The State Bank of Vietnam extends the debt restructuring period for another 6 months
On September 7, the State Bank of Vietnam issued Circular No. 14/2021/TT-NHNN amending and supplementing a number of articles of the Circular No. 01/2020/TT-NHNN dated March 13, 2020 of the Governor of the State Bank of Vietnam directing credit institutions, foreign bank branches to restructure the repayment periods, exempt and reduce interest and fees, and maintain the debt classifications in order to support customers affected by Covid-19 pandemic.
Accordingly, Article 4 of the Circular stipulates that credit institutions and foreign bank branches shall restructure the repayment term for the outstanding principal or interest of a debt (including debts within the scope of the Government's Decree No. 55/2015/ND-CP dated June 9, 2015 on credit policies for agricultural and rural development (amended and supplemented) when certain specific conditions are fully met.
Firstly, outstanding loans arising before August 1, 2021 from lending and financial leasing activities.
Secondly, the obligation to repay the principal or interest arising during the period from January 23, 2020 to June 30, 2022.
Thirdly, the outstanding balance of a debt shall be rescheduled for repayment when in one of the following cases, the outstanding balance is still due or overdue for up to 10 days from the due date of payment, the repayment term according to contract/agreement.
In addition, the debt balance of the debts incurred before January 23, 2020 and overdue in the period from January 23, 2020 to March 29, 2020.
At the same time, the debt balance of the debt incurred from January 23, 2020 to before June 10, 2020 and overdue before May 17, 2021; the debt balance of the debt incurred from June 10, 2020 to before August 1, 2021 and overdue from July 17, 2021 to before September 7, 2021.
According to the State Bank of Vietnam, customers who are assessed by credit institutions and foreign bank branches as unable to repay on time the principal or interest according to the contract or agreement due to the decrease in revenue and income due to the impact of the pandemic.
The Circular stipulates that the time limit for debt rescheduling, including the case of debt extension, is suitable to the extent of the impact of the pandemic on customers and must not exceed 12 months from the date the credit institution, foreign bank's branch restructures the repayment term or from the due date of each debt balance whose repayment term is restructured.
Also according to the Circular, credit institutions and foreign bank branches decide on the exemption or reduction of interest and fees according to internal regulations for the outstanding balance of debts arising before August 1 from credit activities where the obligation to repay the principal or interest is due between January 23, 2020 and June 30, 2022 and the customer is unable to repay on time the principal and interest according to the contract or agreement due to the decrease in revenue and income due to the pandemic.
Circular takes effect from September 7.
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