Pledged Valuable Papers Mortgageable for Short-term Loans

The State Bank of Vietnam (SBV) recently issued Circular 17/2011/TT-NHNN allowing credit institutions to use pledged valuable papers to borrow short-term loans. This move helps lenders to increase short-term loans and liquidity.

 

This policy is applied to credit institutions without being put under special controls; with standard valuable papers belonging to the group of mortgageable papers; with appropriate borrowing purposes; with lawful applications; without current overdue debts at the SBV; and with commitment to using the borrowing for right purposes, paying back principal and interest to the SBV in due term.

 

Standard valuable papers are defined as “transferable, direct ownership of borrowers, remaining validity at least equalling the borrowing term, not issued by borrowers, and others.”