Banks in trouble will be given 'special loans' to pay depositors

Immediately after the National Assembly passed the law amending and supplementing a number of articles of the 2010 Law on Credit Institutions, the State Bank announced a draft circular regulating special loans for credit institutions under special control.

The new Circular will replace Circular No. 06/2012/TT-NHNN regulating special loans for credit institutions.

With the announcement of the above draft, the State Bank has quickly started preparing to implement the new law that has just been passed.

According to the draft circular, from the date the State Bank places the credit institution under special control, the outstanding principal and interest of the refinanced loan will be converted into outstanding special loan with interest rate equal to the refinanced interest rate, term equal to the remaining term of the refinanced loan; the handling of this special loan will be carried out according to the State Bank's policy on restructuring credit institutions or according to the approved credit institution restructuring plan.

Credit institutions may only use special loans to support liquidity for the purpose of paying deposits of individual depositors.

Notably, the draft circular stipulates that credit institutions are only allowed to use special loans to support liquidity for the purpose of paying deposits of individual depositors.

And credit institutions are not allowed to use special loans at the State Bank to pay related persons of the credit institution; managers, founding shareholders; related persons of managers, managers, major shareholders, founding shareholders.

The term of special loans to support liquidity, according to the draft circular, is a maximum of 2 years but not exceeding the period of special control of the credit institution. The term of special loans to implement the restructuring plan according to the approved restructuring plan.

Draft circular stipulates that the special lending interest rate of the State Bank to support liquidity for credit institutions is equal to the refinancing interest rate announced in each period.

In case the credit institution has not paid off the principal and interest of the special loan by the due date and is not granted an extension by the State Bank, the interest rate on the overdue principal is 150% of the loan interest rate stated in the special loan contract, and the interest rate on the late interest payment is 50% of the loan interest rate stated in the special loan contract.

Special lending interest rate of credit institutions implementing restructuring plans according to credit institution restructuring plans approved by competent authorities.

The exemption and reduction of special loan interest is implemented according to the credit institution restructuring plan approved by competent authorities.

According to VnEconomy