On April 23, 2023, the State Bank of Vietnam issued Circular No. 02/2023/TT-NHNN (“Circular 02”) stipulating that credit institutions, foreign bank branches (“Circular 02”) ) are now allowed to restructure the repayment terms to support organizations and individuals (“Clients”) struggling with production and business expenses.
1. Debtors and the debt payments that are allowed to be extended
- Debt payments: The principal balance and/or interest of the debt.
- Debtors: Clients struggling with production and business expenses or struggling with repaying loans to serve the needs of life and consumption.
2. Conditions for rescheduling debt payment term
The rescheduling of the debt repayment term is not compulsory for the credit institution, but the credit institution has the right to consider and decide to restructure the repayment term when the following conditions are fully satisfied:
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Criteria |
Conditions |
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For Clients |
Having request. |
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Being assessed by the credit institution that it is unable to repay the principal and/or interest on time due to a decrease in revenue or income compared to the revenue and income in the payment plan of principal and/or interest under the contract or agreement. |
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Being assessed by the credit institution as being able to fully repay the principal and/or interest according to the restructured repayment term. |
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For credit institutions |
Credit institutions with financial capacity to restructure the repayment term. |
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Implementation period: From April 24, 2023 to the end of June 30, 2024. |
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For the debt |
Principal balance arising before April 24, 2023 and from lending and financial leasing activities. |
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Obligation to repay principal and/or interest in the period from April 24, 2023 to the end of June 30, 2024. |
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The outstanding balance of the debt which is rescheduled for repayment is still within due or overdue up to 10 (ten) days from the due date of payment, the repayment term according to the contract or agreement. |
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The debt is not in the case of violations of the law. |
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Time to rescheduling repayment term |
No more than 12 months from the due date of the debt balance which is rescheduled for repayment. |
3. Maintain the same debt group for the debt that is rescheduled for repayment
Debt classification is done as follows:
- For a debt whose principal and/or interest balance has been rescheduled for repayment (the “Rescheduled Debt”) in accordance with Circular 02: Credit institutions may keep their debt groups unchanged in accordance with the group of debts that have been classified at the latest time.
- For a Rescheduled Debt of which the debt group remains unchanged but the debt is still due according to the restructured term: the credit institution does not adjust and reclassify it into the group of debt with higher risk.
- For a Rescheduled Debt of which the debt group remains unchanged, which is overdue according to the restructured term, but the credit institution does not continue to restructure the repayment term: the credit institution shall classify the debt according to regulations.
In addition, in order to ensure the implementation of debt repayment term restructuring, credit institutions must make provision for risks as prescribed in Circular 02.
Circular 02 takes effect from April 24, 2023.
Key word: Circular 02/2023/TT-NHNN, repayment term, debts
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