The Governor of the State Bank of Vietnam (SBV) has issued Circular 14/2012/TT-NHNN stipulating the upper limit of short-term VND lending rates to be charged by credit institutions for borrowers to meet the capital requirements for several sectors.
Accordingly, the maximum short-term VND lending rate by credit institutions for borrowers is the maximum VND deposit rate for over 1 month term set by SBV plus 3 percent on an annual basis.
At present, the ceiling interest rate applied to VND deposits of one month term or longer is 12 percent per annum. Hence, the ceiling lending rate is 15 percent per annum.
This rate mechanism will be applied to short-term loans for agriculture and rural development as stipulated in Decree 41/2010/ND-CP of the Government dated April 12, 2010 on credit policies in service of agricultural and rural development.
This type of loan will also support plans and projects of production and exported businesses as specified in the Trade Law.
This mechanism will also benefit small and medium enterprises as stipulated in Decree 56/2009/ND-CP of the Government dated June 30, 2009 on development assistance for small and medium enterprises.
The soft loans will also applied to supporting industries as stipulated in Decision 12/2011/QD-TTg of the Prime Minister dated February 24, 2011 on the policy of development of supporting industries.
Borrowers must meet requirements of the SBV and be rated financially transparent and healthy by credit institutions.
Borrowers are responsible for providing information and documents to clearly reflect the borrowing purposes, in accordance with this Circular. They are held accountable for the accuracy of the provided information and documents.
Credit institutions are not allowed to collect any additional fees, excluding the fees already prescribed in Circular 05/2011/TT-NHNN of the SBV dated March 10, 2011 on the collection of fees of loans by credit institutions for their clients.
At a regular government press conference held in Hanoi on May 4, SBV Deputy Governor Nguyen Dong Tien said this administrative solution of setting the ceiling rate has been considered thoroughly and is only applied in a particular context for a particular time. Therefore, beneficiaries are being carefully selected by the central bank, aiming to resolve capital difficulties for enterprises.
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