Under Decision No.13/2018/QĐ-TTg, which will take effect May 1, the Prime Minister can consider approving loans exceeding credit limits in electricity, coal, oil and gas, transport and other prioritised industries, based upon the Prime Minister’s instructions.
According to the State Bank of Việt Nam, the new regulation seeks to help lenders and borrowers develop initiatives to carry out their projects, which are important to the nation’s socio-economic development.
To qualify for the loans, borrowers are required to prove they possess no non-performing loans in the three consecutive years before the loan application date, while their debt ratio must be less than three times their equity capital, according to their latest quarterly or yearly financial statements.
Their projects must also assist in the nation’s socio-economic development, improving people’s living standards in the selected industries or other priority sectors, as approved by the National Assembly or the Prime Minister.
To receive loans over the regulated credit limits, the projects must be considered feasible, as appraised by the lenders, while the financial status of the borrowers is required to be solvent.
Credit institutions are requested to make excess loans in conformity with the law, in which the loans must not exceed four times the borrowers’ equity capital.
Source: VNS