GUIDELINES FOR THE CRITERIA OF DEBT RESTRUCTURING WITH EXTENDED REPAYMENT TERMS

On August 9, 2023, the State Bank of Vietnam issued Circular No. 6248/NHNN-TD ("Circular 6248") regarding guidance on implementing Circular No. 02/2023/TT-NHNN ("Circular 02") on the restructuring of repayment terms and maintaining debt categories to support clients facing difficulties. Circular 6248 provides notable explanations and clarifications related to the restructuring of repayment terms as follows:

1. Regarding the conditions for restructuring repayment terms:

Circular 02 specifies that credit institutions may consider restructuring repayment terms for the principal and/or interest balances satisfying the 8 conditions stated in Article 4 of Circular 02. Some of them are clarified as follows:

1. Only the principal and/or interest balances that generate debt repayment obligations during the period from the effective date of Circular 02 until the end of June 30, 2024, are eligible for restructuring, not the entire debt balance.
2. Debts eligible for restructuring are those of which the payment deadline is within or up to 10 days past the original due date, regardless of the customer's current debt category according to CIC information.

2. Regarding the limit on restructuring times:

Circular 02 does not impose restrictions on the number of times a client can have their repayment terms restructured. Generally, debts (including those previously restructured through regular means or other regulations) meeting the conditions under Circular 02 can be considered for restructuring under this Circular.

In the case where a debt has been restructured twice, the debt category remains the same as the category at the most recent time before the second restructuring of repayment terms under Circular 02.

3. Regarding the timeframe for restructuring repayment terms and the repayment period of the balance after restructuring:

1. The timeframe for restructuring repayment terms for each restructuring time does not exceed 12 months from the original due date of the balance being restructured.
2. The repayment period of the balance after restructuring, as per Circular 02, could extend beyond the final repayment date of the debt before it was restructured.

4. Regarding debt classification:

1. The count of debt restructuring events is not considered for classifying debt categories for debts currently under restructuring.
2. In the case where a client has multiple debts, those undergoing restructuring of repayment terms under Circular 02 will not be subject to the regulations for adjusting debt categories based on the list provided by CIC. Meanwhile, those are not restructured according to Circular 02 must be subject to the regulations for adjusting debt categories based on the list provided by CIC.
3. The debt category is determined based on the most recent classification before the debt was restructured.

The above contents highlight some notable guidance provided in Circular 6248. To access the full details, please refer to the official document.

Circular 6248 is effective from September 9, 2023.