemic.
Statistics showed that in the previous debt restructuring for clients affected by the pandemic, nearly 1.1 million debtors had their repayment terms restructured, keeping the debt group with an accumulated value of more than 722 trillion VND (30.7 billion USD).
Recently, Prime Minister Pham Minh Chinh, in a meeting with the SBV, requested the central bank to amend bond regulations and reschedule debts for businesses.
The PM asked for the completion of the draft circular amending Circular 16/2021 on credit institutions buying and selling corporate bonds in the direction of allowing banks to immediately buy corporate bonds.
According to regulations applied in 2021, banks can only buy unlisted corporate bonds 12 months after these bonds are sold and can only repurchase the same type of bonds that were sold by credit institutions before.
The SBV's recent amendment is to allow credit institutions to buy back unlisted or unregistered bonds on UPCoM that banks sold before the end of 2023./.
Related News
Mechanisms for bolstering "bolder" and more efficient credit flow
08:24 | 31/03/2024 Import-Export
Effectively implement the State's credit capital investments to attract borrowers
11:13 | 17/03/2024 Finance
Credit and access to credit: A problem for banks and businesses
15:24 | 19/03/2024 Finance
Good management of public debt creates room to implement expansionary fiscal policy
10:06 | 19/03/2024 Finance
Latest News
Six localities should expedite site clearance and public investment
10:36 | 05/05/2024 Finance
Banks announce plans to significantly increase capital
15:11 | 04/05/2024 Finance
Minister of Finance Ho Duc Phoc receives Ambassador Extraordinary and Plenipotentiary of Japan to Vietnam
13:47 | 04/05/2024 Finance
Banks strengthen information security systems
14:55 | 03/05/2024 Finance
More News
“Opportune environment” for growth of insurance enterprises
10:15 | 03/05/2024 Finance
Closely monitoring fluctuations to calculate the appropriate time to adjust prices
15:35 | 02/05/2024 Finance
Strictly monitor market fluctuations to appropriately adjust prices
14:46 | 27/04/2024 Finance
Closely monitoring market fluctuations to consider appropriate time to adjust prices
09:30 | 26/04/2024 Finance
How does the Land Development Fund work effectively?
09:19 | 26/04/2024 Finance
Vietnam seeks to remove obstacles in upgrade of securities market
13:50 | 25/04/2024 Finance
Price stability from supply increase and transparency in trading in gold market
09:42 | 25/04/2024 Finance
SBV takes more actions to stabilise foreign exchange rates
13:43 | 24/04/2024 Finance
Proposal to exclude criminal liability for tax officials when businesses provide false information to refund VAT
10:35 | 24/04/2024 Finance
Your care
Six localities should expedite site clearance and public investment
10:36 | 05/05/2024 Finance
Banks announce plans to significantly increase capital
15:11 | 04/05/2024 Finance
Minister of Finance Ho Duc Phoc receives Ambassador Extraordinary and Plenipotentiary of Japan to Vietnam
13:47 | 04/05/2024 Finance
Banks strengthen information security systems
14:55 | 03/05/2024 Finance
“Opportune environment” for growth of insurance enterprises
10:15 | 03/05/2024 Finance