ANNOUNCEMENT 24 Mar 2011

In March 2011, the government of Vietnam announced a rule change for international private debt transactions.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



http://www.mayerbrown.com/publications/Circular-07-Restricting-Lending-in-Foreign-Currency-by-Credit-Institutions-in-Vietnam-06-01-2011/


Inception date: 09 May 2011 | Removal date: 08 May 2012

Controls on credit operations

 On 24 March 2011, the State Bank of Vietnam (SBV) issued Circular No.07/2011/TT-NHNN restricting foreign currency lending in Vietnam. Local and foreign banks are allowed to lend in foreign currency only for specific cases which include - 
 

  • short, medium or long-term loans to make payments to overseas parties for purchase of goods and services, or
  • short-term loans for business in exporting goods via Vietnamese border gates, further if the borrower borrows in foreign currency for these capital requirements to use inside Vietnam, they must sell foreign currency to the lending credit institution in the form of a spot transaction

Further, to avail such loans, the borrowers will have to demonstrate that they will have sufficient foreign currency to repay these loans. For loans for all other purposes, an approval from SBV will be required.
 
This measure takes effect from 9 May 2011. 

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A