Extension of foreign currency loans by the end of 2017

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Foreign currency loans are extended because of the production and business activity context of enterprises is difficult. Photo: Internet

The State Bank has officially issued Circular No.31/2016/TT-NHNN amending and supplementing some articles of Circular No.24/2015/TT-NHN on provisions for lending in foreign currencies of credit institutions and branches of foreign banks for borrowers who are residents.

Accordingly, credit institutions and branches of foreign banks which are licensed to conduct foreign exchange activities will consider and decide for customers who are residents to borrow foreign currency loans in order to meet domestic short-term capital needs to implement current plans for production, export and trading goods through Viet Nam border gates. These borrowers have to have sufficient foreign currency from export revenues to repay loans.

When credit institutions and branches of foreign banks disburse loans, the borrowers have to sell that loan in foreign currency for credit institutions and branches of foreign banks who lent in the form of spotforeign exchange transactions, unless the demand for loans of the customer is the capital for performing payment transactions which are prescribed by law as foreign currencies.

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This provision will come into effect from 1-1-2017, and will be in place until 31-12-2017.

The State Bank said that this provision is extended due to the economic - social context and production activities and business of the enterprises are still difficult, especially exporters.

Furthermore, the above Circular also contributes to the objectives of the Government's Resolution No.35/NQ-CP dated 16-5-2016 on supporting and developing of enterprises by 2020.