Forex Lending for Resident Borrowers

The State Bank of Vietnam (SBV) recently issued the Decision No. 857/QD-NHNN on short-term foreign currency lending by credit institutions and foreign bank branches (hereafter called as credit institutions) for resident borrowers.

 

Accordingly, foreign exchange-licensed credit institutions may extend short-term foreign currency loans to meet the domestic capital demand to carry out plans of producing and trading cross-border export products for those resident borrowers who are able to make repayment by their export revenue.

 

When the loans are disbursed by the lending credit institutions, the borrowers have to sell the total amount of foreign currencies to the lenders under spot contracts, except loans for payments in foreign currencies in accordance with the laws.

 

This decision takes effect from May 2 through December 31, 2012.