SBV allows rescheduling of debt repayments for borrowers
The State Bank of Vietnam (SBV) has told financial institutions to reschedule debt repayments to help customers affected by the COVID-19 pandemic.
Under Circular No 03/2021/TT-NHNN dated April 2, 2021, the central bank gives permission to financial institutions to reschedule debts with repayment obligations incurred from January 23, 2020 to the end of this year.
The time to restructure repayments is not to exceed 12 months from the day financial institutions begin the process.
The circular allows commercial banks and other financial institutions to keep the debt classification for COVID-19 borrowers unchanged.
Experts from the VNDIRECT Securities Corporation said the amount of restructured debts may increase but will not have a critical impact on banks’ return on assets.
According to the SBV’s figures, as of mid-November 2020, repayments on more than VND341.8 trillion (US$14.83 billion) worth of outstanding debt had been rescheduled.
Secretary General of the Vietnam Banks Association Nguyen Quoc Hung said that the circular will help financial institutions handle the challenges that come with restructuring debts, adjusting payment terms, and reducing or exempting interest rates in a sensible fashion.
Circular No 03 amends and supplements a number of articles in Circular No 01/2020/TT-NHNN dated March 13, 2020.