On March 6, 2018, the Prime Minister issued Decision No.13/2018/QD-TTg prescribing eligibility and documentation requirements and procedures for application for approval of credit overextensions granted by credit institutions and foreign bank branches. The Decision took effect on May 1, 2018.

Accordingly, the Decision No.13/2018/QD-TTg requires for eligibility to receive credit overextensions as follows:

1. Borrowing customers strictly meets lawful credit extension requirements, have not incurred bad debts for 03 years preceding the year of submission of their applications for credit overextensions, have the ratio in which the debt owed is not three times more than the owner’s equity according to their quarterly or annual financial statements prepared at the time preceding the time of application for credit overextensions.
2. Borrowing customers wish to borrow fund to implement business projects or plans with the aim of performing socio-economic development tasks under one of the following circumstances: They implement business projects or plans of socio-economic significance and urgent ones in order to perform socio-economic development duties and meet the basic human needs in electricity, coal, oil and gas, petroleum, traffic, public transportation and other industries or sectors under the direction of the Government or the Prime Minister over periods of time; They implement investment programs and projects for which investment policies are decided by the National Assembly and the Prime Minister; They invest in sectors which are prioritized and encouraged under Resolutions of the National Assembly and the Government on socio-economic development over periods of time.
3. Business projects or plans in need of credit overextensions have already undergone the credit institution’s assessment which ensures that they are feasible and borrowing customers remain solvent, and suggests that the credit extension decision should be made; meet applicable regulations on investment and construction, accord with the planning and business plans, and have been approved or received the Investment Registration Certificate granted by competent authorities.

With specific and detailed regulations, Decision No.13/2018/QD-TTg is expected to build a strict legal corridor for approval of credit overextensions granted by credit institutions and foreign bank branches, thus ensuring the safety of the entire credit system of Vietnam.