The State Bank advises firms and cooperatives on loan interest rate assistance

DNHN - The State Bank of Vietnam issued Circular 03/2022/TT-NHNN directing commercial banks to implement interest rate support following the Government's Decree No. 31/2022/ND-CP dated May 20, 2022, on interest rate support from the state budget for loans to enterprises (enterprises), cooperatives, and business households.

The Circular requires commercial banks to make loans with interest rate assistance to consumers in compliance with current legislation requirements on lending operations of credit institutions and overseas bank branches. Decree No. 31/2022/ND-CP, this Circular, and all applicable legislation

Commercial banks may opt to give interest rate assistance to clients through one of the following techniques at the time of repayment of each interest payment term:

Deduct the amount of loan interest payable by the client equal to the loan amount supported by the interest rate.

Collect all loan interest from the client during the term and repay the interest-supported loan amount to the customer on the same day of interest collection. If the loan interest is collected during the period beyond the commercial bank's work hours, the interest-supported loan amount might be refunded the next day.

In terms of determining and notifying interest rate support limitations for each commercial bank, the Circular stipulates unequivocally that commercial banks must register for interest rate support plans from the state budget for both 2022 and 2023. and specifics for each year, as outlined in Point b, Clause 1, Article 7 of Decree No. 31/2022/ND-CP.

If the total amount of interest rate support according to the registered plan of commercial banks is less than or equal to 40,000 billion VND in the two years 2022 and 2023, the State Bank of Vietnam shall decide the interest rate support limit for each commercial bank as registered.

If the overall amount of interest rate support according to commercial banks' registered plans in 2022 and 2023 exceeds VND 40,000 billion, the State Bank of Vietnam must establish the interest rate support ceiling for each bank. The following are examples of commercial goods:

a) The limit determined in the two years 2022 and 2023 is equal to the product of VND 40,000 billion and the proportion of outstanding loans by December 31, 2021, of each commercial bank to the total outstanding loans of commercial banks. Having registered for an interest rate support plan, but not exceeding the amount of interest rate support determined by each commercial bank's plan registration, specifically determined according to Appendix 01 issued with this document.

b) The State Bank of Vietnam sets the interest rate support limit in 2022 for each commercial bank equal to the support amount based on the results of calculating the limit for the two years 2022 and 2023 specified in Point a.

Interest rate based on plan registration in 2022. If the amount of interest rate support determined by the 2022 plan registration exceeds or equals the limit decided in the two years 2022 and 2023, the interest rate support limit in 2022 is equal to the term defined levels in the two years 2022 and 2023.

The limit decided in 2023 is equal to the sum of the limits established in 2022 and 2023 less the limit determined in 2022.

In the third quarter of 2023, the State Bank of Vietnam shall consider and adjust the interest rate support limit between commercial banks based on the reports of commercial banks, according to the principle of transfer from commercial banks that do not need to use up the limit (if any) to commercial banks that need to add the limit (if any).

If the number of credit lines with extra demand exceeds the number of credit lines that do not need to be used up, the State Bank of Vietnam will allocate funds to commercial banks that need to add the limit based on the transaction outcomes. The outcomes of these commercial banks' interest rate assistance implementation till the end of June 2023.

Construction operations directly servicing the aforementioned economic sectors are included, while construction activities for real estate business reasons are excluded by Decision No. 27/ 2018/QD-TTg. Or have the intention of utilizing the loan cash to undertake a project to develop social housing, worker housing, or rehabilitate old apartment buildings on the Ministry of Construction's list of projects created and publicized. 

PV