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Vietnam: State Bank agrees to extend debt rescheduling for six months
The State Bank of Vietnam (SBV) has agreed to extend debt rescheduling for customers for a further six months.
In Circular 14/2021/TT-NHNN issued on Tuesday, the central bank allows financial institutions to reschedule debts incurred before August 1, 2020, instead of June 10, 2020; and debts with repayment obligations from January 23, 2020 to June 30, 2022, instead of December 31, 2020.
The new circular extends the repayment term for customers by another six months compared to Circular 03, until June 30, 2022.
In addition, the restructuring of overdue debts will also be extended from July 17, 2021 to before September 7, 2021.
The new regulation also allows credit institutions and foreign bank branches to decide the exemption or reduction of interest and fees according to their internal regulations for the debts incurred before August 1 with repayment obligation between January 23, 2020 and June 30, 2022 and for customers unable to repay debts due to the pandemic.
The central bank’s move aims to alleviate difficulties for businesses hit hard by the COVID-19 pandemic, especially as the fourth wave of infections is causing severe impacts on economic activities and affecting the payment capacity of businesses and people.
According to SBV, the six-month extension of debt rescheduling is based on the vaccination roll-out and disease control plan of the Government.
The new circular took effect on Tuesday.
Earlier, many banks agreed to cut lending rates until the end of this year to support businesses. From the business side, they expected cheaper lending costs, as well as banks to extend their debt repayment terms as the pandemic severely affected their financial health.
Meanwhile, the Vietnam Banks Association had proposed extending debt rescheduling to “three months after the Prime Minister announces the end of the pandemic”.
This suggestion would help SVB avoid amending their policies.
Source: Vietnam News