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Implementation of Circular 08/2023/TT-NHNN (“Circular 08”) dated 30/06/2023 by the SBV

On 30 June 2023, the State Bank of Vietnam issued Circular 08/2023/TT-NHNN (“Circular 08”) to replace Circular 12/2014/TT-NHNN dated 31 March 2014.


The implementation of Circular 08 with effective from 15 Aug 2023 (“Effective date”) is below.

From effective date, Circular 08 will replace Circular No. 12/2014/TT-NHNN dated 31 Mar 2014, issued by the State Bank of Vietnam, prescribing eligibility requirements to be fulfilled by enterprises for foreign loans without Government’s guarantee.

Part A – Salient points of Circular 08:

1. Loan purposes (Article 17)

  • The borrower may only use the short-term foreign loan capital for restructuring its foreign debts and paying its short-term debts payable in cash (excluding outstanding principal amounts of domestic loans).

  • The borrower may only use a medium/long-term foreign loan for the following purposes: executing its investment projects; executing its business plans or other projects; Restructuring its foreign debts.

2. Limit on foreign loans (Article 18)

The borrower needs to comply with limit for medium and long-term foreign loans as follows:

  • If the foreign loan capital is used for executing an investment project:

The sum of outstanding principal amounts of the borrower’s medium/long-term domestic and foreign loans (including short-term loans that are extended and overdue short-term loans that are treated as medium/long-term loans) used for executing its investment project shall not exceed the limit on borrowed capital of that investment project. The limit on borrowed capital of the investment project is the difference between the total investment capital of the investment project and the paid-in capital of investors as specified in the investment certificate.

  • If the foreign loan capital is used for executing business plans or other projects of the borrower:

The sum of outstanding debts of the borrower’s medium/long-term domestic and foreign loans (including short-term loans that are extended and overdue short-term loans that are treated as medium/long-term loans) used for this purpose shall not exceed total demand for borrowed capital defined in its plan for use of foreign loan capital approved by an authorized approving authority.

  • If the foreign loan capital is used for restructuring foreign debts of the borrower:

The maximum foreign loan amount used for restructuring the borrower’s foreign debts shall not exceed the sum of outstanding principal, unpaid interests and relevant expenses of the existing foreign loan, and expenses associated with the new loan determined when restructuring its foreign debts.

3. Plan on using foreign loans capital (Loan in Cash):

  • The plan for use of foreign loan capital: the business plan to be financed by the foreign loan, in which the borrower justifies their lawful and reasonable purposes and the need of the foreign loan.

  • The plan for restructuring of foreign debts: includes information on the use of a new foreign loan for paying off lawful and existing foreign loan debts.

  • Depend on the loan purpose, the borrower needs to prepare Business plan on using foreign loans or plan on Restructuring of foreign debts (hereinafter referred to as the “Plan”) with full headings and contents (according to Article 7, clause 3 or Article 8) and

Plan must be approved by the competent authority in accordance with relevant laws and the Borrower's Charter (referred to as the approval authority in accordance with the law).

  • Regarding the short-term foreign loan: together with Plan, the borrow needs to prepare the Statement of demands for using of the short-term foreign loan (hereinafter referred to as “Statement of demands”) which is made using the form in the Appendix of Circular 08, and according to Article 7, Clause 4.

  • Regarding medium and long-term foreign loan: Plan must contain total capital for business activities; capital structure; scale of the foreign loan; expenditures to be paid by the medium or long-term foreign loan.

4. Rules for using foreign loan capital (Article 6)

  • Borrowers shall assume overall responsibility to use foreign loan capital for lawful purposes as defined in Circular 08. In case a foreign loan amount has been withdrawn but has not yet used for the lawful loan purposes, the borrower may deposit this loan amount at credit institutions or foreign bank branches operating in Vietnam. Term of each deposit does not exceed 01 month.

5. Borrower’s responsibilities (Article 19)

  • Comply with eligibility requirements for foreign loans laid down in this Circular and relevant law regulations.

  • Assume legal responsibility for the accuracy and truthfulness of documents related to foreign loan, and retain adequate documents to serve the inspection and examination on using the loan capital according to loan purpose by the competent authority.

Part B – Notice of changes in supporting documents to Bank for processing transaction related to the foreign loan.

From Effective date 15 Aug 2023, for transactions of borrowing and repaying foreign loans to be processed by the Bank, the Borrower (Customer) please note changes in supporting documents as follows:


Short-term foreign loan

The foreign loan’s transaction of

Changes (*)

Loan in the form of import of goods with deferred payment.

§ New loan contract signed from Effective date

§ The borrow NO NEED to submit Business plan to the Bank

Loan in Cash.

§ New loan contract (includes the specific loan contract, the framework contract) signed from Effective date.

§ The framework contract signed before Effective date, but the specific drawdown/disbursement agreement signed from Effective date.

§ Depend on loan purpose, the borrow NEED to submit to Bank:

ü Business plan on using foreign loans (Existing) together with the Statement of demands for using of the short-term foreign loan (New) according to Article 7 of Circular 08.

Or

ü Plan for restructuring of foreign debts according to Article 8 of Circular 08 (New)

§ Special note: your Business plan on using foreign loans, or your Plan for restructuring of foreign debts must contain all the headings and contents in accordance with the requirements in Article 7, Article 8 of Circular 08 and must be approved by the competent authority in accordance with relevant law.


(*) Requirement for other supporting document, not be mentioned in this Notice, remain unchanged.

The Bank seeks your attention to explore all the provisions of Circular 08 for compliance with regulations.


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