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Sunday, July 21, 2024

SBV prohibits loans for deposit, gold purchase, and refinancing

The Saigon Times

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HCMC – The State Bank of Vietnam (SBV) has issued a new circular banning commercial banks from providing loans for the purpose of depositing money at other banks, buying gold, or refinancing existing debts.

Circular 06/2023, which will take effect on September 1, amends and supplements certain provisions of Circular 39/2016 on lending by banks.

According to the new regulations, banks are prohibited from granting loans for the purchase of gold bars or repayment of loans obtained from other banks, except in cases where the loan is specifically intended to pay loan interest incurred in the process of developing a project.

In such cases, the interest costs should be included in the total investment cost of the approved construction project, as determined by the competent authorities.

The circular also prohibits commercial banks from providing loans for deposit purposes and borrowing funds for the payment of shares or capital contributions in companies not listed on the stock market or not registered for trading on the Unlisted Public Company Market (UPCoM).

Customers seeking loans for capital contributions in investment projects that fail to meet the legal requirements for business operations are ineligible to apply for loans at banks.

For loan agreements and credit contracts signed before September 1, both lenders and borrowers are required to adhere to the terms outlined in those agreements and contracts in accordance with the provisions of the relevant laws at the time of signing. Any amendments or additions to these agreements and contracts must comply with the provisions of the newly issued circular.

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