HCMC – Banks can now reschedule debt owed by corporate clients, according to a new circular issued by the State Bank of Vietnam (SBV).
Circular 02, which is in force until June 30, 2024, permits banks to extend debt repayment and keep debt classfications unchanged for debtors who are struggling to repay loans. This paves the way for banks to have resources to lend.
Local banks and foreign bank branches are required to review the status of debtors and make decisions regarding the debt repayment terms, provided the delay does not surpass 12 months from the due date.
Meanwhile, banks are required to make credit risk provisions for the debt they extend.
The new circular, which came out on April 24, is expected to address hurdles faced by individuals and corporations, shorten operating cycles and make access to new loans easier, according to the SBV.