Decision 992 on 6Aug01 on Unsecured Loan of JV Banks
STATE BANK OF VIETNAM
No. 992-2001-QD-NHNN Hanoi, 6 August 2001
DECISION ON LIMITS ON LENDING UNSECURED BY PROPERTY BY SHAREHOLDING COMMERCIAL BANKS, SHAREHOLDING FINANCIAL COMPANIES AND JOINT VENTURE BANKS
The Governor of the State Bank
Pursuant to the Law on the State Bank of Vietnam and the Law on Credit Institutions dated 12 December 1997;
Pursuant to Decree 15-CP of the Government dated 2 March 1993 on duties, powers and responsibilities for State administration of ministries and ministerial equivalent bodies;
Pursuant to article 21.2 of Decree 178-1999-ND-CP of the Government dated 29 December 1999 on Security for Loans Obtained from Credit Institutions;
On the proposal of the Director of the Department for Monetary Policy;
Decides:
Article 1
Commercial shareholding banks, shareholding financial companies and joint venture banks which satisfy the following two conditions may provide loans unsecured by property to borrowers:
1. The proportion of their bad debts (including overdue debts which are recoverable, bad debts, debts awaiting settlement, and loan debts which are highlighted in the monthly balance sheets) is less than five per cent of the total loan balance to clients.
2. They have a minimum level of charter capital (appearing in their monthly balance sheets) which ensures strict compliance with the provisions in Decree 82-1998-ND-CP of the Government dated 3 October 1998 issuing the list of legal capital of credit institutions.
Article 2
1. The limit on lending unsecured by property to clients of commercial shareholding banks, shareholding financial companies and joint venture banks which satisfy the conditions stipulated in article 1 of this Decision shall not be higher than the equity stipulated in article 2.1 of Decision 296-1999-QD-NHNN5 of the Governor of the State Bank dated 25 August 1999.
2. With respect to the limit on lending unsecured by property, commercial shareholding banks, shareholding financial companies and joint venture banks stipulated in clause 1 of this article shall not include the following in their loan balance:
(a) Loans as prescribed by the Government;
(b) Loans unsecured by property pursuant to Decision 67-1999-QD-TTg of the Prime Minister of the Government dated 30 March 1999 on Policies on Credit Banking in Support of Agricultural and Rural Development; and loans unsecured by property of up to twenty (20) million dong to agricultural families and farm-owners engaged in agricultural production, forestry or aquaculture in the nature of goods production pursuant to clause 4 of Section 1 of Circular 10-2000-TT-NHNN1 of the Governor of the State Bank dated 31 August 2000 providing Guidelines on Implementation of Solutions on Loan Security for Credit Institutions in Accordance with Resolution 11-2000-NQ-CP of the Government dated 31 July 2000 on Solutions for Managing the Socio-Economic Development Plan for the Second Half of 2000;
(c) Loans unsecured by property mortgage of up to fifty (50) million dong to organizations, households and individuals for production of aquaculture seedlings pursuant to article 4.2 of Decision 103-2000-QD-TTg of the Governor of the State Bank dated 25 August 2000 on a Number of Policies for Encouraging the Development of Aquaculture Breeding;
(d) Loans of small sums to poor individuals and households guaranteed by reputation provided by socio-political organizations pursuant to Section 3 of Chapter IV of Circular 06-2000-TT-NHNN1 of the Governor of the State Bank dated 4 April 2000;
(dd) Loans to State owned enterprises which satisfy the conditions for borrowing unsecured by property pursuant to clause 2 of Section 1 of Chapter IV of Circular 06-2000-TT-NHNN1 of the Governor of the State Bank dated 4 April 2000, being loans to implement investment projects in State key economic programs or special economic programs pursuant to a decision of the Government or the Prime Minister of the Government. Credit institutions must base their lending to these enterprises on the following documentation: legal instrument of the Government or of the Prime Minister of the Government on implementation of the key economic program or special economic program; economic contract or a letter from the competent body proving that the enterprise is participating in implementation of such projects, project works or other work in an economic program or special economic program; minutes of hand-over and finalization of the completed volume of works and other relevant documentation;
(e) Lending as delegated by the Government or by domestic and foreign organizations and individuals.
3. The limit on lending unsecured by property to borrowers by commercial shareholding banks, shareholding financial companies and joint venture banks stipulated in clause 1 of this article shall only apply to credit contracts entered into as from 3 September 2000.
Article 3
Commercial shareholding banks, shareholding financial companies and joint venture banks which provide loans to borrowers unsecured by property shall implement such lending in accordance with the provisions of Decree 178-1999-ND-CP of the Government dated 29 December 1999 on Security for Loans Obtained from Credit Institutions and with the provisions of Circular 06-2000-TT-NHNN1 of the Governor of the State Bank dated 4 April 2000 and with other relevant legal instruments.
Article 4
1. This Decision shall be of full force and effect as of the date of its signing and shall replace Decision 266-2000-QD-NHNN1 of the Governor of the State Bank dated 18 August 2000.
2. The head of the State Bank Inspectorate shall be responsible to check and supervise the implementation of this Decision.
3. Heads of units under the State Bank, directors of State Bank branches in provinces and cities under central authority, boards of management and general directors (directors) of commercial shareholding banks, shareholding financial companies and joint venture banks shall be responsible for implementation of this Decision.
4. The Governor of the State Bank shall decide on any amendments of and additions to this Decision.
For the Governor of the State Bank
Deputy Governor
DUONG THU HUONG
