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Wednesday, July 17, 2024

HOREA pushes for revisions in central bank’s circular

The Saigon Times

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HCMC – The HCMC Real Estate Association (HoREA) is pushing for changes in Circular 06 over concerns that the circular might hinder enterprises’ ability to secure bank loans.

This circular, scheduled to take effect in early September, amends and supplements certain provisions of Circular 39/2016 governing bank lending.

If implemented, banks could be restricted from offering loans for crucial activities such as capital contributions, equity transfers, and capital repayment.

This limitation could impede businesses’ access to credit, said Le Hoang Chau, Chairman of HoREA. He proposed the removal of Article 8, Clause 8, which imposes these restrictions.

HoREA’s proposal also involves eliminating constraints on lending for capital needs of projects approved by state agencies, as outlined in Article 9, Clause 8 of the circular. The association highlighted the potential impact of this regulation on various investment projects, potentially hindering development initiatives.

With over 40,000 real estate enterprises nationwide, encompassing both listed and non-listed companies, HoREA’s suggestions aim to level the lending landscape. It emphasized that the proposed changes would foster equality among enterprises, facilitating a broader spectrum of real estate projects’ access to credit.

Furthermore, HoREA supports revising Article 10, Clause 8, to extend the time frame for evaluating costs incurred by business operation projects, aligning with practical market conditions. The suggested 12-month period could be extended to 24 or 36 months, accommodating projects affected by legal hurdles.

HoREA pointed out that a significant 70% of projects are halted due to legal obstacles, awaiting decisions from authorities rather than being the fault of the businesses.

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