The State Bank of Vietnam (SBV) is drafting a Circular regulating the restructuring of debt repayment terms by credit institutions to support customers facing difficulties due to the impact and damage of storm No. 3.

Notably, this circular stipulates that credit institutions shall restructure debt repayment terms to support customers affected by storm No. 3, and does not apply the extension of Circular 02 in 2023 because the document regulating debt restructuring and maintaining this debt group will end on December 31, 2024.

The State Bank of Vietnam said that the subjects of application in this draft circular include: credit institutions (excluding policy banks), foreign bank branches; customers (including branches and representative offices) of credit institutions in 26 provinces and cities facing difficulties in debt repayment due to damage caused by storm No. 3; other organizations and individuals related to debt repayment restructuring.

The restructuring of debt repayment terms for customers affected by storm No. 3 is carried out according to the provisions of this Circular; other contents related to debt repayment restructuring are carried out according to the provisions of other relevant documents.

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The new circular stipulates customer support until December 31, 2025. Illustration photo: Nam Khanh

The draft regulation stipulates that credit institutions are allowed to consider and decide to restructure the debt repayment period for the principal and/or interest balance of the debt based on the customer's request, the financial capacity of the credit institution, foreign bank branch and meeting the following regulations:

Customers with outstanding principal arising before September 7, 2024 and from lending and financial leasing activities.

The obligation to repay principal and/or interest arises from September 7, 2024 through December 31, 2025.

The outstanding debt of the debt with restructured repayment term is still due or overdue for up to 10 days from the payment due date, the repayment term according to the contract or agreement. The credit institution is allowed to restructure the debt repayment term for the outstanding debt of the debt that is overdue for more than 10 days, from September 7, 2024 to the effective date of this Circular when implementing the first debt restructuring.

Customers assessed by credit institutions as having difficulty and being unable to repay principal and/or interest on time according to the contract or agreement are in one of the following cases: Due to the customer being damaged by storm No. 3; due to the customer's partner having difficulty and being unable to properly and fully fulfill the signed commitments and agreements.

Customers assessed by credit institutions as unable to fully repay principal and/or interest within the restructured repayment period; customers affected by storm No. 3 and need time to stabilize their lives, build and seek solutions to restore production and business.

The consideration of debt repayment restructuring in this case is carried out within the first 3 months from the effective date of the circular, the debt repayment restructuring period shall not exceed 1 year from the date of debt repayment restructuring.

Credit institutions do not restructure debt repayment terms for debts that violate legal regulations.

The review of debt repayment term restructuring is carried out from the effective date of the circular until December 31, 2025 and there is no limit on the number of times the debt repayment term can be restructured.

The final repayment date of the restructured debt balance (including debt extension) shall not exceed December 31, 2026.