Shrimp households and farm owners had difficulties in their business and production operations and borrowed money from credit institutions to develop their business activities. The State Bank of Vietnam will refinance the institutions that carried out debt rescheduling for the households and owners. — Photo vbsp.org.vn

HA NOI (Biz Hub) — The State Bank of Vietnam (SBV) will refinance credit institutions that carried out debt rescheduling for ailing shrimp and tra fish households, farm owners and cooperative alliances.

The move is specified in Circular No. 26/2014/TT-NHNN, which the SBV issued on September 16 and which takes effect on November 1. The refinancing, in Vietnamese dong, covers debt payments of shrimp and tra fish households, farm owners and cooperative alliances facing difficulties in their production and business operations that were rescheduled on or before December 31, 2013.

The SBV refinancing level will be equivalent to the amount of the loans with a zero per cent interest rate. Refinancing will be implemented within 364 days and will be renewed automatically every year for a period of three years.

After three years, the credit institutions must pay the loan amount to the SBV. If the institutions fail to meet the deadline, the SBV will transfer the remaining debt to overdue loans and carry out measures to retrieve them.

On September 15, the SBV issued Circular No. 25/2014/TT-NHNN, which also takes effect on November 1. It requires enterprises borrowing from overseas sources, which are not guaranteed by the Government, to register with the SBV. Overseas loans include long-, medium- and short-term loans with a one-year deadline.

If adjustments are made on the written conditions for these overseas loans, borrowers must register these adjustments with the SBV.

In case of withdrawal of capital, debt payment and fee transfers 10 days after the SBV-approved deadline, borrowers must inform commercial banks or branches of foreign banks in which they opened their accounts of such adjustments. They are not required to register these adjustments with the SBV.

The circular also authorises the SBV's Foreign Exchange Department to confirm registrations for overseas loans with a total amount of more than US$10 million or in other foreign currencies of equivalent value.

SBV branches in cities and provinces will be responsible for confirming registrations for overseas loans with a total amount of $10 million. The SBV Governor will review and approve all overseas loans in Vietnamese dong. — VNS