Lending in foreign currency regulations

1. Borrowers' foreign currency capital needs

The Lender is allowed to consider the provision of foreign currency loans ("Loan") for the following capital needs:

(1) Long-term, medium-term and short-term Loans for offshore payment for imports of goods and services. The Borrower must have sufficient foreign currency revenue from production or business to repay the Loans.

(2) Short-term Loans to leading petroleum import enterprises that are allocated annual petroleum import quotas by the Ministry of Industry and Trade to make offshore payment for imports unless the Borrower has insufficient foreign currency revenue from business to repay the Loan.

(3) Short-term Loans to meet the short-term capital needs for production or business plans for the export of goods via Vietnamese border gates. The Borrower must have sufficient foreign currency revenue from exports to repay the Loan. This provision will be implemented until March 31, 2016.

(4) Loans for overseas investment in key national projects and programmes that the National Assembly, the Government or the Prime Minister has approved; and the Ministry of Planning and Investment has granted overseas investment certificates.

(5) Besides the above mentioned cases, the Lender may consider providing Loans for priority sectors or encouraged sectors under Governmental regulations after obtaining the SBV's written approval.

2. SBV approval of lending in foreign currency

The Lender must send the SBV a written request for approval of lending in foreign currency with the following details:

(1) The Lender's commitments to evaluate and ensure that the project is feasible; and the Borrower satisfies borrowing conditions and is able to repay both principle and interest on time.

(2) The specific items the Lender has evaluated and decided to provide the Loan: the Borrower's foreign currency capital needs to implement production or business in priority sectors or encouraged sectors under Government regulations; the amount of the approved Loan; the Borrower's current financial, production or business status; sources for repayment, and other items for the Lender to ensure the project is feasible and the Borrower satisfies borrowing conditions.

(3) The Lender's report on its own foreign currency sources and commitments to ensure a balance of its foreign currency sources, maturity and amount of the Loans, and lending in compliance with laws.

(4) The Lender's commitment to be responsible for the results of its evaluation and decision to provide the Loan and the information provided.

The SBV must consider and approve the Lender's request on the basis of Government regulations on priority sectors and encouraged sectors, and subject to foreign currency market developments and the objectives of currency policy operations. The SBV's approval or refusal of the Lender request must be made within thirty business days after receipt of the request.

3. Currency of repayment

(1) When providing the Loan mentioned in the above sections 1.(1), (3), (4), and (5) for which:

The Borrower repays for Loan in the same foreign currency as the Loan. If the Borrower repays in a different foreign currency, then the repayment is made as agreed between the parties in compliance with current regulations.

The Borrower has insufficient foreign currency revenue from production or business or from other legitimate sources to repay the Loan as evaluated by the Lender, and then the Lender sells the foreign currency to the Borrower to repay the Loan. If it is the case, the Borrower must undertake that on receipt of foreign currency from production or business, the Borrower will sell the foreign currency amount to the Lender.

(2) When providing the Loan mentioned in the above sections 1.(2), and (5) for which the Borrower has insufficient foreign currency revenue to repay the Loan, the Lender sells foreign currency to the Borrower for repayment of both principal and interest.

This Circular takes effect from January 1, 2016 and replaces SBV Circular No. 43/2014/TT-NHNN (December 25, 2014).