The State Bank of Vietnam has just issued Circular 06/2023/TT-NHNN amending and supplementing a number of articles of Circular 39/2016 on lending activities of credit institutions and foreign bank branches to customers.
Accordingly, credit institutions will not be allowed to lend for the following capital needs: Borrowing to invest in business in industries and trades prohibited from investment and business according to the provisions of the Investment Law; borrowing to pay expenses, meet financial needs of business activities in industries and trades prohibited from investment and business and other transactions and acts prohibited by law; borrowing to purchase and use goods and services in industries and trades prohibited from investment and business according to the provisions of the Investment Law.
In addition, the following borrowing needs will not be met: Buying gold bars or borrowing to repay credit loans at the lending credit institution itself (except for loans to pay interest arising during the construction process, in which the loan interest expense is calculated in the total construction investment approved by competent authorities according to the provisions of law, and cannot access capital from banks)...
In addition to the above regulations, the State Bank has added new regulations such as prohibiting credit institutions from lending capital for deposits. Notably, the purpose of borrowing capital to pay for the purchase or capital contribution of a company that is not listed on the stock market or has not registered for trading on Upcom will also not be allowed to borrow capital from credit institutions.
In addition, customers who borrow capital to pay for capital contributions to implement investment projects that do not meet the conditions for putting them into business according to the provisions of law at the time the credit institution decides to lend will not be provided with capital by credit institutions...
According to the State Bank's leaders, Circular 06/2023/TT-NHNN aims to contribute to ensuring safety, efficiency, and limiting risks arising in lending activities of credit institutions.
The Circular will take effect from September 1, 2023.
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