Takes effect on March 25, 2017, the Circular No. 29/2016/TT-NHNN dated October 12, 2016 stipulating overdraft and overnight lending applicable in the inter-bank electronic payment, to allow credit institutions to make payment in excess of the credit balance in their Vietnamese dong clearance account opened at the Banking Operation Department of the State Bank of Vietnam, Credit institutions are entitled to overdraft for compensate for the shortage of capital in the inter-bank electronic payment.
Besides, State Bank of Vietnam extends loans secured by the mortgage of valuable papers to credit institutions within the period of time commencing from the previous working day to the following working day, overnight to pay overdraft items at the end of working day. Valuable papers used in overdraft and overnight lending applicable in the inter-bank electronic payment at the Vietnam State Bank must satisfy the conditions as they are permitted for use in transactions with and payment to the State Bank of Vietnam in accordance with provisions of applicable laws; can be transferred; are issued in Vietnamese dong; the remaining payment term is 30 days and they must be in the list of valuable papers used on overdraft and overnight lending applicable in the inter-bank electronic payment at the Vietnam State Bank decided by the State Bank Governor.
The interest rate applicable to overnight lending shall be stipulated by the Governor of the State Bank of Vietnam in each period; the interest rate applicable to overdue overnight outstanding principle is 150% of overnight lending as stipulated at the time of lending; interest rate applicable to late payment of overnight lending is 10%/year.
In according to this Circular, credit institutions whose outstanding balance of overnight lending is overdue for 3 consecutive times in a month, the State Bank shall pause overdraft and overnight lending applicable in the inter-bank electronic payment in 10 working days since the State Bank notifies on pausing overdraft and overnight lending, excluding cases that is irresistible and notify to the State Bank.