On October 24th, 2018, The State Bank issued Circular No. 25/2018/TT-NHNN to amend and supplement a number of articles of Circular No. 10/2015/TT-NHNN dated July 22nd, 2015 guiding the implementation of Decree No. 55/2015/ND-CP dated June 09th, 2015 of the Government on credit policies for agricultural and rural development.
Circular No. 25/2018/TT-NHNN stipulated that customers who were having difficulties in repaying the loans due to force majeure reasons shall be taken into consideration of the following:
– Restructure the payment period and keep the debt unchanged on the basis of the request from the client and the credit institution’s assessment of the repayment capability of the client.
– The restructuring time should be suitable for the business cycle of the customer, but the maximum time must not exceed the initial loan term under the signed credit contract.
– After the time limit for restructuring the payment period and keeping the debt unchanged, if the client cannot repay the debt on time and cannot restructure the payment period, keep the debt unchanged again, the credit institution must classify each debt of the client according to the current regulations of the State bank on classifying assets, level of deduction, method of setting up risk reserve and using the reservation to deal with such risks.
– Making new loans to restore the production for clients with feasible production projects and methods.
Overall, the new regulations in Circular 25/2018/TT-NHNN will help the clients in resolving the hardship when encountered with force majeure, making them unable to repay the debt in due time according to the contract and at the same time, contribute to the reduction of bad debts and irreclaimable debts for credit institutions.