On October 09, 2014, the State Bank of Vietnam issued the Circular No. 29/2014/TT-NHNN dated guiding commercial banks to coordinate with Vietnam Development Bank in the implementation of guarantee mechanism for small- and medium-sized enterprises borrowing capital as stipulated under the guarantee regulation promulgated together with the Decision No. 03/2011/QD-TTg dated January 10, 2011 of the Prime Minister.
In accordance with this Circular, the lender and Development Bank shall make a written agreement on the coordination for loans with guarantee of Development Bank (hereinafter referred to as agreements on coordination before signing the credit contract, including the following contents: orders of coordination among parties in receiving and handling with borrowing demands with guarantee of the customers; provision of disbursement documents; examination of use of the borrowing capital, assets originating from the borrowing capital (called examination of the borrowing capital); adjustment of debt term, extension of debt; performance of guarantee obligations.
Within 07 working days since the full receipt of the original guarantee document issued by Development Bank, the lender shall consider to sign the credit contract with the customer if the contents of the guarantee document are in
accordance with the contents of the written notice of loan approval and to notify in writing to the customer and Development Bank if refusal and clearly mention the reasons, and return the original guarantee document to Development Bank.
Especially, this Circular also emphasizes that the lender and Development Bank shall reach a specific agreement in writing on cases that Development Bank shall have rights to refuse the guarantee obligations of the guarantee regulation based when the Development Bank shall have rights to refuse the whole guarantee obligations when the lender disburses a part or the whole part of the borrowing part inconsistent with the purpose. And if the lender disburses the borrowing capital in line with the purpose but fails to perform the examination, supervision of the borrowing capital, assets originating from the borrowing capital that causes the misuse of the borrowing capital, assets originating from the borrowing capital, Development Bank shall only refuse to pay the amount of money that is equivalent to the part of borrowing capital, assets originating from the borrowing capital that the customer misuses.
This Circular takes effect on October 10, 2014 and replaces the Circular No. 12/2009/TT-NHNN dated May 28, 2009.
