From September 01, 2023: Cease 03 cases of prohibition on lending

In particulars, the State Bank of Vietnam ceases the implementation effect of Clauses 8, 9, 10, Article 8, Circular No. 39/2016/TT-NHNN (which is supplemented by Clause 2, Article 1, Circular No. 06/2023/TT-NHNN) on capital demand that credit institution is not allowed to make loan from September 01, 2023, to the effective date of legal documents.

Accordingly, demands eligible for borrowing loans include:

- Paying capital contributions, purchasing, receiving the transfer of contributed capital of limited liability companies, and partnerships; paying capital contributions, purchasing, receiving the transfer of shares of joint-stock companies not listed on the securities market or not registered for trading on the Upcom trading system.

- Paying the capital contribution under the capital contribution contract, or investment cooperation contract at the time the credit institutions decide to provide loans.

- For financial offsetting, unless the loan fully meets the following conditions:

• The client has advanced the client's own capital to pay and cover the cost of implementing the business project, which has been incurred less than 12 months up to the time the credit institutions decide to provide loans;
• Expenses that have been paid with the client’s own capital for the purpose of implementing the business operation project are the expenses using the loan source of the credit institution to be considered for medium and long-term loans to carry out that business project.

From September 01, 2023, a credit institution may not provide loans to meet the following demands:

- Carrying out investment or business activities in sectors and trades in which such activities are banned by the Law on Investment.

- Paying expenses for or financing investment or business activities in sectors and trades in which such activities are banned and other transactions or acts that are banned by law.

- Buying and using goods and services of sectors and trades in which investment and business activities are banned by the Law on Investment.

- Buying gold bullion.

- Repaying the credit extended at the lending credit institution, excluding loans used for paying the loan interest arising in the course of work construction whereby the loan interest is included in the total construction investment approved by a competent authority in accordance with law.

- Repaying foreign loans (excluding deferred payment foreign loans for goods), credit extended by another credit institution, excluding loans used for repaying debts ahead of schedule when fully satisfying the following conditions:

• The loan term does not exceed the remaining time of the existing loan’s term;
• Having its term not yet rescheduled.

- Depositing money.