Circular 06/2023/TT-NHNN (Circular 06) of the State Bank of Vietnam, effective from September 1st, allows banks to consider and decide whether to grant loans to individual customers to repay loans at other credit institutions before maturity.
A number of commercial banks have announced the implementation of this loan program with interest rates ranging from only 5.6% to 7.5% per year.
According to Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, allowing banks to lend to customers so they can repay loans at other banks early is essentially one of the solutions to force commercial banks to reduce lending interest rates, thereby making lending interest rates more competitive.
However, it's not just coal businesses that are having difficulty accessing these loans; even banks are proving "powerless."
Speaking to VietNamNet , Mr. Nguyen Hong Phuc, Directorof SHB Can Tho Branch, said that SHB is implementing the program, but currently the Can Tho branch does not have any outstanding loans under this program.
According to Mr. Phuc, the biggest obstacle currently is that lending to repay other banks requires the consent of all three parties: the customer, the lending bank (the new bank), and the other bank (where the customer originally borrowed money).
"Some customers have come to our branch to raise the issue. However, the biggest difficulty is that other banks want to keep their customers, so these cases are still in the negotiation stage," Mr. Phuc said.
Meanwhile, a credit officer at a Vietcombank branch said that the product for lending to repay debts to other banks has actually been implemented for a long time, but the borrowers were only corporate customers. This time, Circular 06 allows it for individual customers as well.
"However, the branch has not yet incurred any outstanding loan balances to repay debts at other banks ahead of schedule, as per Circular 06," she informed.
According to this credit specialist, based on previous experiences with corporate clients, businesses wishing to borrow money to repay debts at other banks must obtain the necessary documents from the other bank.
"The loan limit and maximum loan term will remain the same as the original lending bank. In this case, we will have to re-evaluate the application with the corresponding documents. In general, the procedure is the same as when lending to businesses," added a credit specialist from Vietcombank.
In addition, any additional fees (if any) will be borne by the customer and paid to the old bank, depending on the contract signed between the two parties.
According to a credit specialist in VietinBank's individual customer division, many customers are now aware of this program and have directly inquired with the bank.
In this case, the bank officer only knows how to advise the customer on the necessary procedures. However, in reality, problems arise, so the customer only goes as far as… researching.
"When customers ask, we guide them to supplement their documents as required. For example, documents currently held at other banks, the customer's current financial situation, the customer's current outstanding debt, etc. In addition, customers must also pass internal checks and controls as stipulated by each bank," this person said.
This credit officer also revealed that, in reality, the VietinBank branch where he works has not yet generated any outstanding loans to repay other banks in accordance with Circular 06.
"We are simply following regulations and have not incurred any additional procedures or costs beyond those outlined in the head office's guidelines. The bank also has ample funds for lending. This year, credit is more flexible, and we haven't seen any directives to tighten lending like last year," he shared.
The customers borrowing capital at this branch are also very diverse, ranging from those involved in rice farming and trading, seafood, to small traders at the market. However, the majority of customers are still businesses and households in the seafood and rice sectors.
It is known that the majority of customers inquiring about this loan package are those currently borrowing from smaller joint-stock commercial banks, while larger banks such as VietinBank, Vietcombank, BIDV, and Agribank offer interest rates that are quite similar but lower.
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